eMusic Confronts Possible Label Defections, Pricing Debate Continues

eMusic is now battling allegations that a number of labels are considering a departure.

The issue first bubbled in Billboard, which alleged that “at least six eMusic partners” were planning “to pull their catalog from the service entirely or to limit content to back catalog tracks.”  The moves would be a reaction to a new, super-sized subscription bundle that lowers per-track pricing considerably.  In response, eMusic strongly questioned the credibility of the report, and rattled against the publication, though defections already appear to be happening.  “eMusic has raised its concerns about the reporting and accuracy of the Billboard piece with the publication’s management,” the group noted on Monday.  “eMusic does not know the identity of the six anonymous labels … and finds it curious that they were not named.”

The controversy actually dates back to early April, when eMusic unveiled its new “Connoisseur” packages.  The larger plans require higher monthly subscription fees in exchange for more downloads, though the bundles force pricing as low as 25-cents per track.  That has already caused independent Victory Records to exit, a move that capped a short-lived, multi-month relationship between the companies.  Meanwhile, the pricing debates are somewhat theoretical, especially considering that few eMusic subscribers maximize their monthly allotments.  And labels may eventually be forced to position their songs at lowered price points online, especially considering the extreme competition posted by competing entertainment packages and free downloads.  “Questions about pricing are in reality part of a larger debate about what consumers are willing to pay when an expanded range of entertainment forms – including movies, DVDs, and videogames – are competing for a slice of their wallet,” commented eMusic head David Pakman.