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May 31, 2007

An Increase in eMusic Payouts
by David Harrell

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Some more eMusic sales showed up in our CD Baby account last week. It looks like they're from the quarter ending 3/31/07 and we received 27.8 cents a track after CD Baby took its 9% cut.

Adding that 9% back in gives a per-track payout from eMusic of 30.5 cents a track, the most we've ever seen for eMusic sales. (It might be an error, but there was also a single download -- supposedly from the same sales period -- that paid 18.9 cents from eMusic. If not a reporting error, the only explanation I can think of is a lower payout rate for the "free" tracks offered to trial subscribers and the bonus tracks subscribers can earn by referring new subscribers.)

That's a decent-sized jump from the 27.4 cents a track payout rate from our last reported eMusic sales.

There are some details about the eMusic model that I haven't been able to confirm, but per-track payouts to labels/artists are basically a function of the average track "price" for subscribers and subscriber download activity. If the per-song payouts are increasing, it's likely a result of an increase in average song price (based on subscription plans, which changed late last year), a decrease in overall subscriber usage, or some combination of the two factors.

Update: Just to clarify, the "per-song" price is simply another way of looking at total subscriber revenue, which is the basis for eMusic's sharing model. It doesn't really matter if you break it down to the individual track "price." While I prefer to think of it that way when analyzing the payouts, the basic equation for computing the per-song payout from eMusic is to divide the portion of total subscription revenue that is shared with labels by the total number of subscriber downloads for the time period.

One final note: these numbers are all for a self-released musician distributed via CD Baby. It's certainly possible that there are different payout rates for labels working directly with eMusic (or the Orchard).

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