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Resnikoff's Parting Shot: Is eMusic Jumping the Shark?

Monday, June 01, 2009
by  presnikoff

Is the eMusic that music aficionados love going buh-bye?  The arrival of a major label may not seem like a big deal, especially since legacy catalog is involved.  But the content ingestion involves Sony Music content as young as two years old, hardly the dusty catalog of yore.  It also involves songs from huge artists, including Michael Jackson and Outkast, hardly the lost gems that eMusic is known for.

Now, eMusic is aiming to incorporate a lot more major label content, according to chief executive Danny Stein, a move that threatens to disrupt the niche appeal.  "They now want to be iTunes, Jr.," one top executive observed.

But has anyone succeeded at that mission?  AmazonMP3 is probably the biggest example of a disappointing attempt, though the terrain is littered with endless download stores with just a sliver of iTunes' share. 

And doing the major label dance requires raising the subscription price for fewer monthly tracks.  In other words, Sony is doing more than just licensing its content, it is also dictating business model specifics.  And what changes?  Instead of 30 songs for $11.99, fans will soon get 24 songs.  Instead of 50 downloads for $14.99, the new math lowers the take to 35 and ups the price to $15.98.  

And that is something no indie could ever do.  When Victory Records pulled its catalog to protest the lower per-track price tags that came from subscription-based downloads, eMusic refused to budge.  After Victory chief Tony Brummel took his ball and went home, then-eMusic chief David Pakman stuck to a game plan that included sub-$1-per-track values.  "We think the music industry must support varied business models and value propositions in order to grow again," Pakman stated at the time. 

That meant tracks dipping below a quarter at times, well below the 99-cent standard.  That is certainly more value, though Pakman's vision wasn't wealthy enough, and Stein is now running the show.  That means broader and more mainstream content, and a diversification beyond the aficionado set.  But does tipping the cart on niche ever result in bigger income?  Or is it better to simply maximize a well-groomed, modest audience?

The marketplace suggests that targeted audiences give more, at least on a per-subscriber basis.  Even iTunes is a relatively poor cousin to other Apple moneymakers, iPods and iPhones.

Perhaps eMusic will put its curating hat on right, and deftly blend the mainstream with the niche.  That was something Pakman was actually anticipating ahead of his departure, particularly as majors started shifting towards MP3s.  But more likely, this is a show that jumps the shark, and alienates core viewers in the process.



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