Peter Kafka

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EMusic’s New Boss Is the Same as the Old Boss

danny_steinThe eMusic subscription music service site, which specializes in nichey tunes for the “High Fidelity” set, has signed a deal to start carrying Sony’s (SNE) back catalog.

But I have a question: Whatever happened to eMusic’s search for a new CEO?

David Pakman, who ran the company since 2005, left last fall to join Venrock, the Rockefeller family’s venture capital arm. Last I heard, in late October, the company was “looking at a handful of very qualified candidates” to replace him. And in the meantime, eMusic Chairman Danny Stein–who runs the investment company that owns eMusic and who ran eMusic himself prior to Pakman–was serving as interim CEO.

So who’s the new boss? Same as the old boss. It’s also old news.

Stein says that’s he’s going to run the company for the foreseeable future, and that he figured that out way back in December: He just never announced it. “It was an easy decision to make”, he says.

Stein says he saw plenty of “very capable people”  but figures, a la Dick Cheney, that he was the right man for the job. He also says that the various headhunting companies who say they’re helping eMusic find a new CEO are doing so without his knowledge (or dollars).

Fair enough! The bigger question, as it has been for many years, is how eMusic fits into the larger digital music ecosystem. It sells DRM-free MP3 downloads, which some consumers like, via a subscription service, which most consumers don’t enjoy. Stein says the company has around 400,000 subscribers, and that that number has remained stready for a while. But he says his topline revenue still grew 40 percent last year, to $70 million. (No word on profits or lack thereof).

That’s a pittance compared to Apple’s iTunes (AAPL)  store, which moves about $2 billion worth of songs every year. And while eMusic was once a couple of signatures away from selling to Amazon (AMZN), that window looks like it’s closed, as the retailer launched its own MP3 store a year ago.

But perhaps there’s still an M&A opportunity for eMusic for a different retailer that wants to get into digital goods; Best Buy (BBY) did something similar when it bought up Napster last year.

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