Music

Now that Amazon has opened a beta version of its MP3 store and everybody else has commented on it (see for example Hypebot’s roundup, as well as good takes from Duke Listens! and Digital Audio Insider) I wanted to revisit my earlier Amazon predictions. So without further ado here’s the scorecard: I predicted variable single track pricing from 60-75 cents for back catalog material, $1 for most material, and $2-3 for hot singles. Amazon instead seems to have opted for a standard price of $0.89, slightly undercutting the iTunes Store price for DRM-protected tracks, and significantly less than the iTunes Store price for DRM-free tracks. I predicted use of a single DRM-free format, namely MP3 at some high bit rate. This was an easy prediction, and I don’t deserve any credit for making it. I predicted that Amazon would offer variable pricing on digital albums, with album prices ranging from $2-3 at the low end to $10 at the high end, with the eventual maximum being in the $5-7 range. Amazon in fact is offering a limited form of variable pricing on digital albums, with most albums being $8.99 (again, slightly undercutting the iTunes Store) but some albums priced under $5. Note that these are true albums, not EPs; for example, Joanna Newsom’s Ys (only five songs, but they’re long ones) is sold for $9.99 at the iTunes Store but is only $4.95 at Amazon MP3. A less extreme example is the Decemberists’ The Crane Wife, a 12-song album that’s $9.99 at the iTunes Store but only $7.99 at Amazon MP3. I also predicted that Amazon would offer a discount on the digital album for people buying the corresponding CDs. This is not the case: If you want both the CD and the digital album you have to buy both separately at the standard prices. As I noted in my post offering such discounts on a regular basis would likely require changes to standard music licensing schemes, so their absence is not surprising. I predicted that Amazon would offer a sort-of-subscription plan with discounts (and/or free tracks) to people willing to commit to volume purchases. This is not part of the initial Amazon offering; Amazon has never offered this for books (to my knowledge), so it’s possible it may never be offered for digital music either. (Amazon does offer “club prices” for members of the CDNow Preferred Buyer’s Club. As I understand it, this is a function of Amazon’s having taken over operation of CDNow’s store, not an Amazon-native program.) Finally, I predicted that Amazon would leverage its existing technologies to provide two value-added services: backing up music libraries using Amazon S3, and personalized music recommendations using the Mechanical Turk service. Nothing like this is part of the initial MP3 store; in fact, Duke Listens! points out that Amazon currently doesn’t do a very good job of recommending new or future MP3 releases that might be of interest. Overall I’m a pretty poor predictor, although in my defense I was deliberately trying to be over the top a bit in terms of suggesting things Amazon might do to differentiate itself from existing services. ...

Last Sunday night I happened to be reading the eMusic message boards when I saw a [new post][new pos]") announcing the availability on eMusic of the new album [Kala][] from M.I.A. The original announcement was quickly followed by those ominous words familiar to all eMusic regulars: “get it while you can.” I followed the advice, quickly downloaded the album, and the next morning woke up to read the latest comment on the topic: “And, now it’s gone.” In this case it’s not really gone from eMusic completely, it’s just “unavailable for download in your country” (another phrase dreaded by eMusicians). ...

Reading one of Bob Lefsetz’s latest letters recently I found out about Universal’s plan to offer digital music in a DRM-free format (although not through iTunes). Lefsetz takes a somewhat jaundiced view of the situation, and in particular makes the point (which I mostly agree with) that the key issue for music buyers is price, not DRM. Hypebot takes issue with his pessimism and (among other things) sees abandonment of DRM as key to enabling more experimentation in music retailing. I agree with this too, but I also remember: Haven’t we seen an experiment like this before? ...

If anyone is still reading this blog, my apologies: I’ve been preoccupied with work and family matters and haven’t posted anything since May. In fact, things got so bad in terms of distractions that I had not one but two months in which I even neglected to use all my eMusic downloads (the horror!). I can’t promise to resume the posting frequency of certain times past, but I do have at least one or two new posts coming up in the next few days, and hope to keep additional posts coming on a semi-regular schedule. ...

From time to time I like to highlight eMusic-related business deals. Here’s a new one (not mentioned on the eMusic press release page): eMusic will be the featured music provider for Jump Music, a new service from Alltel Wireless that lets cellular subscribers download music from their PCs to their mobile phones. Alltel is the fifth-largest wireless provider in the US, and is rumored to be an candidate for acquisition either by private equity firms or by Verizon. (Both Verizon and Alltel use CDMA technology.) Although Alltel claims to have the largest wireless network in the US (based on geographic extent presumably, not on total number of subscribers) it’s not that well known because its main markets are in the “flyover states.” ...

In part 2 of my series “Sympathy for the labels” (see also part 1) I discussed the concern of labels that selling through eMusic lowers overall profitability by diverting sales away from the iTunes Store and other higher-priced outlets. Note that I’m referring here to labels that are realizing at least some profit from eMusic sales. As I wrote in part 2, labels that are losing money on every track sold through eMusic, e.g., due to fixed per-track mechanical royalties, should not be selling through eMusic, period. However even if a label’s eMusic-related sales are profitable, the label might still have a legitimate concern about whether those sales are supplementing sales through other services, or displacing them. ...

In my previous post I discussed the difficulties that independent labels were having in adapting to the new landscape of the music business, and whether eMusic management was being sufficiently sensitive to that fact in their dealings with labels. Beyond the emotional aspects of the indie labels’ issues with eMusic and the music business in general, there are also some serious questions as to whether the current eMusic model is an overall plus or minus for labels. There seem to be three related but distinct concerns here: ...

I previously commented on the Billboard article about labels’ unhappiness with eMusic, although I got some of the facts of the article wrong—an obvious reminder that I need to sleep on eMusic news before writing about it. The article was the subject of much comment on the eMusic message boards, to which I contributed in a small way. Having had some time to think since then, I’m ready now to expand my comments. ...

David Pakman (CEO of eMusic—but you already knew that, right?) has traditionally confined his public comments to press interviews. However in the wake of reports about some labels being dissatisfied with eMusic, Pakman has chosen to bypass the press and take his case directly to eMusic customers using 17 dots, eMusic’s official unofficial blog. His points are pretty much what you’d expect: customers don’t want DRM, they do want music to be less expensive, and the music industry needs to recognize these facts and adapt to them. I’ve previously commented on these points, and will do so again, but I thought for this post it’s more interesting to look at the why of Pakman’s post as opposed to the what. ...

I don’t normally do breaking news, because frankly I’m just too busy to keep track of what’s happening every day in the music business. However I’ll make an exception just this once given its potential importance: Billboard (in a story picked up by the Washington Post) is reporting that three out of eMusic’s top six 60 labels are considering pulling out of the service either wholly or partially (i.e., not offering newer releases). According to eMusic’s label page, the top six labels by downloads are Merge, Naxos, Matador, KOCH, Anti, and Fat Possum. Given its focus on low-cost offerings I think we can conclude that Naxos will not be among the defectors. Also, it’s possible that Fat Possum will be one of the defectors, since otherwise the story would have read “three out of the top N” where N was some number other than six. Hypebot previously named KOCH as being unhappy, so it may be a second defector. I don’t have time now to speculate which of Merge, Matador, or Anti might be the third. (OK, it’s clear now why I don’t do breaking news: because I can’t even read the breaking news articles, and make stupid mistakes like mistaking 6 for 60.) ...