Local record companies run on out of tune market

Newsroom 29/04/2008 | 15:26

There are very few similarities between the local musical industry and external markets. “The lack of professionals in this field makes the musical market a pseudo-mongrel determined by pseudo-values, which, in their intention to take a bigger slice of the music market forget why they entered this business in the first place,” Andi Enache, A&R manager at A&A Records/Warner Music Licensee, tells Business Review.
The market could use some more diversification and productivity. Natalia Bercaru, brand manager at Nova Music/Sony BMG, says the widespread lack of money and decent standard of living also takes its toll on the music industry since it affects information and culturalization. “Thus we reach only the ‘performance' to copy, or to put it differently, to imitate or get inspired,” she explains. It also impedes some of the real talents in building a musical career since they need to get a job to support themselves financially.
Bercaru says in Romania, artists have a long way to go before they learn to adopt the right attitude. “It is not enough to know how to sing, you have to know to sell yourself if you want some money from it, and to know how to make compromises. It is a general issue in Romania which also applies here: the distrust in the professionalism of the person next to you.” Bercaru complains the Romanian artist “has to have an opinion about everything that involves their music, even though some things are not his/her responsibility but that of the producer, manager, PR and the management in general.”
More than just singing goes into building a brand. “It would be ideal to know everything and do everything but in order for a product to ‘look' the same as abroad, the artist should take into account the specialists who tell them what to say, where to go, how to behave, how to dress and even what to sing for the simple reason that you as an artist have chosen them to sell you,” says Bercaru.
In conclusion, it is a market that is still underdeveloped, with a far too high piracy rate, predominant musical styles that are “at best questionable” and promotion on the radio based exclusively on commercial criteria, in the words of Mariana Bancila, representative of La Strada Music, a record company focusing more on niches such as jazz, ambient and electro music. La Strada Music releases on average four or five titles and signs two or three new artists a year.
Piracy is a real issue, with the representative of A&A Records going so far as to say that internet piracy and peer-to-peer networks cut the company's profits by half. “Piracy affects us a great deal. And now everything has shifted onto the internet which is even harder to control, not only in Romania. Unlike what happens abroad where the public buys the original product or downloads legally because stealing is considered wrong, in Romania there is a shortfall in the social standards (small salaries in general) and lack of respect for an original product and the work of the artists,” says Bercaru.
This is why the musical industry is shifting to the digital environment. Diana Singer, marketing director in Cat Music/Media Services, says CD sales are falling everywhere and in Romania this trend is exacerbated on account of piracy. Fewer and fewer stores are receiving CDs and cassettes and on top of this there are very few music stores in Romania, “you can count them on your fingers,” says Singer. “I can go as far as to say that in at most ten years global music sales will move to digital format (online sales, on sites such as iTunes or, in Romania's case on musicmall.ro, and also sales for mobile phones in the form of ringtones, trutones etc.).”
Bercaru explains the artist can sign with a record company a contract of licensing, distribution, promotion or a specific contract in which the two parties make a deal on a certain project.
The profit from debut act is very close to zero, even “in the minus area” and as far as acknowledged artists are concerned, it is something “mutually advantageous.” “The artists are at an advantage by belonging to a record company because large media distribution networks want to talk to a single person (the record company) for more than 10 artists, says Enache.
Promotion is done “in a classical way in Romania,” which includes CD editing, video clips, TV and radio appearances, media partnerships, concerts and posters and flyers.
The record company also has the role of acting as a promoter for the interests of an artist abroad. “It is very hard, if not impossible, for an artist to have access to an A&R Manager from a record company outside the country. We can make this thing happen and the proof of that is several compilations and albums with bands from the local repertoire,” says Enache. A&A Records has had collaborations which involved artists in Romania and its counterpart record companies in the Warner Music network.
La Strada Music does promotion on the internet “because this is the main source of information for our public,” and also in specialty magazines. “In our case, there is also direct promotion made by those who bought our CDs and show up for the concerts of the artists who have signed with us,” says Bancila.
Cat Music has a promotion targeted more at the songs than the artist by broadcast video clips and shows on the radio and TV as well as promotion in the written press and the internet. This approach also applies when it comes to outside promotion. “We export songs, not artists,” says Singer. The most successful songs that were exported by Cat Music belong to Romanian artists such as O-Zone and Cleopatra Stratan. “Recently we also signed a contract for DJ Project in the United States of America,” says Singer.
Other artists who have had songs licensed abroad were Impact and Voltaj and more recently, the new song from GeoDaSilva “I'll Do U Like A Truck,” licensed in Germany, Greece and Turkey which “surprisingly, has not become a success yet! We hope he will forge a career here also,” says Singer. Cat Music also has collaborations with independent labels from abroad such as EMI Music and Ministry of Sound. The record company does not release a fixed number of titles every year, it all depends on what albums are ready. Having been licensed by EMI, Cat Music distributes what “catches on” on the Romanian market, plus “titles from the back catalogue, which sell constantly.”
In the “export” process, a promo package which contains the album and biography of the respective band is sent to the record company (this also happens in the reverse situation, when a foreign artist is promoted here). “The one who receives the package ‘disseminates' it on the local music market and does some research. If the product catches on, things move forward to a marketing campaign, signing sales contracts and so on,” says Bercaru.
Unfortunately, few local artists make it abroad because the market and standards in Romania are musically inferior to what is made abroad. “Our entire industry is much inferior and this can be seen in the products – the artists, the sound and the attitude. Only those who are very good, talented and hardworking make it abroad,” she says.
Most of the money comes from sales but the organization of events is also an important profit generator. Last year, Cat Music organized through the company MediaServices Events several important concerts such as RBD, Pet Shop Boys and Julio Iglesias and it is currently in the process of preparing the concert of jazz guitarist John McLaughlin which will take place on May 15 in Bucharest.
Events are also the most profitable part of the business for La Strada Music as well since “people do not buy CDs any longer but enjoy going to a concert,” says Bancila.
A&A Records is at the beginning as far the organization of events goes. The firm has had the Warner Music license for 10 years and foreign artists are selling well, given their fame, although “sometimes we were surprised by sales in the repertoire of Romanian artists as well,” says Enache.
Distribution of the products depends on whether the record company has a distribution network or not. In the case of La Strada Music, the house cooperates with a specialized distributor, not having its own distribution network. The products can also be ordered online, which represents 10 percent of the total sales. “We would also like to enter the download market but at the moment there is no significant demand on this market in Romania,” says Bancila.
As a rule, large record companys have a distribution network. This includes hypermarkets and supermarkets, electronic and home appliance stores as well as small stores. Carmen Hrubaru, sales manager at Nova Music, says each local and international artist in the company's portfolio is distributed in almost all the hypermarket and gas station networks as well as specialized stores such as the Diverta chain and Media Galaxy, and products can also be found in small stores.
Cat Music distributes its products in chains such as Altex and Diverta, the specialized Muzica store and co-operates with independent distributors. “Our distribution is mainly done through specialized stores as well as networks which ensure a good and specialized presentation of the music and we are also present in hypermarkets and book store networks,” says Enache, the A&A Records representative.

By Otilia Haraga

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