Press Release: Survey Shows eMusic Helps Independent Labels by Adding Incremental Sales

Survey Shows eMusic Helps Independent Labels by Adding Incremental Sales

eMusic Boosts Sales of Deep Catalogue and Obscure Artists; 61% of Subscribers Buy Music They Would Not Otherwise Purchase

NEW YORK, July 30 -- In recent surveys of more than 4,000 of its active U.S. subscribers conducted, eMusic found that 61% buy music from the website that they would not have otherwise purchased. Additionally, 62% of subscribers said they purchase more than 10 additional songs per month than before they joined eMusic, 84% felt they discovered music they would not otherwise have known about, and 44% of subscribers believe they download less music from major labels now that they are in the eMusic fold.

The results show that eMusic is helping independent labels gain market share by selling albums and songs that wouldn't have sold otherwise to customers willing to experiment and discover music. This mirrors sales trends that are tracked by Nielsen SoundScan. A recent analysis of Nielsen SoundScan data shows that independent label digital album sales increased by 42% from 2005 to 2007 year to date.

"The survey confirms what we've known for a long time -- that by encouraging our customers to experiment with new artists and dig deep into our catalogue, eMusic's subscription pricing model and focus on value for the customer adds incremental sales for our labels," said David Pakman, eMusic President and CEO. "In the process, our customers spend more money on music than they normally would, and buy music that wouldn't have sold elsewhere. We've also shown that we're actively introducing our subscribers to a rich selection of independent music that's supplementing, or at times replacing, their consumption of mainstream hits."

Of the survey respondents, 61% agreed or strongly agreed with the statement, "The majority of the music I download is music that I would not otherwise have purchased." When asked, "How many more digital songs do you purchase each MONTH now compared to before you joined eMusic," 14% said they download between and 10 and 25 additional songs, 25% said they download between 26 and 50 additional songs, and 23% said they download more than 50 songs. 84% of subscribers agreed or strongly agreed that, "I have discovered music on eMusic that I would not otherwise have discovered," and 44% of subscribers agreed or strongly agreed with the statement, "I download fewer albums on major labels compared to before I joined eMusic."

The survey response validates eMusic's editorial support for notable catalogue releases, with 62% of subscribers saying they download an even mix of new and old releases. Survey respondents also support independent music by word-of-mouth: 56% say that they recommend music that they discover on eMusic to friends "often" or "most of the time."

"Three years ago I discovered eMusic," said Mark Puckett, an eMusic subscriber from Houston. "With eMusic's pricing and download plan, I am able to sample, risk and explore new and old music across multiple genres. Thousands of songs, hundreds of albums and artists later, I'm now spending more than $300 a year on music, instead of $30 - $40, and enjoying music more than ever."

Of the subscribers polled, 67% have been with eMusic for 7 months or longer, and 82% spend more than $100 on recorded music per year.

Survey results are based on samples of more than 4,000 eMusic subscribers. Surveys were conducted April 26-27 and May 15-16, 2007. The margin of error is plus or minus 2 percentage points.

Selected eMusic Customer Survey Results (more results available upon request)

Q. Please indicate your agreement with this statement: The majority of music that I download from eMusic is music that I would not otherwise have purchased.

1. Strongly disagree 130 3%
2. Disagree 684 16%
3. Neither agree nor disagree 791 19%
4. Agree 1754 42%
5. Strongly agree 791 19%
Total 4150 100%

Q. Please indicate your agreement with this statement: I have discovered new music on eMusic that I would not otherwise have discovered.

1. Strongly disagree 118 3%
2. Disagree 148 4%
3. Neither agree nor disagree 322 9%
4. Agree 1264 36%
5. Strongly agree 1697 48%
Total 3549 100%

About eMusic

eMusic (http://www.emusic.com) is the world's leading digital retailer of independent music, second only to iTunes in number of downloads sold. The eMusic Web site offers a global catalogue of more than 2.5 million tracks from established and emerging artists in every genre from the world's leading independent labels. Created by music experts for music fans, it features award-winning editorial content, a vibrant online community and unrivaled music discovery tools. A subscription-based service that offers 25 free downloads at sign-up, eMusic gives consumers an inexpensive, low-risk way to explore great new music they wouldn't find otherwise, and unlike other download services, its universally compatible MP3 files play on any device including the iPod®. Based in New York with an office in London, eMusic.com Inc. is wholly owned by Dimensional Associates, Inc., the private equity arm of JDS Capital Management, Inc.

CONTACT:

Cathy Halgas Nevins
eMusic
212-201-9201

Denise Yantin
eMusic
212-300-2885