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Can eMusic Survive The New Amazon Store?

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Second only to iTunes, eMusic has carved a significant niche in the scattered download marketplace with a subscription service offering plans starting at 30 tracks per month for $9.99. But how will Amazon’s new mp3 store effect eMusic; and how will labels who will be getting higher payouts from Amazon react?

eMusic has amassed an impressive catalog from many significant indie labels.  By offering an effective per track cost of $.33 or less, the service is an attractive a alternative for heavy downloaders who love independent music and want to consume it in a safe, legal and convenient environment. 

But Amazon is saying to consumers that they don’t need to buy a $10-$20 monthly subscription.  Amazon will sell you the tracks you want when you want them as DRM free mp3′s. The price is higher then eMusic – $.89 to $.99 per track and $4.99 to $9.99 per album – but often lower then iTunes. And Amazon carries music that eMusic can’t from Universal, EMI and others. Can’t find the mp3? Amazon will sell you the CD.

I wrote extensively about problems with the eMusic model back in May. Some notable labels like Vagrant Victory and Epitaph have already left over lower payouts. How long will others accept a share of eMusic’s $.33 or less when a download at Amazon nets them far closer to the $.65 they get from other sites?

The major labels will never embrace eMusic. But if Amazon’s payments, variable pricing and powerful brand are enough to entice the two remaining major labels to experiment with mp3′s, an eMusic subscription becomes even less attractive. 

eMusic is stuck between raising prices and driving away subscribers or loosing key labels unhappy with a lower payouts.

Amazon has changed the game and there is no clear way forward for eMusic.

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