At Sony Music, a Plan to Dominate the Industry

A huge self-portrait of Bono hangs in the Madison Avenue office of Doug Morris, the new chief executive of Sony Music Entertainment, and on a nearby table sit his snapshots, arm-in-arm with Tupac Shakur and Snoop Dogg. Along with a determination to dominate the music industry, Mr. Morris brought them from his last job as head of the Universal Music Group. My plan here is very simple,” he said on a recent visit, leaning back in his sofa. “To help create the pre-eminent record company in the world.”

Mr. Morris, one of music’s reigning patriarchs, took over Sony in July, after 15 years at Universal. He is widely seen as the most capable hand to steady Sony’s music division, which has been plagued by internal quarrels since its merger with BMG in 2004. So far he has been aggressive in trying to remake the company, the home of artists like Bruce Springsteen, Beyoncé and Usher.

At 72, his age and experience summon up the inevitable charge that as part of the industry’s old guard he is ill-equipped to thrive in the digital age. Mr. Morris rejects that notion, pointing out his role in creating Vevo, the hugely successful music video site.

Yet Mr. Morris is also an embodiment of one of the unchanging realities of the music business: that despite all the changes in technology, there is still money to be made in hits, and staying successful means holding on to a bigger piece of a shrinking pie. One way he has done that is hiring strong creative executives who can spot the next stars.

“He is a master at attracting and developing executive talent,” said Jon Landau, Mr. Springsteen’s manager. “No one is better at picking the people who pick the hit artists.”

Last Friday afternoon, after months of talks, Mr. Morris signed his first major new deal, with Dr. Luke, the pop producer behind big hits by Katy Perry and Kesha. It creates a record label, Kemosabe Records, to be financed by Sony and run by Dr. Luke in Los Angeles. And, perhaps most valuably, it also gives Sony exclusive rights to Dr. Luke’s services as a producer for five years.

Already sounding like a label boss, Dr. Luke said between the signing and the Champagne last Friday: “I plan to sign only artists that I really love and really want to work with. I also believe that songs are the bloodline of a label, so I will still be instrumental in creating and acquiring them.” Dr. Luke is a 38-year-old former guitarist with the “Saturday Night Live” band whose real name is Lukasz Gottwald.

Mr. Morris, a creature of habit, called the Dr. Luke deal an attempt “to duplicate a magic trick” 21 years ago — his bankrolling of Interscope Records, which was co-founded by the producer Jimmy Iovine and has become one of the most successful labels in the business. Dr. Luke, Mr. Morris said several times in an interview, is his new Jimmy.

“He’s the best guy at the moment, as far as a writer and a producer,” he said. “He and Jimmy are very different, but it’s the same kind of level of intellect and talent.”

In turn, Dr. Luke seemed ready to adopt Mr. Morris as a mentor.

“Doug has an amazing history, creating labels, finding talent,” he said. “I felt there is a lot I could learn from him.”

Mr. Iovine, for his part, said he was still close with Mr. Morris, but noted that they were now playing for different teams. “If we played on the Lakers and he got traded to the Knicks, I would still love him,” he said. “But when we get on the game floor, we still compete.”

Kemosabe will become Sony’s fourth label division, with Dr. Luke reporting directly to Mr. Morris. The label is expected to become operational in January, and Dr. Luke will have free rein to hire staff members and sign artists. One trade-off: because he can now produce only Sony artists, Dr. Luke will not be able to work with Ms. Perry, who records for EMI.

Mr. Morris started his career in the 1960s as a songwriter (he co-wrote the Chiffons’ “Sweet Talkin’ Guy”) and held top positions at Atlantic Records and the Warner Music Group before Edgar M. Bronfman Jr. hired him in 1995 to run the collection of labels that would become the Universal Music Group.

Late last year, Mr. Morris stunned the industry when it emerged that he would take over Universal’s biggest competitor, going head-to-head against his former protégé, Lucian Grainge, Universal’s new chairman. The two are expected to bid aggressively for artists and for Cash Money and Big Machine, two independent labels whose distribution deals with Universal are expiring soon.

Since taking over Sony, Mr. Morris has replaced top executives in Sony’s international division and streamlined the label structure, a process that resulted in dozens of layoffs and shuttered several prominent labels, like Jive and Arista. He hired a longtime Universal lieutenant, Antonio Reid, who is known as L.A., to revamp the sluggish Epic label, by making it an independent division after decades under the Columbia umbrella.

How much leeway Mr. Morris will have is unclear. Music, while representing a fairly small part of the overall business for the Sony Corporation, has been profitable. Yet the corporation itself is troubled. Last week it announced that it expected to lose $1.2 billion this year.

Because of his influential position running Universal, Mr. Morris is often blamed for all the mistakes that the major labels made in the early digital age. In a remark he will never live down, he once called iPods “repositories of stolen music.”

“All the major label heads spent years mistakenly trying things they thought would change consumer behavior,” said Fred Goldring, a former music lawyer who now invests in media and technology companies. “Their attitude was, ‘We’re not going to let anybody take our content and create new businesses that we’re not getting enriched by.’ But as a result they stifled innovation.”

Mr. Morris says his stubbornness in negotiations over digital music helped protect the rights of artists and record labels. He also rejects the idea, whispered and blogged about when he went to Sony, that he is simply too old to run a company reliant on youth culture and fresh technology.

“In each company that I’ve gone to run, that’s always been the same question,” Mr. Morris said. “And each company has gone to be the No. 1 company and the most innovative company. And I think the reason I’m never getting the credit for this is because I’m the oldest guy.”

Yet in one of his mantras, he also made it clear that no matter how music was delivered, the most important thing for a record company was simply to release music that people would want to listen to again and again.

“Our core focus still needs to be developing hits,” he said. “That’s the only constant amidst all the change. So if you don’t get that right it doesn’t matter how revolutionary the distribution model is or how many revenue streams you have. You still have to have the hits.”

Source: NY Times