Search Results

Having written about the music industry (here, here, and here), InsideWork's Al Lunsford notes with interest the Wired Magazine article on Universal Music Group's CEO Doug Morris.

Morris, perhaps more publicly than his peers, is angry with Apple for giving customers what they want—and in the process breaking major label hegemony over the distribution of non-independent music (independent musicians have none of the benefits—real and perceived—of signed artists but they also have none of the constraints). And Morris is maybe more than a little bit angry that he agreed to a deal that made the iTunes Music store possible.

Mr. Morris doesn't like being disintermediated and resents the "golden handcuffs" that keep him in the deal with Steve Jobs. "We make a lot of money from him," Morris tells Wired. "We would hate to give up that income." No surprise there. But why didn't the major labels act sooner—and proactively—to leverage emergent digital technologies?

"There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"

Personally, I would hire a vet. But to Morris, even that wasn't an option. "We didn't know who to hire," he says, becoming more agitated. "I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me." Morris' almost willful cluelessness is telling. "He wasn't prepared for a business that was going to be so totally disrupted by technology," says a longtime industry insider who has worked with Morris. "He just doesn't have that kind of mind."

As interesting as all this is, the thread of comments at Wired (also at MacRumors.com) may say more about the commercial future of music than Mr. Morris wants to hear.

"For Doug to say the label had no technologist is a load of crap. How about he didn't want to listen to any of them. In Circa 2000 Universal Music Group was suing the pants off of a company called MP3.com…"

"The problem, he says, is that 'there's sympathy for the consumer… ' That's the PROBLEM???"

"God - hear my prayer; I want 'Total Music' to fail!"

"These music execs, besides being absurdly greedy, selfish and short-sighted, seems to pride themselves on their tech ignorance. No wonder preteens are riping a hole in their business model. I hope to see them go the way of the dodo soon (and this time, everyone will cheer this extinction)."

"The writing was on the wall when music went digital (a music store employee told me in 1985 "Someday you'll just plug your TRS80 into your modem and wham, ten hours later you will have downloaded all of Led Zeppelin 4!")…

"Our strategy is to have the people who create great music be paid properly." Oh, that's just too funny."

"Music may be more popular than ever, but it's also more meaningless fodder than ever and that's the true reason the industry is tanking."

"As usual, the major labels are completely out of touch and talking rubbish. They won't be here for much longer, obviously, as they refuse to adapt. People are not interested in "renting" music - they want to "own" it…"

"He only cares about the artists… right… I sure wish these guys would just retire and give the reigns to people that are actually looking FORWARD and not trying to hold onto the past."

"What Morris and other music biz execs don't seem to realize is that the game is already over. The net has already replaced CDs. And their fear of iTunes and Steve Jobs is pathetic. They completely missed the opportunity to capitalize on digital music. And the reason is simple: Greed."

All that said, it's not safe to paint the major labels with one brush. In fact, it's not even safe to assess Universal Music Group by the attitudes of its chief executive.

Perhaps "Group" is the operative word in Universal Music Group. About the same time the Wired article was released, Universal-owned Island Def Jam set a new record for highest first-week digital sales with 133,000 downloads of Kanye West's album, Graduation. John Bartleson, vice-president of digital media for Island Def Jam, told Fast Company that, "Music is so easy to experience online relative to other media."

But nobody's putting all their eggs in the download basket. At this writing, iTunes accounts for about 22% of total music sales. Kanye West's new release sold a SoundScan total of 957,000 copies the first week, of which those 133,000 downloads accounted for less than 15% of initial sales. Digital downloads haven't yet swept compact discs away as a delivery platform.

But they will. The question is whether the major labels will still be major when that happens. Or will Universal have spun off Island Def Jam by then to pay for Mr. Morris's parachute?