Tuesday, January 23, 2007

eMusic a success?

eMusic, the digital music download service, says it is eyeing Asia after a successful launch across Europe last year.

eMusic became the first service to launch in all 27 European Union member states when it kicked off in September, taking on iTunes in some of the big markets such as Britain and Germany.

In its search for further expansion, New York-based eMusic is looking toward Asia--and Japan in particular.

"Aggressive international expansion is on the calendar for us. The Asian markets are interesting, but they're challenging."

eMusic said it believes it is now Europe's second biggest digital music service, although there were no official industry figures to confirm this.

"In 150 days since the launch, we've sold 4.5 million tracks. And we think that makes us the undisputable No. 2," Chief Executive David Pakman said late last week.

eMusic is second to iTunes in the U.S. market, putting it ahead of well-known brands such as Rhapsody, MSN Music, Napster and Yahoo. Last month, it sold its 100 millionth track in the U.S.

eMusic differentiates itself as the only company on a large scale delivering songs in the MP3 format, meaning they can be played on any portable music player, including the Apple Computer's iPod.

Apple's iTunes can only be used with an iPod, and music from other legal services such as Napster or Rhapsody cannot be used on the mass-selling device.

eMusic's policy of making tracks available to all formats has not resulted in any of the four major music companies, which are responsible for about two-thirds of the music sold worldwide, supplying to the service.

Pakman said he is still talking to the four companies: Vivendi's Universal Music, Sony BMG, EMI Group and Warner Music. But until they agree to distribute in the MP3 format, Pakman said, eMusic will not carry their songs.
Instead, eMusic offers some 2 million tracks from 13,000 independent labels covering jazz, blues, classical and everything in between to its 250,000 subscribers.

And Pakman is not complaining.

"The older consumer is terribly underserved by retail today, yet it is the only segment that is still buying music in meaningful numbers," he said, explaining that older consumers are less likely to opt for illegal services. "It's better to have a more diverse selection and cater to a lot of people's taste."

eMusic also offers advice from a team of 120 music experts, and subscribers can rate and review songs.

"We have a 2 million-track catalog and just over two-thirds of it sells every quarter," he said. "We spend a lot of time guiding people."

The company now has Asia in its sights.

In a report released last week, international trade body IFPI said Japan is the first market where the growth of digital music had made up for the loss in physical sales.

But according to Pakman, some 70 percent of the music sold there is indigenous Japanese music and each label would need to be licensed before it could be sold on the service.

Music experts would also need to be signed up for a Japanese unit and any launch could take a couple of years to prepare.

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