• by Wendy Davis , Staff Writer @wendyndavis, April 2, 2008

EMI has poached Google's vice president of engineering, Douglas Merrill, to head digital operations for the Big Four record label.

The move comes as EMI -- like the rest of the record industry -- struggles with the challenges of the Internet era, which has enabled consumers to easily share tracks without purchasing them, and also paved the way for established musicians to shed their labels and distribute on their own.

With Merrill, EMI is getting an executive who comes from a culture of envelope-pushing on copyright issues -- an attitude that has landed Google in court more than once, and sparked wariness among traditional media companies. While EMI eventually forged a deal with YouTube, allowing it to show music and video clips in exchange for royalties, the music label's interest in preventing piracy hasn't generally helped it adjust to a world where content is increasingly digital.

It's not clear that Merrill will be able to import Google's seemingly more relaxed attitude about copyright issues with him to EMI -- after all, Google, which doesn't create content, has a very different agenda than the record labels or other copyright owners. But the move seems to at least signal that EMI is looking for a more innovative digital strategy than the record labels have so far adopted.

And that can only help them. Consider, industry revenues have plummeted to around $10 billion last year from nearly $15 billion in 2000 -- the year after 18-year-old Shawn Fanning shook the music industry to its core by launching Napster. The labels sued Napster, which ultimately shut down and then relaunched with the labels' blessing as a digital music service. But new file-sharing services that enabled piracy proliferated.

At the same time, some established artists realized that the advent of broadband meant they no longer needed to rely on their record companies for distribution. Groups like Nine Inch Nails and Radiohead recently left their labels to strike out on their own. In the last several months, each has released albums online at pay-what-you-wish pricing -- and the move hasn't seemed to hurt them. Nine Inch Nails' "Ghosts" took in $1.6 million in revenue in just nine days, while Radiohead's "In Rainbows" topped the sales charts in January, even though the group made the album available for free online in November.