Hidden rootkits that open customers’ computers to viruses… Spyware to track customers without their knowledge… A growing mound of lawsuits filed by violated purchasers of their products… How did Sony BMG fall so far so fast?

Truth is, it was good old-fashioned Presbyterian-style predestination. The Sony-Bertelsmann 50/50 merger couldn’t, wouldn’t, shouldn’t work. Ever.

Add a bit of misguided management, and… but we’re getting ahead the story. We’ll let Sony BMG’s Sony-installed head honcho, Andy Lack, tell you himself.

Pre-Merger.
When The Hollywood Reporter scribe Tamara Coniff interviewed Andy in February 2004, she gave the world a preview of a fortress-like mindset:

Question: Do you expect the music business to go back up this year?

Lack: I think the business may stabilize somewhat. I don’t believe it’s going back up. It’s wildly optimistic to say that it’s going back up. I think the growth in this business is under siege. I think the losses have been stemmed. (The major labels) are trying to restructure their companies so that financially, they can stem the bleeding. I believe that the industry has done a good job in trying to stop the bleeding. But it’s a much longer road to travel before you can say this industry is really growing and that we have, as an industry, a business model that makes this an attractive business to be in.

Even before the merger, Andy Lack saw the music industry as a struggle between Us (Music, Inc.) and Them (you).

The Merger.

Admirably, Andy sees himself clearly: “I was never, ever thought to be credible as a businessman. … I am the inmate put in charge of the asylum.”

Credible businessman or not, Andy refused to allow his shortcomings to stop him. “I said, ‘I won’t put us into a merger where we don’t maintain control.’”

Therefore, as the Inmate In-Charge proudly told the Financial Times, he swept aside the experts to forge the Sony BMG venture:

There were no advisory teams that went out and said, well, after investigating and discussing and contemplating and we’ve issued reports and sent them back to the home office and now they`re going to digest and consider and they told us that beginning of the first quarter of next year they will… There was no bureaucracy in the process.

So what do we have? An Inmate with a siege-mentality calling all the shots while avoiding the very advisors who may have saved him from some really dumb mistakes. But that describes lots of execs.

What drove Andy to allow his company to attack its own customers with rootkits? Perhaps the relentless attacks from… pirates. Rafat Ali paraphrases his musings for BillboardPostPlay readers:

Piracy is an idiotic word for what’s happening…it is stealing. This is about criminals and thieves in the night…

I’ve had to fire thousands of people in the last few years [due to piracy issues]…it has been misery for me. These are people without jobs, without life…Until we figure out a way to protect content, there is no growth, and no business model. Piracy, it can’t be said enough, has been devastating for us. Until we protect content — and that will not happen in any significant way for the next 2-3 years — we cannot go to the bank with the business model.

The ‘miserable tsunami’ [of piracy] is going to hit the TV and studios this year…

And just before the tsunami crested, our embattled philosopher-king-inmate gushed to USA Today’s David Lieberman, “I bring a journalist’s mind to the table - the ability to ask a question and not have an answer.”

To which, we can only ask, “Ever?”

Perhaps if Andy had been more businessman and less journalist, he would have avoided a 50/50 split (see any decent Biz 101 text, page one). He may also have had more respect for his customers and the Law… and in the process, he may have spared Sony BMG’s dismemberment.

But that was not to be. Predestination, you know.

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