Just as we get back from the Video on the Net Big Hug conference feeling warm and fuzzy, Universal Records boss Doug Morris sends out cold pricklies.
As AP, Reuters and the New York Post have reported Morris pulled a Ed Whitacre and raised the rhetorical stakes to the previously back-room negotiations between his label and YouTube and MySpace. AT&T's Whitacre words that set off the net neutrality fight last November were:
"They use my lines for free -- and that's bull. For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for free is nuts!"
Morris is quoted in a transcript at an investor conference saying:
"The poster child for (user-generated media) sites are MySpace and YouTube. We believe these new businesses are copyright infringers and owe us tens of millions of dollars...."
"(MTV) built a multibillion-dollar company on our (music) ... for virtually nothing. We learned a hard lesson."
When 800-pound gorillas attack, indeed.
But, we wonder if Universal is playing bad cop to the other labels good cops. After all, it's well know that that the labels have been in deep negotiations with YouTube. Perhaps, as Heather Green of BusinessWeek foretells, the labels aren't getting YouTube to agree to an equity arrangement and Morris went ballistic. From Green last week...
YouTube and the labels are in talks to hammer out a licensing deal in particular for all the music videos that appear online. One record label exec explained the talks this way: The labels would actually rather take a stake in YouTube than sign a revenue sharing deal....YouTube won't comment on the negotiations, but I doubt they would want to give up a piece of themselves. Still, the leverage the that labels have is the threat of a copyright infringement lawsuit if some kind of deal can't be reached.
Ubiquitous analyst Rob Enderle says that same in the Alex Viega AP piece:
"They're getting frustrated with how the negotiations are going. To drive the negotiations in the directions they want, they're starting to make it clear there are legal alternatives for not complying with what Universal wants done."
But, a Universal action instead of a united RIAA action would be far different. If Universal isn't playing bad cop, is the company then simply off the reservation and more willing to bring in lawyers into this fight before the rest of the music industry fully figures out what to make of the opportunities and challenges that user-generated content and viral online networks are affording them?
At a May meeting of the Recording Industry Association of America, the industry's main trade group, the world's largest music company, Universal Music Group, pushed for an aggressive stance against amateur videos using commercial songs.
At least they're consistent.
Or, are they? We get the YouTube issue. But, what about MySpace? MySpace is many things, but one of it's biggest (and original) purposes is the promote bands. Even major label acts. Even Universal acts.
If the labels sue, will they pull their promotions away from 100 million target customers? Will Universal acts Nine Inch Nails, Ludacris, Ashlee Simpson and others close their MySpace pages? Better yet, will MySpace faves Fall Out Boy take down the links to their videos on YouTube?
We've been hearing from so many on the front lines of the label business that they don't want to live through another Napster era and see lots of opportunities from the Web 2.0 crowd. We'll see if they (among others) are disappointed again.