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Universal Music CEO Still Doesn't Believe In The Promotional Value Of Music
from the how-does-this-guy-stay-in-charge? dept
A year ago, we were fairly shocked at an interview with Universal Music CEO Doug Morris. The guy gleefully explained how clueless he was about technology, and said that he didn't even know enough to hire people who could properly guide him to understanding how technology was impacting the music industry. Furthermore, he displayed an ignorance of basic economics and basic finance at the same time by insisting that any sort of promotion that might pay back tenfold at a later date was bad business because it meant someone was "taking advantage of you." Yes, apparently, the idea of spending a dollar today to make back ten next year makes no sense to the CEO of a large company. We wondered how Universal's shareholders could possibly let someone so gleefully clueless continue to run the company.
Apparently, he's still at it, and still not afraid to open his mouth and expose his ignorance. In Morris' latest interview he insists that the company doesn't believe in promotions, but wants to get paid for every single use of its music:
"We don't look at anything as promotion. Take a look at MTV. It turned out to be a disaster for us. We sold some records, but they built this huge company and we gave them our (music) for nothing, and what did we get?"If this sounds familiar, it's probably because fellow big record label boss, Edgar Bronfman recently used the same fallacious logic in claiming that video games like Guitar Hero and Rock Band were getting all the benefits from Warner Music's bands, without giving anything in return. In both cases, you have content providers who are significantly overvaluing the content, while significantly undervaluing the way that content is used. In this case, notice that Morris is admitting that MTV actually did help Universal sell more records. So what's the "disaster"? It's that another company, MTV, also got big. As we recently explained, this psychological phenomenon is seen throughout the big record labels. They care less about their own absolute success than they do about their relative success compared to others. They would prefer that they actually bring in less money for shareholders, as long as it means other companies do even worse.
I guess I can understand that, as a record label boss, you might overvalue the content, but to insist that there's no value in promotions -- even when there's increasing economic evidence that such promotions can greatly expand your market (at a time when your old strategy has resulted in a rapidly diminishing market) screams of corporate malfeasance. It makes you wonder what Universal Music's parent company, Vivendi is thinking. Are Morris' bosses just so impressed with the fact that Morris once wrote the song "Sweet Talk Guy" that they let him sweet talk them into letting him continue to run the company into the ground?
