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DRM-hating eMusic chief quits

Farewell David Pakman

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David Pakman, CEO of eMusic, will leave the subscription service at the end of the year. Pakman explained his departure on Monday, and yesterday disclosed that his next destination would be VC firm Venrock.

Pakman championed DRM-free music, viewing the measures as anti-consumer. This has been a phenomenon, along with his commitment to editorial investment - a stark contrast to Apple's iTunes music store which one reader after launch called "an airport kiosk without the cigarettes and chewing gum." Pakman grew the eMusic subscriber base from 10,000 to 400,000 in his four years as boss, turning it into the second largest music retailer.

The cost was the refusal of the major four labels to participate. This handed eMusic ammunition for a serious antitrust challenge against the big four labels - but Pakman hesitated to pull the trigger.

Pakman and his backers deserve more credit than anyone for the major labels' decision to drop DRM restrictions. Steve Jobs became a born-again opponent of DRM belatedly last year, but iTunes still wraps his music in locks and keys - even when the labels don't want it.

eMusic was founded in 1998 as GoodNoise by Gene Hoffman and Bob Kohn, a former Borland and PGP counsel and music licensing guru. The following year it went public, reaching a first-day market capitalisation of over $500m. Following the dot com blow out, Vivendi Universal acquired the company for around $25m, but it lay fallow until private equity company Dimensional (part of JDS Capital) acquired the business in 2003, giving Pakman the job of "super-serving the over-25 age group".

Today, eMusic isn't perfect. The lack of major label catalogues leaves music lovers short, and subscribers don't have the offer of being "super-served" songs in a lossless format. But it has been a rare digital music success - a viable business that's committed to giving a great experience for customers, while rewarding the creators.

Whereas with most digital music ventures over the past ten years, it's typically been "pick any none from three". ®

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