Digital Audio Insider -- the economics of music and other digital content

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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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May 27, 2009

Less Digital Breakage for eMusic in Europe?
by David Harrell

Some more Q1 2009 eMusic downloads showed up in our CD Baby account yesterday. But instead of the 30.5 cent rate I wrote about last week, we received either 17.8 or 19.7 cents per track for this second batch of downloads.

CD Baby just confirmed that these smaller payouts were for our non-U.S. eMusic sales. After accounting for CD Baby's 9% commission, eMusic paid out the following rates for Q1 2009:

33.5 cents -- U.S.
19.6 cents -- France and Denmark
21.6 cents -- U.K.

This isn't, however, an apples-to-apples comparison. For the U.S., eMusic doesn't withhold mechanical royalties from its payouts to labels and self-released artists. That is, the 33.5 cent payout includes the mechanical royalty for each download, and labels are responsible for paying the music publishers/composers of each track. (My band hasn't recorded any non-original material, so I skip this step.) But outside of the U.S., eMusic makes a separate payment to Buma/Stemra for the mechanical royalty for each download.

I'm not sure what statutory mechanical royalty rates are outside of the U.S., but assuming they are similar to the current 9.1 cent base rate in the U.S., adding that amount to the label payout amount gets you fairly close to the U.S. payout rate. (I'm hoping the mechanical portion for our non-U.S. eMusic sales will eventually make its way to me via BMI.)

There is, though, another element to consider: eMusic subscription prices are more expensive outside of the U.S. This comparison is a couple years old, but it's probably safe to say there's still a premium for subscribers outside the U.S. And -- as explained in last week's post -- digital breakage by subscribers boosts the per-track amount eMusic pays to labels for each download.

So if the payout rates are fairly similar, despite the differences in subscription prices, the best explanation I can think of, assuming the same revenue sharing percentage, is that -- on average -- non-U.S. eMusic subscribers are less likely to let their downloads expire.

related: eMusic's Per-Song Payout for Q1 2009, More On eMusic Payouts

tags: digital music eMusic digital breakage mechanical royalties

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THE LAYAWAYS

Out Now -- "Maybe Next Year" -- The New Holiday Album:

"This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

"Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

O Christmas Tree - free mp3 lyrics and song details
Away In A Manger - free mp3

Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.

"...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

"Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

"...melodic, garage-influenced shoegaze." -- RCRD LBL

Where The Conversation Ends - free mp3
January - free mp3
Keep It To Yourself - free mp3

Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.

"The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

"Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

Silence - free mp3 lyrics and song details
The Long Night - free mp3

Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

"These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

Let Me In - free mp3
Ocean Blue - free mp3

Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

More Layaways downloads:

the layaways website