Business Matters: Inside eMusic's Lack of Subscriber Growth
Business Matters: Inside eMusic's Lack of Subscriber Growth

Inside eMusic's Lack of Subscriber Growth
-- While recorded music sales have moved from physical to digital formats, eMusic's subscriber base has remained unchanged over the last four years. "It has been flat," eMusic CEO Adam Klein told Billboard, confirming a report at Digital Music News that the company has had the same number of subscribers since 2007.

But there are some important asterisks at play here. While the company has not improved its number of customers, eMusic says the company has got more out of its existing customers. Klein claims the company has experienced a 22% increase in average revenue per user in the last six months.

That growth has come in part from some plainly visible changes: the addition of catalogs from all four major labels, a move to currency-based pricing, user interface improvements and the launch of the Access & Awards program.

Klein explains the company had an "inefficient, scattershot" approach to marketing when he joined the company in August. So instead of going ahead with plans for a major advertising and branding campaign, Klein had the company take a step back in order to better understand its customers. Four months of consumer research informed eMusic where they were and were not being successful, he says.

eMusic's research showed the company how its customers are different than other digital music consumers, he says. For example, 87% of popular music consumers get their recommendations from radio compared to just 7% of eMusic subscribers. And while 16% of the music downloaded by popular music consumers are albums, 75% of eMusic customers' acquisitions are full albums. "Ours are people who want to collect music, own it and learn about it in great depth," Klein says.

If all goes as planned, eMusic could experience subscriber growth soon enough. Klein says the company will roll out a different way of attracting new members in July and believes eMusic will see membership growth in second half of the year.
(Digital Music News)

Is the New York Times' Digital Pay Wall Working?
-- Citing a senior level executive at The New York Times, Business Insider founder Henry Blodget says the newspaper's digital pay wall is "working." Not "working" in the sense that people have acknowledged a superior value and convenience of digital delivery of the Times' products. Instead, "working" means charging for digital content (beyond the free access one can enjoy in small monthly doses) has encouraged people to start paying for subscriptions to the print edition.

"Even people who love their newsprint had to give serious thought to why they were blowing $600 for nothing," Blodget writes. "But now that the pay wall is in place, they at least don't have to feel like idiots anymore."

Unfortunately, Blodget, a former equities analyst who almost certainly understand the power of numbers, doesn't cite a growth rate in print subscriptions or the Times' current number of digital subscriptions. All he offered was the word "uptick" (as in "an uptick in print subscriptions") and a figure the Times had previously rolled out: 100,000 digital subscribers, many of which may have signed up at a embarrassingly low introductory price.

This is certainly an interesting way to measure success of digital products. Although digital certainly stands to be the Times' focal point in the distant future, there's still current demand for a (more lucrative) legacy product, print newspapers. And while the digerati will chastise the Times for clinging to its cash cow, there really isn't any other option until digital subscriptions become the main breadwinner.

The same legacy vs. digital dynamic is being played out in the music industry. Labels are growing (through fits and spurts) their digital businesses while allowing the CD to age gracefully without putting it out to pasture prematurely. The Times' boasting about an "uptick" in print subscriptions is like the record industry trumpeting an improvement in CD sales after raising digital download prices. Wait… that has actually happened.
(Business Insider)

PledgeMusic Expanding Stateside, Taps Former S1 Songs Exec Sabiston
-- U.K.-based PledgeMusic is expanding to the United States. Randy Sabiston, formerly the senior VP of creative at music publisher S1 Songs, has been named managing director for North America. Sabiston has also worked at Warner/Chappell Music Publishing, Polygram/Island Music Publishing and EMI Music Publishing. He will oversee operations at offices in New York and Los Angeles.

In this country, PledgeMusic is a less well known fan-funding platform than New York-based Kickstarter. But they both do pretty much the same thing, which is allow artists to raise money directly from their fans. PledgeMusic lists 233 current projects, including some by fairly well known artists like Juliana Hatfield, Margot & the Nuclear So & So's and Fun Lovin' Criminals.
(Music Week)