Economics Lesson for eMusic

Paul Brown @ 2006-11-23T01:34:00Z

I've been a happy and active eMusic user for the past several months with a monthly subscription in their highest tier, and I bought a booster pack if I got bored mid-month and there wasn't anything really compelling on Bleep. On a per-track basis:

MONTHLY :: $19.99 / 90 tracks = $0.22 / track
BOOSTER :: $14.99 / 50 tracks = $0.32 / track

However, they recently reshaped their pricing and packaging; the new per-track prices:

MONTHLY :: $19.99 / 75 tracks = $0.27 / song
BOOSTER :: $15.99 / 30 tracks = $0.53 / track

The per-track price impact is a whopping 36% increase:

OLD :: $34.98 / 140 tracks = $0.25 / track
NEW :: $35.98 / 105 tracks = $0.34 / track

The aggregate price increase aside, the fact that the monthly subscription tracks and booster tracks are different goods (at least in that they have different prices) should have tipped eMusic that they might be shooting themselves in the foot. My new purchasing habits will be the monthly tracks only, making the pricing change a net decrease in revenue for eMusic of $14.99 — whoops. Hopefully someone there had heard of price elasticity and wasn't actually expecting to get 36% more out of me...

eMusic was doing a great job of nickel-and-diming me, but I'm not so fond of being dime-and-quartered as an encore.

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