“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 anxious to promote their artists,” Alex Veiga reports for The Associated Press.
Veiga reports, “So when he saw his own 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 deal in 2005,” Veiga reports. “He wrangled similar arrangements from Time Warner Inc.’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 Inc.’s YouTube, Microsoft Corp. and News Corp.’s MySpace.”
“‘I’m no tough guy,’ said 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.’ I’m going to be a kamikaze pilot until that’s all straightened out,’ he said,” Veiga reports.
Veiga reports, “Morris has already suggested, albeit guardedly, that his next target will be iPod-maker and No. 1 online music retailer Apple Inc. With Apple’s licensing deal to sell Universal music on iTunes set to expire in May, Morris said, ‘there might be other ways to get paid.’ Speculation in the industry is that he’ll seek a slice of iPod sales. Apple declined comment.”
Veiga reports, “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 said.”
Veiga reports, “Last fall, Morris threatened not to license Universal music to Microsoft just days before it 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 just over 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, a move that 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.”
Full article here.
[Thanks to MacDailyNews Reader “Steve” for the heads up.]
We’re all for people getting fair compensation for their work, but not for work they didn’t do. Apple should never capitulate to forking over iPod royalties to greedy old suits like Morris (who last November basically called iPod user thieves) whose hunger for money exceeds the bounds of propriety. Until Microsoft crossed the line, either in desperation or underhandedness, no device maker paid such royalties. AM/FM/Satellite radio makers do not pay content providers a royalty on each radio sold. TV makers do not pay content providers a royalty on each TV sold. Phonograph makers did not pay royalties to the labels on record players. Audio speaker makers pay no royalties to labels, either. The list goes on and on. Why should Universal get a percentage of an iPod sale when Universal content may never even be played on that iPod? Content providers that seek royalty payments on hardware devices are illogical, greedy, and severely out-of-touch.
A royalty fee for iPods? Universal CEO Morris must be dreaming – December 03, 2006
Universal CEO Morris wants iPod royalty fee from Apple – November 28, 2006
Microsoft’s Zune selling like snotcakes – November 15, 2006
Universal Music Group CEO calls iPod users thieves – November 11, 2006
Following Zune deal, Universal expected to demand iPod royalties from Apple – November 10, 2006
Microsoft to pay Universal for every Zune sold – November 09, 2006
Warner’s Middlebronfman: ‘We sell our songs through iPods, but we don’t have share of iPod revenue’ – October 05, 2005