Blog Post

@ Media Week: Interview: Eric Nicoli, Chairman, EMI Group

[By Staci D. Kramer] During an interview last year at Media Week, Eric Nicoli told me that interoperability was key to the digital music industry’s success. We revisited the subject after his UBS presentation Tuesday in a brief interview that started in the conference hall, moved to the elevator and concluded as he prepared for a series of one-one meetings with investors. The following is an edited transcript:

You had a very strong belief that in order for this industry to really take off, there had to be interoperability. But in the intervening year the lines have become even more delineated.

Because, so far, a credible competitor to Apple hasn’t emerged.

Is Windows Media (Player) 10, is Janus getting there?

…The whole thing is still in its infancy so no one can get too excited about what’s there, what’s not there, what the market share’s like. Over time we will see many players emerging producing attractive hardware devices, companies like Samsung, Sony, of course … My concern is that you’ll have disappointed consumers … and then find they want a different device and they can’t play music they’ve already bought on the device of their choice. That’s the concern. It’s as simple as that. … People need to bear in mind the possibility they’ll be disappointed.

On a completely different subject, Jon Bon Jovi spoke to cable operators this year and one of the things he was lamenting was a trend towards capitalizing singles because of digital download sales, and he had a suggestion — an “a”side and a “b” side with digital singles, sell the “a” side and include a “b” side they might not have otherwise heard.

The beauty of digital is we can do whatever we want to — absolute flexibility to bundle, put music on top of other digital types of content like pictures, like information. It’s entirely possible. I think we need to get away from the single and album way of thinking. The beauty of digital is it allows you absolute flexibility to present your content in whatever way works best … Variable pricing, which is a public debate at the moment, is simply an assertion on the part of the content owners that not all content is the same thing. … Bon Jovi’s suggestion is a straight reflection of that — not all content has the same value in the minds of consumers and to force all content to have the same value runs the risk of commoditizing content.

You may not have seen this but this morning NBC Universal and iTunes announced that 11 shows are going onto iTunes; whether they’re new primetime shows or vintage “Adam-12” reruns …

They’re all the same price.

All $1.99. … Once again, Apple is being allowed to set the marketplace — or are they?

It’s early days. They can do what they like. Either way, content owners don’t all have to charge the same price for all content, do they? …Apple has done a fantastic job … but it’s still in its infancy, it’s all open for negotiation and I’m not at all phased by the debate.

Are you as close to a variable pricing deal as it sounded from remarks by another EMI executive?

I’m absolutely not going to comment.

What’s the single most important issue that has to be deal with by the industry right now in order for digital to succeed?

(Long pause.) I’m not sure that there is. I’m not sure it would be right to pick one. Fighting piracy is a major, major continuing challenge.