[by Jemima Kiss] It was thirty-three degrees in London today, so what better than to spend the early evening in a stuffy basement with not even a hint of any Pimms. Music Ally decided to get people together to mull over whether the digital music industry is any better off than it was in 1999. As we left, a guy behind me said it was like an education for people that haven’t done any marketing for two years, but that might be a little harsh.
Ted Cohen, fresh to his role at TAG Strategic (and fresh out of new business cards), said he’d have liked the session to explore more examples of what did and didn’t work. I said I’d have liked eMusic president and CEO David Pakman‘s PowerPoint slides, so we were both left wanting.
Echoing that MySpace-less MySpace event last month, Apple didn’t grace us with its presence so we made do with Pakman’s insight from his days as co-founder of the Apple’s Computer Music Group, etc etc. We had the inevitable Apple bashing and grumbles about interoperability, but the core of this event was Pakman’s stats and the buzz around the empowerment of independent labels and unsigned bands.
Pakman guesstimated the average number of iTunes purchases by iPod owners, based on Apple’s claim of selling 1 billion songs and 50 million iPods in three years. If 20 per cent of all iPod owners (10 million people) accounted for those sales that’s still only around 2.8 songs per each per month. If that’s made up of 60 per cent of all iPod owners, or 30 million people, that’s less than one song per month each.
And how is Apple doing at getting revenue back to content producers? Major labels get 70 cents per customer per month – indies get 19 cents. eMusic’s catalog is entirely made up of independent labels (4,600 of them) and Pakman said it pays an average $5.62 per customer, per month, back to those labels. “That’s 2858 per cent more than Apple,” he said, with a wry smile. Apple would probably want to contest Pakman’s juicy stats – but then if it had sent a speaker…
eMusic is second to iTunes as the largest digital music retailer but focuses on an older demographic and the long tail of music from 4,600 indie labels. Pakman quoted 4.5 million downloads per month and a catalog of 1.5 million tracks; most recently 400 previously unknown Sun Records tracks were added. Users pay $9.99/40 tracks, $14.99/65 tracks, $19.99/90 tracks per month. Pakman said a lower price per download equates to more experimentation among users so in that way, subscription complements the non-mainstream concept of the site.
The two of them disagreed about the direction of subscription services: Cohen says they will eventually dominate the market but Pakman – even though eMusic is built on them – says they will always be a minority of the market.
Clive Mayhew, general manager at Destra Media in Australia backed up the subscription model and criticized major content owners for their lack of innovation. In partnership with 3, Destra’s unsigned music service for mobile started in Australia – the UK version launched on 17 May with 85,000 people subscribing in the first two months. 3 charges AU$3/
This article originally appeared in MediaGuardian.