Comments on: eMusic economics http://gonze.com/blog/2008/07/17/emusic-economics/ internet music technology since ~2002 Sat, 31 Jul 2010 19:34:38 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Lucas Gonze http://gonze.com/blog/2008/07/17/emusic-economics/comment-page-1/#comment-634 Lucas Gonze Sat, 19 Jul 2008 00:35:04 +0000 http://lucasgonze.wordpress.com/?p=284#comment-634 Here's a relevant anecdote: http://money.cnn.com/2008/07/15/technology/emusic.fortune/?postversion=2008071614 : ... Jesse McCann, digital operations manager for Allegro Media Group, a music distribution company in Portland, Ore., says his company makes about the same amount of money selling songs on eMusic as it does on iTunes: "I'd say our eMusic check is about the same as our iTunes check." ... Here’s a relevant anecdote:

http://money.cnn.com/2008/07/15/technology/emusic.fortune/?postversion=2008071614 :

…
Jesse McCann, digital operations manager for Allegro Media Group, a music distribution company in Portland, Ore., says his company makes about the same amount of money selling songs on eMusic as it does on iTunes: “I’d say our eMusic check is about the same as our iTunes check.”
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]]> By: Jon Healey http://gonze.com/blog/2008/07/17/emusic-economics/comment-page-1/#comment-631 Jon Healey Fri, 18 Jul 2008 17:49:15 +0000 http://lucasgonze.wordpress.com/?p=284#comment-631 I've been an eMusic subscriber for several years. It has led me to spend far more on music than I would otherwise -- and I can't even listen to it all, much to my chagrin. I've gotta find a more mindless job.... (Go ahead, say it.) That's why I think you're completely on the money when you say looking at per-track revenue is the wrong focus. Instead, look at dollars extracted per listener. The subscription model works exceptionally well, IMO, at prompting people to download albums or artists that they wouldn't otherwise have spent money on. Once I've ponied up my monthly fee (or, in my case, my annual one), there's no incremental cost to me to download tracks up to my monthly limit. There's just what you might term an opportunity cost, especially when it comes to choosing the final songs to download. So I'm *much* more likely to take a flyer on a band just because I like other bands on the label. I concede that eMusic's appeal to an artist or label will depend to some degree on its chances for success on the full-price outlets. That's why I don't complain when a label delays a release while it tests the waters at iTunes and Amazon.com. But again, it's a mistake to think that $120 or $150 spent annually at e-Music is replacing 12 or 15 album purchases iTunes or Amazon, or that labels are getting 30 cents a track in lieu of 70. The offer from eMusic is more compelling that the alternatives. That's why it makes people like me spend more than they would otherwise. I’ve been an eMusic subscriber for several years. It has led me to spend far more on music than I would otherwise — and I can’t even listen to it all, much to my chagrin. I’ve gotta find a more mindless job…. (Go ahead, say it.) That’s why I think you’re completely on the money when you say looking at per-track revenue is the wrong focus. Instead, look at dollars extracted per listener.

The subscription model works exceptionally well, IMO, at prompting people to download albums or artists that they wouldn’t otherwise have spent money on. Once I’ve ponied up my monthly fee (or, in my case, my annual one), there’s no incremental cost to me to download tracks up to my monthly limit. There’s just what you might term an opportunity cost, especially when it comes to choosing the final songs to download. So I’m *much* more likely to take a flyer on a band just because I like other bands on the label.

I concede that eMusic’s appeal to an artist or label will depend to some degree on its chances for success on the full-price outlets. That’s why I don’t complain when a label delays a release while it tests the waters at iTunes and Amazon.com. But again, it’s a mistake to think that $120 or $150 spent annually at e-Music is replacing 12 or 15 album purchases iTunes or Amazon, or that labels are getting 30 cents a track in lieu of 70. The offer from eMusic is more compelling that the alternatives. That’s why it makes people like me spend more than they would otherwise.

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