Why Won't the Music Business Hire Nerds?

Edgar Bronfman Jr. Photo: Getty Images

Last Thursday, Portfolio broke the news that Warner Bros. Music CEO Edgar Bronfman Jr. had hired ex–Geffen Music executive Jim Griffin to launch an innovative new initiative that will almost certainly fail to save the troubled recording industry. Under the proposed plan, Internet users would pay a tax (Griffin suggests $5) on top of their monthly service bill allowing them to download all the music they want, without fear of being sued by the RIAA. All collected revenue would be shared among musicians and copyright holders after record labels took their (presumably enormous) cut. Obviously — as lots of irate nerds on the Internet have already pointed out — such a thing would likely never work for millions of reasons. Nevertheless, Bronfman has reportedly signed Griffin to a three-year contract to put the plan into action (or something). Hey, why don't the record companies just save themselves some grief and hire a few nerds?

Yes, Griffin, a Geffen executive turned industry critic, is well credentialed and obviously a perfectly intelligent guy; as far as major-label music executives go, Warner would've been hard-pressed to find a more forward-thinking one, or one with a more realistic perspective on his industry's situation ("Today it has become purely voluntary to pay for music," he told Portfolio. "[T]he music business has become a big tip jar"). But, given the dire circumstances, isn't it sort of surprising that record companies still aren't willing to hire someone outside of their own industry to help them find a digital future.

For the past few years, almost every lucrative innovation in music, from iPods to Guitar Hero, has come from technology nerds with zero music-business experience. Seemingly none of the skills that propelled the recording industry to bloated, profitable excess in previous eras have any relevance in the current Web-centric economy, so why — nine years after having their milkshakes drunk by a geeky, Napster-inventing college kid — are record labels still hiring only people with music-business backgrounds? Would it kill them to get a nerd or two on staff?

Surely with the outlandish salaries they pay their executives (regardless of performance, apparently) they could afford to recruit a few MIT grads or at least a disgraced former tech CEO. Maybe then they could turn a profit on the Internet without splitting their margins with Apple and MySpace or, at the very least, have someone around to let them know when one of their harebrained proposals (like requiring Internet users to pay a monthly tax on the music they've already been getting for free for a decade) might be met with less than unbridled enthusiasm.

We were surprised a few months ago when we found out that the labels never called in the geeks during the early days of file-sharing. It still seems like even now — with most of them still staffed by the same executives that ran them into the ground — they still haven't learned their lesson.

Warner's New Web Guru [Portfolio]