Universal CEO Scares Me: Part II.

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Yesterday I wrote about Universal CEO Doug Morris and how he claims all the mistakes the major labels have made (and are making) in regards to digital downloads are only because they “just didn’t know what to do”.

My post was based on an excerpt of a longer interview with Morris. The full interview is available on Wired, and suggested reading. After reading the entire interview, this is what immediately sprang to mind:

Oh. My. God.

It turns out the earlier excerpt wasn’t just a quote pulled to make Morris look silly. No, pretty much all the stuff he says in the interview will do that. Let’s take a look at a few other gems Mr. Morris had for us…

“”It was only a couple of years ago that we said, What’s going on here?’ Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs.“

He should be bounced out of the CEO office for that remark alone. The “worth” of anything is relative, and one item’s worth has no bearing on another. Morris implies a cup of Starbucks is worth $2 so an album should be worth X times as much. I could just as easily claim a downloaded album is overpriced at $10 (it is) so a cup at Starbucks should be worth 35 cents!

Doug, things are worth what people are willing to pay. No more. No less. The rampant “free” music your industry all but encouraged this decade has devalued your property. You had your “Starbucks” in the 90’s when CDs were 18 bucks and people bought ‘em. That’s over.

“If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.””

Geez, this guy’s analogies are killing me. With all the free-flowing music on tap today people still buy CDs (declining sales) and digital downloads (rising sales) by the truckload. You’re simply pissing and moaning because the truck’s not as big as it used to be. It’d be the same damn size if you’d sold the digital goods eight years ago instead of trying to sue everybody, charge too much, stomp all over fair usage rights, and sucker us into subscription models only 10 people want.

Even after the lessons of the last eight years you guys are still encouraging people to look into alternatives. I’ve got news for you: When somebody finds an alternative and becomes comfortable with it, I don’t think you can get them back.

In this next quote, the emphasis is mine:

“”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.”

Then why the f**k is he still the Universal CEO?!

And Doug, why admit you’re an idiot to the world? Are you as clueless about digital print as you are digital music? Did you think nobody would read the article and see your quotes?

I don’t think a CEO has to know everything, but I think he has to know how to tell whether he’s being BSed or not. Telling the world you’re a dope, and were therefore better off following your own stupid ideas instead of somebody else’s stupid ideas is not a particularly encouraging strategy. Maybe Doug will get lucky; perhaps Universal shareholders don’t read Wired.

Meanwhile, when discussing the iTunes deal with Apple:

“”Looking back, the best thing we could have done would have been to mandate one format,” he says. So why didn’t that happen? Morris is happy to field this one. “It never crossed anyone’s mind!” he exclaims. “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.””

AAAAAAAARRRRRRRGGGGGHHHHH!!! (Sorry, had to get that out of my system.)

So what’s the problem, Doug? You’re making a lot of money from iTunes, and would hate to lose their business, but you’re actively working on initiatives to limit their revenue and crush them.

Universal has all but admitted the incredibly successful iTunes store simply doesn’t charge enough and provides too many usage rights for the consumer. Their goal is to jack up revenue in any way they can via subscriptions (with very restrictive DRM), higher prices, a cut of the hardware profits, ads, or any other screwy scheme that comes to mind. Apple won’t play ball, so Universal wants to crush them and hop in bed with Microsoft, who’s already paying Universal a hardware cut of the Zune and never met a DRM they didn’t like.

I find it laughable that Universal reminds everyone the hardware vendors didn’t create the content, but never point out that the content providers didn’t create the hardware.

“”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.””

The labels have been using artists for years; stop acting as if you’re a caretaker over anything other than next quarter’s profits. If you were taking care of artists, they’d be coming to your defense. They’re not. Instead, the successful ones are leaving the labels and forming their own deals (sadly, in some cases with the same digital download detest that Morris has).

Finally, this item in the article is particularly enlightening:

“Morris’ ascent coincided with the rise of CDs — the biggest boon the music business has ever known… By 2000, more than 900 million CDs were being shipped each year. Many of those were back-catalog purchases, as music fans converted to the format that seemed destined to make all others extinct.”

This tells us Morris was not some kind of genius, but rather simply rode the CD wave where it was all but impossible not to grow and rake in huge volumes of cash. The entire industry was doing it hand over fist. So what we’ve learned is not only that Morris isn’t very bright now, we don’t even know if he was particularly bright then.

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