June 3, 2009, 12:00 AM

eMusic.com and Sony collaborate on song sales

EMusic.com and Sony Music Entertainment have announced a joint gig. Sony will offer its back catalog of tunes on music subscription site eMusic.com. The agreement lets eMusic sell recordings that are at least two years old from all Sony Music labels.

Online digital music store eMusic.com Inc. and Sony Music Entertainment have announced a joint gig. Sony has agreed to offer its back catalog of tunes on music subscription site eMusic.com.

The agreement, slated to start in Q3, will allow eMusic, No. 153 in the Internet Retailer Top 500 Guide to sell recordings from all Sony Music labels, including Arista, Columbia, Epic, Jive, LaFace, Legacy Recordings and RCA, that are at least two years old. The companies did not announce terms of the deal.

“We welcome the opportunity to expand the reach of Sony Music catalog artists online to include eMusic’s large and passionate subscriber base. We look forward to working with them to promote discovery and sales of all the great music available from Sony Music’s recent past and legendary history,” says Thomas Hesse, president, global digital business, U.S. sales and corporate strategy.

EMusic is known for its large selection of music from independent labels and artists. This is the retailer’s first deal with a major label, an eMusic spokeswoman says, and eMusic will raise its prices and lower the amount of downloads included in some of it plans as part of the agreement. Currently, subscriptions to eMusic begin at $11.99 a month for a package that enables consumers to download 24 tracks. EMusic tracks can be played on any MP3 player and can be copied freely without restrictions.

The spokeswoman adds that eMusic is in talks with the other major labels-Warner Music, the Universal Music Group and EMI-to add tracks from those labels to its catalog.

For now, eMusic’s prices are still far lower than Apple’s iTunes-despite Apple’s move early this year to adjust its pricing to 69 cents for most songs, 99 cents for others and $1.29 for new releases.

At the time of that announcement, Apple also announced it would start offering music from the four largest record labels sans copying restrictions. Apple was selling music from EMI without the restrictive digital rights management technology, but had difficulty getting other big names to sign on, even though such labels offered non-protected tracks to iTunes eMusic competitors such as Amazon.com and Wal-Mart. Those e-retailers trail far behind iTunes in market share, while eMusic has more of a niche customer base and caters to music aficionados.

Labels have been more open to non-traditional and perhaps less profitable agreements as of late. For example, free music download service Qtrax recently announced it would offer tunes from all four major labels. Such free download services typically generate revenue from advertisements and share it with the labels.

The big labels are likely becoming more flexible because they’re facing stiff competition from companies like Live Nation. The concert promoter has been eating away at record labels’ profits with its 360 Deals with megastars that pay artists hefty sums up front-often over $100 million-in exchange for a cut of the profits from nearly all aspects of their careers, including touring, merchandise and recordings.

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