With Biz Declining, Germany Banks On Download Service

The German record industry is bracing itself for a "good news, bad news" day as the annual Popkomm music fair gets under way today in Cologne.

Shipments of music in Germany continue to fall. Sources tell Bulletin that first-half figures, to be announced today at the confab, will show a 16% volume decline from the same period in 2002. The sources say the figures would have been worse if not for a strong showing by domestic repertoire.

Germany, ravaged in recent years by downloading and CD burning, has seen its position slip from the third- to the fifth-largest global music market.

Meanwhile, the Germany industry will announce today details of its Phonoline.de download initiative, in a festive launch that will mark the opening of Popkomm. Members of labels body BPW met in Cologne on the eve of the trade fair to add final touches to the long-awaited project. At launch, Phonoline is expected to offer 10,000 major-label and indie tracks as a la carte downloads.

Players from various facets of the music sector have already expressed confidence that the service will be a boon for business. German Record Retailer Assn. president Michael Huchthausen says the portal should be launched with a "big bang" to ensure the best possible marketing advantage. "I am certain, if the launch is successful, we will be able to make up for any further loss of sales and reverse the current downward spiral," he says.

This year's Popkomm, open to the public for the first time, runs until Saturday.