Jeremy Sirota.
The IMI 8th Aug 2022

Jeremy Sirota on demystifying Merlin, explosive growth and the Web3 potential for indies

Since Sirota joined Merlin in 2020, the New York-based exec has brought an experience that benefits from roles at both major music and tech corporations. The independent digital music licensing organisation has seen its ranks increase by 140, shooting past 500 members, while signing deals with no less than 15 new platforms or major new features…

Looking back, Jeremy Sirota feels like he was on the path towards Merlin years before he became CEO of the organisation in 2020.

If you look at his CV prior to joining the company – which collectively licenses the digital music rights of its more than 500 independent members – there are three tentpole roles that comprise his path: a big law firm, a big record company and a big tech platform. On the surface, it doesn’t scream ‘independent’, Sirota admits but delve a little deeper and the signposts are there.

Sirota started as an Associate in the New York offices of the global law firm Morrison & Foerster in 2004.

“I joined the law firm specifically because of my interest in intellectual property law and the collision course that was happening with technology,” he says. “I found it absolutely fascinating. I’d had the computer bug since I was a kid.”

One of Morrison & Foerster’s clients at the time was Warner Music Group. Music was the other big passion in Sirota’s life, and so he was well placed when Warner was looking for a tech-minded individual who understood the music business.

“They were consolidating a lot of the functions that were sitting at their labels – merch, ecommerce, web, data – into the artist and label services division called WEA,” Sirota remembers. “My mind was blown. I had an opportunity to combine everything I loved and still work with technology. And, once you join the music business, you don’t want to leave.”

Sirota was at Warner for nine years, working at the company’s independent distribution unit ADA during the latter end of his time there: “That was really my first holistic entry point with the independent music community.”

After rising to SVP, Head of Business & Legal Affairs, WEA and ADA, Sirota started to feel he had reached a ceiling of reinventing his role. In 2017, he was tapped by Facebook, which was in the nascent stage of putting together a music licensing team. The mission given to Sirota was to license independent music from all around the world.

“My history is a lot more integrated with independents than it seems at first,” he points out. “Before joining Merlin, I’d had at least five years of really intense work with the independent community. In fact, my career prior to 2020 was based around the same three foundations that underpin Merlin: digital, music licensing and independents.”

Since Sirota became CEO of Merlin in 2020, the organisation has added 140 new members from all over the world, signed deals with 15 new platforms or major new features from a similarly global span and helped assist the independent music community through a global pandemic, of course.

With Sirota currently on something of a European tour to check in with members face-to-face, we had a chance to grab a coffee with him in London and get his thoughts on his tenure so far and the modern music biz as it pertains to independents in 2022.

"the cost of doing business is increasing, the competition is increasing, and the complexity of the marketplace and the operational rigour required as a result is increasing."

With experience from the legal side, a major music company and, latterly, the tech and social media world, what was your assessment of the independent music industry when you joined Merlin?

I’ll start by saying that I found the Merlin team to be incredibly passionate and hyper driven. Merlin operates as a membership-driven organisation and we treat all members the same. We have the same membership agreement, the same admin fee, and everyone receives our deal notices — notifying about the terms of new deals or renewals — at the same time and can determine whether they want to participate or not. So, there’s a tonne of functionality and flexibility.

Because we operate like a not-for-profit, the way we measure our own success is by asking, ‘Have we helped our members achieve more success? Have we helped them gain more value than they could have on their own?’

When I showed up, we had this incredibly strong culture, which is something you can never take for granted. It’s all about people. Yes, technology, workflow, and education help … but, ultimately, it’s about the team.

To your question about the wider independent community, I had a couple of observations: One was that the cost of doing business is increasing, the competition is increasing, and the complexity of the marketplace and the operational rigour required as a result is increasing.

One advantage that the majors have is a larger revenue base that they can arbitrage against. That’s something that independents don’t have to the same degree, which means they have to make smarter decisions and be more ruthless about prioritisation. One of the areas where Merlin can be really beneficial to its members, and help them own their independence, is to help them prioritise, help them with the complexity and help them with that operational rigour.

When I joined, there were particular struggles around Covid – touring was disappearing, merch sales were not at the same level and ad sales were decreasing. That was causing a lot of pressure. Where we excel best is behind the scenes. There’s so much information coming into us, and my question was how we can do more to educate our members. How can we send out that information to help our members make better decisions, prioritise and grow? How do we provide more added value within our deals – both for our members but also for our partners? One of the areas where our digital partners struggle is that because the independent sector is more spread out, it can be hard to interface with. So, we’re focusing on synthesising that more – creating more visibility about who our members are, their releases and their artists. Our partners can’t always go to our 500+ members and try to engage them individually, but we can help by creating more visibility into them.

So, it’s about leaning into areas where our members want more technical education and information about the services and what works, and then creating more opportunities for our members.

Tell us a bit more about some of the new members that have come to Merlin since you arrived…

Something I’ve seen that’s really inspiring is that we’ve been able to reach further around the world. I’m really excited that we’ve had our first direct member in Iraq. We’ve also had our first direct members from Albania, the UAE, Slovakia, Kenya, Ghana, Burkina Faso, Singapore and more. What the last 2.5 years has proven is that the Merlin model is elastic. What we do can be beneficial regardless of country, genre and business type. And the more we grow, the more we can provide value to independents, helping them stay independent and have options.

"What we are seeing with the rise of social is that independent music fits particularly well in those spaces."

You’ve had high-level roles in licensing on both sides of the music and social media/tech divide. There always seems to be a bit of tension between those two industries and a repeating cycle of a social platform exploding in popularity, a public conflict around music licensing and then an eventual agreement. Having been on the tech side of that conflict, is there anything that the music industry could be doing differently to prevent that constant tug of war?

A couple of things to note first. Number one: A core mission of Merlin is to preserve the value of copyright for our members to ensure they can better compete. Number two: independents are well-positioned for where the music industry and tech are currently heading – and I say ‘currently’ because it’s changing all the time.

The key is to position yourself not for what is happening now, but to structure your business in a way that can adapt to change. Change is inevitable, particularly with technology. It’s going to get more complex; there will be more digital partners out there. What we are seeing with the rise of social is that independent music fits particularly well in those spaces. A hit song is always a hit but independent music, because there’s so much diversity within it and it’s so wide reaching, plays so well within a world where the user is making intentional choices. Within social, there are fewer gatekeepers. We saw that with MySpace, where the music being used was predominantly independent, and it’s coming around again. It’s one of the reasons we were the first to sign a deal with Snap, why we have such a strong relationship with Meta, Triller, YouTube… and why we’re seeing such strong performance across our membership.

To your question: There’s inherently always a tension to any commercial negotiation. So we should start there – it’s ever present. One of the ways in which Merlin has done a very good job over the last couple of years is, yes, focusing on the value of copyright. But also finding more alignment with partners. There is inherently a zero sum game if you’re just looking at a dollar and how many ways you can split it. But, if you look at it in terms of, ‘How do we create more value in your ecosystem? How do we find alignments with your priorities? And how do we articulate a vision about what your platform could be doing – what value could music create?’ Then there’s an opportunity to create more, rather than only focusing on a zero sum game.

So, when we talk about partnership, we’re talking about finding that overlapping interest and defining it. We don’t stop when the deal is signed. We continue to work with our partners to help them use the value that our members in the independent space can provide. That sets us apart.

Do you find social and tech platforms receptive to that?

Absolutely. I get excited whenever I can carve out time to talk to product managers at a platform, to help them think about the music space, the future and feature ideas that would be exciting. There’s tremendous value in having spent those two years at Facebook – and I worked with a lot of people who had come from other platforms, so I learned a lot from them as well. It was a tremendous opportunity to find out what drives platforms and what differentiates them.

"In new spaces, it’s always a great approach to look at ten companies and then pick just one. Test before you buy. Even for the smallest label."

The next tech horizon that we seem to be on the edge of is web3, crypto and blockchain. What’s your assessment on how much of a legitimate future that is as far as music is concerned and, if it were to become a dominant ecosystem, what would that mean for Merlin, since many of the principles of web3 stem from decentralisation?

What’s great about technology is that sometimes you don’t recognise the value of it until a decade later. Web3, blockchain and crypto are all getting conflated together and everyone has a different definition.

I’d say we’re at the particle accelerator phase – where you have a lot of money sloshing in to accelerate a lot of companies that are banging up against each other. If particles bang into each other enough, something interesting comes out of it. We are very much in an experimentation phase where I’m not quite seeing anything as a stand out just yet. Merlin is engaged in plenty of conversations but we’re not going to waste our members’ time unless we feel a potential partner can bring value. These web3 companies have the same problem services have: they can not reach scale individually. So there will always be a role for Merlin in web3 because these services are always going to need someone to help them reach scale, and our members are going to want us to ensure that we’re protecting the value of copyright, creating opportunities and helping them make better decisions. Is there anything real in this space yet? Talk to me in six months when we’ve announced a deal.

The whole industry is trying to work out what’s going to happen in web3 and nobody wants to be left out if it does establish itself as the next prominent ecosystem. One approach that the major corporations are able to take is acquiring to make sure they have a stake in whatever happens next. It’s rare that independents are able to do that. What advice would you give to independent operators that want to make sure they don’t get left behind should web3, blockchain and crypto take off in the music business?

This applies regardless of what the technology is.

Right now I have an ever-present question in my head: Are NFTs the new ringtones? Are we going to be having this conversation five years from now and it turns out NFTs are just a historical anomaly? I don’t have an answer for that yet. But, if you go back to what I said earlier, it’s about ruthless prioritisation and making better decisions.

In new spaces, it’s always a great approach to look at ten companies and then pick just one. Test before you buy. Even for the smallest label, you can find one platform that interests you, and that’s an opportunity to find out what this means and learn from it. If that experiment fails, but web3 succeeds more generally, at least you’ll have learned something that will allow you to be ready for whatever’s coming next in tech. That’s what I was talking about when I said, ‘How do you build an organisation that’s ready for change?’ Because whatever web3 is today is not what it’s going to be five years from now. Independents are typically derived from founders and entrepreneurs who got their starts in all sorts of different ways but they all had to be scrappy, to fight and turn over every stone to get to where they are today. Whatever comes next, they’re uniquely positioned because they’ve had to keep pivoting to build their business.

You mentioned that you usually have an end goal in mind, a trajectory mapped out. What’s your long-term goal for Merlin?

I’m going to layer that in with the question you asked earlier about what I saw when I joined Merlin and what I thought needed to be built. Within the community I was in, Merlin was really well known and really trusted. That trust factor is such a key component to Merlin. But, one of the areas that we had not driven as hard as I thought we needed to was in the wider understanding of Merlin, who we are and what we can provide. Those who knew us, knew us, but I wanted to expand that. That’s why we went through a rebranding in 2021 – we wanted to reach audiences that we hadn’t traditionally spoken to before and we wanted to do it with simpler language.

What we do behind the scenes is incredibly complex, what we offer to members is a lot. We needed to make the messaging around that simpler. I wanted to demystify Merlin. That was a huge part of what I did in year two and it’s really started to pay dividends. It’s why we’ve had people reaching out to us from more countries and regions and why we’ve had an increased growth in membership. That’s where I want to see us continue to grow—I would love to see a direct Merlin member in every country around the globe.