eMusic CEO David Pakman has posted his thoughts on the state of digital music pricing on the company’s blog, defending the company’s pricing model as one that inspires fans to actually buy music.
“We want musicians to be fairly compensated for their work … and we wish we could say that the music industry was moving in a direction where it was finally doing that,” he writes. “But it isn’t.”
He points out that although CD sales are falling, CD prices have been rising. And he questions the 99 cents per-track model that has become accepted as the industry norm.
“The customer now decides which music is successful and how much they’re willing to pay for it,” he writes. “And, the truth is, our customers tell us that 99 cents a song is not the right price for most music – particularly for music that they haven’t heard of before.”
Pakman backs this up by saying that the average iTunes customer spends only $12 a year on iTunes, while the average eMusic customer spends $168 a year.
The blog was posted amid reports that some eMusic labels are dissatisfied with the company’s pricing model, which he addressed directly.
“Sure, on occasion, a few labels will come and go,” Pakman wrote. “And we wish them well. We love their music and wish they would work with us. Our model may not work for everyone. But one thing is for sure – if the model doesn’t work for customers, it doesn’t matter what the industry thinks.”