eMusic is in talks with other majors after Sony deal

June 1, 2009

Long time independent digital music retailer eMusic has finally got its mittens on some major label music after signing a deal with Sony Music Entertainment — and the company says it is still in talks with other majors like Universal Music, Warner Music and EMI to see if it can get more.

From the third quarter eMusic will have catalog from names like Bruce Springsteen, The Clash, Johnny Cash and Outkast. Catalog music here means songs older than two years.

eMusic, which is an independent retailer owned by JDS Capital Management, competes in a tough market led by Apple’s iTunes and Amazon.com MP3. But it has has held its own and even claimed to be the No.2 digital music retailer on some measures in the recent past.

It has managed to gain market share by being the digital retailer of choice for music on independent labels focusing on the grown-up end of the market.

Some see this deal as the latest sign that the major labels are finally getting round to the idea of becoming more flexible and prepared to work with a wider range of retailers on less onerous terms licensing terms.

eMusic, for instance, sells its service as a subscription offering the ability to download 24 tracks for prices starting at $12 a month or 50 cents a song. This compares with the 99 cents a track that iTunes typically charges customers, though it does not tie customers into a monthly commitment.

But the music labels have recently struck deals with Napster allowing fans to stream all the music they want for $5 and get 5 song downloads for free. NY Times reported last week that the labels reduced their fee demands for music social networking site Imeem, which helped it survive.

About time you say? Well, some feel it may be too late as music sales continue to tumble. The music label model will likely change significantly over the next few years so much so that how much retailers charge customers for buying downloadable songs may become completely irrelevant.

(Photo: Outkast/Reuters)

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Worth noting that many eMusic users are threatening to cancel their subscriptions following the price increases that accompanied the Sony newshttp://www.emusic.com/messageboard/v iewTopic.html?topicId=173930

Posted by Richard Baum | Report as abusive