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A Music Download Site for Artists Less Known

September 20, 2004
By LAURIE J. FLYNN





The Internet has long carried the promise of being an
outlet for new writers, artists and independent musicians.
But to David Pakman, chief operating officer of eMusic, an
online music service, that promise has not yet panned out.

Indeed, for many musicians not affiliated with one of the
major record labels, Mr. Pakman says, it has become
increasingly hard to get noticed on online music stores,
which tend to sell the same music as the megastores.

EMusic hopes to change that. On Wednesday, it plans to
start an online music service that will give independent
musicians a place of their own.

The site will sell only music from 3,700 independent
labels, a total of a half-million tracks. The aim is to
help fans locate the small, the obscure and the eccentric;
help musicians find their fans; and grab a chunk of the
more than $2 billion in revenues generated annually by
independent music labels.

"What has been missing for indie music, until now, is a
service completely devoted to the discovery of new or
established independent artists," Mr. Pakman said. He added
that while "many indie labels and artists feel strongly
that the Web, in general, has provided many advantages in
communication, marketing, promotion, and even sales," it
has not leveled the playing field.

Still, with the demise of independent radio stations, many
musicians have had to depend on word-of-mouth on the
Internet to gain an audience.

In 1999, the eMusic site began charging for each song
downloaded, but it switched to a subscription plan the next
year. In 2001, Robert Kohn and Gene Hoffman, the founders,
sold eMusic to Vivendi Universal, which sold it last year
to Dimensional Associates, the private equity arm of JDS
Capital Management. Danny Stein, chief executive of
Dimensional Associates, also is chief executive of eMusic.

Mr. Pakman, who is Dimensional Associates' managing
director and chief operating officer of eMusic, said that
eMusic was losing money when his company bought it, even
though it had a strong following among independent music
fans.

When the new service starts this week, eMusic will look as
much like a magazine as an online music service, Mr. Pakman
said, with an assortment of reviews, recommendations and
columns.

A new editorial staff led by Michael Azerrad, a rock writer
and leading advocate of independent music, will cover all
niches, including jazz, folk and rap.

The emphasis will be on helping users find music they like,
and connecting them with other fans who like the same
thing. On other sites, Mr. Pakman said, "you can only
finding it if you're looking for it."

The site has 70,000 paying subscribers, a number Mr. Pakman
said he hopes to expand. Rather than charging per song,
eMusic charges monthly subscription fees ranging from $10
to $20, for 40 to 90 downloads. Most major sites, including
iTunes from Apple and the new music service from Microsoft,
charge 99 cents a song; eMusic customers end up paying
about 25 cents a song.

Because eMusic's audience tends to include very active
collectors of independent artists, the subscription model
makes sense, Mr. Pakman said.

"Our users consume a disproportionately larger number of
downloads," he said. "They're die-hards."

A major difference between eMusic's service and other
online music stores is that the tracks are delivered in the
unprotected MP3 format, which means the number of copies
that can be made after a song is downloaded is not
restricted. For many new bands, the exposure they gain by
allowing their music to be shared makes up for the fact
that they may not get paid for every copy of their songs.

The unprotected format also means that the songs will play
on all portable music players, including the Apple's iPod.
To enhance its appeal, eMusic also records live
performances around the country, making the tracks
available immediate after a show.

The subscription model for music services is small but
growing, and many industry analysts predict that most
online music will eventually be sold this way.

RealNetworks already has 550,000 subscribers to its music
services; America Online has 260,000 subscribers to
MusicNet; and Musicmatch, which was just acquired by Yahoo,
has about 225,000 paying subscribers.

As it is, eMusic faces stiff competition. All the major
online services offer catalogs of independent music, with
their more mainstream fare. For example, iTunes offers
songs from more than 600 independent labels, and
RealNetworks says that more than half the tracks on its
site are from independent labels. But in nearly all cases,
the bulk of the songs customers actually buy come from the
major labels, and it is the big names that are promoted
most heavily.

On the eMusic site, however, the independent labels do not
have to fight the major labels for the attention of
consumers. "If you're an independent band, it's more likely
you'll get exposure than you would otherwise," said Josh
Bernoff, an analyst at Forrester Research, a market
research company.

http://www.nytimes.com/2004/09/20/technology/20music.html?ex=1096701599&ei=1&en=\
b984bf05a3adc775


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