EXCLUSIVE: Interview With Orchard CEO Greg Scholl

Part 1 of 3: Doing Business With Russia & Other Emerging Markets

Last week Greg Scholl, the President and CEO of digital distributor The Orchard sent an open letter to the US and Russian governments and music industry leaders outlining initiatives by the company to bring "legitimate electronic commerce" to Russia.

HYPEBOT: The Orchard has been a pioneer in licensing music in Russia and other emerging markets. Given piracy issues have your label clients seen any significant revenue from these markets.

SCHOLL: We are very encouraged by the initial revenue figures from the two Russian services to which we have licensed tracks, i.e., Yanga and Audiofind. In Russia, like many countries where piracy exists at staggering levels, the process of working constructively with governments, labels, retailers and consumers to migrate the business into legitimate retail channels will be a slow one, but we take a long-term view of the value of our positioning in and commitment to these markets.

We can point to a specific success story with the Orchard-distributed band "ist", part of a new wave of Western artists who are building a profile in the Russian Federation through exposure online. ist was the top-selling act on Yanga the week of June 28, 2006, and the band’s two most recent albums held the Nos. 1 and 2 positions on Yanga’s album chart. The "ist" has developed a Russian tour based on this success and the market visibility the positioning gave the band. Certainly, there, the value to the band extended beyond a simple view of "how many tracks got downloaded?" Building and monetizing audiences is part and parcel to selling songs online and throughout our retail network worldwide, we’re focused on creatively doing both.

We look forward to helping more artists gain exposure in Russia – and throughout the world – by making new distribution and marketing channels available to them.

Tomorrow: The Russian Response To Piracy & AllOfMP3.com omorrow: Piracy & AllOfMp3com