Mapping of the Danish pop music industry Mark Lorenzen & Lars Frederiksen DYNAMO, Danish research Unit on Industrial Dynamics (DRUID), Department of Industrial economics and strategy (IVS), Copenhagen Business School, Denmark In the 1990s the heterogeneous firms involved in the production of pop music1 within the Danish pop music industry2 experienced rapid growth related both to the number of people employed in the segment, sales as well as to a development of impressive export rates relative to the total Danish economy. This over-all trend working in tandem with the economic success of single Danish artists – role models - as, for example, Aqua and Safri Duo as well as particular sensations as for example the Dogma 2000 movies (i.e. von Triers; Breaking the waves and Vinterbergs; the Celebration), laid the foundation for an amplified both economic and political awareness and interest concerning the activities and knowledge of the rather broad industrial arena of the creative industries – the entertainment business. Naturally such economic success is generated in close relationship with a more creative or artistic evaluation and critique of the products both from peers and from laymen – the public demand. The activities of the innovation and production of music together with film making, books and other media related aspects emerged as a significant economic factor linking, what previously was understood as merely cultural elements to policies of trade and industry (Kulturministeriet og Erhvervsministeriet 2000). Thus, the Danish pop music industry developed from being regarded as a cultural bearer of certain social and political beliefs and values and as such a policy resort area of the Ministry of Cultural Affairs into an industry seen as a potential lever for small open relative low-tech economies, hence containing the potential to increased Danish export rates in the setting of a new knowledge- and experienced-based global economy (Pine & Gilmore 1999). Such tendencies of importance are to a certain degree reflected in the activities in a national and even regional setting, where quite a number of initiatives during the last five years have been launched for instance the ‘Musicon valley’ project in Roskilde and the development of Holmen - a renewed part of the harbour area in Copenhagen now hosting both the rhythmical conservatory, the school of architecture, the art school for acting and performance as well as other newly established institutions for incubating entrepreneurs bridging art and business activities and visions. Hence, the significance of the activities and knowledge of the creative industries as both generator of economic Pop music industry denotes here commercialised and often mass produced music with the broad genres of rock, funk, soul, R&B, folk, blues, latino, rap, hip hop, punk, techno, house, etc. (see www.allmusic.com for an extreme outline of the number of various genres that may be characterised as pop music). However, the data presented here is to a large extent not separable from the rest of music industry (e.g. classical; jazz; and folk music). 1 Whereas Eurostat (2002) pictures the music industry as only including the firms involved in activities classified under the NACE codes for publishers of sound recordings and industry for the reproduction of sound recording, we take a broader and more systemic view, focusing upon whole the commercial part of the production of music (i.e., “entertainment”) spanning from artists, publishing, record companies, music stores, to sound recording studios, - as well as firms that produce and sell equipment like musical instruments, gear, services, etc., and the agents involved in distribution and retail of music. 2 1 growth as well as an important factor as a side-effect beneficial for the general development of innovations etc. and hence economic growth in certain cities and regional (Florida 2002), has broad attention to the term and activities of cultural/creative entrepreneurs (Leadbeater & Oakley 1999). However, there tend to be an overall agreement that the attention to a few particular Danish music acts and Danish music artists in general is far from enough to create a stabile platform for continuously profiting from the Danish music industry on an international level. This since the business often seems driven by a few very influential key persons in various positions and therefore may appear vulnerable. Knowledge and talent seems often embodied more than embedded in a common socio-economic structure. An overall attempt of the research project ‘Behind the music’ is to develop a few policy recommendations that are more grounded in institutional settings. In addition, it is worth remembering that the products originating from the Danish music industry at first manoeuvre within a relative little Danish market embedded in a global market of music products, which however, in 2000 was estimated to approximately 37 billion US$ (IFPI 2001). The broad overview presented below intent to map and, thus, only describe various aspects of the Danish pop music industry. The point from where the overview emerge is deriving from a systemic approach to innovation and production activities (Edquist 1997) which suggests a coherence and several integrated relations of these activities and as such, a need for description of the industry in general. This includes a portrayal of the key actors, the products, some main economic parameters, significant institution, hints at the most vital knowledge-bases and elements of the development history of the industry. Mainly quantitative data is provided even though elements of a more speculative character derived from interviews with key actors of the industry3 are included in this mapping exercise. The mapping exercise is structured as outlined below. The output of the music industry is in wide terms related to three main economic parameters illuminating the industry’s performance and to some extend competitiveness: Figures on sales per year: value and units Figures on turnover of firms in the industry Export rates The production activities of the industry and description of key players activities are characterised according to two main factors: Labour market data Industry system (size, industry structure, firm relations and localisation) Finally, is offered a note on the supporting institutional set-up. An note on output There are broadly speaking three avenues of receiving profits from the production of music: Products: sound recording like CDs or MC’s, LP’s or sound recording involved with DVD’s, videos, etc. (mechanical rights). These activities include: invention or creative In 20002 and 2003 some 25 interviews with key agents of the industry has been conducted, however related specifically to the case study work presented in this publication. 3 2 effort, production, promotion, distribution, sales, etc. The main actors are: artists, producers, remixers, staff related to recording studies, staff of record companies, managers, publishers, the tangible production of CDs and tapes, etc. We find an increase overlap of the actors undertaking the various activities both within the artistic field as well as within the more business related ones. Performances: live or recorded concerts and other gigs. This segment can be said to comprise musicians, booking agencies and institutions/persons involved with arranging concerts. The two latter groups are to a large degree overlapping concerning activities. The institutions arranging concerts include: large music halls (Cirkusbygningen, Musikhuset i Aarhus, Falkonerteatret), festivals (Midtfyns, Roskilde and Skanderborg), concert halls (KB hallen, Forum, Herning hallerne), regional concert halls (Baltoppen, Portalen, Forbrændingen), traditional clubs (Vega, Copenhagen Jazzhouse, Magasinet) and minor clubs (cafés, medborgerhuse, etc.). A relative large portion of the artists sees giving live performances as their main business domain. Royalties: deriving from playing on: TV, radio, films, and live performances etc. and do as such include both the mentioned arenas of profiting. The size of royalties depend basically on frequency of use, lengths of time the music is in use, estimated size of listening audience, synchronization fee for use in TV, films, licensing deals. Various activities of both an artistic and more humdrum character are involved in these three aspects, as such; composing, playing and publishing, promotion and distribution are related both to selling a good, for example, a recording and sheet music as well as to performance and to collecting royalties. However, we also find profits in the music industry generated by associated elements like sales of merchandises, sponsorships and advertisements, media writings of the music industry and its actors, etc. Also, a lot of related services are gaining rent like video-production, management, booking activities, etc. Additionally, from the three bullet points presented above we can identify three groups benefiting from the various profit providing elements: Creating and performing artists, The industry that manage, produce, package, reproduce, promote and distribute their products The finished products. These relates to three bearing points of measures the profits from the products: The performed work The published work The recorded work Moreover, an important group to acknowledge regarding influencing the activities of the music industry is the consumers; record buyers, live audiences, media, etc. Still, the economic output factor of the industry is here described by the three main parameters of sales, turnover and exports. Danish record sales The market for music recordings is relative small accounting only for approximately 0,1 percent of the general Danish economy (TI 2000). Therefore, it is the increasing growth rates of export and 3 turnover and not the figures of turnover relative to the general national economy that makes the industry segment an interesting case. A note of importance here is the fact that the growth rates of the industry to a large extend appears to be initiated by an increase in export revenues and not by an increase in spending from domestic consumers on sound recordings (TI 2000). From table 1 we identify that there has not been large changes over the last 10 year regarding the consume of domestic and international pop releases as well as classical phonograms. Table: (1): Repertoire origin percentage of value from sales of albums and singles on the Danish market (1991-2000) Years 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 29 25 26 29 30 34 36 32 35 31 Domestic 69 69 67 67 62 59 60 59 65 International 65 6 6 5 4 3 4 5 8 6 4 Classical Also, it must be emphasised that the Danish music industry is only a very partial element compared to the main actors on the market. The Danish music industry amounts to be the 20th. largest market in the world according to IFPI (2000). This is illustrated by the table below of the sales of music recordings in 1998 (thousand units). Table (2) EU 15 890.713 Total 711.624 CD 9.543 Turnover (Mil. US$) (source: EUROSTAT, 2002) DK 17.468 16.900 234 US 1.038.167 847.000 11.777 UK 236.623 175.715 2.549 The figures below in table (3) originate from IFPI Denmark, whose member’s both majors and associations representing the independents account for approximately 95 - 99 percent of the turnover related to sales of sound recordings in Denmark. The value of the domestic record sales experienced growth from 1991 to its peak in 1996 on around 67%. However, from 1996 to 2002 we find a drop in sales on more than %. A change that may many is interpreted to some extent to be explained by an increase in internet-based copying. Table (3): Value of the record sales (millions of USD) and number of units sold in Denmark 19912000 (millions) 1991 1992 1993 1994 1995 1996 1997 1998 199 2000 9 Total Value (singles and 182,5 192,0 190,0 265,6 306,3 306,8 273,2 266,5 263, 233, 9 3 albums) Total Units (3 singles =1 11,2 10,3 11,0 15,8 15,3 17,9 18,4 17,8 18,8 19,5 album) (Source: IFPI 2002) The increase of sales and units may be explained by the traditional parameters of an enlarged consumer interest in music, a general growth in disposable income and the increasing release rates 4 of new products. Also, to some extend we still see some consume related to people who buy certain CDs to substitute their old LPs, MCs. When we look isolated on the numbers of sold units the downturn in value of record sales is difficult to register in a longer timeframe since sales of units show a continuing increase from 1991 to 2000 on almost 75%. Yet, recent figures from IFPI, Denmark indicate a severe drop in 2001 both in sales of units and in value. IFPI, Yet, more recent figures from IFPI, Denmark indicate a severe drop both in sales of units and in value. These figures on value of sales and number of units sold suggest a serious drop concerning for example sold units on the Danish market in 2001 to 15,2 millions and in 2002 only 11,9 million units. This does of course hold grave implications also for the value of sales. Thus, IFPI figures for 2002 put forward a decrease amounting to approx. 32% from 2000 to 2002 and approx. 28% for the period from 1996-2002. By comparing value form sales from June last year with value from sales from June this year 2002 the table below (4) shows to some extend the problems currently facing the firms of the industry. Regarding the international sales we discover a critical decrease in value of sales on approximately 40%. Value of sales for Danish produced music increased during the same period. A development that appears quite difficult to explain but may be made clearer by the suggestion that Danes are more loyal to Danish artists considering purchase as well as regarding the respect of the property rights of Danish artists and thus, do not download and copy their work to the same extend as they copy the work of international artists. Table 4 furthermore, provide some indication on the ratio between the value of sales of domestically produced and internationally produced music. The sales of works of Danish produced artist relative to sales of international produced recordings on the Danish market was last year about one third of the latter, while the recent situation has effected this pattern so, that Danish produced sound recording account for almost the same market share as the internationally produced work. Table (4): The sales of recordings of the Danish IFPI members in Denmark in June 2002 Total sales in Month this Month last Accumulated year to Accumulated year to date millions DKK year year date last year Danish sales (The producer is 19.06 13.15 119.86 120.58 domiciled in Denmark) International sales (The producer is 24.22 41.84 214.57 290.85 domiciled outside Denmark) 43.28 54.99 334.43 411.44 TOTAL (Source: IFPI Danmark, 2002) Turnover The table below illustrates the figures of the turnovers for the Danish music industry as well as the general turnovers for the whole Danish economy. Table (5): Figures on turnover for the Danish music industry and the total Danish economy Year Turnover music Turnover Percent of the Index of growth Index of growth 5 industry (mil. US $) general Danish economy (mil. US$) turnover of the of the turnover music industry in the music relative to the industry general (1992=100) turnover (Mil. US$) 523,9 177745,5 0,29 100 1992 755,2 200154,5 0,38 144,2 1995 769,8 222038,1 0,35 147 1997 856,1 234046,4 0,37 163,4 1999 (Source: The Danish Statistical Office 2002, US$: 2002 currency) of the turnover in the general Danish economy (1992=100) 100 122,6 125 131,7 As the table shows the turnover from the music industry only make up for about 0,37 % of the general turnover of the Danish economy. The Danish music industry turnover rates have increased significantly during the 1990s (TI 2000). Particular interesting is to compare the index figures on growth of turnovers in the music industry segment with the general Danish turnover figures since the former clearly illustrates much more significant growth rates. Figures from Institute of Technology (DK) regarding the huge growth rates particular in the period from 1992 –1997 in turnovers point especially to the segment of: Publishing of sound recordings (NACE 221400) and Reproduction of sound recordings (NACE 223100) of the music industry. Compared to other European numbers (Eurostat 1997) on turnover per. firm, we find that Danish firms within the music industry (defined as only NACE 2214 and 2231) do quite well having an average on 0,4 million US$ compared to Sweden on 0,2 and Finland at 0,1 while the UK turnover per firm is 0,9 mill. US$. This might indicate that the Danish music industry is more concentrated in terms of being constructed by fewer larger firms than in the other Nordic countries. Also, the figures on turnover per employed show that the Danish firms do well - 156,1 thousand US $ per employed compared to Sweden (111,1) and Finland (111,7). Again the UK firms hold an impressive turnover per employee at 197,7 thousand US $ per employed. Exports A salient indicator looking at competitiveness either from a firm or industry level of performance is export rates4. Such figures inform us about how well Danish music does on the international market of music products in rivalry with products and artists from the US, UK and the other Nordic countries. Table (8): Export rates of the Danish music industry relative to the total Danish export (1992-1999) Export, music Export, general Percent of the Index of growth Index of growth industry (mil. Danish export of the of the export in of the export in US $) economy (mil. music industry the music the general US$) relative to the industry Danish general (1992=100) economy turnover (Mil. (1992=100) US$) 4 Of cause import is equally an important factor talking about competitiveness and export rates. 6 44,2 41849,2 1992 95,7 48713,0 1995 81,1 51454,1 1997 96,7 54478,6 1999 (Source: The Danish Statistical Office 2002) 0,11 0,20 0,16 0,18 100 216,5 183,5 218,8 100 166,4 123,0 130,2 The total export of the Danish music industry is estimated to account to approximately 0,18 of the total Danish export of goods and services. Nevertheless, an interesting dynamic element is that the growth rates of the export of the industry between 1992-1999, which show a huge increase also compared to the figures describing the increase of export rates of the total Danish economy in the same period of time. This relative pattern between the Danish music industry and the aggregated Danish economy is found also in the estimates on the related figures on firm start-ups and growth rates regarding full-time employed (TI 2000). See table presented later). Another figure illuminating aspects of the Danish music export rates are the numbers of artists, which received royalties (income) from abroad. Table (9): Number of receivers of royalties from 1997-1999 Years 1997 1998 1999 2.176 2.489 Number of 2.717 receivers (Source: The Danish Music Information Center, 2002) These figures underline a tentative increase of the use of Danish music abroad. Also, it proposes a somewhat broader export potential for the Danish music industry. Connected to the development of the Danish industry seen in a wider perspective the numbers suggest that it is not only a few standalone hit records, which are important and single-handed account for the Danish music export5. Table (10): Export revenues of music products in 1998 and 1999 1998 1999 Mil. US$ Mil. US$ Export revenues from music 38,44 28,01 Music products total (CD’s, etc.) 2,13 2,40 Performance rights (KODA) 0,36 0,13 Radio/TV- rights (GRAMEX) 0,85 0,85 GRAMEX, 1,47 Mechanic rights: Via NCB 9,07 5,13 Mechanic rights: (direct from publisher) 3,98 9,98 NCB’s affairs abroad 15,09 12,07 Concert-bookers, managers, etc. 3,02 3,62 Danish artists signed abroad 15,70 16,30 CD production 88,64 79,96 Music exports total (Source: The Danish Music information Center) 5 Neither Aqua nor Safri Duo released material in 1999 7 Musical products relates to the producing firms’ gathered export. In general income from abroad is generated by sales of finished products and licensing, the latter is the most common. Yet, important to keep in mind is the fact that performance measures must take into account that the general profit includes costs connected to producing, the producing firm’s part of the license deal and the artist’s share of the license deal. Payment of the performance and publishing rights derives from the collecting societies of KODA6 and NCB (see later). Remember however, that certain parts of the export market not naturally connect to the business of KODA. Some of this income related to performance, which is paid from this point, can be found under the label: concert bookers and managers. Yet, the figures above only suggest - understood at an aggregated level - an increase in the use of Danish pop music internationally. In the context of generating an extended export rate we may claim that the issue of domestic competent demand plays an important role. Therefore, it seems interesting to note the fact that the number of sound recordings7 sold per inhabitant 1998 (units) in Denmark was 3,3. A purchase rate only matched by the consume rate in the US (4,0) and UK (3,9). Sweden (2,9) follows Denmark. This may imply that the critical mass in these countries are potential higher and hence act as more alert for identifying new trends and genres in music than countries where people buy less music. Moreover, an interesting aspect concerning the use of music (demand side) is to be found in a new Eurobarometer survey (2002). This point among other things out that almost 60% of all Europeans listen to the radio every day and of these persons 86,3 % prefer to listen to music. Actually, we find that the highest rates of music listeners in Europe are found in Sweden and Denmark. Demand The Danish market for music products appears in terms of tastes to be of a rather mainstream character and not as diverse into many sub-markets as somehow characteristic for the rest of the Nordic countries. A glace on the hit-list facts of 2000 reveals a strong position of domestically produced records on the home market. We find that within the 10 best selling CD’s we find 5 Danish produced records featuring Danish artists and on the single top 50 the 5 best selling singles are Danish of origin (IFPI, 2002). Still, regarding what kind of music people listen to a European barometer survey (2002) finds that Danes are the country within the European Union where most people listens to pop and rock music. In the context of generating an extended export rate we may claim that the issue of domestic competent demand pushing the limits for good music plays an important role. Therefore, it seems interesting to note that the number of sound recordings8 sold per inhabitant 1998 (units) in Denmark was 3,3. A purchase rate only matched by the consume rate in the US (4,0) and UK (3,9). Sweden (2,9) follows Denmark. This may imply that the critical mass in these countries are potential higher and hence act as more alert for identifying new trends and genres in music than countries where people buy less music. 6 7 8 KODA is the main body of the Danish society for collecting royalties. In this measurement three singles count as one sound recording unit (Eurostat 2000). In this measurement three singles count as one sound recording unit (Eurostat 2000) 8 In addition, an attention-grabbing aspect concerning the use of music (demand side) is to be found in a new Eurobarometer survey (2002). This points out that almost 60% of all Europeans listen to the radio every day and of these persons 86,3 % prefer to listen to music. The survey further finds that the highest rates of music listeners in Europe are found in Sweden and Denmark. Releases The number of phonogram releases provides us an indication about how many new products that are yearly commercialised in Denmark. A figure on the number of from artists, producers, firms etc. related in some way to Denmark has not been possible to collect. A tentative figure has however been develop through the use of the Danish libraries database, which suggested that there were about 1200 releases of rock music in 2001 in Denmark. Also, such figures combined with statements from interviews propose an increase of the rate of Danish releases since 1990. New works and members of the collecting societies Related to the figures presented in table 6 and 7, it is interesting to identify how many songs that each year are reported to the collecting societies as well as the overall picture of collected songs and member. These figures tell us something about what we might term the rate of invention that could in a longer time frame be turned into releases by various producers and record companies. Table (6): New Danish works reported to KODA from 1997-2001 Year 1997 1998 1999 2000 2001 Total 27.764 28.333 27.376 26.915 26.256 136.644 New Danish works 319.403 348.375 373.519 399.359 Total reported Danish works 764.490 829.312 882.769 932.224 Total reported works (Source KODA 2002) Table (7): New Danish members of KODA from1997-2001 Year 1997 1998 1999 2000 2001 Total New members Members total 1.962 20.585 2.049 22.634 964 23.598 973 24.571 983 25.554 6.931 116.942 (Source KODA 2002) As the latter figures show the rate of new Danish members decrease relative to the total amount of members. Yet, the Danish proposition of all reported works relative to the total reported works seems to stay relative stabile. Numbers deriving from collecting societies put forward that the number of new members, of new reported songs, of the relationship between new reported Danish developed songs and international ones are all status quo over the past 5 years (KODA). Employment and firms of the Danish pop music industry A first issue to underline in this context is the relative low barriers to entry concerning the artistic related activities we find for firms and persons in this industry. This is of cause due – among other things - to low costs of various equipments (i.e. recording, instruments, mixing), and as such related to changes in technology and distribution (i.e. for example on the internet). Yet, it is recognised, on the other hand that we detected a recent growth concerning marketing and costs of promoting a 9 release or artist nationally as well as internationally. These two trends seem to be working along side each other – particularly linked to different genres. And might explain why many independent labels currently are doing well at a certain level of developing artists and records but need the resources and capabilities of major record companies when wanting to move to a higher level of record sales. According to The Danish Statistical Office, 2002 the number of firms within the music industry has increased over the last decade. In 1999 we found 1918 firms in the industry, which is estimated to account for about 0,59 percent of the full population of firms in Denmark. Compared to the same figure from 1992 we find that the numbers of firms in the music industry answered for only 0,47 percent. The figures below describe the change in the number of firms and the number of full-time employed in the industry segment from 1992 to 1999. Table (11): Changes in the number of firms and full-time employed in the Danish music industry (1992-1999) 1992 1995 1997 1999 1618 1735 1803 1918 Number of firms 4948 5432 4983 5429 Employed in total Full-time employed 3.109 3.205 2.834 3.057 (Source: The Danish Statistical Office, 2002) The main interest is not so much the general increase in the number of firms in the music industry or the explained increase of the number of firms related to the general number of firms in the general Danish economy –but the fact that the growing number of firms is not matched by an equal increase in the number of full-time employed in the industry. It is in the current paper left un-touch to explain this pattern. Employment On a general level, the organisation of non-professional rhythmic music in Denmark: Fajabefa estimates in the autumn 2002 that approximately 290.000 persons above 16 years play music in Denmark. As the figures of table (11) above reveal we find from 1992 to 1995 a small increase of persons fulltimed employed in the music industry in Denmark. Yet, we may identify a server drop from 1995 to 1997 on 371 persons and just a weak recovery in 1999. The 3057 persons employed in the industry segment account only for 0,26 percent of the number of full-time employed in the total Danish economy in 1999. The figure on the total number of employed in the Danish music industry shows a slow increase from 1992 to1995 then a drop back to around 5000 persons and yet, again a slight growth in 1999 to reach 5429 employed, which is an increase from 1992 amounting to approx. 10%. Table (12): Absolute number of employed in various sectors of the Danish music industry (19921999) Branch (NACE code) 1992 1995 1997 1999 10 Creation 923110 Performing artists, producers of artistic and literary work Industry: 221400 Publishers of sound recordings 221500 Other publishers 223100 Industry for the reproduction of sound recording 246500 Industry for prepared unrecorded media Distribution: 514330 Wholesale (CDs, tapes, records, videotapes 524530 Stores for records & videotapes 524540 Stores for music, instruments & music scores 923200 Theatre & concert hall companies etc Machinery & equipment: 363000 Industry for music instruments Total number of employed of the music industry Total number of employees in DK incl. the music industry (Source: The Danish Statistical Office 2002) 268 801 776 675 61 2763 190 1872 198 1174 450 1427 29 169 188 172 346 376 17 469 272 460 326 736 383 426 352 768 439 484 306 809 485 453 431 300 4948 315 5432 320 4983 306 5429 1554948 1585432 1634983 1685429 If we look at the single segments within the music industry we find that particularly the category ’Other publishers’ has experienced a decrease in employment. On the other hand we observe an increase of employment in sectors as ‘Wholesale’ (514330) and ‘Publishing of sound recording’ (221400) as well as ‘Industry for the reproduction of sound recording’ (22310). Furthermore, we identify an increase concerning the number of employed within ‘Performing artists, producers of artistic and literary works’ at 152%. However, it is important to note that the production of music often is related to matters of microbusinesses, self-employment, part-time employment, freelancing, semi-professionals, etc. This makes accurate statistics rather difficult to create, as data is hard to collect. Besides, when individuals of the firms of the industry find themselves un-employed both concerning so-called humdrum and artistic activities they frequently seek employment in other more or less related industry sectors. Moreover, to undermine the credibility of the data from The Danish Statistical Office (2002) figures originating from the Danish music information center (MIC) estimates that there are around 7500 professionally organised musicians, singers, composers, etc. in Denmark. The majority are organised in the Danish musicians union (DMF) (approximately 6000 members) or the Danish artists association (approximately 1500 members). An interesting figure also from Eurostat 1997 concerns average number of employed per enterprise. Again figures only concern firms involved in activities under NACE 221400 and 223100. The figure informs us about firm size for the firms of the music industry. The average number of employed pr. firm is in Denmark 2,3, while Sweden holds 2,0, Finland 1,1 and the UK 4,6. 11 Firms in the music industry If we focus on the development between 1992-1999 concerning the number of firms in the various sectors of the music industry in Denmark, we find the following picture. In general, there has been an increase in the number of firms within the industry (table 11) accounting for approx. 19%. Table (13): Absolute number of firms in the different sectors of the Danish music industry (19921999) NACE 1992 1995 1997 1999 Creation: 923110 Performing artists producers of artistic and literary work Industry: 221400 Publishers of sound recordings 221500 Other publishers 223100 Industry for the reproduction of sound recording 246500 Industry for prepared unrecorded media Distribution: 514330 Wholesale (CDs, tapes, records, etc.) 524530 Stores for records &videotapes 524540 Stores for music, instruments and music scores 923200 Theatre and concert hall companies Machinery & equipment 363000 Industry for music instrument Total (Source: The Danish Statistical Office, 2002) 129 180 185 219 12 600 150 464 219 434 244 417 7 19 5 33 5 39 7 43 41 85 127 106 128 107 158 255 420 224 361 208 369 196 416 111 120 116 115 1618 1735 1803 1918 What is particular interesting to infer from the table above is the extreme growth in the number of record labels (NACE:221400) growing from 12 in 1992 to 244 inn 1999 (more than 200%), while we see a drop in the number of ‘other publishers’ (NACE: 221500) around 35% in the same period of time. Moreover, the general picture of the music industry is a slow growth or status quo in the number of firms in most sectors yet, excluding categories as other publishers and stores for music instruments and music scores. Table (14): Size and number of firms in the various parts of the Danish music industry, 1999 100(+ Number of employed – Firm size 0 1-9 10-49 50-99) Total (NACE) Creation 92310 Performing artists producers of artistic and 169 42 8 219 literary work Industry 224 17 2 1 244 22140 Publishers of sound recordings 319 86 8 3 1 417 22150 Other publishers 12 22310 Industry for the reproduction of sound recording 24650 Industry for prepared unrecorded media 51433 Wholesale (CDs, tapes, records, videotapes Distribution: 52453 Stores for records & videotapes 52454 Stores for music, instruments & music scores 92320 Theatre & concert hall companies etc Machinery & equipment: 36300 Industry for music instruments Total (Source: The Danish Statistical Office, 2002) 31 5 57 5 2 1 1 33 14 1 2 1 39 7 107 121 31 4 132 57 7 375 40 1 2 158 196 416 96 13 5 1529 325 52 1 8 115 1.918 4 The figures above table 14 show that most firms involved in activities of the music industry are small and medium sized enterprises (SMEs) having less than 9 employed. Moreover, more than 80% are one-person firms. As such, many of the firms are one-person firms only established to manage a single artists work and economy. The average number of persons employed (not fulltime) in a firm of the Danish music industry in 1999 was 2,8. However, as we know a few of these SMEs are connected to multinational companies and as such to view more in the realm of major firms. We find that the most firms according to this industry segment are located within the categories: ‘Other publishers’ and ‘Theatre & concert hall companies’ etc. These categories both include a number of firms not directly related to the industry in scope. How is the size relationship within the different elements of industry then? As the table (15) below shows in percentage of the full population of firms, turnover and employment split up on the sublevels of branches of the industry the largest parts of the industry’s employment in 1999 were firms located within categories ‘other publishers’ and ‘wholesale’. Concerning turnover the main bulk (52%) arrived from sales of CD’s, tapes, etc. Table (15): The percentage of firms, employed and turnover from various sectors of the Danish music industry, 1999: Branche Employment Firms Turnover 221400 Publishers of sound recordings 8 12 6 221500 Other publishers 24 22 13 Industry for the reproduction of sound 223100 recording 10 2 7 363000 Industry for music instruments 7 6 2 514330 Wholesale (CDs, tapes, records, etc.) 21 6 52 524530 Stores for records &videotapes 9 8 8 Stores for music, instruments and music 524540 scores 8 10 5 923110 Performing artists 9 11 5 923200 Theatre and concert hall companies 4 22 2 I alt 100 99 100 13 (Source: The Danish Statistical Office, 2002) Firm location Table (16): The spatial distribution of firms in the Danish music industry from 1992 to 1999 Absolute number 1992 1992 1995 1995 1997 1997 1999 1999 of firms Music Music Music Music Location industry Total industry Total industry Total industry Total (council): CPH and 30,81 FRDBRG 435 30,143 479 29,672 550 1 649 32,206 Municipality 29,51 212 29,100 228 29,321 229 8 238 30,188 Copenhagen 21,89 120 21,609 120 21,503 124 8 129 22,557 Frederiksborg 12,90 71 13,305 55 13,081 41 2 55 13,138 Roskilde 19,02 63 19,983 63 19,104 72 7 77 19,098 Vestsjællands 16,21 44 17,551 45 16,524 44 3 42 16,072 Storstrøms 12 3,677 10 3,248 15 3,076 15 2,977 Bornholms 26,87 98 28,510 118 27,502 120 0 115 26,721 Fyns 17,00 47 17,934 52 17,387 62 1 52 16,566 Sønderjyllands 15,09 44 16,422 40 15,416 43 4 46 14,918 Ribe 21,66 74 22,510 89 21,669 72 6 70 21,720 Vejle 21,05 43 23,145 49 21,567 51 1 50 20,490 Ringkøbing 36,93 204 38,740 231 37,200 236 8 238 36,910 Århus 19,72 38 21,723 45 20,351 38 6 35 19,445 Viborg 32,23 113 36,258 111 33,352 106 3 106 31,639 Nordjyllands 340,81 326,89 324,0 324,64 1618 3 1735 9 1803 51 1918 5 Total (Source: Danish Statistical Office 2002) As the figures (table 16) reveal, there is a clear concentration of firms connected to the music industry within the Greater Copenhagen area (Copenhagen and Frederiksberg municipality and Copenhagen council) accounting for no less than 46% of all firms of the Danish music industr. A minor concentration of firms is found around the city of Aarhus (Aarhus Council) accounting for 12% of all the firms within the music industry. If we relate the music industry figures to the figures 14 of the total number of Danish firms in all industries we learn that the music industry concentration within the Greater Copenhagen area are more significant than the general concentration rate (19%). Besides, the growth in the number of firm start-ups in the Copenhagen region from 1992-1999 is larger than in other parts of Denmark. Key players of the music industry Record Companies The record companies are the segment within the music industry in Denmark that properly makes most money. The trend characterising the record companies’ industry structure is: 1) the strong tendency towards an organised division of labour and knowledge due to a high level of specialisation between the firms, 2) the development of a large number of differently related industries 3) the strong market concentration dominated by the five majors with only relative few Danish independent labels. In Denmark the majors represent approximately 75- 90 percent of the total Danish market of sales of phonograms. It is furthermore, difficult to say to what extend the income stays in Denmark or is shipped to the mother company. This said, it is important to keep in mind that the music industry in Denmark perhaps by economic numbers are dominated by multinational global players but that the firms as showed by table (14) in general are SMEs. The members of IFPI, DK account for approximately 95-98% of the record sales in DK per year. IFPI represents 37 companies9 including the majors and umbrella organisations of the major independent labels. The firms are involved in various aspects of the processes of production of music - various NACE codes – but mainly involved in activities of production and reproduction of sound recordings (NACE 221400 and 514330). IFPI represents as such a major bulk of record companies relative to economic size concerning the whole population estimated by musicnet.dk to approximately 60 – 80 labels represented on the Danish market (www.musiknet.dk). However, more is represented since some of the firms mentioned represent more than one label. This goes, for example, for Playground Music Scandinavia, which have distribution and to some extend marketing activities for approximately 50 minor or medium sized labels from all over the globe. The number of recoding labels changes rapidly as small independent labels constantly enter and exit the market (e.g. relative low entry costs for small scale production). Yet, some interviews imply that the majority of these labels survive only for a very short period of time or is merged into existing ones. Moreover, many labels are under the same ownership control (see the description of the majors below). The majors All the five recognised multinationals; EMI, BMG/Bertelsmann, Sony/CBS, Universal/Vivendi and AOL Time Warner – the majors dominate the global entertainment business environment and especially the music industry. All of them are represented in Denmark. The majors are, almost rudimentary to say, part of huge media conglomerates involved – and to some extend partial - with the production of music but have core activities within hardware production (PC, TV, Hi-Fi, etc.), film-making, publishing, and internet services, etc. The majors situated in Denmark can be said to have two basis tasks. First, the majors have the mission to do activities related to marketing, distribution, promotion and sales of products from international artists – initiated by strategy of the mother company within the Danish market. 9 These include associations of a number of independent labels 15 Secondly, to search and discover Danish talents and hence, if possible produce, marketing, promote, distribute and sell this nationally produced (Danish) music both on the home market as well as in the global marketplace. A glance at the web pages of the majors in Denmark and related to interviews revealed that the first objective seems currently to have the strongest priority. However, several of the people of the industry mentioned when interviewed that only one or two firms among the majors really were interested in producing Danish pop music, namely EMI and to some extend Universal. The other major companies located in Demark are of cause interested in making money from selling music produced in Denmark – they do produce some recording of Danish origin - but are not as such deeply involved in producing national artists. A number of labels as, for example, BMG, Sony Music Denmark and Universal appear over the last years to have narrowed down the number of yearly releases of Danish produced music. In general, we can state that the Danish pop music industry has developed closely aligned to the main trends identified in the UK and US segments of the industries. That is market concentration, particularly regarding the marketing, financing and distribution elements. In common for all the majors are that they own or are involved both internationally and nationally in a wide range of various labels specialised in certain genres or which are country specific. Also, the Danish part of the majors shares the features that each company consists of highly composite conglomerate of mergers and acquisitions of various national labels and furthermore, that the ownership relations are rather complex involving a number of holding companies, etc. The Danish located majors employ around 20 – 40 persons each. Brief - The five majors in Denmark The figures presented below on the activities of the majors in Denmark are presented in thousand Danish Kroner. All data of the majors are found using Greens on-line business information service. EMI Music Denmark A/S The company took over Skandinavisk Grammophon Aktieselskab (founded in 1903) in 1967 to establish itself in Denmark. In 1992 EMI took over the major Danish independent label Medley Records. In 1999 the company merged with EMI Invest. The company is owned 100% by the EMI Group Denmark. EMI Music Denmark is connected to local labels CMC, Recact, Chrystalis, as well as more internationally known labels as; Capitol Records, Virgin records, and other labels. Corporate mother: EMI Group, UK. Tabel (17) 1996/97 1997/98 1998/99 1999/00 2000/01 273384 206712 172964 207227 178630 Turnover 40769 -15062 -66701 3674 -17754 Revenue 73133 36397 24423 45781 26376 Export 43 44 39 44 45 Number of employed Universal Music A/S The company started business in Denmark in 1920 under the name of Polygram Records, In 1991 the company bought the main activities of Sonet/Dansk Grammofon A/S, In 1995 the companies distribution was moved to Germany. Owns Universal Pictures Denmark A/S. Universal Trading 16 Company B.V. Nederland owns the Danish company 100 percent. Universal Music Denmark is associated with among others the following labels: Polydor Music, MCA Music Entertainment, Magnet Music Production, Sonet, Mercury Records, Mercury and Polygram Records. Corporate mother; Vivendi Universal (France-US). Table (18) 1996 1997 1998/99 1999/00 2001 178813 197166 226627 354365 253760 Turnover 17051 17592 7329 6504 9370 Revenue X X X X X Export 35 34 34 42 42 Number of employed BMG Denmark In Denmark founded in 1988 under the name of BMG Ariola A/S. In 1993 the company merged with Genlyd Grammofon (a ‘major’ Danish independent label form Aarhus). In 1995 the company merged with Reinhardt Mohn Scandinavia and in 1999 with Replay records. The company is associated with the label: BMG Ariola Records, BMG Publishing Denmark, BMG Ariola Denmark. The firm is owned by Bertelsmann Music Group GmbH, Germany, 100%. Table (19) 1996/97 1997/98 1998/99 1999/00 2000/01 106636 105771 87293 90208 80556 Turnover 12852 5236 2991 -1572 1566 Revenue X X X X X Export 28 29 27 23 21 Number of employed Sony Music Entertainment (Denmark) A/S The firm begun activities in Denmark in 1971 by the name of CBS Records. Changed in 1991 to the current name and form of company. Merged in 1995 with (the third largest independent Danish label) Pladecompagniet. The company is associated with products from Pladecompagniet, Sony music Nordic A/S and is owned by Sony Software Nordic Aps, 100 %. Corporate mother; Sony Corporation, Japan. Table (20) 1996/1997 1997/98 1998/99 1999/00 2000/2001 169506 172783 162619 159835 131751 Turnover 26308 16143 12119 8613 575 Revenue X X X X X Export 31 34 37 40 40 Number of employed Warner Music Denmark A/S The firm was created in Denmark in 1988 under the name of Wes records, it changes its name in 1990 to the current one. The company is owned by Warner Music Holding Denmark A/S, 100 %. Corporate mother; AOL Time Warner, US. Table (21) 1996/1997 1997/98 1998/99 1999/00 2000/2001 111770 141252 143190 150796 107292 Turnover 3262 7142 5523 5129 -4171 Revenue X X X X X Export 17 Number of employed 20 20 21 21 21 On a global scale EMI is the smallest company of the five majors, yet, EMI, DK claims, when interviewed, today to hold about 47% of the market share of sales in Denmark of Danish produced music and the firm is as such a dominating force on the domestic market. In addition EMI, DK is an example of a major record label buying stakes in other Scandinavian independent companies (Pogo, Finland, Virgin, CMC, Medley) as well as having many licensing deals (‘mainly marketing and distribution’) with minor now up coming Danish indies like: Crunchy Frog, Auditorium and Musicmatters. Also, Universal DK is involved with minor companies of A&R, management, eventcoordination, etc. This is particular occurring related to artists originating out of a Universal effort, but the artist only has a distribution and marketing arrangement with the firm everything else is so far and to some extend detached from this major company. Table (22): Market shares of the majors in Denmark (1992-2002) Company/years 1994 1995 1996 1999 2000 2002 BMG/Ariola EMI/Medley (CMC, Virgin) MCA Music entertainment Polygram Records Universal (MCA, Polygram) Virgin Records Warner Music Sony/Pladecompaniet CMC Total 14,2 9,6 10,7 9,2 19,3 15,1 17,9 29,5 1,8 4,3 3,5 18,1 17,2 14,4 17,2 6,5 5,4 6,4 7,3 11,2 9,3 10,2 11,4 17,1 16,7 17 13,2 6,5 5,5 88,2 84,1 85,6 87,8 7,9 27,5 8,7 31,9 21,3 9 12,1 11,6 26,5 89,4 92,6 9,9 15,6 (Source: IFPI, DK) (The company names in brackets are companies bought by some of the majors over time – see description above) As table 22 shows, the majors in Denmark from 1994 to 2002 have increased their shares of the Danish music market (IFPI members sales equal 100% of the market). Furthermore, due to mergers and take-overs a concentration of ownership has occurred in the Danish music market. The largest companies are EMI and Universal have both experienced growth in market shares during the latest years. BMG and Warner Music are the smallest firms of the majors in Denmark. Only Warner Music has experienced a decrease of market shares during the last 2 years. The independent labels - indies Table (23): The most important labels represented in the Danish market Company name Company mother or associated to, main decision-making location Edel, Germany Edel/Mega Sweden, Edel Playground Sweden MNW Nordic Bonnier Musiklærerforenings forlag Denmark Denmark Steeplechase 18 Market share (2002) 2,6 0,95 1,43 0,95 0,12 0,03 Sundance Trust Olufsen Pineapple Dacapo Egmont/Litas EMG Exlibris Kick A/S Cruncy Frog (Source: IFPI) Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark Denmark 0,02 0,06 0,19 0,02 0,08 0,09 0,25 The staffs of the major record companies in DK are mainly consisting of people from many former Danish independent record companies: Medley (integrated in EMI), Pladecompagniet (bought by Sony), Genlyd (taken over by BMG). These were acquired/merged to majors who used this as an entry strategy to the Danish music market. The value chain (soup) is as mentioned characterised by a strong division of labour. TI (2000) argues that about 67% of the firms of the Danish music industry collaborates as sub-suppliers and almost 50% as direct customers. This ‘flexible’ organisation of the industry seems to provide an organisational form, which can handle a huge variance in demand. So, competition and collaboration looks to be a distinct feature of the Danish music industry (Darmer 1998). For example, various strategies for survival among the indies exist according to Darmer 1998. The conclusion offered by Darmer is that the indies are not really independent of the majors but to a large degree interpret themselves as being so. Furthermore, the indies are not independent in an economical rationality but can be considered independent concerning their self-perception and to some extend also regarding the space for decision-making ‘given’ by the relation to the majors (Hesmondhalgh 1996). The latter, since the majors often offer the indies very broad space for selfgovernance and self-organisation since this form of interdependency is understood to be the best device supporting the entrepreneurial and not least artistic innovative spirit. Also, the majors could be seen as offering the indies a pathway to the global music market. Moreover, we find very little formal horizontal relations in the industry and as such only few initiatives benefiting the whole industry segment. It must also be underlined that matters of venture capital financing music production is rather weak in the Danish music industry. This is in the conducted interviews explained by pointing to the fact that demand is characterised to be quite uncertain and thus, only very little security in investments. Outside the arena of the majors and a few sponsoring deals, we therefore mainly find public and labour union driven support initiatives involved in the promotion and developing activities of the music industry. The relationship between the majors and the indies Darmer (1998) advocates that competition is weak in the Danish pop music industry compared to the UK. According to Darmer the industry is not as developed and big as the latter, and hence, he argues reputation-effect mechanisms and trust within the community of the actors involved in the industry are essential. The indies and majors depend on each other in an market organised way, since a division of labour seems to has developed. Darmer maintains that the indies has specialised 19 due to the interpretation of a remaining integrity and authentic. They contain a certain cultural capital and credibility for doing pure true music. This interpretation since they often have close relationships to the people and firms of the underground scenes and thus, to the non-commercialised and pure artistic output, which is not done to make money. Sometimes the indies due to they relationships and embeddedness in the local environment also hold an early sense of new trends mushrooming. The indies can be said to perform activities the remind to a certain degree of smaller R&D units, which core competencies is finding and developing talent. The majors appear to a large extend to have their key capabilities within marketing, financing and distribution activities. The development path for many independent labels has usually been that a major would take over when the label has experienced growth and success. This process may also occur the other way round since some indies or related activities (e.g. A&R consultancy, talent discovery and development, management, event production) are spin offs by employees from majors. Several interview made it explicit that this latter trend within the last 5 years has been identified in Denmark and is a growing tendency. When a major interact with an indie label – mainly via licensing deals – the independent label stays in the public eye un-touched by the major company due to the possibility of erosion of integrity and decreased branding effect. Still, some independent labels remain outside the sphere of the majors because mainly of either a particular strong political ideology or simply the strategic decision that the label does not have intentions to grow or become a bigger label. A current trend recognized seems to be that the major record companies sell or outsource many of the elements forming, what we usually consider some main parts of the complex chain of activities of a record company. This relates for example to A&R functions, event coordination – marketing and promotion elements -, connected recording studio, etc. This trend seems also detected in the US one, two or three decades ago, when record companies appeared a more coherent vertical integrated firm built around for example a recording studio (i.e. Motown records) and thus, also employed a set of actors closely related to the production process of a sound recording; musicians, producers, songwriters, etc. This process of disintegration links well to a tendency towards an increasing specialisation and hence new skills needed to be coordinated to be successful in the business. For example pushed forward by technology development. This had let to some organisational fragmentation since all – divers knowledge assets seems not easily to be integrated in house. The apparent answer to the specialisation and increase of capabilities that need to be integrated appears to be the proliferation of several small project-coordination firms that in a dynamic market organise a lot of the artistic activities as well as more marketing related issues connected to the production of a new record or launching of a new artist. While the typical coordinators - the major record companies concentrate on providing capital, some promoting activities and the channels of distribution and retail. Recording studios Another part of the value creating parts of the industry is the recording studio. It is estimated by musicnet.dk that there are around 60 professional recording studios in Denmark. However, since a recording studio for a professional release today can be located in the bedroom and done with the equipment of a lab-top, at a cost that can be meet by most people, this figure only relates to big and more established recording sites holding a certain expertise on sound recording, mixing and other related technologies (e.g. computer-based skills) as well as some particular high quality equipment. 20 CD producers The physical production of CDs in Denmark is located mainly in two firms: SDC DanDisc, which is not a Danish owned firm and the Danish firm Tocano. Distributors Distribution is for Sony, BMG, EMI, Universal and some indies in DK arranged through the partnership of the company GDC, which cover 90 % of the Danish distribution market of audio and video. These mentioned players are the key suppliers and part of the ownership. Retailers The retail of music products in Denmark (i.e. CD’s) is undertaken mainly by three forms of firms. These three hold almost equally shares of the retail market. 1) The specialised independent record shops (i.e. GUF records, TP music), 2) the large national or even international retail chains as; Fona, HMV, Virgin Megastore, and 3) finally, supermarkets: FDB or Dansk Supermarket (i.e. Brugsen, Føtex, Bilka, OBS, etc.). The latter segment is the one that have experienced the largest growth over the last decade and it today a serious player for the record companies to negotiate with. These firms should nit be included in the exercise. Live performances The volume of the live music market seems impossible to estimate as collecting the information on this topic is difficult due to problems of defining what qualify as a live performance on the music market (that an entrance fee is paid?), that the artist and musicians receive payment? That the live performance is accounted for at the collecting society?). One may however take the figure on the revenue collected by KODA for live performances as an interesting vector pointing towards a tendency considering the overall activities of the live scene. Still, a recent Europeanbarometer survey refers that the highest rate of people attending a pop/rock concert during the last 12 month is found in Denmark (Eurostat 2002). Supporting institutions Under this heading we provide two basic elements: an outline of the dominating structure and functions of the formal supporting institutions influencing the activities of the Danish music industry scene. Additionally, we have selected to describe some of the formal institutions that we find of particular interest in the given context, such as, the new music manager education as well as organisations as The Danish music information center (MIC), ROSA and FAJABEFA. The latter is the organisation of the amateur musicians in Denmark, which represent artists and musicians from the growth area that might possible foster and develop the next export success of the Danish music industry. Many both public and private institutions influence in many and rather various ways the activities and development of the Danish music industry. This related both to the innovation and production activities as well as more exchange related elements. As such, it is in order to draw a more conclusive picture of the industry a need to outline the most important of these. The institutions dealt with here are formal ones providing a wide range of services such as education, state funding units, national, regional or local institutions of cultural affairs, industrial bodies, labour unions, as 21 well as the various collecting societies. These institutions serve as a form of support, guidance or regulation concerning most activities of the industry. Neither descriptions nor explanations of the existence and importance of information, knowledge and activity coordinating informal institutions as trust relations or reputation effects are not directly addressed. Furthermore, the institutional setup is consisting of a rather large element of related and associated services as specialised layers and accountants supporting both artistic related and more humdrum business related actors. However, Public authorities Government ministries Policies deriving from at least two ministries are of direct importance for the Danish music industry, to be exact: The Ministry of Cultural Affairs and The Ministry of Trade and Industry. However, in this system view of the industry also policies from, for instance, the Ministry of Education are of significant for shaping the condition of the industry. Ministry of Trade and Industry This ministry influences various factors of the Danish music industry since it is responsible for the Danish trade and industrial policy, and hence the more business related aspects of the music industry. However, the ministry does not as such have particular policies targets towards the specificities of the music industry. Still, as mentioned before the Ministry of Cultural Affairs and the Ministry of Trade and Industry have done a political statement on the developments of the creative industries. The underlying assumption is that the interaction between the creative and the business field would yield synergies. Public support schemes: The Ministry of Cultural Affairs supports the development, production and performance of Danish music primarily from a cultural perspective. Funding to popular music genres is mainly allocated through the Danish Music Council. This institution may be regarded as the main political authority concerning the music industry in Denmark. The Danish Music Act from 1976 is believed to be one of the first in the world. The act comes within the jurisdiction of the Ministry of Culture and is administered by the Danish Music Council. The Music Council advises and assist public authorities and institutions in matters related to music. The Music Council shall hold the final administrative authority with respect to the distribution of subsidies, yet, it holds a relative independent position regarding the Ministry of Cultural Affairs. The Danish Music Council The Danish Music Council is a body of 9 experts from all corners of Danish musical life. The Minister of Culture appoints 4 members, and 5 members are elected among Danish organisations and institutions working with music. The main task of the Danish Music Council is to subsidize a range of different areas within Danish musical life. Both classical and rhythmic music are subsidized. The amount fixed for the Danish Music Council in the Finance Act of 2001 is approx. 23 million US$. From this 9,2 mil. US$ are subsidies for the more than 200 music schools for children and young people and 3,47 mil. US$ are subsidies for venues arranging concerts with rhythmic music. The council has distributed subsidies to the following specialised organisations within the field of rhythmic music. ROSA - The Danish Rock Council, The Danish Folk Council FFS, Danish Jazz Federation and The Danish World Music Association. 22 Most of the funding from the council is not granted towards activities of pop music but other more prioritised genres as classical music, children’s music, folk and jazz music. These are aspects of the music scene, which do not generate the value as pop music does. One example however is the transportation fund, which is financed by the council. This can cover domestic travel expenses for rhythmic bands in some instances (from 2003 the fund is closed down). Another support for pop music that the council also stands behind is the Consultancy for Rhythmic Music. A consultant service that publishes useful handbooks such as "Spillemønter", which is a guide through the funding-jungle. The book (in Danish) covers all forms of music and can be ordered on-line. The possibilities for subsidisation regarding CD publishing are explained in the brochure "CD-støtte" from the consultant service. The county music committees and similar music committees in the municipalities of Copenhagen and Frederiksberg support local music initiatives. Other local Danish governments also support music initiatives within their respective areas. If a certain music activity involves exchange between Denmark and another Nordic country, it is possible to apply for subsidies through one of the bilateral funds. Should partners from three or more Nordic countries become involved, it could be helpful to contact the Nordic music committee (Nomus) or other culture supporting agreements under the Nordic Council of Ministers, where musicians can apply for Nordic scholarships. Projects are subsidised through the Nordic culture fund, which has a secretariat in Copenhagen. Financing through EU-funds requires participants from several countries and a substantial selffinancing. Information on this is gathered at the Cultural Contact Point of the Ministry of Culture. The Danish Music Information Center- MIC An important piece in the development of both cultural and business related aspects of the Danish music industry is MIC. This institution is a state-funded, non-profit organization for providing information about and promoting Danish music at home and abroad. Accordance with the by-laws MIC is supposed to: disseminate the knowledge – nationally and internationally – of Danish music and music life, within all genres, provide existing information, registration and documentation of Danish music and music life, coordinate the initiatives abroad to ensure the best possible use of the public financed subsidy. ROSA: The Danish Rock Council ROSA is music-political umbrella organisation that represents a line of music associations and organisations. It is a organisation with it’s own economy but yet, based on funding mainly from public institutions schemes. ROSA’s objectives are: Support Danish rock music and related genres via the means from the music law, Support public institutions in cultural and musical political matters related to the rhythmic music scene, Support the distribution of Danish music nationally as well as internationally. The Danish musicians union, The Danish artist association, Spillested DK etc. are involved in organising ROSA activities. To estimate any direct effect of the ROSA initiative is rather difficult but from the normative standpoints picked up under the interview round there seem to be a general 23 agreement that the organisation has been rather successful in its support particular concerning helping and developing upcoming bands and artists. Public education institutions On the highest level of education focusing on music Denmark has six institutions. These are engaged in educating professional musicians, singers, composers, music teachers, etc. This takes place at the conservatories: The Royal Danish Academy of Music, Copenhagen Rhythmic Music Conservatory, Copenhagen. The Carl Nielsen Academy of Music Odense, Odense. The West Jutland Academy of Music, Esbjerg. The Royal Academy of Music, Århus. Centre for Improvised Music and Movement (Silkeborg) is a section of the conservatory, which educates music teachers and educators in the rhythmic field. The North Jutland Academy of Music, Aalborg. There are tracks for rhythmic music at all the institutions. In order to enrol at the conservatories, one must pass an extensive admission test. Last year 682 were accepted on the Danish conservatories. One can qualify by taking the preparatory class for conservatories, musikalsk grundkursus - MGK , which is a two year part-time education (20 lessons pr. week) offered at several public music schools all over Denmark. Furthermore, on the gymnasium (high school/college) level there are 2 hours a week compulsory classes concerning music understanding and practice. Over more, there is a specialised line focused on offering music education, which add additional 3-4 hours of music a week. Furthermore, there are a few specialised gymnasiums that offer a special music education. Music schools for children and young people are found in almost all of the 275 municipalities in Denmark. The classes are subsidised by the Music Council with a special grant of around 10. mil. US$ per year. This often takes place in partnership with funding from user-payment and small grants from the local authorities. The council has related to the development of the schools created a consultant service in this field: The Music School Consultant. Public school education in music begins in the first grade with one hour (45 min.) per week than it develops into 2 hours a week from the second to fourth grade. Music education in fifth and sixth grade is one hour a week. The education finishes as compulsory classes in sixth grade, however it can be chosen as free classes 2 hours a week until ninth grade. The general effect of the large public music education scheme is that playing music is a quite common hobby among youngster in Denmark providing the possibility for further development of talents (critique mass), which may lead to music success stories later. Within the academic approaches to music one finds The Graduate studies in Musicology (B.A or M.A) that take place at: Department of Musicology, University of Copenhagen Music Department, Aarhus University Department of Music and Music Therapy, Aalborg (the music-therapy studies aim to use music for psychological and curative purposes.) 24 In order to follow courses at university level, one does not necessarily have to meet the admission criteria, as both "Folkeuniversitetet" and "Åbent Universitet" (alternatives to formal universities) offer courses at a high level for interested people. Music teachers for elementary school are educated at the teachers colleges - lærerseminarierne. Advanced theoretical and practical studies take place at "The Pedagogical University of Denmark” in Copenhagen, at the Institute of Aesthetic Studies and Media Education. The advanced university institutions collaborate within the "Dansk Netværk for Musikpædagogisk Forskning". One initial observation at this point is that in general the classical music education in Denmark is much more institutionalised in lines of education and development. This is the case since the craft – technical aspects in the first instance seems more important to master within this musical arena than within the pop music context, where improvisation and expressive abilities are more significant for both artistic and economic success. As such the educational institutions mentioned must be recognised as being only one leg of development of talents and skills for doing profitable CDs etc. in the pop music business. Musical manager education The new three-year music manager education connected to the rhythmic music conservatory in Copenhagen started September 2002. The idea is presented simply to educate persons with an initial understanding of both the artistic and humdrum activities of the music industry to be able to improve amongst other elements the manager, booking and A&R functions in Danish pop music and as such hopefully fuel innovative and creative behaviour to develop export success like Aqua. The music manager education is initiated by recommendations from the industry and focused on management and development activities. This relates however, not only to employment possibilities in the music industry but in most artistic related sectors: advertising, movies, media and Internet businesses, etc. The education is centred in three main blocks of competencies: studies of the music industry, general cultural studies and business studies of firms. As such the abilities to develop are described as sound business practice, good music knowledge and perhaps capabilities as well as fine communication skills. There is a nearly similar education being started up in Aarhus. However, the Aarhus addition of the education is focused on providing additional formal training to people already employed in the business. The third sector There exist in Denmark numerous local culture organisations involved in arranging concerts, educations, etc. This sector includes the following: ‘High schools’- højskoler In Denmark there are at least 30 high-school institutions offering a wide range of training courses in various aspects of music. Quite a number of these arrange local performances and even recordings of the produced music. These high schools are open for every one and regarded as a free space for self-development, yet, recognised as educational institutions. Students are between 18 -70 years. 25 Evening classes There is a huge group of various semi-educational organisations occupied with teaching and playing music. The main ones are related to activities provided by the large national labour in organisations like AOF and FOF but also in Aarhus and Copenhagen the institution of the ‘rytmiske aftensskole’ is an important place for evening classes as well as a meeting place for musicians. Music festivals During the summer season, more than 100 festivals and concert series are held all over the country. A comprehensive agenda - Festival Denmark - is compiled by MIC. The largest rock festivals are; Roskilde Festival, Midtfyns Festival and Skanderborg Festival. The Tønder Festival focuses especially on Anglo-American folk and folk-rock. In the jazz field, there are two main summer events, the Copenhagen Jazz Festival and Århus International Jazz Festival whose secretariat is situated in Musikhuset Aarhus. Copenhagen Autumn Jazz is a newcomer in this field. Concerning the effects of the festivals there is little doubt that they contribute greatly to putting Denmark on the map regarding a ‘rocking‘ or swinging nation. Furthermore, the provide opportunity for the customers to see and hear their favourite acts live but also offer fine opportunities to minor Danish bands to perform for a larger audience. Associated effects of the festivals are of cause income from tourism etc. The festivals must however also be seen as a part of a wider cultural issues where young people from all around the North European countries gather. Spillesteder.dk, Dansk musik kontakt og musiknet.dk These independent web sites communicate relevant information on organisations and institutions of the music industry: recording studies, record companies, rehearsal opportunities, bookers, publishers, concert arenas etc. as well as provide general information on developments and changes of the Danish pop music scene. Danish music contact is a portal mainly for artists for dealing music equipment and instruments, getting in touch with fellow musicians and bands. Vocation training This hints among other elements for example to a newly started arrangement mainly developed by the Danish Musicians Union (DMF) and thus directed towards persons that either is employed parttime by performing or creating music - or is currently unemployed. The activity is done for professional musicians. The initiative is called Artlab (www.artlab.dk). The institution tries by new initiatives to bridge art and business and art and technology to develop and provide its participants with new or complementary skills to the ones already possessed. As such it is an attempt to move some not particular successful artists to other segments of the labour market but still in another context draw on their competencies of music. Currently around 60-70 people are engaged in activities there. Professional organisations, workers organisations and industrial bodies Table (24) The key professional bodies and worker organisation of the music industry in Denmark Core sector Supporting organisations Koda* Composers, artists etc. (i.e. creators) Danish Musicians Union (DMF) Danish Artist Association (DAF) 26 Record companies, publishers etc. (i.e. Industrialists) Danish Songwriters Guild (DPA) Danish Composers Society The Danish Society for Jazz, Rock and Folk Composers ( DJBFA) Council of Danish Artists Danish Council of Performing Artists' Organization International Federation of Phonographic industries (IFPI) Spillested.dk Danish independent publishers Society of Danish impresarios Association of Danish music festivals Association of phonogram suppliers in Denmark Danish Music Publishers' Association Association of art bureaus in Denmark (FKD). GDC Distribution * These organisations are also collecting societies and are described below There are estimated about 7,500 organised professional musicians, singers, composers and conductors in Denmark. Usually the musicians join the Danish Musicians Union or the Danish Artist Union (DAF). Soloists also within the traditional pop music genre may be organised by the National Federation of Danish Soloists whereas many classical soloists are members of the Classical Soloist Association of 1921. It is within the pop0 music segment difficult to say when someone is a professional as well as determining when a performer is an artist or musician. Matters which un-doubtly complicate data as well as discussion. As a composer one can chose from among three unions: Danish Composers' Society, which organises composers within the classical tradition and score jazz. Members of Danish Songwriters Guild (DPA) are songwriters, writers of revues and entertainment, as well as lyricists within the popular genre; The most recent – and largest – association is The Danish Society for Jazz, Rock and Folk Composers - DJBFA, which recruits its members on a large scale within the rhythmic field. The three organisations support their members in various ways, and they have collaborated in making all information concerning the members available on the Internet at komponister.dk. In Denmark there are two umbrella organisations for performing and creating artists: Dansk Kunstnerråd - Council of Danish Artists and Fællesrådet for udøvende Kunstnere - the Danish Council of Performing Artists' Organization. Finally, also people working within the education world teaching music is organised in: Dansk Musikpædagogisk Forening, Gymnasieskolens Musiklærerforening, Seminariernes Musiklærerforening og Folkeskolens Musiklærerforening. 27 International gatherings and showcases are important nodes in creating contacts and maintenance of network for firms, institutions and individuals of the music business. The main ones for for the Danish music industry seems to be: Popkomm (Cologne), Midem (Cannes) and to some extend CMJ (US) Industrial & professional bodies: IFPI, Denmark IFPI is the Danish part of the International Federation of Phonographic Industries – or in other words the major branch organisation representing the firms of the recording industry. The members of IFPI in both Danish and foreign owned firms, whose turnover account for more than 95% of all sold CD’s pr. year in Denmark. IFPI Denmark handles its members common interests among other things: protection of the rights of members, negotiations with other holder of rights, fight against piracy collecting and distribution of money til the IFPI memebers establishing hit lists, music awards arrangements export initiatives IFPI collaborates with the collecting society of Koda and Gramex and it is the organisation that distributes mechanical royalties to the main record companies. There seems not to be any special industrial body representing the main part of the independent labels in Denmark. A lack that might affect the influence of the independent scene on various policies and initiatives shaping the dynamics of the industry (i.e. concerning education, financial regulation and different handlings of intellectual property rights). Collecting societies: In Denmark the main institutions involved within this area are: Koda, Gramex, NBC, and Copydan. Legislation governing intellectual rights, which was revised in 1998, dictates the guidelines for all kinds of copying, presentations and publishing of music in Denmark. "Samrådet for Ophavsret" gives information on the current regulations. The company Koda bases its activities on this law, and collects money for artists and other copyright holder, when music is played in public places – concerts, radio/TV, retail shops, cinemas, Internet, etc. Koda has sole and exclusive rights in this field and is ’owned’ by the composers’ associations and the publishers’ association. The money is distributed to Danish composers and publishers or is passed on to those companies representing the foreign copyright holders. Part of the revenues is distributed as subsidies for music projects. Last year Koda collected 45.144 mil. US$ and redistributed 43.068 mil. US$ to holders of performance rights. About 27.8282 mil US $ was paid concerning performance rights in Denmark in 2001 of these about 45% was received by Danish members. Koda did in 2001 forwarded money from performance rights collected round the world of some 2,64 mil. US$ to Koda members. Koda did last year register 51.000 new units (i.e. songs, etc.), which about half was the work of Danish members. In 2001 11439 of the Koda members received money from the firm. 28 The originator joints Koda when a song or other work is ready for publication. A contract is signed. The originator has then agreed to transfer all legal rights to compensation for public performances, recording and reproduction etc. to Koda. Koda then ensures via the contract to collect the royalties from whoever performs the music in public. Or warrant that if the music is recorded there are established a license to do this, and hence a fee is paid, which Koda distributes and pay the originator to who owns the right of the music. Composers, lyrics writers and publishers also hold another right, a part from the performance rights – the mechanical rights, which simplified is explained as the right to record or store and spread music on media such as CD, video, film and hard disc. All collection and accounting in this field – mechanical rights - are managed by Nordisk Copyright Bureau (NCB). Koda and NBC have collaborated since 1936. The Nordic and Baltic owners of rights transfer all their rights to the local copyright company, which administrate the performance rights, while mechanical rights are managed by NCB. As such, NCB represents all protection of music in the Nordic countries regarding recording, storage and spreading. NCB collected in total in 2001 72,476 mil. US$. In general the collection increased across the Nordic countries by 5 % from 200 yet, on the Danish market the collecting decreased by 16% mainly due to a weak sale of CDs in 2001. From NCB did only 9,4 % of the earnings go to Denmark because of the concentration of publishing and record companies primarily in Sweden. Danish holders of rights got in 2001 6,312 mil. US$. In 2001, 4535 of the Koda members received money from NCB. Concerning tones of mobile telephony the money from the property rights are collected like mechanical rights by the NCB. When it comes to photo-copying note sheets for teaching purposes or the like, the copyright holders’ interests are taken care of by Copydan. The performing artists’ rights, in connection with the rights of the record companies are administered by Gramex. Gramex see to that these firms and artists get paid for the music recorded on CD, records or tape. In 1998 Performex was founded. It is a company, which on behalf of the performing artists, negotiates the rights for audio and images. Among other things, Performex gives information on what is allowed on the Internet. Export supporting institutions Under the management of the Danish Musicians Union there was in 2000 set up an initiative concerned with a more efficient promotion of Danish music abroad. The MXP – Danish music export and promotion is a music promotion effort intended to benefit Danish music, musicians and composers throughout the world. MXP annually produces a series of promotion CDs featuring a selection of the very best of Danish music. The CDs are released for and first presented at the annual international music industry [MIDEM] convention in Cannes and are subsequently distributed to industry professionals around the world including radio programmers, music journalists, publishers, record companies and managements, festivals, venues, music industry conventions, seminars etc. The efforts and success of MXP are continuously supported by artists, their managers, record companies and publishers and by financial support of The Musicians' Union, The Authors' Rights Society (KODA), Danish Music Council, The national associations for Folk, 29 World, Jazz, Rock and Pop music and CD-manufacturing is sponsored by Tocano Multimedia A/S. (see link www.mxp.dk/2002). Any direct economic or innovative effects of this initiative cannot be identified. However, the massive support of both artist unions, artists personally and record labels seem to hint at the importance of this institutions. Venues and concert halls Danish venues for rhythmic music are subsidised by the council, the Danish Music Council, by pursuance of an amendment to the Music Act, which was passed in May 2000. Information about the venues and their programmes are available through the association Spillesteder.dk. There are large concert halls in every region of the country. The largest ones are Aalborg Congress & Culture Centre in Aalborg (2,442 seats), Falconer Salen in Frederiksberg (2,150 seats), Concert Hall of Tivoli in Copenhagen (1,860 seats), The Conert Hall Aarhus (1,477 seats ), the Music Theatre in Holstebro (1,351 seats), Odense Koncerthus’ (Carl Nielsen hall (1,302 seats), Musikteatret in Vejle (1,130 seats), Esbjerg Performing Arts Centre (1,100 seats) and Concert Hall of the Radio House in Copenhagen (1,058 seats).A number of sports centres and convention halls with extensive capacity are also used for concerts, especially rock concerts. When the Rolling Stones, Pink Floyd or Tina Turner visit Denmark, the concerts take place in the football stadium "Parken" which accommodates 47,000 persons. Music prizes The Jazzpar Prize is an honorary prizes, which is awarded to artists of international importance. The Jazzpar Prize, the world’s largest jazz award, was instituted in 1989 and is awarded every year. The winner performs a number of concerts with Danish musicians. Additionally there exist a long range of various private sponsored prizes often directed to persons in the jazz environment. However, recently some larger national competitions has developed as the Danish champignon-ship in rock music as well as the more commercial focused TV shows of star discovery and development (i.e. star overnight or popstars). Each year and with massive media coverage the record business awards the Danish Grammy – Danish music awards within many categories. This award is primarily given on a basis of votes from the public as well as on numbers of sold entities of the various release. Agencies for musicians and concert organisers A wide range of private management and booking agencies manages the artists, but often work with only a limited number of artists, usually famous names. The catalogues for the booking agencies Arte, Danish Music Agency and Danartist are a mixture of genres. Tivoli Artists Management operates in the classical field, whereas famous names within Danish rock music are managed by agencies such as PDH International, Rock On and Aarhus Musikkontor. The trade association is Sammenslutningen af Kunstnerbureauer i Danmark (FKD). Soloists, musicians and bands often work as their own agents. More and more create their own homepage on the Internet, and others use the project Stereonet, subsidised by the Music Council, to make a textual or an audio-visual presentation of themselves for no charge. Links to the homepages can be found on bandnet.dk. Foreign pop and rock names are promoted through concert organisers such as Dansk Koncert Bureau (DKB) and Motor. School concerts are promoted and organised by the organisation Live Music in Schools. 30 Amateur music Rhythmic amateur music is nationally organised in Fajabefa, the association for amateur rhythmic musicians. The organisation aims at improving the conditions for not professional musicians be it rehearsal facilities, access top places to play own material etc. The organisation is established in 1974 and has today more than 110 local associations and 5800 members. The organisation has a secretariat to take care of administrative work. Furthermore, Fajabefa arranges the Danish national championships in rock, releases the promotion CD ‘starsearch’ and grants fees to posters etc. for amateur artists. The National Music Council, subscription from members and organisations support the Fajabefa organisation. Sponsoring deals related to the organisations activities also create the economic foundation for Fajabefa. The organisation covers all rhythmic genres from rock to metal, hiphop, blues, jazz, elektronik and latino. Again the direct effects of this effort is highly difficult to measure – say describe - to a fulfilling extend. The media Music is broadcasted on radio and TV by the two country-wide public service broadcasters: the Danish Broadcasting Corporation - Danmarks Radio (DR) -with two TV-channels and several radio stations/networks, including a special satellite channel for classical music; and, the TV channel TV2. A comprehensive guide is presented by DR online. There is also a wide range commercial broadcasters – some on the Internet-, and the non-commercial local stations, joined in ‘Sammenslutningen af lokale radio- og TV-stationer i Danmark’. On the pop/rock side, The Voice is the most popular commercial radio station, whereas the idealistic Radio Jazz, with a limited broadcast time, is found at the other end of the scale. Current live recording with Danish bands is presented on the Internet by Concertspot.com, whose object is to market musicians and bands. The printed media include the national daily newspapers, Berlingske Tidende, B.T., Politiken, Ekstrabladet and Jyllands-Posten. Dansk Musik Tidsskrift, Musikeren og Gaffa are the leading professional magazines with the widest range in the realm of music. Information and service Danish Music Information Centre (MIC) offers comprehensive information about Danish music. The centre also has specific documentation and communication tasks in the areas of new music, music in the classical tradition and in the experimental fields. Information on Danish jazz and the Danish jazz scene can be obtained through Danish Jazz Federation. The Danish Folk Council FFS, ROSA - The Danish Rock Council and The Danish World Music Association work for and with Danish music groups. These organisations are also excellent sources for questions within the respective genres. When it comes to practical advice within the rhythmic field, inquire at Den Rytmiske Konsulenttjeneste. This consultant service publishes an e-mail newsletter, to which you can subscribe. The music industry support and hold relationships to initiatives of cultural industries, creativity and innovativeness in general. This includes for example recent polity initiatives as the NYX network and the entrepreneur house: LouiZ located at Holmen in Copenhagen. 31 References Charles Leadbeater,& Kate Oakley (1999): The Independents: Britain’s new cultural entrepreneurs, Demos, UK Darmer, P. (1999): The Indie way: Relationship between leisure and labour among Danish independent labels, paper presented at the ‘Leisure, labour, and urban life conference’, Leicester University, Leicester, 29. -31. March 1999. Edquist, C. (1997): Systems of innovation -technologies, institutions and organizations-, Pinter, London Eurostat (1997): http://europa.eu.int/comm/eurostat/ Eurostat (2002): Statistics on Sound Recordings, EU sound recordings market stagnating in 2000,The European Commission, Eurostat Eurobarometer (2002): Europeans participation in cultural activities, The European Commission, Eurostat Florida, Richard (2002): The Rise of the Creative Class, The Perseus Books Group, New York, Hesmondhalgh, D (1996): Flexibility, post- Fordism and the music industry in Media, Culture and Society, vol. 18 (pp: 469-488) IFPI (2002): Year book 2002, IFPI IFPI (2002): www.ifpi.dk KODA: Annual reports from 1997 to 2000 Kulturministeriet og Erhvervsministeriet, 2000: Den kreative alliance. Kulturministeriet, DK Music information center (2002): www.mic.dk Pine II, J. B. & Gilmore, J.H. (1999): The Experience Economy: work is theatre and every business a stage: goods and services are not longer enough, Harvard Business School Press, Boston, Ma, US Teknologisk Institut (2000): En erhvervsøkonomisk analyse af fire fokusområder i de kulturelle erhverv. Teknologisk Institut, Erhvervsanalyser Copenhagen, DK 32