Wired writer Seth Mnookin chronicles the upset Universal Music Group CEO Doug Morris feels today about the digital revolution and the iTunes stranglehold Apple holds on the download music market. In an era of new technology, Morris is old school, and he shows it.
From the outside looking in, record labels helmed by men in their 70s (i.e. Morris, Davis) seem like foreign countries led by oligarchs. Crotchety old men yelling in the halls, “they must pay for everything,” yet they once instructed their promo departments to ship hundreds of boxes of free CD’s to mom & pop retail as a bribe so those stores would sell more and pocket the difference.
I recently had a conversation with a former record industry executive who pointed out to me that the salaries executives receive here in the U.S. to fail would never exist in other countries. There have been a number of companies whose executives take a token salary of $1 when times are tough. Their bonuses are tied to the overall performance of the company. Yet, here in the good’ol U.S. of A., we reward executives with golden parachutes when the board and shareholders kick them to the curb.
Mnookin points out that Morris’ office is in the process of being renovated. Great that Doug can spend a few dollars to make sure his throne looks like the Oval Office. Has anyone walked through the offices of Island/Def Jam lately? The way the external offices with windows were built, little light gets into the internal cubes. It looks so grey, dull and dark–just like the predicament labels put themselves into. The lighting is poor. The office walls are scuffed. The employees are hunkered down, backs facing the aisles, all trying to meet numbers for the quarter. Is that what this business has become?
UMG’s new Digital EVP, Rio Caraeff says the music business is turning into one of service and away from physical product sales. He’s absolutely right and he’s taking the steps to put into place a new, service oriented business model (Disclaimer: The company I work for has a license agreement with UMG).