eMusic will no longer offer songs from big labels, focusing only on indies starting Oct. 1
EMusic Returns to Indie Roots Amid Shift in Online Market — EMusic, a pioneering digital music store that has struggled to find its place in the rapidly shifting online market, has changed directions again.
Context & Ripple Effects
eMusic built its business as the indie-friendly alternative: it was already selling DRM-free tracks when the majors were still locking their catalogs, and its early positioning rode exactly the wave described in the Times' 2005 report on the web as a boon for indie labels. Its advantage collapsed once the majors themselves went open — Sony BMG's decision to drop DRM and Apple's expansion of the iTunes Store put big-label catalogs everywhere at commodity prices.
With no differentiation left against the scale players, eMusic has cycled through strategy changes for years, and this move is the logical endpoint: retreat from a fight it cannot win and re-own the niche where it started. The pickup across Engadget, Gigaom, and Ben Sisario shows how much attention a pioneering store's retreat still commands.
First-order effects
- From Oct. 1, eMusic subscribers can no longer buy major-label songs there, so customers who used the service for big-catalog purchases must shift those buys to iTunes or Amazon.
- eMusic's catalog and revenue base shrink immediately to independent labels, making the store's fortunes directly tied to indie supply.
Second-order effects
- Independent labels gain a dedicated retail channel whose entire inventory showcases them rather than buries them under major-label hits — pricing and promotion leverage shifts toward whoever controls that shelf.
- The major labels lose one more direct-sales outlet, pushing their download economics further onto Apple and Amazon, which can then dictate terms from an even stronger position.
Third-order effects
- Mid-sized download stores are being forced into the same choice eMusic just made: own a defensible niche or be squeezed out between platform-scale retailers and subscription streaming.
- If indie-only positioning proves viable, expect more services to differentiate on curation and catalog identity rather than price, since the majors' catalogs have become undifferentiated commodities.
The trend: Digital music retail is bifurcating, with scale players commoditizing the major-label catalog while survivors like eMusic retreat to curated indie niches.