eMusic cuts quotas

Cuts annual subs too

By Andrew Orlowski • Get more from this author

Posted in Financial News, 31st October 2006 17:43 GMT

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The No.2 legal music service, eMusic, is cutting the number of tracks Stateside subscribers are permitted to download each month.

The basic monthly allowance falls to 40 from 30 songs (a 25 per cent cut), the Plus allowance falls from 65 to 50 songs (a 23 per cent cut), while the Premium cap is down to 75 songs, from 90 - a 16 per cent cut.

Prices for all three monthly plans remain the same. eMusic is hoping that users of the hit service - it's the fastest-growing rival to iTunes - will upgrade to an annual plan, which are on offer at the moment.

(Subscribers can also buy booster packs.)

"We have a much bigger catalog than we had when we relaunched in 2003 - 1.7m songs as opposed to 250,000 - and the web site is much more sophisticated too," A spokesperson for eMusic in New York told us.

The economics of eMusic is complex. The service depends on the same logic as a health club, acknowledges CEO David Pakman - occasional users subsidize heavy users. If the average number of songs a subscriber downloads increases, there's a significant bottom line impact.

So was eMusic becoming a victim of its own success, we wondered?

"We still offer the best value out of any download service, 25 cents a track," eMusic told us, sidestepping the question. "We're offering people more so we feel can we can charge more for it."

Cuts to the 1-year and 2-year plans suggest eMusic wants to move its loyal customer base onto longer contracts. The price of these plans has been cut as the monthly quotas have been capped. Annual subscriptions range from 40 downloads per month for $124 per year to 90 per month for $244 per year. The top two-year option permits 90 songs per month for $359.82, equivalent to $14.99 a month.

Unlike rival subscription services, eMusic doesn't lock or time-bomb the songs with Digital Rights Management, so customers keep their music unhindered.

eMusic claims 12 per cent of the legal download market, behind Apple's iTunes Store. The new monthly plans take effect from November 17. ®

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