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News Wed May 09 2007

The Trouble With eMusic

The city of Chicago and it's citizens play prominent roles in the latest online music retailing brouhaha according to an article published on Yahoo. It turns out that at last week's NARM meeting (held in Chicago) there was the start of a mini revolt against eMusic. It turns out some record labels aren't that thrilled with the pricing policy/profit payout that eMusic has put into place. In a nutshell that policy is to keep costs low, sell songs on the cheap and pay out a smaller percentage than iTunes and other digital sites. According to CEO David Packman, "There's no question that eMusic pays less on a per-track basis than other a la carte digital services," Pakman says. But "it's not clear that 99 cents a song is the right price ... Music is an elastic good. If you lower the price, you'll sell more, and if you raise the price, you'll sell less." The hope was that eMusic would sell songs in such high volume that labels would be happy with the service. But with iTunes paying out $.70 per song vs. eMusic's paltry $.12 per song that arguement doesn't seem to be flying with certain labels.

Chicago's Victory label was the first to bolt, but now 6 more labels are rumored to be leaving eMusic. Despite being a fan of the service, Drag City's digital guru, Rian Murphy, also sounds the alarm, "I'm a subscriber of eMusic, and I love it," says Rian Murphy, head of digital sales for Chicago-based Drag City, who says he has no plans to leave the service. "But from the point of view of the label, the profit margin is greatly constricted, and it's a concern to anyone selling records. They would be better off being more equitable, or they will probably lose some labels. Everyone has to live."

This may be a case of the labels looking to pressure eMusic to re-negotiate or it may be the beginning of the end of a popular online destination for independent music.

 
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Feature Thu Dec 31 2015

Our Final Transmission Days

By The Gapers Block Transmission Staff

Transmission staffers share their most cherished memories and moments while writing for Gapers Block.

Read this feature »

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