Wednesday, September 19, 2007

eMusic & Epitaph

Soon after posting my past month's eMusic downloads, I came across this story saying that the Epitaph label -- whose subsidiaries include Anti (home of Tom Waits, Neko Case, Bettye LaVette and others) -- is not renewing its contract with eMusic.

The reason is that eMusic sells its downloads for about a third of the price charged by iTunes and other services. (iTunes charges 99 cents per song, plus tax, while the average price for the subscription-based eMusic is closer to 30 cents. Those like me who were members before the latest price increase were grandfathered in at the old price, so I'm paying about 22 cents per download.)

On first glance that might make sense for Epitaph and its artists. Who wouldn't want to make three or four times as much for a song?

However, eMusic president David Pakman makes an interesting case.

At a time when the music industry is in such steep decline, our research and experience shows us that consumers are still willing to buy music, provided the value is right. And 99 cents a song is not an acceptable price point for all consumers. That’s one reason why eMusic exists and has been so successful; those consumers who are willing to spend more on music (provided the price is right) do so with us. (eMusic subscribers) spend more than 14 times as much as the average iTunes customer at a time when per capita spending on all music and audio is under $24. (eMusic subscribers) buy twenty times more music than the average iTunes customer.

We know that consumers seeking good value don’t have to buy CDs for $16 or buy downloads for $1 each. They simply go to Amazon and eBay and buy used Epitaph CDs for $3 each. When consumers buy used CDs, as you know, the artist and label don’t get paid at all. Some analysts have estimated that as much as 30% of Amazon’s music business comes from selling used CDs. With facts like these, it’s hard to argue that we, as an industry, can control the price of music. You, the consumers, make that decision and you are telling us what we need to know — you’ll buy more if you can pay less.
Pakman is lowballing the price of most used CDs, but what he says is basically true. Most of us only have a certain amount we can spend per month on music. If eMusic went away I wouldn't have much more than my $20 a month to spend on downloads. I'd probably spend it on used CDs. I've probably spent less than $10 on iTunes since they opened the thing.

I've said it before, but one thing I like about eMusic is the fact that because you have to download your allotment before the end of your month, it encourages you to experiment. I've ended up with some great tunes I otherwise would not have purchase -- and not very much bad stuff.

I'm glad Pakman is standing pat. And I hope Epitaph eventually changes its mind.

UPDATE: 9-20-07 I noticed that Fat Possum is still on eMusic, so I removed the reference to the label in the original version of this post.

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