Will Universal Manage To Make A Music Player More Useless Than The Zune?
When a company’s earnings fall 25% in the first half of the year, sometimes executives start to panic and develop bad ideas that will never ever ever work. Today’s example is Doug Morris and the Total Music Service, an alternative to the Apple music empire and Morris’ mortal enemy, Steve Jobs. Something good about Total Music: purchase a player, and theoretically, the music would be included, with the Universal, Sony/BMG and Warner catalogs at your fingertips. The bad news: you might not be able to play anything else.
When an unanswered question about your new line of music players is whether you can use it to play MP3’s, it might be time to go back to the drawing board, but Morris and his blind rage towards Jobs and his music marketplace must prevail! Irving Azoff says so!
While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that’s essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would move many more players. “Doug is doing the right thing taking on Steve Jobs,” says ex-MCA Records Chairman Irving Azoff, whose Azoff Music Management Group represents the Eagles, Journey, Christina Aguilera, and others. “The artists are behind him.” Morris and Jobs were once the best of allies. When Jobs began pushing his idea for a simple-to-use download store in 2003, Morris backed him. Industry insiders say Jobs felt that Morris, unlike many other music executives, understood that they had to adapt or die. And in the years that followed, Apple and Universal moved in near lockstep. But before long, Morris realized he and his fellow music executives had ceded too much control to Jobs. “We got rolled like a bunch of puppies,” he said during a recent meeting, according to people who were there. And though Morris hasn’t publicly blasted Jobs, his boss at Universal parent Vivendi is not nearly so hesitant. The split with record labels–Apple takes 29 cents of the 99 cents–“is indecent,” Vivendi CEO Jean-Bernard Levy told reporters in September. “Our contracts give too good a share to Apple.”… With the Total Music service, Morris and his allies are trying to hit reset on how digital music is consumed. In essence, Morris & Co. are telling consumers that music is a utility to which they are entitled, like water or gas. Buy one of the Total Music devices, and you’ve got it all. Ironically, the plan takes Jobs’ basic strategy– getting people to pay a few hundred bucks for a music player but a measly 99 cents for the music that gives it value–and pushes it to its extreme. After all, the Total Music subscriber pays only for the device–and never shells out a penny for the music. “You know that it’s there, and it costs something,” says one tech company executive who has seen Morris’ presentation. “But you never write a check for it.”
It seems to be a common theme with music companies that any amount of money that isn’t flowing directly into their coffers is heading the wrong direction, but it seems somewhat ridiculous to bite the hand that feeds with Apple, especially to go in the direction of furthering the perception that the music itself has no value. As wonderful as the collected catalogs of the biggest three music distributors are, a player that only works with their music is going to be worthless to most consumers when they realize that “This Is Why I’m Hot,” “Walk It Out,” or “We Fly High” aren’t available. As important as the feelings of the artists might be to Doug Morris and Irving Azoff, it’s hard to imagine any device that shorts the consumer so throughly getting off the ground.
Universal Music Takes on iTunes [Business Week]
