Our New Service Is Called ‘Total Music,’ but We Like to Refer to It Internally as ‘Total Panic’
Doug’s a very special guy. He’s the last of the great music executives who came up through A&R. He’s old school. I like him a lot.”
–Apple CEO Steve Jobs on Universal Music Group CEO Doug Morris
The per-device royalties Universal Music Group receives for every Zune player sold were apparently substantial enough to buy CEO Doug Morris a bigger set of balls, because he’s out drumming up support for an industry-owned subscription service with which he hopes to loosen Apple’s grip on the digital music market.
The endeavor is called “Total Music,” and Morris has already approached Sony BMG Music Entertainment and Warner Music Group about participating. His proposition: a subscription-based music service for the hardware industry, one whose cost could be baked into the hardware that supports it. Under the Total Music model, hardware makers subsidize the cost of music, which consumers are then given for “free” when they buy a new digital media player. That’s more money up front for hardware makers, but it’s a wise investment because, as Morris reckons, they’ll make that money back and then some by selling many more devices.
Interesting business model. “If the object is to wrest control of the market from Steve Jobs,” said Gartner analyst Mike McGuire, “this is a credible way to try it.”
Sadly for Morris, it’s also one inevitably complicated by recent turmoil in the music industry. With Radiohead releasing its latest album as a pay-what-you-will digital download, Nine Inch Nails declaring itself a free agent, and Madonna about to dump Warner Music Group for a concert promoter, we’re clearly seeing a sea change in music discovery, distribution and consumption, one perhaps lost on an industry so hardened by years of CD price fixing. So while the music industry struggles so to wrest control of the digital music market from Apple, some of today’s biggest popular artists are crafting an entirely new business model.
Comments
I’m sure upon hearing Doug Morris scheme, and Mike McGuire’s amen to it, Steve Jobs must have thought, paraphrasing John Kennedy, Doug Morris may an idiot, but he is our idiot. Seriously, I like this guy Morris. If the music industry follows his advice, this is good for Apple. Why?
If Universal, Sony BMG, and Warner try this stunt and fail (and they will definitely fail), they will have not only wasted tens, maybe hundreds, of millions of dollars, but the leaders, and I use that term very loosely, of these companies will have also lost most of what little credibility they have left. In short, by taking on Apple, they will weaken themselves much faster than is occurring naturally right now and will make Apple’s job of maintaining its dominance in music much easier.
I swear, I have to wonder what in the world passes for intelligence in the music business?
Posted by Jim Hillhouse at October 12th, 2007 at 3:00 pmDoug Morris is intelligent. He graduated from Columbia.
Posted by Dave Barnes at October 12th, 2007 at 4:12 pmIn my opinion, the top execs at the music companies are a bunch of 60+ year olds (e.g., Doug Morris) who are trying to hang on to their very fancy corner offices and immense salaries for “just a few more years”.
I don’t believe they really care about creating a long-term strategy for success in the music biz.
Here is how I see the digital music world: 1. Most music is obtained for nothing on P2P networks. 2. The price of digital music that is purchased is falling (see Wal-Mart and Amazon). 3. In order to move mp3 players, manufacturers are slashing prices.
So in the digital music world where the price of everything is falling, Morris really believes that adding $90 to get in the game will entice consumers?
I like the approach of bundling unlimited music with hardware but make the music truly free. In fact, make the hardware free.
How do you do this? Advertising support.
Check out the Ad-Supported Music Central blog:
Posted by Marc Cohen at October 12th, 2007 at 4:21 pmhttp://ad-supported-music.blogspot.com/
I think a better solution would be for the record labels to make their own media players, so they could decide who, what, where, when, and how. They could make them “official” players, and create their own formats, and encryptionation. That’s the best solution. The sooner they start on this, the better. No reason why they can’t.
Posted by rod sandcones at October 13th, 2007 at 3:40 pmHey, great ideas, Universal!
As a musician, I was thinking of adopting a similar business model: Anyone who has ever heard music at any time, live or recorded, owes me a guitar!
Bypassing all the middle-men, this “instrument surcharge” will help defray expenses I incure in my continuing efforts to create music no one wants or cares about. It’s win-win!
Posted by Jim Williamson at October 15th, 2007 at 9:25 am