Idiot Executives

(for the full text of this blog, see the Evolving Music blog)

Read an interesting article this week in Wired. Actually, the entire magazine was phenomenal and prompted me to order a subscription, but one article jumped out. Examining the current state of the music industry through the eyes of Universal Music Group's CEO Doug Morris, author Seth Mnookin prompts a series of new perspectives and questions surrounding the idea of where exactly we are now and where we are likely to go in the future with regards to music rights management, distribution and artist promotion. All of which, obviously, are keen topics in the mind of MixMatchers.

Morris is an industry ancient. If it weren't for the fact that the past several years have seen him hammering other companies over rights to use and sell the Universal catalog with great success, he'd be a dinosaur. But he has. He's been very busy, limiting who can use the Universal catalog and when, making YouTube sign an agreement with regards to the licensing, he's engaged in a lawsuit with Myspace, and he has even gotten Microsoft to give Universal $1 for every Zune music player sold because they could be used to play music that wasn't directly paid for by the listener.

So why's he involved in all these digital disputes at the moment? It boils down to the record industry turning an ignorant eye in the 90's to the idea that the huge profit margins on CDs and the public's willingness to buy them couldn't be eradicated by something as non-tangible and silly as a, um, what was it called again? Oh, yea, mp3. When you look at this period in time, it would be easy from an outside perspective to see clearly and rationally that the record labels didn't want to go digital for fear of losing the justification for the large profit margins created by CDs. So rather than get out in front of the mp3 movement and attempt to control its direction, record companies dug in. The obvious initial example is the first assault on Napster. When Apple launched the iTunes store, they were only able to get major labels to sign on because when you break it down, Macs are a small percentage of the population, so how much could they possibly damage the sale of CDs? Of course, this is before the Windows iTunes was released....I doubt Jobs told the execs THAT when he was pitching for them to sign up and let him sell their music on the web.

Article continues here.