Ted Cohen is an unlikely rock star.
The 56-year-old computer fanatic has a high-pitched giggle and thinning gray hair. Instead of slinging a guitar over his shoulder, Cohen carries a backpack filled with nine mobile phones, three iPods, two portable video players and enough wires, cables and tape to mummify Mariah Carey. At 5 feet 8 and 240 pounds, he will never be mistaken for one of the crooning waifs on MTV.
But among music executives, Cohen is something of an American idol. As senior vice president of digital development at EMI Group, home of Coldplay and the Rolling Stones, Cohen has been in on the ground floor of dozens of online music ventures, including Apple Computer Inc.’s iTunes Music Store. And he’s one of the most sought-after speakers on the recording industry’s endless conference-and-gala circuit.
During a recent Santa Monica, Calif., symposium, so many people wanted a moment of Cohen’s time that he resorted to holding back-to-back meetings in a hallway, where petitioners stood in line to win a brief audience with him.
“Ted is very high-profile,” said Mitch Bainwol, chief executive of the Recording Industry Association of America. “He’s part ambassador and part evangelist.”
Cohen’s celebrity is surprising, even to him. For decades, technologists were relegated to the lower levels of the music business. Then, in the late 1990s, when peer-to-peer computer networks such as Napster Inc. made music easy to steal, techies became outright pariahs.
But now, after half a decade of fighting high-tech change, the recording industry is rushing to embrace it. As consumers spend billions of dollars downloading songs and ringtones online and via mobile phones, music executives have become desperate to convince Wall Street that they understand the Internet marketplace.
Suddenly, Cohen and other tech-savvy executives capable of translating between Silicon Valley and Tin Pan Alley are essential. The once-spurned geeks are becoming some of the music world’s most respected leaders, and as they ascend, they are changing the industry’s culture.
“What Ted is working on is embedded in everything we do as a company now,” said David Munns, CEO of EMI Recorded Music North America.
Such change was on display recently when Cohen joined a panel on innovations in music distribution. One by one, speakers from the nation’s largest music, computer and peer-to-peer corporations launched into serious forecasts of the industry’s bleak future. Cohen managed to keep quiet for almost three minutes before the dire predictions proved too much.
“Listen to this!” he said, cueing the Beatles’ “Help!” on his mobile phone. “Isn’t that great?” he shouted into the microphone.
It became Cohen’s show. In the space of a quarter-hour, he challenged a Yahoo Inc. executive to a mud-wrestling contest, high-fived a friend in the front row, snickered when another speaker mentioned an outdated music player and weighed in on half a dozen other subjects.
“The future has never been more exciting!” he told the room. “We’re going to figure out how to make this work!”
When the panel ended, people rushed the stage-like groupies at a concert. Cohen’s fans, like those of Bono or Cher, hailed him by his first name: “Ted!”
“Ted has made music fun again,” said Gabe Adiv of Gracenote, a music software company, as he looked on.
But Cohen’s antics are more than eccentricities. They are the key to how he bridges the disparate worlds of music and tech. Under Cohen’s guidance, EMI has negotiated with just about any high-tech entrepreneur who stood still long enough to talk.
Sean Ryan, who helped create Listen.com in the late 1990s, said, “EMI was in front of everyone else because Ted was willing to talk to anyone.”
It’s more than friendliness, Cohen says. It’s strategy.
“I try to embody what the industry should become,” he said.
Music’s love-hate relationship with technology is as old as the recording industry itself.
It began in the early 1900s, when songwriters, fearing for their jobs, begged the federal government to outlaw what they called “ungodly machines”: player pianos. Instead of criminalizing the new invention, Congress created the copyright system that exists today, and songwriters relented when they began receiving royalty checks.
It was the start of a pattern: Innovation led to panic, which slowly turned to celebration when profits soared. In the ’50s, recording executives said FM radio would kill the music industry. Then they discovered that broadcasts helped sell albums. In the ’70s, record companies warned that cassette tapes would make piracy rampant. Then Sony released the Walkman, and music sales hit new heights.
In the 1980s and ’90s, some insiders cautioned that the compact disc would make it easier for listeners to steal perfect copies. But when sales skyrocketed, the industry embraced the new format. By 1999, music corporations were larger than ever, shipping $14.6 billion worth of albums and growing at 6 percent a year.
But disaster loomed. As computer users began trading illegal copies of songs online, music sales began a free fall that has yet to hit bottom.
Cohen was about to find himself in the right place at precisely the right time.
An early adopter of technology and a music fanatic, he had begun collecting clunky reel-to-reel records and computer prototypes in high school. Working as a concert promoter in those days, he hoped to accomplish what were then his two goals: learning how to be cool and earning enough money to buy the gadgets that fascinated him.
After dropping out of Ithaca College after his junior year in 1968, Cohen scored a low-level job with a record label accompanying acts such as Alice Cooper and Van Halen on tour. But he failed to vault up the corporate ladder. “Technology was not seen as a good career move,” he recalled. “You got promoted by finding the next hot band or schmoozing with DJs.”
Cohen kept at it, visiting computer companies in his spare time. In the late 1970s, Steve Jobs and Steve Wozniak, co-founders of an upstart company called Apple Computer, couldn’t get record executives to return their calls. Cohen, then charged with learning about new gizmos for Warner Music, helped trade a friend’s stereo for one of the first Apple computer systems. Cohen spent much of the 1990s working on interactive videos at technology giant Philips Consumer Electronics, then became an independent consultant, helping computer companies such as Microsoft Corp., Amazon.com Inc. and Liquid Audio Inc. sell music online.
Then in 1999 he was offered the CEO position at a new peer-to-peer music company named Napster. He accepted a job at EMI instead, but the message was clear: Being a techie had suddenly become an asset.
Since peer-to-peer music-sharing networks became popular in 1999, U.S. shipments of recorded music have dropped by more than 30 percent, according to the recording association, and U.S. music sales have fallen or remained flat every year.
Music’s technology visionaries include Larry Kenswil and Rio Caraeff at Universal Music; Thomas Hesse at Sony BMG Music Entertainment; Alex Zubillaga and Michael Nash at Warner Music Group; and many others. Kenswil, Hesse and Zubillaga are among their companies’ top policymakers.
“The record industry used to think of technology as termites they could ignore,” said Stan Cornyn, who spent 34 years as an executive at Warner Music. “Now the west wing of the house has fallen off. They’re desperate for people who can build better places.”
In 2001, Cohen urged EMI to be the first company to make its entire repertoire available to newly created digital music services.
The next year, Cohen helped EMI cement distribution deals with nine Internet firms, more than any other major company. EMI was also the first among its rivals to allow listeners to download permanent copies of songs, transfer tunes to portable music players and make copies to blank CDs. Cohen helped work out the licensing agreements upon which the iTunes Music Store was built.
This year, EMI released a new song by Coldplay via mobile phones, offered listeners podcasts from the band OK Go and launched download services in China and Latin America. Then, in September, Cohen negotiated to release the Rolling Stones’ latest album on a memory card playable on mobile phones and computers.
“The only way we win is if we’re willing to try everything,” Cohen said.
But technological enthusiasm hasn’t been a magic bullet.
EMI’s operating profit has declined in each of the last three years. And although U.S. digital music sales are growing, they still have not offset the decline in CD purchases. No company has provided an online service compelling enough to drive most music fans away from file-sharing networks that offer free, illegal downloads.
