Universal Aims for Video Outlet
Universal Music Group, the world’s biggest record conglomerate, is trying to start its own uncensored music TV channel to showcase cutting-edge acts and help bolster falling music sales.
The Vivendi Universal unit, which releases albums by acts such as 50 Cent and Marilyn Manson, is in discussions with satellite television leader DirecTV, according to people familiar with the matter.
The channel would feature uncut music videos and original music-flavored programming. Backers believe it could fill a void for those seeking “raw” lyrics and images, creating what one called “more of a free-expression place” than traditional TV outlets.
Representatives of Universal and DirecTV declined to comment.
With music trading for free online and CD sales sinking, record companies have been grasping for new sources of cash and unorthodox means of promoting new acts. At the same time, entrepreneurs inside and outside the record industry have been testing the notion that viewers are ready for new outlets in a music video market that has been dominated for two decades by Viacom Inc.-owned MTV.
Record label executives have long complained that MTV has abandoned its original focus on music in favor of “Jackass"-style stunt shows and youth-lifestyle programming. MTV executives counter that such fare draws far more viewers than a basic rotation of music videos, and that it still focuses on developing artists on spinoff channel MTV2.
In 1994, five major record companies initiated plans for their own 24-hour music channel, but dropped the idea amid a Justice Department antitrust probe. Since then, executives in various corners of the music business have chewed over the idea, only to find themselves short of financing or support.
The Universal-backed channel has yet to secure cable or satellite distribution. If it succeeds, Universal would be the only major record company with a stake in television in the U.S., the world’s biggest music market.
In a nod to the proposed channel’s uncensored content, it is called 1 AM, short for the 1st Amendment. Uncut videos and live concerts and complete song lyrics will distinguish the channel from MTV, which edits language and graphic content.
Unlike MTV, which is carried as part of advertising-supported basic cable packages, 1 AM would be available only as a commercial-free premium channel, similar to HBO.
Universal is pitching the new channel as a joint venture with the Endeavor talent agency, along with the adult-video entrepreneurs behind Vivid Entertainment Group, and Shady Records, the Universal-financed label run by rap superstar Eminem. Sources close to the deal said the ownership structure has not been set in stone, but one idea under discussion has Universal and the Vivid partners each owning 45% of the channel, while Endeavor and Shady would own 5% stakes.
Major players behind the deal include Jimmy Iovine, chairman of Universal’s Interscope label, and Ari Emanuel, a founding partner and top agent at Endeavor. The two worked together in pulling together the star-studded national telethon that raised in excess of $150 million in pledges for victims of the Sept. 11 terrorist attacks. Iovine and Emanuel declined to comment.
In the early 1990s, Interscope -- initially financed by Time Warner Inc. -- forged a reputation as a creative risk-taker, pushing the boundaries of mainstream pop music and transforming controversial but acclaimed rap and rock acts such as Dr. Dre and Nine Inch Nails into multimillion-dollar sellers. Under pressure from critics such as former drug czar William J. Bennett, however, Time Warner cut its ties to the label in 1996.
Interscope was acquired by MCA Inc., predecessor to Universal, and now ranks as the nation’s biggest seller of new releases.
The 1 AM channel is aiming for a July launch, although insiders note that may be optimistic given the recent ownership change at DirecTV. In mid-December, News Corp. took control of the satellite TV leader, installing a new top management team that will be located in New York rather than at its current headquarters in El Segundo.
DirecTV sources said it was unclear when News Corp. would delineate a strategy for adding new channels.
Sources said the Universal team was trying to beat to the market a rival group pitching a premium music channel. Called Hype TV, for Hot Young People’s Entertainment Television, the competing channel plans to focus on hip-hop music and lifestyle.
The brainchild of entrepreneur Peter Griffith, Hype has an indirect association with Universal Music: It is partly owned by a unit of Bad Boy Worldwide, the hip-hop company run by Sean “P. Diddy” Combs. Bad Boy’s record label is distributed by Universal Music. Hype has exclusive access to content and music videos owned by Bad Boy, sources said.
Like 1 AM, Hype plans to air uncensored music videos as well as movies and original fare.
The channel has secured limited distribution. Through a partnership with Playboy Entertainment, Hype will begin airing a two-hour Saturday night block on the Playboy channel this May. Hype TV President Tracy Lawrence, who formerly ran the Fox Family Channel, said cable negotiations are underway but that no deals have been signed.