Douglas Merrill, Google's former chief information officer who jumped to EMI Music not quite a year ago, has resigned as chief of the label's digital unit.
Merrill was hired by Guy Hands, the founder of private equity firm, Terra Firma, and parent company of EMI. Merrill's departure comes less than a week after Hands announced he would give up everyday control of Terra Firma. EMI said in a press release little more than Merrill had stepped down. I spoke to Merrill's wife, Sonya, by phone and she said Merrill didn't wish to comment.
An internal memo circulated at EMI was obtained by the blog All Things Digital. In that memo, EMI told employees that operating a standalone digital division was unnecessary.
"With digital now comprising over 20 per cent of our revenues and growing fast," EMI wrote in the e-mail, "we will no longer operate a standalone digital function."
EMI also announced that Cory Ondrejka, one of the founders of Linden Lab's virtual world, Second Life, was named executive vice president of digital marketing. EMI hired Ondrejka last summer. The record label took pains to note that Ondrejka was not replacing Merrill.
Merrill and Ondrejka were hired to help the record company plot a new course in digital music. EMI, the smallest of the four top recording companies, has lost market share in the U.S. and has wrestled with big financial losses. Managers there appeared to be willing to place big bets on the Web.
Merrill's departure raises questions about whether EMI has once again changed directions. EMI's move to ditch the digital unit on the day Merrill stepped down suggests that he was no longer needed because the entire company has gone digital, doesn't exactly sound very plausible.
Under Merrill, EMI's digital unit--in the year he was there--hadn't exactly hit any home runs. There were few awe-inspiring moves, or at least little the company announced publicly. In October, EMI said that Merrill's unit was planning to launch its own music service. The label markets its own stars directly to the public and is supposed to be more of a testing area where the record company can learn more about digital retail. The site is still in beta.
Not a bad idea, but it didn't exactly drop any jaws.
So EMI is doing away with the company's digital unit and a technology star brought on to run it is on his way out. My best guess on what's happening is that EMI, which has been losing lots of money for a long time, is under new leadership and is once again following a different vision.
Regardless of what happened between EMI and Merrill, to say that continuity has not been one of the label's strengths is an understatement.