licensing deals for Samsung’s streaming services.
At the Universal Music headquarters in Santa Monica, California—a
sleek sandstone-colored building surrounded by palm trees—T.J. walked
past the iconic Universal globe outside the entrance to attend a one-on-one
meeting with Rob Wells, president of the global digital business. Frustrated
with Apple in the year after Steve Jobs’s death, Wells told T.J. that Jobs
was “ruthless,” “cutthroat,” and “a bully.” But a former Universal Music
Group executive also insisted to me that Jobs was “the only partner that
comprehended the value of music to his business.
“We already knew back then that Spotify was going to blunt Apple’s
edge internationally,” the former Universal Music Group executive told me.
“We were looking for a global device manufacturer that could step up and
do what Apple had done with a download store and a massive marketing
push.”
The mSpot team responded by playing off Hollywood’s concerns over
Apple’s dominance. The company wielded too much influence, T.J.
claimed, over the people who actually owned the films and albums.
“Right now you’re beholden to iTunes,” Daren said in negotiations.
“They’re the only game in town. You need to counterbalance that. You need
other successes in the industry so that you...have more control of pricing
and all that. And Samsung really is the only credible company that can do
that for you at a global scale.”
If Hollywood helped nurture Samsung as a media company—say, by
offering it favorable licensing deals—it’d be a chess move that would play
to Hollywood’s favor.
Samsung was already getting a good deal of buzz in music circles.
“We did everything properly and we licensed content, so they loved us,”
Daren said. Samsung’s team reported back stellar news: Universal and Sony
were eager to license music for Galaxy’s Music Hub, and the terms for
Samsung were favorable.
T.J. and Daren explained to Samsung’s hardware executives how to
license music for streaming services. Sony Pictures and Universal doled out
licenses for their copyrighted films and songs with minimum guarantees
each year. For instance, the smartphone manufacturer would have to pay a
minimum of $10 million to a music label in a hypothetical agreement.
The catch? Whether Samsung was actually successful in selling $10
million worth of songs fell on Samsung. The fee was guaranteed. The big