eMusic Claims Niche as Indie iTunes

Digital music sales are exploding -- they've more than doubled in the past year --and as they do, Apple's iTunes continues to dominate the market, with eighty-three percent of all downloads. But an upstart service that caters to indie-rock fans and other music lovers has surged in popularity since 2004: eMusic, a service that sells music only from independent labels, has risen to number two, selling 4.9 million tracks a month, mostly on the strength of its cheap, listener-friendly subscription model.

"I was surprised at how cool it is," says Carl Newman of indie rockers the New Pornographers. The band licensed its music for an eMusic TV ad, part of a multimillion-dollar campaign that the company just launched. The ads focus on legends like Johnny Cash and Ray Charles, but the top sellers are indie-rock bands: Newman was happy to find old records from the Minutemen and the Meat Puppets and the new Animal Collective CD. "It's really set up in a good way," he says. "You buy something, and then you can look at other people's lists, and within a few minutes you find yourself really deeply into it."

Basic eMusic users pay ten dollars a month for forty downloads. Unlike any other major service, all music comes in an unprotected MP3 format, which means that tracks can be copied or burned to CDs as much as the owner likes and played on any MP3 player. And, distinct from subscription services like Napster and Yahoo!, the music doesn't disappear once you cancel the service.

"As the digital music market emerged, we knew this model would succeed," says eMusic CEO David Pakman. The service now has 150,000 members -- triple what it had a year ago. "If there's one problem, it's that not enough people know about it."

Although 2005 was a miserable year for the music industry as a whole, indie-music sales inched up. "With digital, the barriers to entry that kept independent music out of consumers' hands are falling down," says Danny Stein, CEO of Dimensional Associates, which owns eMusic as well as burgeoning indie distribution outlet the Orchard.

Although labels get more money per download from iTunes than from eMusic, savvy indies see the service as a valuable extension of the word-of-mouth marketing they have always championed. "It's good for us to have alternatives and not just be locked into iTunes," says Adam Farrell of Matador, the top-selling label on eMusic. "It's always been important for us to use more of a grass-roots approach."

eMusic's Top Five Album Downloads:

1. Cat Power's The Greatest
2. Johnny Cash's The Complete Sun Singles, Vol. 1
3. 100 Greatest TV Themes
4. Belle and Sebastian's The Life Pursuit
5. Creedence Clearwater Revival's Chronicle Volume One