eMusic to challenge iTunes with Europe service

Apple’s dominance of the online music market in Europe will be challenged on Tuesday with the launch of a pan-European subscription service offering 1.7m tracks, all of which can be played on mobile phones and other digital music players as well as Apple’s iPods.

The new service is being launched by eMusic, which has already signed up 200,000 subscribers in the US and sold more than 85m tracks in the past 36 months. It will charge €12.99-€20.99 ($16.46-$26.59, £8.82-£14.26) a month for 40-90 monthly downloads, rather than using Apple’s pay-per-track model.

According to the NPD Group, eMusic has taken an 11 per cent share of the US downloads market for the year to date, second only to iTunes’ 60 per cent share, although the Apple-owned site has sold more than 1bn songs so far.

Its catalogue excludes songs owned by the four largest music companies, which have resisted working with eMusic because its MP3-format files are not protected by digital rights management (DRM) software.

The 8,500 independent labels signed to eMusic’s service account for about 30 per cent of the market, said David Pakman, eMusic’s chief executive. “That’s $10bn of a $33bn market. It’s not a small niche.”

However, the absence of their artists leaves eMusic’s catalogue focused on jazz, classical, world music, dance and rock rather than pop music. It includes independent acts such as the White Stripes, older artists including Miles Davis, and early albums by established bands which are now with major labels.

Mr Pakman argued that consumers were suspicious of DRM technology and opposed to “walled-garden” systems, such as iTunes, which only allows tracks bought on the site to be played on an iPod.

He criticised large music companies for “believing more strongly in the need for piracy prevention that market success,” arguing that they had failed to “stand up to Apple” in recent renegotiations of their iTunes contracts and would “blindly walk in and license Microsoft much the same ecosystem” when the software giant launches its Zune digital music service.

The service will launch simultaneously in all 25 EU countries, giving it a broader reach than established rivals, thanks to a novel pan-European licensing deal with Buma/Stema, the Dutch society in charge of collecting authors’ royalties.

The launch follows news on Monday that Napster, whose music service is incompatible with iPods, would give away free MP3 players to new subscribers in the UK.