More signs of hope for the music business

“There’s a set of data that shows that file sharing is actually good for artists. Not bad for artists. So maybe we shouldn’t be stopping it all the time.”

–Douglas Merrill, EMI’s newly appointed president of digital

As reported earlier this week, EMI has hired Douglas Merrill from Google to head up its overall digital music group.

“I’m passionate about data,” Merrill said during a phone interview Wednesday with CNET News.com. “For example, there’s a set of data that shows that file sharing is actually good for artists. Not bad for artists. So maybe we shouldn’t be stopping it all the time. I don’t know…I am generally speaking (against suing fans). Obviously, there is piracy that is quite destructive but again I think the data shows that in some cases file sharing might be okay. What we need to do is understand when is it good, when it is not good…Suing fans doesn’t feel like a winning strategy.”

The hiring of Merrill, Googles former CIO, who has no background in music sales, represents an acknowledgment of how important digital distribution and technology is to the future of the music industry, and to EMI in particular. Merrill says he’s all about applying what he learned from Google about the Internet, digital distribution, and innovation. Expect to see EMI experimenting with different business and distribution models.

“You must do experiments and follow the data,” Merrill said. “That’s often hard because we all have intuitions. The problem is our intuitions aren’t always right and Google has shown that over and over again. We’ve had internal discussions about ‘Oh I believe the site should work this way.’ We go into the experiment and we’re wrong. And you have to be willing to say ‘I thought it was X, I was wrong. It was really Y. That has to be OK. You have to be OK failing because most of the things we try won’t work. That’s why it’s called an experiment. Those things are very deep in my soul.”

More specifically, Merrill said he would see whether a Google ad model will work for music. But he’s willing to try music subscriptions and even an ISP fee. Certainly, what came across about what strategies Merrill intends to use is that he’s not married to any one idea.

“I think there is going to be a lot of different models,” Merrill said. “Those are two (subscriptions and ISP fees) you can imagine. I’m not sure that either one of those will be the most dominant model. But they are both interesting. We should try them and see what the data says. Other options will be things like you can imagine supporting music through relevant targeted ads, the Google model. There is a dozen of other things…we should try them all. We should see what the data says and whatever it says, we should follow the data, and follow our users and let them help guide us. We should engage in a broad conversation about art.”

“I think it’s important to figure out where can record labels add value,” Merrill said. “I don’t know the answer. I think Nine Inch Nails’ experiments have been really interesting and enlightening. We need to step back and say what is the process of artist creation and helping fans find what artists create.

“Given that as a system we need to understand how record labels fit in there,” Merrill continued, “I think the Nine Inch Nails’ release of Ghosts experiment was fascinating. What a great problem to have: people are trying different things. If everyone tries the same thing you’ll never learn anything new. Instead we’re in a situation where people are trying things. How cool is that? Some are going to work. Some aren’t going to work. But we need to try them.”

It’s not often that you hear the word “data” come from the mouth of a record company executive. One thing for sure is that Merrill will either have a significant impact on the way that EMI proceeds to develop it’s overall music strategy moving forward, or he will be ejected from the Capital Records building in a few months. The clash of culture and thinking between an ex-Google exec and the traditional music industry mavens will surely be entertaining to watch and learn from.

As my friend Gerd Leonhard has said many times, “when the pain becomes great enough, the labels (if they are still in business) will have to change their path.” Apparently the pain at EMI is considerable. Lets wish Mr. Merrill the best of luck!

We Welcome Your Comments

Comments