UMG CEO Doug Morris Interview in Billboard

Exclusive Billboard Q&A: UMG's Chairman/CEO Doug Morris

This should be good: another interview with UMG CEO Doug Morris. Earlier, I commented on an interview Mr. Morris gave to Wired magazine in 2007. Now he's back with some more confessions. The interviewer jumps around with disjointed questions and starts the article trying to position the ego of the head of the world's largest music label as somehow modest. Here are some points from the interview that struck me as odd.

On promotional distribution, Morris says he doesn't do promotion, yet says his first experience with breaking a band was through radio promotion and a record order that included 20% promotional units.

"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?"

What did he get?! His companies didn't just sell "some records". They sold tons of records from the free prmotion MTV gave them, and MTV built a business. If Morris wanted to own that business, why didn't he start it himself? His attitude towards digital is the same thing. If he thinks he can do digital better, why doesn't he? Because, as he admitted to Wired last year, he has no idea what digital is. So why not make and sell great music, and let someone else build your business by figuring out how to promote your product?

Morris brags how he pulled his videos from Yahoo! and might not renew Universal's YouTube agreement at the end of the year.

With YouTube, the quality isn't great; it gets low [cost per thousand]... Why would you want to be in the middle of music-generated product that doesn't demand high CPMs?

...we called [Yahoo] and I said, "You're making money off our videos and not paying us anything... we don't want the promotion, we want to get paid." And [they] said basically something like, "Over my dead body." And we took all our videos down. As soon as our videos came down their viewership went down, because we're about a third of all their videos.

Morris doesn't mention that his sales also went down, and have still been falling ever since. Most businesses want to be where their customers are. So why didn't he work out a deal with Yahoo? I imagine his demands included more than just getting paid. They probably included getting paid too much, and unrealistic technology limitations that would have shrunk Yahoo's usability anyway. Morris says videos are now a cash-positive business, which is great, but what additional value is he leaving on the table?

Regarding RIAA lawsuits and theft of music, Morris makes this ironic statement, as anyone who has tried to deal with the labels says they're the ones that are not logical:

You have a lot of people who think that things should be free. I don't know how they think we should produce it for free, but there's a lot of people who aren't logical.

Morris even obliquely refers to his disasterous comments from the Wired article about not being able to recognize a technology person by claiming he can recognize other great business people (bold added):

Whatever their education is, whether it is or isn't, it's about them having some connection with culture and the fact that they are competitive and driven and intelligent. When you get that group of people together, you win. I can recognize them a mile away.

I give Morris credit for building a label that has around a third of the music market (by having best acts around, and lots of them), but his lack of digital savvy will help bury any post-physical future major labels may have had.