Following on from the recent news that Pump Audio is reducing its commissioning rates to artists to fund expansion (when you have friends like that, who needs enemies?) news has appeared about a new ‘innovative’ background music supplier.

Eosmusic.com claim they are offering an innovative Internet streamed background music service to businesses such as hotels, retail and restaurants. Nice idea. Not only this, they are only signing up artist compositions that are not registered or are to have performing royalties collected via performing rights societies. So, royalty free music. This helps businesses afford music in their business environments without the cost of additional licensing requirements. Its a great idea and differentiates Eos From Musak holdings who they see as their main competitors, however it draws Eos into a new market that is very well established and can compete better than the established corporate world of performance royalty based music licensing. Simply enter ‘Royalty Free Music’ into Google or Yahoo and you will see there are some great music providers out there already well established.

So I do not agree that Eos Music is innovative for this reason and a few others which I will now explain.

EosMusic are not innovative with the Internet streaming model. For example, VoiceSolutions inc. have been using the Internet to stream to dedicated devices for a few years now.

Secondly, the subscription model for selling music to businesses and earning monthly fees for artists is also not new. Ambient Music Garden’s background music service has been offering a subscription model for a while, as has Voice Solutions inc. The model itself is a great way for businesses to rent music, rather than purchase music that they may not use in perpetuity. Additionally, as part of the deal with both Voice Solutions and Ambient Music Garden, a churn of the music collection is offered so that the collections remain fresh and never get dull to listen to as a client or as a staff member of a business.

Lastly, EOS Music is offering artists only 25% share of the music sales. We all thought Pump Audio was being a bit tough on its artists, EOS are really slimming down their potential artist’s income. The problem I worry about is that some artists who don’t understand the value of their music will think, ‘this is 25% of something I wouldn’t get normally’.

What worries me is why EOS think they need to take such a large share? is it that their overheads are so high? paying their managers too much for so little in return? or is it that the music is a ‘loss leader’ and that the devices used are costly to manage and maintain?. Well now, I think we may have caught onto something here. You see, EOS music is really just a new front for a music on hold device manufacturer. Stated from their website meta description:

“Applied Media Technologies Corporation has been an innovator at
utilizing electronic technologies in marketing applications. AMTC is one of the largest providers of telephone
on-hold messaging solutions. AMTC introduced the first compact disc and removable memory card message on hold
systems, as well as the first Web content distribution system for on hold messages.”

Their devices cost $299 plus install ($100) whilst the monthly music service is anywhere between $29.99 and $19.99 (depending on where you look on their site) which massively undercuts Musak holdings who they see as the competition). So it seems to me that AMTC see their new EOS Music venture as a way to shift more boxes whilst attracting businesses with a low monthly fee. Artists, they may think, are a dime a dozen.

The reality is that they are box shifters with a box shifting mentality as opposed to being built by musicians and business people who really understand the innovation that the Internet can provide (i.e. you don’t need a $299 device to do this sort of service anymore!).

Ambient Music Garden for example (although we have to stress that as one of our sponsors we may be accused of being bias, but then I have no doubt that you are intelligent enough to take this into consideration when reading this article) offer a subscription based service with no minimum contract period, a monthly fee and a new mix of a full 8 hours of music (churned to at least 1 hour of music each month).

Their artists earn a full 50% of the total gross earnings, so all costs of sale and distribution are apportioned to Ambient Music Garden themselves. To me that sounds like a fair trade. The partnering of musical artistry with Internet business accument in a fifty fifty split on all earnings, not just a minority share of part of the earnings. Fair Trade Music at its best.

Ambient Music Garden’s music is distributed to the business as mp3 files at 192kb/s which is the same quality as iTunes. The music is licensed for download and burnt to CD, or played on any music player the customer wishes to use. So by using existing equipment (be that an iPod, a PC or a Mac) the costs of playing music in a business is even cheaper.

You see, we may be so bold as to say to AMTC (EOS Music) that the Internet has moved the market on already. They are not innovators but followers of sort. Musak holdings is not your competition. They filed for bankruptcy protection (Chapter 11) in February 2009 so their focus is on financial restructuring, not market share growth right now. Not only that, without providing their artists with a fair share of the music sales and also relying on devices that are costly and unnecessary AMTC (EOS Music) are not providing businesses with value for money.

Those artists who understand the value of their music will look elsewhere to get better returns for their work.