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The tragedy of Doug Morris - November 27, 2007

The digerati are having fun making fun of Universal Music Group CEO Doug Morris, who generally comes off as a clueless Luddite in Seth Mnookin’s give-‘em-enough-rope profile in the current Wired.

Morris himself admits as much in the money quote making the rounds of the blogosphere:

Morris insists there wasn't a thing he or anyone else could have done differently. "There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"

Personally, I would hire a vet. But to Morris, even that wasn't an option. "We didn't know who to hire," he says, becoming more agitated. "I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me." Morris' almost willful cluelessness is telling. "He wasn't prepared for a business that was going to be so totally disrupted by technology," says a longtime industry insider who has worked with Morris. "He just doesn't have that kind of mind."

Media Wonk certainly isn’t going to defend a highly paid CEO who got almost everything about his business wrong over the past 10 years (why were there no technologists in the record companies? If you’re going to get the big bucks, shouldn’t you at least be expected to know what you don’t know, and find someone who does)?

But I will say this for him: he is, at heart, an old A&R guy, like a lot of the dinosaurs running record labels these days. Their gig was always about finding and nurturing artists.

By and large, they loved music and they respected musicians. That didn’t stop them from screwing artists financially, but at least they respected the talent that went into making good music.

Today, the music industry is ruled by Steve Jobs, who, despite his turtle-necked, hipster pose, just doesn’t strike me as a music guy at heart.

The real story in Mnookin’s profile is Morris’ rather poignant insistence on protecting the A&R function no matter what. Poignant, because it’s ultimately futile.

“This business had been the same for 25 years,” Morris sobbed to Mnookin.

The hardest thing was to get something that somebody wanted to buy—to make a product that anybody liked.” The part that Morris and his kind were good at, or at least knew.

Like so many other things in the media industries, however, the A&R function of record companies—once seen as the heart of “the business”—turns out to be technologically dependant.

It was the high margins the labels made off the sale of CDs and, before that, vinyl records that made loss-leading A&R departments possible.

Record labels got into the A&R business because the margins they made were high enough to make it worth the cost to go out and find new product.

So long as the margins remained high, new product development—A&R—became the engine that drove the business. Those who were good at it sold more product. It was how you competed.

Whatever the digital future holds for the record labels, it won’t hold those kinds of margins. And without those high margins, the labels will no longer be able to pay for A&R.

The A&R function will still happen, but it will happen outside the control of the record labels. Their business will be selling and licensing music ratified by someone else.

The tragedy of Doug Morris and his peers—the concept they still haven’t gotten their heads around—is that they no longer get to say what’s a good record. All their other blind spots stem from that.

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