Diversity Is Sweet Music to His Ears

Less than two years ago, music veteran Doug Morris launched a tiny New York label with a unique management philosophy.

Morris, 57, who had just been fired as domestic chief of Time Warner’s music division, decided to build a record company with a diverse, multicultural staff and executive team. The label was financed by Seagram, which later hired Morris to run its global music division.

The plan, according to Morris, was to tap into what he calls a “vast pool of untapped minority talent” and forge a “wall-less” environment where white and African American employees work together marketing and promoting pop, rock, rap and R&B; records. This contrasts with most record labels, where white and black employees are usually segregated into pop and urban music departments.

Morris’ experiment is paying off. This week, Universal Records has two albums in the Top 10 on Billboard magazine’s national pop chart and represents about 4% of all current albums sold in the United States--nearly twice the market share of such established labels as Motown and Capitol Records. The label is expected to turn a profit this year based on revenue of an estimated $125 million in sales.

“This place is proof of what can be achieved when people from different cultures work together and respect each other,” Morris said Tuesday in a phone interview from New York. “At this company, we don’t believe in segregating talented people. It makes no difference to us if you’re a Martian. If you’re a talented Martian, we’ll give you a shot.”

Universal Records is emerging as a full-service record label with a string of pop hits by such R&B;, rock and rap acts as Erykah Badu, Chumbawamba, Sister Hazel, Reel Big Fish, Rakim and MJG. Located in a 24,000-square-foot office on the fifth floor of a New York City high rise, Universal Records now employs 80 people--half of whom are minorities.

Half of Morris’ executive team at the fledgling label is also made up of minorities--an unprecedented feat in the music industry where women and people of color have long generated huge profits as artists, but rarely participate in the running of companies. Among the key players on Morris’ new management team are Kedar Massenburg, Jean Riggins, Kim Garner and Jocelyn Cooper-Gilstrap.

“Half of the intelligence and talent in this world is female, but you’d never know it if you took a survey at how women are represented in the executive ranks of the music business and the rest of corporate America,” Morris said. “There is also a vast pool of untapped talent in the black community that is virtually ignored. So that’s where we went fishing.”

Morris has a track record for discovering and grooming young talented executives. Indeed, many of the most successful record chiefs in the business came up under his wing: Interscope Records’ Jimmy Iovine, Elektra Entertainment’s Sylvia Rhone, Mercury Records’ Danny Goldberg and the entire executive team working under Val Azzoli at Atlantic Records, the No. 1 label in the nation.

Morris officially opened Universal Records, originally called Rising Tide, on Jan. 1, 1996--just six weeks after he was fired as domestic chief of the Time Warner’s music division following a corporate power struggle. Seagram chief Edgar Bronfman Jr. offered Morris a $60-million joint venture label deal about one week after Morris was given the boot by Time Warner.

Competitors initially doubted whether Morris’ label could compete against other such recent start-ups as Interscope, Bad Boy, Death Row and DreamWorks. But Morris and longtime associate Mel Lewinter, who had also been fired from Time Warner, dug their heels in and quickly came up with a novelty dance hit by singer Lisa Santiago. Within a year, Universal racked up about $55 million in business, scoring hits by such unknown acts as Goldfinger, Merrill Bambridge, Crucial Conflict and the Lost Boyz.

Last year, Bronfman asked Morris to take over as global chief of Seagram’s Universal Music Group, which included MCA Records, Uptown Entertainment and Geffen Records. On Morris’ watch, Universal Music Group purchased half of Interscope Records and has established itself as an industry powerhouse, jumping from last to fourth place in domestic market share.

At the same time, Morris continued to oversee Universal Records. He took over as de facto president of the label about a year ago after dismissing promotion whiz Daniel Glass from the post. The label gained critical mass with a hip-hop smash by newcomer Badu, who was discovered by Massenburg, now a senior vice president at Universal.

Badu’s “Baduizm” album, which is released on the Kedar imprint, has sold more than 2 million copies since its release in January. Badu’s follow-up “Live” album is expected to enter the pop chart this morning at No. 4.

Universal will also capture the No. 8 position this week with a pop album from Australian rockers Chumbawamba, whose recording has sold about 1 million copies since its release in August. Rap albums by Rakim and MJG will also rank in the Top 40. Universal’s multicultural team worked on promoting and marketing Badu, Chumbawamba, Rakim and MJG.

Some competitors criticize the hit-and-run approach that Morris used to put Universal on the map. Unlike some companies that discover acts in clubs and patiently develop artist rosters, Morris frequently signs talent based solely on marketing research.

Universal has a small team of employees that poll retailers in small markets on a daily basis trying to detect sales spikes in music released by local artists. That’s how Universal discovered and ended up signing Chumbawamba, Sister Hazel and Reel Big Fish. Morris invented the research concept during his days at Atlantic Records co-chief, and it was also responsible for bringing that label one of the decade’s biggest hit acts, Hootie & the Blowfish.

Morris says he’ll take a hit wherever it comes from. He says that he and Lewinter, vice chair and COO of the Universal Music Group, urge the team to use their gut when chasing an act that interests them, but also teach them how to market and promote music--even when it runs against their own taste.

Morris insists that running his label does not interfere with his job as overseer of Seagram’s global music group.

“Actually it helps me to be better at my other job,” he says. “It keeps me in tune with what is going on musically. When you’re detached from it and operating way up there above the fray in some corporate suite, you really don’t experience the day-to-day highs and lows of the business. This experiment we tried really works. We’re tearing down the walls. We’re having a blast.”