The Race For The Silver
A good post over at Alley Insider pointed me to a USA Today article about the battle for bragging rights as runner-up to iTunes in digital music sales. Amazon.com says it is number two. eMusic says it is number two. The USA Today reporter called up four majors -- who have no relationship with eMusic outside of equity ownership of some indies -- and they all said Amazon.com.
eMusic's David Pakman pointed out the number of tracks it sells every month -- about 70 million. But labels get less for each eMusic track than they do for each Amazon.com download. In terms of total billing Amazon.com could very well be ahead of eMusic. What matters most to record labels -- and pretty much every other company that I can think of -- is total billing, not number of units sold. eMusic's revenue sharing model typically pays out in the $0.25 to $0.30 per track range (some payout info at this post). Amazon.com is probably getting around $0.65 to $0.70 per track. If number of units were so important, I'd exchange paper bills for pennies and walk around feeling like a king.
And if Amazon.com's entry and ditching DRM hasn't caused a noticeable spike in download sales, so what? There wasn't going to be an immediate reaction. Trends in music are long term. Download trends aren't like the stock market, which jumps every time the Fed chairman blows his nose. Consumers take time to adjust their shopping habits. I fully believe that selling only unprotected files will help sales in the long run -- new ideas, new stores and services, more entrepreneurship -- but not so much in the short run.
Music Groups