Memo to the Future

eMusic’s Mistake: A Lesson for Music Marketplaces of the Future

July 5th, 2009

Forgive the rant-ish nature of this post. eMusic and I have been through a lot over the last month and I just needed to put this out there and make my peace. I feel a little like Travis Coates taking care of Old Yeller.

We really had something magical, eMusic and I. Some rare symbiotic connection between corporation and customer that could have lasted a lifetime. But consider this an epitaph for what once was, because today I turned my back on our partnership and cancelled my account after more than three years of patronage. Let it be said that there is no bad blood, no ill will—we’re just another dynamic duo undone by the misdeeds of one half of the team. The recent missteps taken by eMusic are a lesson for all future music marketplaces, and so I say unto thee: heed this warning and you may just survive in a world where customer loyalty is the greatest form of currency.

The Ghost of eMusic’s Past

For those of you reading this in some distant future, eMusic was a pioneering force in the digital music marketplace. They provided access to a wealth of DRM-free music from small and independent labels at a consumer-friendly price—for many MP3 pirates, the cost of eMusic met the threshold necessary for them to give up their criminal life and legitimately support the labels and artists they might otherwise be ripping off. (It’s a sad truth, I know, but let’s save the discussion of proliferation and the value of content in a digital world for a different day).

The point is, eMusic had something pretty great going. They amassed a customer base of more than 400,000. Their sales data was a proud proving point for Long Tail theorists. More people were purchasing a much more diverse mix of music as a result of the exceptional music discovery and recommendation features eMusic consistently improved over the years. All of these gains were built on the backs of small labels that wanted to increase their reach in a marketplace devoid of major label music dilution. And I never hesitated to renew my annual subscription despite a few gripes I have with their system—monthly download allotments are a use-them-or-lose-them inconvenience, for instance, and artists or labels will occasionally drop out of eMusic’s available catalog. Gripes aside, the service had become a fantastic resource for independent music lovers like myself, and I was more than happy to pay my fees and suckle at their teat of independent tuneage.

Jumping the Shark

But all of that changed when eMusic CEO Danny Stein delivered a turd message to the eMusic community at the end of May: Good news! We’re going to add Sony’s back catalog (2007 and older), we’re going to double our rates, and as a result we’re going to drastically reduce the number of downloads you’re alloted per month. Oh, and we’re also going to create a confusing and needlessly wonky method for you to exchange your newly reduced download credits that will change from one album to the next.

But, hey! Old Sony music!

Adding insult to injury, I discovered Stein’s posting and the proposed changes to my account days later when I visited the site to do some music browsing. There was no direct e-mail explaining the change and new account terms, no details on how the price increase would positively impact the small labels I was there to support, and they certainly weren’t addressing the company’s previous policy of “grandfathering” long-held accounts.

Nothing Gold Can Stay

Now, I recognize Robert Frost’s timeless truism that “nothing gold can stay,” but man—a buried blog post is not how an evangelical eMusic foot soldier wants to hear about fundamental changes to the philosophy and business practices of a company they’ve been cheerleading for years. What made eMusic great was what separated it from other digital music marketplaces: a good catalog of independent music pooled together in one place and available for purchase at an incredibly low price.

Too low? Maybe. But the price point was also part of what made eMusic’s model successful: low prices removed the barrier to buy unknown artists and enabled listeners to gamble on a variety of music outside of their previous tastes. Editor picks, custom album lists, and community reviews were created to push listeners “farther down the tail” where they tapped into artists and genres of music they might have otherwise overlooked. On a personal note, I have eMusic to thank for all the ambient electronic music I now listen to while taking cold baths and staring listlessly out a window onto the streets of my decaying urban hellhole. (I’m kidding—my urban hellhole is awesome!).

Despite my emotional attachment to their previous and rather pristine business model (of which I would have been a lifelong customer, ahem), I recognize the fact that eMusic is, first and foremost, a business. I understand that businesses need to grow and diversify and sometimes that means an increase in cost for increased benefits. But if prices had to rise, what about making the upside consistent with your marketplace? There are dozens of labels for which I would gladly pay extra. Sub Pop and Warp are just a couple, and polling the community would certainly produce a number of overlooked (or underpaid) labels ready to make the leap into the eMusic marketplace for increased rates. But no, that would not be the way forward.

Are you listening, future music marketplaces? Because herein lies eMusic’s mistake: they took their distinction in the market and diluted it by adding major label music and increasing the cost of entry without explicitly improving the upside for their most faithful customers.

Rationalizing the Irrational

I was not alone in my unhappiness as I trolled Danny Stein’s post for nearly a month, reading more than 1,500 comments from equally upset customers waiting for a proper response from eMusic. Most of my sentiments about the changes are reflected there—frustration with such a dramatic cut to download credits; inclusion of Sony releases I already own or care little about; muddying of the site’s music charts and the reduction of their new music discovery value; and the overall feeling that we had been betrayed by some back-room deal that would erode everything that made eMusic unique.

I went back and forth over the course of the month. I tried to rationalize the prospect of paying more for fewer downloads and continue my support of eMusic’s marketplace in spite of the price increase that felt so clearly tied to Sony’s content. I wanted eMusic to reach out to its obviously impassioned community and explain, in detail, how this move made sense for the model that they have built and that thousands have subscribed to over the years. I expected announcements proudly touting new independent label inclusions as a result of the price change, the kind of content boost that would make long-time subscribers celebrate. But none has come.

Reconciling with Reality

After a long month I’m now stuck with the feeling that eMusic isn’t exactly the same company I signed on with three years ago. I’m not convinced that the extra money I would be paying would go to the indie labels I’d like to support. And eMusic hasn’t bothered to come out of their bunker to describe in plain terms how this price increase is going to positively affect the bottom line of labels other than Sony. Maybe those details are forthcoming, and maybe some of the more elusive indie labels will jump on board in the near future, but I’d rather not see my money go to waste in the meantime.

So I cancelled, and my cancellation comes down to the fact that I don’t want my extra cash to prop up eMusic’s marketing department or drop coin into Sony’s pocket for the back catalog material I’ve already purchased from them. I joined eMusic to support small labels and independent artists, and to discover great music with limited risk thanks to the low cost of exploration. I left because eMusic stayed silent at a time when their best customers are asking important questions about the direction of the business they’ve been supporting for years with their hard-earned money.

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