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Universal Music CEO enforces get-paid mantra on licensing - USATODAY.com

Universal Music CEO enforces get-paid mantra on licensing - USATODAY.com
Andy Jones  |  by www.usatoday.com. All rights reserved. 16.01 | 19:33

LOS ANGELES (AP) Universal Music Group CEO Doug Morris resents that MTV and other cable music channels built multibillion-dollar businesses around videos given away by record companies eager to promote their artists.
So when he saw his grandson watching 50 Cent's In Da Club video on Yahoo, it got him asking: "How much are we getting paid for that?

"
The answer nothing led Morris to pull all of Universal's videos from the giant Web portal until it agreed to a licensing agreement in 2005.
He wrangled similar arrangements from Time Warner's AOL and other Internet portals as part of his unrelenting campaign to generate more revenue for Universal.
Among Morris' most recent targets were Google's YouTube, Microsoft and News Corp.

's MySpace.
"As the largest music company, he's got an interesting hand of cards," says Mike McGuire, a technology analyst for Gartner. "He's playing them pretty adamantly and pretty hard.

"
Universal, a division of French telecommunications giant Vivendi, accounted for about 31% of U.S. album sales in 2006, according to Nielsen SoundScan.

The company is home to artists such as U2, Kanye West and Mariah Carey.
Morris' get-paid mantra has cast him as a champion in the eyes of many people in the industry and a bully among others at a time when music companies are trying to stem losses from declining compact disc sales and widespread online piracy.
With online music and video becoming the digital content of choice for iPods, mobile phones and websites of every stripe, the recording industry is scrambling to find ways to cash in as much as possible.


"I'm no tough guy," says Morris, 67, a former songwriter and performer who is entering his 12th year as chairman and chief executive of Universal Music.
"It's just the position you get put in, where you're either going to succumb to it, and say, 'Fine, that's OK, yeah, put your advertisements next to our videos, we don't care,' or you're going to say, 'Hey, this isn't fair,' " says Morris.
"I'm going to be a kamikaze pilot until that's all straightened out.

"
Other recording companies have yet to follow Universal's hard-line lead, particularly in suing online video and social networking sites. They appear happy to let Morris carry the fight through lawsuits and other measures.
In his tussle with YouTube, Morris called the site a hub for pirated music videos and negotiated a licensing deal that landed Universal and other labels small stakes in the company just before it was acquired by Google for $1.

7 billion last year.
A bigger slice from Apple?
Morris has already suggested, albeit guardedly, that his next target will be iPod-maker and No.

1 online music retailer Apple. With Apple's licensing deal to sell Universal music on iTunes set to expire in May, Morris says, "There might be other ways to get paid."
Speculation in the industry is that he'll seek a slice of iPod sales.

Apple declined to comment.
Universal's upcoming negotiations with Apple could set the tone for the rest of the recording industry. But Morris says he doesn't know if he's prepared to pull Universal's music from iTunes to get a cut of iPod sales.


"I wouldn't want to draw a line in the sand," he says.
Last fall, Morris threatened not to license Universal music to Microsoft just days before Microsoft was scheduled to launch its own online music store and its Zune digital music player. In response, the software company coughed up a royalty of slightly more than a dollar for every Zune sold and paid a licensing fee for the right to sell Universal music.


Microsoft extended the same terms to other labels, which led Edgar Bronfman Jr., chairman and CEO of Warner Music Group, to tell Wall Street analysts that it took a strong stand by the industry leader to make the deal happen.
Morris isn't sure he's cut out for the role of enforcer but believes he has no choice.


"The truth is that I'm the most unlikely candidate because I don't like being in the middle of the sandwich," he says.
Morris broke into music as a performer and songwriter in the late 1950s. His writing credits include the Chiffons' sugary 1966 chart-topper Sweet Talkin' Guy.


He launched his own label, then sold it in 1978 to Warner Music's Atlantic Records. Two years later, he became president of Atlantic.
As a record executive with roots in songwriting and performing, he was seen as an ally to artists and creative executives.

But he could also come down hard on artists who didn't live up to expectations.
Among the bands Morris worked with was INXS. When their fourth album took a stylistic detour and sales lagged in the USA, the displeased Morris had a talk with Chris Murphy, then the manager of the Australian band.


"He definitely showed his inner personality and was pretty wild with me. He was just very aggressive," Murphy says.
Still, months later, when Murphy asked Morris for support in moving the band from a smaller label to Atlantic, Morris agreed without imposing any stylistic demands, Murphy recalls.


In the mid-1990s, Morris vaulted to president and chief operating officer of Warner Music U.S. the parent company of the Atlantic label but soon was ousted in a clash with corporate management with its then-parent company, Time Warner.


"It was a very difficult period," Morris recalls. "You can't live in a place for 17 years and then not be there the next moment and have to start again."
He went on to form a joint venture with MCA Music Entertainment Group and was tapped in 1995 to be chief executive of the company, which was renamed Universal Music Group.


"He put that company together, and he's kept it together despite all the changes in ownership and the changes in technology," says Danny Goldberg, a former chairman of Warner Bros. Records who worked for Morris in the early 1990s.
Goldberg says Morris has remained atop the volatile industry in large part because of his realistic, forward-thinking vision.


"He's a survivor," Goldberg says. "No one ever got rich betting against Doug Morris."
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Keywords: Universal Music, Music Group, Warner Music, Universal Music Group, Time Warner, Doug Morris
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