Long story (and longer comment section) short, eMusic signs a deal with Sony to offer some 2+ year old music to their customers and in return they cut the number of downloads their users have in half.  Now, if you aren’t familiar with eMusic, then you need to understand that the people that are members of this subscription service are looking for hard to find music that isn’t offered at your more well known outlets like iTunes or Amazon.  Now, apparently, you know more than eMusic did when they made this decision.

The real kicker is that they announced it in a blog post titled “More of the Good Stuff”.  Really? More of the good stuff?

It’s so surprising to me when I see a company that is having a great deal of success, has a strong following, and seems to have a good connection with their customers (they have an active blog and message board), and then they just totally blow it.  Now, eMusic probably has tens of thousands of users, maybe many times that, but is now the right time to risk losing thousands of those customers?  There are over 650 comments on the announcement post, the vast, vast majority of which are negative.   Many state that this move assures that they are going to cancel their account.

It doesn’t take a lot to come up with some alternatives for how this could have been handled.  I’ll go over a couple below, but these are the types of decisions that make me wonder how the company became successful in the first plae.

Add Content Now, Delay Price Increases for Grandfathered Users

Really, how hard is it to figure this one out?  Add the Sony content on schedule, but announce that the price will increase at the end of the year (or some other arbitrary date).  It doesn’t have to be a long, long time, but the month notice that eMusic offered is without question too little time.  eMusic claims that they were already losing money on every download from the larger subscribers that had been around for a while and had been grandfathered, which could easily be true.  Would it be worth it to continue to lose money on those folks for another months before increasing the price, giving them the opportunity to get used to the new service, see if there is some value added to their experience, and when the price increase comes, they will have had time to get used to the idea.  Yes, the price still increases, but the customer doesn’t feel ambushed.

Add an Additional Membership Level / Package

This idea also makes a great deal of sense.  Give those users that want access to the new Sony songs (or even just a “premium” tier of labels) the option to get those songs, but at an additional charge.  WordPress.com does this very thing with the (in)ability to edit CSS, integrating sales widgets, and other similar features.  There are a couple of reasons that they wouldn’t go with this solution.  They could have decided it was too difficult to implement, but I have to believe that if you’ve already done all they’ve done to facilitate the downloading of music, adding an additional membership level couldn’t be that hard.  It’s a flag in the user database.

I think the  real reason is that eMusic had a real fear that the interest in Sony’s music wouldn’t generate nearly enough intereset in their existing user base, there wouldn’t be enough subscribers to Sony’s music which would be embarassing for both eMusic and Sony, and wouldn’t provide the revenue that either needed to make the deal work.

That’s why they went with the plan to convert all people to have access to the Sony music and increased the price of each download (in some cases from $0.18 to $0.42 each).  By ensuring that everyone has access, they almost guarantee that even those that aren’t that interested in the vast majority of the Sony offerings will at least give a few of them a try.

Is this good for eMusic, Sony or the customer?  I’d say “no” to all three.  eMusic is going to lose customers because there are literally hundreds (maybe thousands) of users that don’t want the Sony offerings and certainly don’t want to pay for the addition of something they don’t want.  Sony will lose out because there just isn’t going to be substantial demand on eMusic, they won’t be making as much per track, and I don’t think they are going to see the volume they will need.  It may be that they don’t really care what they make per track, since this is basically all marginal profit seeing as how these are out-dated tracks and they aren’t seeing any new revenue from them anyway, but they are still getting a black eye by being the instigator in the meltdown of this community.  And the customers lose out because they are paying the same or more for half the tracks.

Lose, lose, lose. It’s a sad day for everyone involved.