Universal Music CEO Morris still dreams of getting cut of Apple’s iPod sales

“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.

Related articles:
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

40 Comments

  1. And I still dream of waking up and having George Clooney’s face, but then my meds kick in and I realise it’s never going to happen.

    Go ahead, pull your music from iTS and see how much your artists thank you for working so hard on their behalf.

  2. I think Apple should ask for a cut of the CD sales during the next round of negotiations. Since Apple is “promoting” Universal’s music on iTunes and how else are consumers going to listen to Universal’s CD’s without ripping them to iTunes and their iPod! It works for game console makers, why not Apple!!

    MW=Dead As in, Universal’s tactic is “dead” in the water.

  3. Yep, he’s a Grade A, Prime, a##hole.
    If Morris pulls his music, Apple should offer all Universal artists a chance to get their music on iTunes directly and allow them to pocket the full $0.65 or so per song that Apple would have paid Universal. While new artists need the labels for promotion, established artists would be much better off if they could get their music sold directly to their downloading fans. OK, I don’t know if the artists would go for it, but it sure would be a great “F$*k You!” to “former songwriter and performer” Doug Morris.

  4. Definately a grade lower than a###hole if you ask me. Certainly greedy on all counts and he deserves nothing from any iPod hardware sales. Or any royalties from any other hardware sales. ” width=”19″ height=”19″ alt=”mad” style=”border:0;” />

  5. He looks like that Mexican politician Lopez Obrador that is used to live from the poor and ignorant people’s money and criticism all the working people. This Morris must be a Mexican politician.

  6. I don’t really buy songs from iTunes, I have bought a couple but for the most part I rip the CD’s that I purchase and dump them onto my iPod. So now these guys want to add several $$ to the price of my next iPod to recoup more money from me, the exorbanant price of CD’s wasn’t enough for them… I can hardly wait until all musical acts do what some indie groups do, sell their music direct. I would much rather pay an artist I like half a buck to own the song than pay more money to these record marketing idiots.

  7. I can understand how, if the videos are used on Yahoo, and Yahoo uses the videos to promote other products through advertising shown with the video, Universal may get a cut of the advertising revenue. That seems like normal capitalism at work – royalties for commercial use.

    I don’t get how this relates to iTunes or, even a bigger stretch, to iPod sales. iPods (and iTunes) use of the video isn’t connected to other advertising. If I want the video on iTunes I pay for it and they already get their cut of the sale. That’s not commercial use, I’m not buying a commercial license, but a personal one, so I can watch or listen when I want to. And, if I share it with a friend (share – as in let him listen, not give him a copy), then it’s perfectly within my (fair use) rights.

    I can’t watch it for free, except a 30 second preview and it’s not connected with advertising other product, either.

    Seems like Universal is trying to create a revenue stream that’s based on personal pay/play in addition to commercial pay/play. Greedy.

  8. Morris is going to look pretty silly in May when he signs up to continue selling via iTunes on the same deal as before.

    If he thinks that publicly announcing he’s going to get Steve Jobs to change his business model is a good strategy to adopt before even starting negotiations, then he’s in for a rude awakening.

    It would have been more sensible to keep his mouth shut and get rejected in private, but he doesn’t have much of a track record for sensible decisions, so that doesn’t come as a surprise.

    He might fantasise that he has the option to take his artists was from Apple, but he would also be taking them away from any chance to figure prominently in the music charts. I’d love to see him explain to his artists that it would be beneficial not to get into the top 40 any more.

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