Global Repertoires

Popular Music Within and Beyond the Transnational Music Industry

Andreas Gebesmair, Alfred Smudits

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781351565417
• Edition: 1
• Topic: Media & Performing Arts
• Subtopic: Music

With just four record companies controlling nearly 80 per cent of the world market in popular music, issues of globalization are evidently significant to our understanding of how and why popular music is made and distributed. As transnational industries seek to open up increasingly larger markets, the question of how local and regional music cultures can be sustained is a pressing one. To what extent does the global music market offer opportunities for the worldwide dissemination of local music within and beyond the major industry? The essays in this volume examine the structure and strategies of the transnational music industry, with its deployment of mass communication technologies including sound carriers, satellite broadcasting and the Internet. The book also explores local and individual experience of global music and this music's dissemination through migration and communities of interest, as well as the ideological and political use of different kinds of music. In contrast to recent arguments which posit an American imperialist dominance of popular music, the contributors to this volume find that the global repertoire of the major labels no longer represents the culture of a certain country but is fed by different sources. The essays here discuss how we can characterize this vast de-centered industry, and offer perspectives on the so-called 'international repertoire' that calls for a melodic structure, ballad forms, unaccented vocalisation and an image that has global recognition.

Part I:
Structures and strategies of the transnational music and media industry

1
Global strategies and local markets: Explaining Swedish music export success

Robert Burnett

‘In the electronic age we are all living by music.’

Marshall McLuhan

The recent World Bank report, ‘World Development Report 1999’, describes the current ‘state of the world’ (according to the World Bank) and points out several key developments. Two trends dominate current economical, political and cultural development. The first and most well known and researched, is globalization. The other, much lesser known, is localization. Localization refers to the growing importance for regions, cities, and other entities beneath the national level. Both globalization and localization are described as inevitable, but with inherent risks and possibilities when it comes to different nations’ ability to adapt and meet the challenge. Globalization may increase welfare while at the same time destabilizing certain nations. Localization may lead to increased democratic participation and influence as well as increasing tensions within certain countries. What I would now like to do in this paper is see how globalization and localization can be applied to our understanding of the music industry.

The global music industry

Music, its production, distribution, regulation and reception, is an essential feature of the European information society. The European music industry is a key asset. Today, two of the world’s four largest music groups are European. The Bertelsmann Music Group (Germany), and EMI (UK, now controlled by AOL/Time Warner USA), together with Universal (Canada, formerly Polygram/MCA), and Sony (Japan) account for about 80% of the world market for pre-recorded music, a market that was worth an estimated 37 bn ECU in 1998. The music business also has many small companies. The fact that 60 percent of recordings sold in the EU originate in the EU means that local audiences are likely to continue to demand ‘local’ products despite the ‘globalization’ of the music industry. In Greece, the United Kingdom, France and Italy, the majority of records sold are by local artists. In the Scandinavian countries around 30 percent of all purchases are by local artists. In Austria and Belgium the number sinks to about 15 percent. Internationally, between 1991 and 1997 the percentage of the global music market share attained by European artists rose from 34 to 42 percent.

The four large multinational music companies operating in Europe are known as ‘the transnationals, majors or multis’, depending on where you live. Together, these four companies have about an 80 percent share of the global market. Some several thousand independent phonogram companies supply the remaining 20 percent of the market. Many of these are very small companies, some making only one or two releases a year. However, the independent companies are a very important part of the music industry since they are often at the leading edge of developments in popular music, with the ability to discover new talent and establish new trends. They also have to face the risks inherent in developing a new repertoire.

Universal, EMI, Sony, Warner and BMG all own and operate national distribution systems within the EU, distributing their own and third-party sound recordings to retailers, wholesalers and smaller distributors. Several of the majors also own and operate their own CD, cassette and vinyl-record manufacturing facilities.

As well as supplying phonograms nationally, the music companies exploit their recordings in foreign markets. Normally this is done by licensing a local company to supply phonograms in a particular country. In the case of the majors this is usually done through the music company’s local affiliate. The independent phonogram companies often rely on unconnected companies to perform this function, including the majors’ foreign affiliates. Licence income generated in this way is important to music companies. Europe is second to the United States as a supplier of recorded music to the rest of the world, but is closing the gap as more European artists gain global exposure.

The Internet and the music industry

The music business has often very little to do with music. It essentially consists of fast-moving, unit-led production, marketing, licensing and distribution functions. How much product will sell in which markets, how quickly they can ship, how fast they can restock, and so on. With the Internet as a potential high-speed digital distribution channel, phonogram companies will no longer be in a position to control the distribution chain. As a result they may be unable to shape the demand for a product. When music is distributed over the Internet, only one master copy is required. New artists who can create their own product will potentially be able to produce, market and distribute their work without the involvement of the major phonogram companies. This scenario is an example of disintermediation (cutting out the middle layers of certain distribution channels) in the extreme and would result in the collapse of the music business of today. However, it is an ideal that may never be fully realized. It disregards the possible actions that the key players in the multi-million ECU music business may take to reposition themselves in order to acquire a competitive edge in the changing conditions of the new Internet economy.

There are a number of complex technological and copyright issues that need to be resolved before the digital distribution of music can develop into a commercially viable product. For the foreseeable future, most consumers will continue to purchase hard copies of pre-recorded music, currently in the form of compact discs (CDs), mini discs, cassettes and vinyl records. These products can be purchased from a number of different sources including web shops, specialist music shops, supermarkets, gas stations and mail-order catalogues. During the 1990s, the Internet has been developed as a new medium for the exchange of information between businesses and consumers. It has the potential to enable merchants to incur lower costs in reaching consumers and supplying products, and to provide consumers with more choice and lower prices twenty-four hours a day, seven days a week. Although the amount of commerce conducted on the Web remains relatively small, its volume is increasing. Many companies are now looking into the possibility of on-line retailing.

The importance and implications of retailing on the Internet are likely to grow in the near future as technologies become more affordable and reliable, and as people become more aware of the potential efficiencies that can be achieved. Other benefits for organizations using the Internet as a retail outlet include the potential widening of their markets; better meeting of customer needs; faster introduction of innovative products and services; better customer-supplier interactivity; improved market intelligence, and lower costs and faster turnover. However, for coherent realization of these benefits, there are a number of fundamental changes that must take place, not only within organizations, but also in society at large. A number of improvements must be made: financial, legal and regulatory frameworks must be made clear and coherent, and security, privacy and authentication issues must be addressed, both at the practical level and in legislation.

The relatively minor cost of establishing home pages that offer goods or services attracts both existing merchants and newcomers. Theoretically, anyone who opens or accesses a Web site can enter the market. Merchants are able to gain direct access to consumers, thereby avoiding the need to go through various intermediaries to reach them. This may make it possible for them to avoid certain intermediary costs, such as distribution inventories and maintenance of expensive retail shops. Technically, the Web can be accessed from all over the world through the Internet. However, to become known and make a profit requires promotion, and in this respect established companies with well-known names and brands are in a better position than new entrants, who need significant capital to advertise. Nevertheless, in some respects, new entrants are in a more advantageous position than fully established companies, not only because of lower costs, but also because they may be better able to make quick changes in response to changes in consumer demand.

The possible entrants to the on-line music market are both large and small firms and include music store retailers, mail-order retailers, phonogram companies, broadcasters, and start-up enterprises with no previous experience in the music business. First movers often face disadvantages as well as advantages. Therefore it is strategically important for a company in considering whether to enter the on-line music market to understand the significance of the timing of market entry in relation to its competitors and the current state of advanced communication technologies and services.

Like other service industries, the music industry is repeatedly undergoing structural changes that are related to technological innovation. As the music industry is an innovation-intensive industry it warrants more attention especially as it incorporates advanced information and communication technologies more centrally into its core marketing practices.

Open production system

Due in part to the ever-increasing range of musical styles the transnationals have opted for a more ‘open’ system of production. This process is at work in Sweden as in most other countries. Multiple independent production units take care of artist and repertoire (A&R) and recording, while the ‘parent’ company takes care of manufacturing, marketing and distribution. This enables the transnationals to exploit both the talents of small creative units to identify potential successful new artists and sounds, as well as the advantages of large-scale manufacturing and distribution. In effect, the modern transnational phonogram company consists of many independently operating creative units at the ‘input’ side, and concentrated manufacturing and distribution at the ‘output’ side. To regulate the flow of products through the channels of a transnational, an internal market is at work in which the independent units act like they would in a more normal market. For example, Sony USA and Sony UK are in competition to have their products released in Sweden. This system of internal competition is coupled with a centralized control set-up that helps the local units to best deploy their resources. All creative units, at a national level, are allowed to try out new artists within their budget. Once a particular artist becomes successful in either a geographical region or within a specialized music genre, the combined resources are provided. That particular artist becomes a priority.

This partially explains how Garth Brooks and country music were a hit in Sweden in 1997, as well as why Ricky Martin and his Latino sounds were the summer of 1999 flavour in Sweden. As a consequence, the national units can concentrate their resources on this potentially successful artist, thereby increasing the chances of turning a local success into an international one.

The case of Sweden

The Swedish music industry is in one sense no longer Swedish because the transnationals essentially control the production, and distribution of popular music. During the eighties and nineties the transnationals bought up all the Swedish phonogram companies of significance. The only remaining Swedish labels are small, most of which have rosters of fewer than a dozen artists. The transnationals work in Sweden in much the same way they do in most other countries. The role of the transnationals in Sweden is now predominantly concerned with three major activities.

First, to ensure the local selling of international artists (a job previously licensed to Swedish companies).

Second, to ensure the local selling of local artists (a job previously done by Swedish companies).

Third, increasingly important is to develop local artists to plug into the international ‘talent pool’ (a job nobody did until recently).

Swedish popular music has in recent years risen to new heights of export success. From Abba, to Europe, Roxette, Ace of Base, and the Cardigans, to name the most prominent examples, the list of recent export successes goes on and on. Jonas Åkerlund is one of the hottest video producers these days and the services of the late music producer Denniz Pop and his partner Max Martin have long been sought after by international artists and record companies alike. This in turn has led to an interest in Sweden as a music nation. Where does the success come from? Why just Sweden? How much money does this success involve? Why is Swedish music considered so cool by so many?

Export earnings of the Swedish music industry

Previous attempts to measure the overseas earnings of the record industry have relied on estimates based on the known share of world sales accounted for by Swedish resident companies, artists and writers. In order to provide a more accurate assessment of recording-industry overseas earnings, Export Music Sweden (ExMS), the International Federation of the Phonographic Industry (IFPI) Sweden, the Swedish Performing Rights Society (STIM), and the Swedish Artists’ and Musicians’ Interest Organisation (SAMI), undertook a survey of the overseas earnings of its largest members – estimated likely to account in total for over 90 percent of the industry’s total overseas earnings – for the calendar years 1994, 1995, 1996 and 1997. Record companies were asked to provide details of earnings received from overseas for the corresponding periods. The companies responding were Polygram, Stockholm Label Group, Sony, BMG, Warner, EMI, MCA, Virgin, MNW, and Arcade. Wherever possible the survey figures for individual companies were verified against the detailed published accounts made available by some companies.

While the figures presented in Table 1.1 seem substantial, we know that they are on the conservative side; a number of major Swedish artists receive their royalty income from overseas recordings directly rather than through their Swedish recording company. Many artists categorized as Swedish also live or are registered abroad and total royalties repatriated will only be a portion of the total. In many cases, publishing, record company and other incomes from sales by Swedish artists also do not return to Sweden. ‘Swedish’ albums on major labels selling in Germany could be recorded in the UK, published in the US and manufactured and distributed in Germany. For example, artists such as Ace of Base, Neneh Cherry, Dr. Alban and Wannadies are all signed to foreign labels and as such earn no money in Sweden.

What is interesting to note is that the export of Swedish music is not confined to a small group of artists but shows a breadth of talent when it comes to music companies, music styles, artists and producers. Bearing in...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Contributors
• General Editor’s Series Preface
• Preface
• Introduction
• Part I: Structures and strategies of the transnational music and media industry
• Part II: Beyond the transnational music industry – The global use and abuse of popular music
• Part III: Approaches and methods: Popular music research between ‘production of culture’ and ‘anthropology’
• Index