Red Sox) has an interview in Wired with Doug Morris, CEO of Universal Music. The interview is a must read. Its clear that Morris absolutely hates his customers:
Morris goes on to rail against criminal-minded college students and
low-life punks who steal the music that his artists work so hard to
create. He admits to being fairly ignorant about technology and insists
that his job is to nurture the creative side of the business — work
that's being threatened by all of this other nonsense.
...
He wants to wring every dollar he can out of anyone who goes anywhere
near his catalog. Morris has never accepted the digital world's ruling
ethos that it's better to follow the smartest long-term strategy, even
if it means near-term losses. As far as he's concerned, do that and
someone, somewhere, is taking advantage of you. Morris wants to be paid
now, not in some nebulous future. And if there's one thing he knows how
to do, it's use the size of his company to get his way.
and despises Steve Jobs and Apple:
"We were just grateful that someone was selling online. The problem is,
he became a gatekeeper. We make a lot of money from him, and suddenly
you're wearing golden handcuffs. We would hate to give up that income."
And Morris is still deluding himself about music subscriptions:
Total Music subscription would come pre-installed on devices like
the Zune, the Sony PlayStation, or a mobile phone. Universal is well
aware of the difficulty of convincing consumers to pay for music
subscriptions, so Morris wants the device makers to pony up the cash
themselves, either by shelling out for a six-month introductory offer
or by assuming the cost forever. This would be money well spent, Morris
argues, because it would help the Microsofts of the world eat into the
iPod's market share. He has already hammered out preliminary agreements
with Warner and Sony BMG and has met with executives at Microsoft and
several wireless carriers. If Morris is able to make Total Music a
reality, he will once again have succeeded in bending the industry to
his will — in this case, by using the combined catalogs of the major
labels to help establish a true competitor to the iPod. After all, why
buy an iPod if a Zune will give you songs for free?
Unfortunately, Total Music will almost certainly require some form
of DRM, which in the end will perpetuate the interoperability problem.
Morris likely doesn't care. He is more committed to Total Music — or
any other plan that allows protection — than he is to a future where
music can truly be played across any platform, at any time. "Our
strategy is to have the people who create great music be paid
properly," he says. "We need to protect the music. I know that."
I guess this is why Rick Rubin (Morris' cohead of Columbia Records) has drunk the cool-aid on music subscriptions. The problem is that people do not want to subscribe to music - they want to own it.
I mean doesn't anybody at Universal get it? Where are the stockholders? Is this guy so powerful that he can run his company into the ground? I think Mnookin concludes that yes, Morris is that powerful and implies that if the "Total Music" initiative fails and/or iTunes climbs the last hurdle:
This year, 22 percent of all music sold in the US will move
through iTunes. "If iTunes gets up to 40 or 50 percent, they'll have
too much power for anyone else to enter the business," says James
McQuivey, who analyzes the digital music industry for Forrester
Research.
that he very well may ruin Universal.
Now, trying to unseat the iPod is not a bad business strategy but I think that everything known about consumers and how they want to purchase music says subscriptions are a dead end. Every subscription service has failed or is failing. What that tells me is that the wrong guy is running Universal:
"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."
Universal needs someone who recognizes that technology has transformed the music business and is willing to embrace this. Someone who can take the world's largest music label and get it on the path to the future and not down some dead end to protect short term profits. Someone with a lot of money on hand to take over Universal - say 15 or so billion dollars.
Until that happens, all I can say is ugh! - Will someone please save the music business from itself?
Charles Starrett at iLounge has written an excellent editorial on the growing "War on iTunes" being initiated by Universal. I urge everyone to read it.
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