For the moment, Doug Morris seems spellbound. His eyes are closed, and his Italian loafers are propped up on the big mahogany desk in his office. On the stereo, the pop quartet All-4-One is crooning a remake of the country hit I Swear. Morris' head is swaying and a faint smile creases his bearded face. The 54-year-old chairman of Time Warner Inc.'s Atlantic Group plainly loves the song.
"I tell ya," says Morris, popping out the cassette and shaking it like a tambourine. "This song's gonna be a monster hit. Every wedding in America will be playing it this summer."
It wasn't so long ago that such a prediction would sound like folly coming from the Atlantic Group--a key unit of Time Warner's $4 billion music empire. Once a thriving record company full of such hot acts as Genesis and Crosby, Stills & Nash, Atlantic spent most of the 1980s languishing. Its reputation as Warner Music Group's penny-pincher crippled its ability to lure new talent. Instead, it milked sales from its catalog of greats and watched potential stars such as rocker Bon Jovi break off negotiations and sign elsewhere. "A lot of people were concerned about our future," concedes Ahmet Ertegun, Atlantic's 70-year-old founder.
Not anymore. Since taking over the helm from Ertegun four years ago, Morris has boosted Atlantic's revenues from $400 million to an expected $900 million by the end of this year. Part of that growth--about $150 million worth--is from expanding into exercise videos and audio books. But the bulk has come from returning Atlantic to the hit parade. Morris has recruited a group of young, trend-savvy music executives and encouraged them to take risks to find new talent. The result: The Atlantic Group has become a fixture on the Billboard 100 listing of current hits. Its 9.4% market share of new releases outpaces all of its competitors.
Of course, Atlantic still has its weaknesses. With the exception of Phil Collins, it lacks a major superstar and must rely instead on a steady stream of hits from newer, trendy acts such as rapper Snoop Doggy Dogg. In the past few years, Morris has kept that stream flowing, but in an age when MTV makes and breaks stars virtually overnight, reliance on new acts is chancy.
Nevertheless, Atlantic is clearly on a roll, and most attribute that to Morris, who stands out as a true "record guy" in an industry dominated by risk-averse bean-counters. "Until recently, this was a company that was doing very badly," says rival record mogul David Geffen, "and it was doing badly because it wasn't doing all the things that Doug is doing: signing labels, taking risks."
ARTISTS' RESPECT. Morris likes to think of himself as "bilingual"--he speaks the language of both business and music. "I wasn't very successful at the creative part of the business," he says. "But I understand the thrill of hearing your song on the radio for the first time." During the 1960s and '70s, Morris was both a songwriter (the Chiffons' 1966 hit Sweet Talkin' Guy) and a producer (Brownsville Station's 1970s hit Smokin' in the Boys' Room). That gives him credibility with artists. "It's easy for me to say `What the hell do you know?' when record executives want to talk music," says Atlantic's Pete Townshend, co-founder of the Who. "I can't say that to Doug."
But Morris is also a solid manager, something Warner Music Group Chairman Robert J. Morgado recognized in 1990, when he picked Morris to succeed an aging Ertegun as active CEO. Long an Ertegun protege, Morris had joined Atlantic in 1978 when he sold his tiny Big Tree label to the Warner giant. Although Atlantic floundered, Morris distinguished himself during the 1980s luring acts such as Townshend and former Fleetwood Mac vocalist Stevie Nicks.
When his chance came, Morris started creating and buying smaller labels. They're run by executives hand-chosen for the "music in their blood," Morris says. "I don't understand all the genres of music," he explains, "and at my age, I'm certainly not going to be the one who goes to all the funky clubs where groups start at 12:30 a.m."
His first venture was EastWest Records, headed by a former promoter, Sylvia Rhone. She quickly discovered En Vogue, a hot women's R&B quartet. Next came Atlantic Nashville, run by country-music producer Rick Blackburn. It launched the company into one of the industry's hottest segments. Danny Goldberg, former manager of grunge superband Nirvana, took over the flagship Atlantic Records label and recruited platinum band Stone Temple Pilots. Interscope Records, run by longtime hit producer Jimmy Iovine, has scored big since Morris bought it in 1992 with Snoop Doggy Dogg.
As Morris's new team began to spend heavily to develop talent, Atlantic lost money in 1992. "I was terrified about what I'd set in motion," Morris says. A year later, he insists, profits returned and have been growing ever since (Time Warner doesn't break them out). Results have been buttressed by Morris' acquisition of Rhino Records, which does a better job of repackaging old hits than Atlantic did on its own. And Atlantic has cornered the market on fitness videos--it dominates the business by producing everything from the Jane Fonda series to Buns of Steel.
OPEN TO CHANGE. Morris likes to use corner-office terms such as "empowerment" and "decentralization" to describe his role. But a bit of "micromanagement" comes into play, too. Consider his dealings with Tori Amos, Atlantic Records' up-and-coming alternative pop soloist. In 1991, Morris asked to hear a demo version of Amos' album, Little Earthquakes. Morris didn't exactly enthuse over the quiet and cerebral songs, which were costly to produce and seemed too spacey for American listeners. In fact, Morris was downright annoyed. "He called me up and said: `Why are you doing this?"' Amos recalls. Her belligerent response: "Because I believe in it with every cell of my being."
Morris hung up and listened to Little Earthquakes several times over. The next day, he called Amos. "I don't know how to tell you this," he said, "but I've fallen in love with your record. I really get it now." He added, though, that it should be introduced in London, which is easier on new artists. Little Earthquakes became a hit there, creating a buzz, and eventually went gold in the U.S. Amos' latest album, Under the Pink, promptly went platinum worldwide.
Stories like that are why Atlantic has become Warner Music's fastest-growing unit. Insiders say its sales this year will likely surpass those of flagship Warner Bros. Records Inc. That has put Morris' star on the rise and has sparked rumors that he may soon move up to a bigger job at Warner Music Group. "Clearly, Doug has the talent to play a wider role in the future," says Morgado. Artists such as Amos, however, would rather he stay right where he is.