After months of speculation, now that Sony Music Entertainment has finally announced that Doug Morris will become the company's CEO on July 1, it raises the question: What are they getting with that appointment?
For one, they are getting an executive with an unparalleled track record who has led the record company that for the past dozen years has been the largest in the world. But even more importantly, he will bring much-needed stability to Sony Music Entertainment, which still has elements of a BMG-versus-Sony vibe in some quarters of the company.
When Morris oversaw the merger of PolyGram and Universal in the late 1990s, he put together a company that jelled immediately and grew market share from the get-go, in contrast to the way the Sony-BMG merger never managed to close the corporate cultural gap and resulted in shrinking market share.
In the year prior to the Universal merger, PolyGram and Universal's combined market shares in 1998 added up to 24.48%, according to Nielsen SoundScan. At the end of 1999, the merged company's market share grew to 26.4%, and held steady at that level over the next couple of years until it grew to the 28%-29% range in 2002-2004, reaching 30% and above in subsequent years through now.
When the Sony-BMG merger was still in the works, executives in both camps were jubilant that the companies' combined market share seemingly would allow them to surpass UMG as the largest major label, at least in the U.S. UMG's U.S. album market share at the end of 2003 was 28.1% while the Sony and BMG's U.S. album market share, when added together totaled 29.2%.
But in contrast to the market-share gains produced by the PolyGram-UMG merger, Sony-BMG's merger saw its combined U.S. album market share shrink to 28.5 at the end of 2004 and to 25% by the end of 2007, before beginning an upswing in 2009 to 27.9% in U.S. market share for albums and track equivalent albums and 27.3% in 2010. So far this year, Sony's market share stands at 27.9%.
So while UMG has thrived under Morris' leadership, the Sony-BMG merger retained elements of fractured divisions, which was exacerbated by the impending departure of Rolf Schmidt-Holtz, as senior executives in both camps jockeyed to position themselves as his replacement.
The appointment of Morris should end the corporate infighting. While Morris is known as one of the industry's legendary executives, with an affinity for the creative side of the equation and a stellar ability to pick executive talent.
Who he will be picking, however, to fill the empty slots in Sony's leadership structure remains to be seen. Most industry observers speculate that as part of his agreement to get out of his UMG contract six months early, he probably had to agree that he would not raid Universal's senior staff. Besides, most of the label presidents and CEOs at UMG either have another 18 months left on their contracts, as is reportedly the case for Universal Motown's Sylvia Rhone and Island Def Jam's LA Reid, or have recently renewed their contracts -- as have the Lipman brothers, Universal Republic's Monte and Avery.
On the other hand, some sources speculate that their may be some horse trading between Universal and Sony, since Barry Weiss is scheduled to join UMG in May as the head of East Coast operations, after his contract with Sony expires at the end of April. It is unclear if the deal to let Morris out of his Universal contract early carries a quid pro quo ingredient that lets the RCA/Jive chairman leave Sony ahead of his contract expiration.
Beyond that, some sources speculate that Weiss may want to bring with him to Universal some of his senior RCA/Jive staff, which otherwise might run into contract issues. Morris' first agenda likely will be deciding who will replace Weiss at RCA/Jive.
On the downside of his appointment, some industry executives question whether Morris, at 72, has a vision for the digital future beyond what he has shown at Universal.
Morris' most recent noteworthy accomplishment at Universal was the creation of VEVO, a novel partnership with Sony Music and Google, which in its first month of launch amassed 35 million unique visitors. A year later, the network currently has nearly 60 million unique visitors.
Morris, of course, brings five decades of music-business experience to Sony. After graduating from Columbia University, he began his music career as a songwriter for music publisher Robert Mellin, Inc. Morris joined Laurie Records in 1965 as a writer and producer and was eventually named VP/GM. His credits include writing the Chiffons' 1966 hit, "Sweet Talkin' Guy," and producing such hit records as Brownsville Station's "Smokin' in the Boys Room."
Morris launched his own label, Big Tree Records, which was distributed and eventually acquired by Atlantic Records in 1978. With that deal, he was named president of Atco Records, beginning a 17-year association with Warner Music Group that culminated in his being appointed as chairman of the company's U.S. music group.
After Morris was fired from WMG in 1995 during the company's long period of infighting, he moved over to the then-named MCA Music Entertainment Group (now Universal Music Group) by forming the joint venture Rising Tide Entertainment. Upon his appointment as Chairman and CEO of Universal Music Group in November 1995, the joint venture became wholly owned by Universal Music Group and was re-named Universal Records.