Doug Morris, CEO of Universal that sells one in three CDs around the world, told Reuters the ability to find star artists and generate hit records will continue to matter more for the success of a music company than simply being bigger or scaling resources.
“Everyone disagrees with me but I don’t think scale is particularly important,” said Morris, chief executive of Universal Music Group, a unit of the French media group Vivendi.” “I really don’t know what you get from actual size – you get a chance to get smaller, he said referring to the need for staff and resources cutbacks.
THE END TIMES FOR RADIO?
This year has been a drastic change for radio. For years, Labels have been involved in radio payola scheme. UMG among others has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs
But Morris said that he thinks Spitzer’s investigation might have backfired by making radio companies play even safer than usual to avoid being suspected of being paid to play new artists.
“I think the initial object of Spitzer’s intrusion into the record business was to really put everything on a level playing field, he said.” “Spitzer cleaned it up and put in regulations that makes everyone much more careful about what they play – but its slowed down the radio playlists,” he said, referring to the addition of new artists’ songs to radio programming.
SELLING CD’s IS A TOUGH BUSINESS, NEED TO ENGAGE IN NEW BUSINESS OPPORTUNITIES
The Music business is currently at its tipping point with the decline of physical CD’s, with the lack of “Hits”, as its faced with explosion of both illegal and legal digital music.
Morris said for companies like Universal to do well in the future, they will need to evolve from the current model of record production and distribution to becoming a more diverse music company developing new revenue streams effectively becoming an entertainment company rather than just records.
“We’re going to branch out more into television and movie projects but you have to remember we’re not good at television or making movies so we have to be very careful.” Morris said the current change-over to digital music could generate potentially much bigger rewards than previously imagined for record companies if they could adapt the business to new technologies.”The guy who got it right was Steve Jobs he came up with the complete thought – from the store through to the iPod. Simple to use, inexpensive and we helped launch it.”
Doug Morris seems to have the right intent in moving forward in the ever-changing music industry. Although selling CD’s remains a core business for any label, one needs to seek new business opportunities to survive. I also agree that major and indie labels should focus on breakthru artists that have the potential to create blockbusters. The seventies, eighties, and nineties provided healthy record sales and career artists. Now we have 30,000 releases a year and no “blockbusters” other than a few exceptions. Throwing thousands of rubber darts against the wall and hoping one sticks is aÂ costly game with guaranteed losers. Although, IÂ completely disagree with his comment regarding the investigations into the radio payola scheme backfired. Radio Payola was one of the 7 deadliest sins the industry committed. No excuses for trying to turn a “turd into a hit”. Once upon a time the industry sought out breakthrough artist’s that changed culture, changed platforms, and even changed playlists. Then, the radio playlistsÂ dictated the industry and signings. Currently radio is in a state of chaos. “It chopped off eachother’s head”