Link: Coping With Fury at a Price Hike

Inc. Magazine profiles eMusic and the way they dealt with their price hike last year.

Stein knew there was only one way to prevent even more labels from jumping ship: raise prices for subscribers. He also knew that eMusic couldn’t get away with another price hike without offering something in return. He sought ideas from his executive team and eMusic subscribers, and he held a series of focus groups. All the feedback pointed in the same direction: eMusic needed to broaden its catalog. And given that eMusic had nearly exhausted the universe of independent labels, Stein says, “It was pretty obvious that in order to take a big swing, we needed to start working with the major labels.”

I think the price hike was the right decision for emusic. Surely their plans weren’t sustainable. I suspect I made emusic very little with my 90-track a month plan, or I costed them money.

But it doesn’t quite address why a customer like me, who had an eMusic subscription for about 6 years, decided to leave.

I didn’t quit eMusic specifically because of the price hike, but the price hike revealed it sucks doing business in credits. Tracking credits is not fun. Sometimes I’d download all but one track from an album because I ran out of credits. I wouldn’t be able to complete the album until the next month.

Let’s put it this way: I had a reoccurring task in Omnifocus to make sure I used up all my eMusic credits each month. That’s not fun. It makes eMusic plans feel more like making car payments than discovering new music.

eMusic felt like work. It was a job I liked enough to stick around for until they moved my desk next to a guy who talks on speaker phone all day. I still did the same kind of work, but the environment changed. And I got other offers.

So I quit the job.

Digital Music Sources and Price Elasticity

Holy crap. You ever notice how many places you can grab music from these days? Almost too many.

  • iTunes
  • Amazon
  • Amie Street
  • Lala.com
  • eMusic

And more.

So now when I want to buy something new there are five sources to check. Why not just get everything through iTunes? Because other places might have it cheaper. Not a few cents cheaper, but dollars.

The album I want may be in an Amazon Black Friday sale. Or it may be from an unknown artist, therefore even less than that on Amie Street. But wait, I still have all those eMusic credits I have to use up in 30 days.

WTF?

Years ago I thought $9.99 was great for an album. Now I find myself browsing $5 albums just because they’re marked down, or delaying the purchase of a new album because Amazon might have a daily deal on it.

And there’s still free.

Competition is good, but is it any wonder that it’s hard to get people to buy downloads when there’s so many options and variable pricing?

eMusic and Netflix Cancellation Messages

With both eMusic and Netflix you can choose to cancel an account or simply put it on hold until you decide to come back. What’s interesting is how they both approach the same thing.

If you cancel eMusic you get this message:

emusiccancel2.png

Which is wrong anyway. The whole reason I decided to cancel my account is because I have no special pricing anymore compared to other eMusic plans.

eMusic also tries to convince you to stay with the following message:

emusiccancel.png

Netflix approaches this from the other way. If you choose to put your account on hold you can still add to your queue and browse through the movies – you just won’t receive any.

This is what’s displayed at the top of each Netflix page you visit during this time:

netflixonhold.png

I don’t know if it’s still the same, but years ago I canceled my Netflix account. When I decided to start it up again Netflix retained my queue and ratings. Creepy? Maybe for some sites, but my ratings on Netflix had enough value towards recommendations to justify keeping them in the system.

So where Netflix seems to make it easy to come back after a cancellation, eMusic tries to make it painful to even leave. I don’t think it’s difficult to see which approach is more likely to retain customers in the long run.

eMusic’s Credit Economy – Feel the Pinch

Here’s another annoyance with eMusic.

eMusic's Credit Economy Problem

You can click-through to the Flickr page if you need to see it bigger, but basically this is a screenshot of the new Vitalic album on eMusic. It’s also a good demonstration of how eMusic’s credit economy is broken.

For starters, most albums now cost 12 credits – which is alright because it usually aligns with eMusic’s entry-level plans. But this album costs 13 credits. That 13th track is 31 seconds long. There isn’t even a preview.

Don’t they see how this is obnoxious?

Sure, it’s only 1 credit – but at the end of the day I don’t want to manage credits. When I buy something I want to do an apples-to-apples comparison. I want something with a dollar sign. eMusic, Microsoft, and others don’t want that – which is why they make you buy points good for the content they sell.

1 credit wasn’t a big deal back in the 90-credits a month days. But with the new plans you can feel the pinch.

The (eMusic) Final Countdown

Earlier this year eMusic changed their pricing plans. For years I had been on a 90-download per month plan. The time on my yearly plan is almost at an end and I’ll need to decide whether to resubscribe at the new rates or ditch eMusic for good.

Screen shot 2009-09-27 at 1.53.45 PM.png

For years I had been one of eMusic’s biggest cheerleaders. When they had 40 downloads for $10 a month it made a lot more sense to spend that then try to find music through P2P, especially when it was something more obscure. Working out at about 25¢ per download it was more valuable than iTunes.

But things have changed in the past few years. For starters, I joined eMusic back during the days when iTunes music was DRM’d. iTunes has dropped DRM and the encoding is better (eMusic is typically LAME MP3 alt -preset -standard, about 192kbps. iTunes is 256kbps AAC). Just about anything on eMusic can be found on iTunes. On top of this, Amazon is now in this marketplace with their sights set on iTunes – not eMusic.

eMusic is still less expensive than either of these. The current equivalent of my old plan is 35 downloads a month for $15.89 – 45¢ a track.

But eMusic hasn’t ever really been about music retail – at least for me. It’s been more about trying and discovering new music than anything else. Users were given a generous amount of credits. If you didn’t use your download credits you lost them, which meant that at the end of each month you might download stuff because you liked the album art or because you thought the band name was cool.

Even though the new plans are cheaper, they’re not low enough to encourage the musical playground that eMusic once was. I almost never regret buying an album from iTunes or Amazon. It costs more, so my purchases are more carefully considered. I don’t know for sure whether I actually like the music more or I subconsciously equate higher price with higher quality (hint: I’m pretty sure I do in some way). Those purchases are more hit than miss.

With eMusic whatever you download has to fit into their credit plan (which is weird, because full albums are now counted as 12 credits. Why offer a plan that’s not a multiple of 12?) – so there’d be more misses than hits, but it didn’t matter as much because tracks were a fraction of the cost. You want that kind of freedom? Rhapsody and Zune Pass look very compelling in comparison.

Plus, one has to think a little bit about eMusic’s explanation for the price increase:

We understand that the new price per download is a significant adjustment for some of you. The new pricing allows us to pay all our labels, and their artists, more and we hope will attract some of the great labels subscribers like you have been asking for. You can always choose a different plan by visiting the Plan Options page within Your Account.

“And we hope will attract some of the great labels subscribers like you have been asking for.” There’s no guarantee you’ll see Sub-Pop on eMusic, but they’re trying.

But think of it from Sub-Pop’s perspective: their catalog is strong enough that they don’t need eMusic and the lower cut they’d get. If most listeners will downloaded it through P2P anyway, why cut into profits from listeners who’ll pay for music by selling it to them for less through eMusic?

In fact, some of my favorite labels seem to be leaving eMusic. Some labels, like Warp, only put their old stuff on eMusic (with the exception of the latest Grizzly Bear, which isn’t very representative of Warp’s catalog anyway and was held for months before becoming available on eMusic).

Take all this into consideration and there appears to be little incentive to keep an eMusic plan.

Link: eMusic CEO Explains Controversial Price Increase, Sony Deal

Wired interviews eMusic CEO Danny Stein about their recent price increases and the addition of Sony’s back catalog.

Wired.com: What do you have to say to longtime subscribers who are so upset about prices going up?
Stein: We knew it was going to be tough breaking the news about the price increase, so we’ve been listening to all the reactions. We appreciate that our users have such a strong connection to eMusic and are very passionate and vigorous music fans. As I said at the top of this call, the price change is something that all of our labels have been asking for, for a long time, and it’s really a necessary move for us to maintain a viable business. Not only that, but to support the independent label community and their artists, through royalties. We still offer one of the best values for digital music. We’re about 50 percent cheaper than iTunes and Amazon. And we hope those people will stick with us and see what we do with the Sony catalog and all the other labels that we may get in the future. We hope that they’ll give it a shot and stay.

Many eMusic subscribers are upset about their announced price increases that more than double the price per track they got before. However, surely there are subscribers that saw the writing on the wall with 24¢ tracks and labels like Epitaph pulling out.

50¢ for a track isn’t that bad, but it still stings when you’ve been getting them for less than half that.

Link: Sony Adding All Songs Over Two Years Old To EMusic; EMusic Raising Prices [Cheap Music]

Sony is coming to eMusic, and eMusic will raise prices.

This is the first I’m reading about the price increase. I haven’t received an email about my plan changing – I’m on an annual plan so I’m not sure they can do much until I resubscribe in the fall.

Today eMusic will announce that Sony is adding its back catalog of songs to eMusic’s library. The bad news is that eMusic also plans to slightly raise prices and/or drop the number of downloads per month. Even if it works out to between 50-60 cents per track, though, that’s still far less than iTunes Music Store or Amazon, and probably the cheapest way to grab music from Sony artists without resorting to piracy.

Having been grandfathered in to eMusic’s 90 downloads per month plan at $20 (which is a really sweet deal) I suppose I should’ve known that it wouldn’t last forever.