eMusic responds to UK and Europe long-term subscribers

Thanks to the persistence of dhaith we now have more definitive information on how eMusic will be handling existing UK and Europe subscribers on the annual and 2-year price plans. According to dhaith, Keeping your annual subscription at the orginal US rates is not an option for European customers according to eMusic Customer Support. Instead when their current subscriptions expire existing UK and European subscribers on annual and 2-year plans are being offered the option to be converted into monthly subscribers to eMusic UK and eMusic Europe respectively at a plan level of their choice (i.e., Basic, Plus, or Premium) with a discounted monthly price for the plan equal to the current US monthly price plus VAT.

For example, assume a current UK subscriber at the Basic level who took advantage of eMusic’s offer to sign up for an annual subscription at 20% off. Prior to the creation of the new services they were paying $95.90 per year (20% discount off $119.88) or £50.33, equivalent to a monthly price of $7.99 or £4.19 per month (using an exchange rate of 1.90530 dollars per pound as in my previous posts). Their effective per-track price was thus about £0.10 per track. Under eMusic’s offer, when their current plan expires they could switch to a Basic monthly plan at a discounted price of $9.99 (the current US rate) or approximately £5.24 pre-VAT, for a final price of approximately £6.13 with VAT. This corresponds to a per-track price of £0.13 exclusive of VAT (£0.15 including VAT), and as such is a bit more attractive than signing up for a 2-year Basic plan at the new UK rates (£0.14 per track exclusive of VAT). They could also switch to discounted Plus or Premium monthly plans instead.

The following table presents the options for existing annual and 2-year subscribers in the UK; we assume an exchange rate of 1.90530 dollars per pound:

Type of plan Per month (exclusive of VAT) Per month (including VAT) Per track (exclusive of VAT) Per track (including VAT)
Discounted Basic monthly £5.24 £6.13 £0.13 £0.15
UK Basic 2-year £5.74 £6.74 £0.14 £0.17
Discounted Plus monthly £7.87 £9.20 £0.12 £0.14
UK Plus 2-year £7.65 £8.99 £0.12 £0.14
Discounted Premium monthly £10.49 £12.27 £0.12 £0.14
UK Premium 2-year £9.57 £11.24 £0.11 £0.12

The following table presents the options for existing annual and 2-year subscribers in the rest of Europe; we assume an exchange rate of 1.2841 dollars per euro:

Type of plan Per month (exclusive of VAT) Per month (including VAT) Per track (exclusive of VAT) Per track (including VAT)
Discounted Basic monthly €7.78 €9.10 €0.19 €0.23
Europe Basic 2-year €8.29 €9.74 €0.21 €0.24
Discounted Plus monthly €11.67 €13.66 €0.18 €0.21
Europe Plus 2-year €10.84 €12.74 €0.17 €0.20
Discounted Premium monthly €15.57 €18.21 €0.17 €0.20
Europe Premium 2-year €13.40 €15.74 €0.15 €0.17

(Note that I didn’t include the UK and Europe annual plans in the comparisons since in the published eMusic pricing materials the annual plans don’t appear to offer any discount relative to the monthly plans.)

Assuming I’ve done the math right, the key points from the above tables are as follows:

  • If you’re currently on a Basic plan and don’t want to upgrade to Plus or Premium, you’re better off taking advantage of the eMusic offer for a Basic monthly plan at a discounted price at the point where your current subscription expires. It’s cheaper than taking advantage of the new UK and Europe Basic 2-year plans, and you don’t have to pay in advance.
  • iIf you’re currently on a Plus and Premium plan and you don’t mind making an upfront commitment, you would be nominally better off switching to a standard UK or Europe Plus or Premium two year plan when your current subscription expires.

Note that this analysis is complicated by two factors:

  • There may be exchange rate risks in electing for the discounted monthly plan. In particular, suppose that the discounted monthly price is fixed in terms of dollars (e.g., $9.99 plus VAT for the discounted Basic monthly plan) but is converted into pounds or euros each month at the then-current exchange rate. If the pound or euro depreciate relative to the dollar then you’ll effectively end up paying higher prices than originally anticipated.
  • Paying up-front for a 2-year plan may get you a better per-month price, but it also prevents you from using that extra money for other purposes; in particular, depending on the returns available to you (e.g., interest rates on savings deposit) it may be better to stay with a monthly plan and invest the money you would have spent buying a 2-year plan.

Of course, the differences we’re talking about are relatively small: typically less than a pound or euro per month between switching to a discounted monthly plan per eMusic’s offer or electing for a new 2-year plan at standard UK or Europe prices. That makes me wonder why eMusic even bothered to make this discount offer, especially considering that it was made to subscribers who were already on long-term plans and presumably would not have minded continuing on such plans if the price were perceived as fair. Given that eMusic didn’t seem to have given any thought to long-term subscribers in their original announcement of the UK and Europe services, it’s possible that the eMusic sales and marketing people just threw together a last-minute proposal that at least appeared to be a concession to long-term subscribers. Then once the long-term subscribers took advantage of the discount offer they’d come to realize it wasn’t that great a deal, and would just switch back to a long-term plan at standard pricing.