Apart from the instant when bespectacled singer-songwriter Lisa Loeb uttered the word "monetize" a few minutes after singing her 1994 number-one hit "Stay (I Missed You)," the most arresting moment of this morning's Digital NARM session occurred when newly anointed EMI digital music chief Douglas Merrill (pictured) took the stage during a panel featuring industry leaders.
Merrill, who joined EMI from Google Inc., appeared third among representatives of the four major labels, but his presentation wasn't like any of the others, a frenetic, pacing, Power Point-free, tech-evangelical performance not unlike those of Steve Jobs when he really gets rolling.
Merrill arrived after Sony BMG's Thomas Hesse pronounced that "the CD is definitely here to stay," and after Universal Music Group's Amanda Marks discussed her company's digital revenues in a slide presentation titled "The World Is Flat." Rather than presenting numbers or bundled mobile strategies, Merrill was all about ideas: "Technology has always destroyed or radically changed its participants ... the mass market has vanished ... monetization is a result of traffic." He threw out thoughts about Gutenberg's disruptiveness and cell-phone penetration in the third world. Although didn't offer much in the way of concrete goals, Merrill suggested one way that his experience at Google could shape EMI's music strategy: "We found ways to create value from free services."
Consumers aren't brand-loyal to major record labels, and the four majors generally tend to adopt new technologies in groups. But Merrill seems intent on differentiating EMI as a thought leader in the digital sector, and it stands to reason that it could make more pioneering, risky deals than its peers. Its move to reject digital rights management software last year (predating Merrill's arrival) was a sign that it's willing to experiment, but to date it's lagged behind the others in investing in innovative startups, as UMG has done lately.
Warner's Michael Nash followed Merrill, commencing his remarks by noting that "the digital transition is not a comforting idea to many here." The contrast between Merrill's enthusiasm for the digital frontier and the others' wariness to embrace it was vivid, and it's why we'll be watching EMI's dealmaking strategy especially closely in the coming months. He may be inspired, but if Merrill can't translate his visions into fiscal success in a roiling industry, he could make his more conservative peers look sage rather than stodgy. -- Paul Bonanos
See April 2 post from Tech Confidential regarding Merrill's arrival at EMI
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