Will former Google exec help save the music industry?

Douglas Merrill, Google's former Chief Information Officer talks about his new role guiding music label EMI's digital strategy, which may include easing off file sharers.

Douglas Merrill, the new president of EMI's digital unit Google

Douglas Merrill is everything one would expect from a former Google exec.

The new chief of EMI's digital unit is a Googler down to his soul, which means he's extremely bright, a techie, and dead set against suing fans for file sharing.

"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."

I just got off the phone with Merrill, Google's former Chief Information Officer who was named president of music label EMI's digital group Wednesday. He impresses me as a good-natured guy who is going to rock the boat at the label...maybe the entire industry.

This is good news for EMI, the smallest of the four top major labels. The hiring of Merrill, who has no background in music sales, represents an acknowledgment of how important digital distribution and technology is to the future of music.

What are his credentials to run the digital arm of a major record company? He doesn't have much outside of sharing a few song files back in his youth (gasp!) and a deep love of music. He said very early in the interview that he doesn't have all the answers yet on how to cure the music industry's woes. ("I don't know where my desk is," he added.)

"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 president of digital

But he's all about applying what he learned from Google about the Internet, digital distribution, and innovation. Expect to see experiments with varying business and distribution models from now on at EMI.

"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."

He says he's leaving Google to follow one of his passions.

"I'm not running away from Google," Merrill said. "I'm running towards an opportunity to maybe help change the world."

Merrill is due to report to work at the old Capitol Records building in Los Angeles on April 28. That's the place in Hollywood designed to look like stack of albums. It's also the former workplace of Nat King Cole, Frank Sinatra, The Beach Boys and Bonnie Raitt.

Merrill and Guy Hands, CEO of EMI's parent company Terra Firma, were introduced not long ago by a mutual friend. Merrill said Hands began talking to him about moving over "very recently."

What did Eric Schmidt think of the move? The Google CEO told him, "I think it makes perfect sense for you," Merrill quoted Schmidt saying. "Eric has been a huge influence on me personally as well as professionally."

To be sure, Merrill is up against an enormous task. He's moving from one of the biggest success stories on the Web to an industry racked by plummeting revenue, layoffs, and customer dissatisfaction. It's also an industry facing labor issues.

Merrill is a fan of Nine Inch Nails so he is aware that the band's leader is the embodiment of artist dissatisfaction with music labels. Trent Reznor, who walked away from Universal Music Group last year, has helped spearhead experiments with self-distribution, mainly on the Web. Merrill doesn't appear worried about this.

"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."

 

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