EMusic's Pitch: Download Song - and Own It
The smash success of Apple's iPod is paying huge dividends for a less-well-known music industry player, online retailer eMusic.
Apple has sold nearly 60 million iPods since 2001, and music fans regularly frequent the company's iTunes online store to buy songs for their iPods - giving iTunes a nearly 70% share of the music-download market.
Rivals Napster, Rhapsody, Yahoo Music and others compete with similar online offerings. Their songs don't play easily on iPods, however, hindering their growth.
Then there's eMusic and its more than 1 million songs, which do play on iPods - and the company isn't shy about letting customers know. "Get 25 free iPod-compatible downloads just for trying us out," eMusic says in its current TV ad.
Like Napster and Rhapsody, eMusic is a subscription service. Unlike those of its competitors, eMusic customers fully own the songs after downloading, with no restrictions. How does it do that? EMusic's songs are unprotected MP3s, which means they play on any device. Rivals sell copy-protected songs aimed at preventing unauthorized trading on file-sharing networks.
EMusic's supplying labels don't worry about such trading because eMusic users tend to be older, sophisticated music fans who are less likely to engage in online song-swapping.
Napster, Rhapsody and Yahoo have deals with the four major labels to sell the big hits. EMusic does not. It sells only independent label music, which it says is more popular than most people think. It cites statistics from the American Association of Independent Music that independents' market share of CD sales is 28%.
EMusic believes that copy-protecting files hinders sales, and that view is shared among many in the industry. Yahoo Music, for one, recently persuaded major label Sony/BMG to let it sell a song by pop diva Jessica Simpson without copy protection, as a test.
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