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Summary:

eMusic launched its new website today, which includes 250,000 new songs from Universal, new hits from Sony (NYSE: SNE) Music and Warner Musi…

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eMusic launched its new website today, which includes 250,000 new songs from Universal, new hits from Sony (NYSE: SNE) Music and Warner Music-and higher prices for its newer tracks.

CEO Adam Klein is hoping the new site will help the company rebound from a bit of bad news from earlier this week, when several indie labels-Merge Records, Domino Records, and Beggars Group-decided they would no longer do business with eMusic. “A handful of labels have left us, and we trust they’ll be back at some stage,” said Klein. “We hope so, because we miss them.”

The overwhelming majority of labels stuck with the new price scheme, he pointed out. As to why the labels departed, Klein said: “I can only tell you, we all have to make our own decisions, and I’m respectful of that.”

The new service, which previously charged for plans beginning at $11.99 for 24 tracks per month, will now simply charge users money for each track. Track prices will range from $.49 to $.89 each, depending on the newness and popularity of the songs.

[Clarification: Users will still have to commit to a subscription, spending at least $12 per month to become members of the service and have access to eMusic's collection.]

That represents a price increase over the old model, where no track came out to more than 50 cents. But eMusic just finished adding 250,000 songs from Universal Music Group to its catalog, and will now be carrying tunes songs from Sony Music and Warner Music, so Klein is hoping that the increased selection will make up for higher prices on some tracks.

For users who aren’t buying the newest music, the price will stay the same. About 80 percent of the 10 million tracks available on eMusic will be 49 cents each-the same price point as before. And whatever price point users are buying at, Klein emphasized he will still beat the prices of what he called the “a la carte” music stores by 25 to 50 percent.

“We now go from front-line content, all the way through some deep old catalogs,” said Klein. “Because you commit up front, there are certain advantages, and price is one of them.” Another is the curating and editing of the site, which Klein hopes will help users find new music that they wouldn’t have otherwise known about.

While the deal with Universal opens up a large store of popular artists to eMusic members, the store still doesn’t have available some of the newest albums by big artists. For example, while Lady GaGa’s 2008 album, “The Fame,” is available for $6.49, compared to $9.99 on iTunes. But her 2009 follow-up album, “The Fame Monster,” isn’t available on eMusic. Nor is Jay-Z’s “The Blueprint 3″ (released September 2009) or the new Drake album (June 2010), all of which are available on Amazon’s MP3 store.

Labels that do business with eMusic are paid in two ways. First, they’re paid a “wholesale price” on each track downloaded. They also get part of the overall eMusic revenues, based on their relative market share on the site.

There’s “absolutely no difference” between the deals eMusic strikes with indie labels and the ones they strike with major labels, Klein added. And the labels have “a fair amount of control” over how they want their music to be priced-but eMusic also has its own pricing rules that come into play, which look at factors that include what level that music is priced at on competing music services.

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  1. Your article isn’t clear. The subscription model isn’t going away. They are just changing to a currency-based system from a credit-based one, so that they can charge different prices for different tracks. You still have to “commit up front” to a subscription level.

  2. CruzMark, thanks, you’re right. I should have emphasized that users still need to buy a subscription. I added a line to make that clear.

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