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Summary:

Imeem and iLike were scooped for scraps by MySpace Music. But Lala may have walked away with a respectable buyout, and now, eMusic appears…

Emusic

Imeem and iLike were scooped for scraps by MySpace Music. But Lala may have walked away with a respectable buyout, and now, eMusic appears to be angling for a favorable exit. According to a Christmas Eve story in the New York Post, eMusic owner JDS Capital (the same owner as the Orchard) is “examining strategic alternatives for its business,” including a straight-out acquisition or recapitalization. The company is also considering an on-demand streaming component to complement its subscription-based, download model.

These types of stories rarely just appear out of nowhere, and JDS is probably juicing the channels. The Post notes that Best Buy and Rhapsody have already expressed interest, and eMusic chief Danny Stein (and JDS president) seems ready to talk. “If an offer was made that created value for our shareholders, we’d listen to it,” Stein stated.

Okay then. But who wants to buy this thing? Question marks surround the scalability of an aficionado-focused, paid site, and indeed, Stein has been attempting to drive eMusic towards a broader audience. But that appears to be eroding the core subscriber audience, and the company may be struggling to broaden its audience. Meanwhile, former eMusic CEO David Pakman – pushedleft in late 2008 – is now a venture capitalist at Venrock with a more modest (and probably realistic) concept of digital media growth.

Update: Pakman responded in comments below.

This story has been provided by our content partner Digital Music News.

  1. A few points: I was not “pushed in late 2008″. After being COO and CEO of eMusic for five years, and growing the business by more than 850% from a modest single-digit millions in revenue to more than $68M, I elected to move on. As most in digital music probably know, I spent more than 12 years banging the drum for alternate digital business models in hopes of growing the total music pie. eMusic has demonstrated one such model exists and can be executed profitably. That is more than most, if not all, digital music startups can say. Secondly, I don’t understand the last sentence. eMusic’s challenges have never been one of growth…the business has grown steadily for the years I was there at rates north of 40% annually. My role at Venrock is to invest in promising internet companies whose technological innovations cause disruption to large incumbent industries. I’d say the parallels with digital music are obvious and, if anything, the growth I see in ad tech, real-time web, payments, video, social media and big data are far greater than the growth rates digital music experienced.

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  2. eMusic carved out a great niche catering to long tail material. i’m not sure incorporating more mainstream content (especially when you only have a slice of the pie) is in line with their core competency, but the company definitely has a loyal userbase.

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  3. eMusic runs a number of scams to get their “loyal” subscribers. They took me for $30.99 when all i did was sign up for a free trial – now they have my money. Tried to call them to discuss and got some Phillipino customer service rep the said too bad for you and hung up on me – great service for a service company!
    They should go out of business – they are just scam artist in my opinion!

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  4. David, I find that there’s always ‘more to the story,’ so in response to your comments, we explored the matter further. http://digitalmusicnews.com/stories/122709emusic2

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  5. Paul, I read your comments. I, like JC, have been trying to cancel my FREE trial offer. I just looked at my VISA balance online and sure enough I’ve been charged again this month. In all my years of doing business online I have NEVER been ripped off until emusic. I just wonder how much of Davids company growth he is so proud of is legitimate and how much are revenues that were in reality monies that were scammed from people. Not something I’d be bragging about. If there is a sharp young attorney listening out there I can guarantee you a class action law suit if you advertise around the country for those who have been “taken” by emusic. Just go online and you’ll have your very frustrated client base waiting for you. Not a bad way to make a name for youself and help out some folks in the mean time.

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