I've used this space to praise eMusic CEO David Pakman before, but I can't resist doing it again after reading his recent post to 17dots about the departure of Epitaph (and Anti-, and Hellcat) from the eMusic fold.
Sure, it's a way of blanketing the spark before it becomes a fire and hopefully minimizing the "WTF WHARE'S MAI TOM WAITS!?!" complaint emails, but it's also the kind of measured sensetalk I've come to expect from eMusic's chief executive. Read it for yourself. He's right.
eMusic users are some of the last remaining paying customers in the American music market. And per capita, they spend about 14 times more than the typical iTunes customer. There is money changing hands here.
Of course, labels that leave eMusic do so because they want a steeper cut of the proceeds. I can't speak to the pay structure because I don't know it and I don't really care to find out. But if you're pulling out of this deal because your price negotiations are hitting a wall, you're cutting off your nose to spite your face. You are leaving money on the table. You're willing to take none because you can't get more.
Bottom line: almost nobody buys music anymore. The people that still do can only be found in a few places. Just like the old school music business, distribution is still king. Only now, it's easier. Just make digital copies available every single place people have shown a willingness to pay for them. Because if your music isn't available at their store of choice, willing shoppers become reluctant thieves.