Music

As is amply clear from recent postings on the eMusic message boards and comments on 17 Dots, eMusic pretty much made a hash of its announcement of the Sony agreement, angering current subscribers not just about the accompanying price increases but also the way in which eMusic CEO Danny Stein’s 17 Dots blog post addressed—or rather, didn’t address—those increases. While I’m quite unhappy about my personal eMusic habit more than doubling in price, I can also see the economic justifications for why eMusic did what it did. I thought it would be an interesting experiment to create a fictional letter to subscribers that Danny Stein might have written in some alternative universe. ...

Well, I significantly underestimated how far eMusic was willing to go in terms of changing its pricing to attract major label content. My personal guess was that Sony demanded a minimum price of at least $0.30 per track, but based on the new US pricing it appears that the new floor is actually $0.40 per track. More specifically, the plan changes are as follows: The eMusic Basic plan is still $11.99 per month, but has been reduced to 24 downloads ($0.50 per song) from the previous 30 downloads ($0.40 per song), or a 25% per-track price increase. The eMusic Plus plan is now 35 downloads for $15.89 per month ($0.45 per song) vs. $14.99 per month for 50 downloads ($0.30 per song) under the previous plan, or a 50% per-track price increase. The eMusic Premium plan is now 50 downloads for $20.79 per month ($0.42 per song) vs. $19.99 per month for 75 downloads ($0.27 per song) under the previous plan, or a 56% per-track price increase. The eMusic Connoisseur plan is now 75 downloads for $30.99 per month ($0.41 per song) or 100 downloads for $40.99 per month (also $0.41 per song) vs. 100 downloads for $24.99 per month ($0.25 per song) under the previous plan, or a 65% per-track price increase. Also, the new Connoisseur plans are available only as upgrades from another plan, and require a minimum 3-month commitment; previously the Connoisseur 100 plan was offered as an option at sign-up time, with no minimum commitment required. People with annual and 2-year plans will be moved to higher-priced plans when their old plans refresh. In my case the default choice offered is to move from my (grandfathered) Basic 2-year plan offering 40 downloads a month for $89.91 per year ($0.19 per song) to a standard Premium Annual plan offering 35 downloads a month for $171.99 per year ($0.41 per song), or a 119% per-track price increase. When downloading at least some complete albums with more than 12 tracks, only the first 12 downloads will be counted against the subscriber’s monthly quota. Booster pack downloads now range from $0.60 per track (when bought in packs of 5 or 10) to $0.50 per track for a pack of 50. I don’t have a complete record of the old pricing, but as far as I’m aware this is not a major change from previously. eMusic is offering a free one-time 15-track booster pack to subscribers who stay with eMusic past July. I’ll have more to say about the overall changes at eMusic in future posts, but for now I wanted to note a few additional points regarding the new pricing: ...

Danny Stein, eMusic’s new CEO, dropped some major news just now on eMusic’s semi-official 17 Dots blog. As reported in more detail in the New York Times, Sony Music Entertainment (home of Arista, Epic, Columbia, and RCA, among others) has decided to release its back-catalog material (anything over 2 years old) to eMusic—basically what eMusic management has apparently been urging them and other major labels to do for ages. (For example, David Pakman addressed this in several of his interviews.) ...

Bob Lefsetz recently published another broadside in his continuing crusade to drag the music industry into the 21st century. In this one he asked the following question: How long until there’s enough unfettered new music, tunes the creators control as opposed to the fat cats, that someone from the outside can roll up these rights and create a viable alternative to the established game? This I think is the key question, since I agree with Lefsetz that industry incumbents are extremely unlikely to innovate, and long copyright terms, existing contracts and statutory licensing arrangements, and political battles over compensation (e.g., regarding performance royalties for terrestrial radio) will slow down if not halt altogether any major revamp of business arrangements for existing works. In particular I doubt we’ll soon see Lefsetz’s preferred “all you can eat for one monthly price” scheme for legalizing P2P downloads of major label content—a skepticism shared by others. ...

In the latest of his Lefsetz Letters” (not yet online) Bob Lefsetz touches on the strategy behind Radiohead’s “pay what you want” album release: How do acts establish a direct connection with their fanbase? How do they entice listeners to join their e-mail list, with authentic e-mail addresses? That’s the number one lesson of Radiohead’s “In Rainbows.” Give away something desirable and you get the right to make contact with your fans thereafter. At MIDEM the co-manager of Radiohead said the “In Rainbows” release allowed the band to collect 3 million e-mail addresses, and ultimately play to 60,000 in San Francisco as opposed to 25,000 the previous time through. And isn’t live where it’s at? ...