Germany Sees Music Sales Drop In First Half Of '98

The German record industry is blaming the World Cup, long-term unemployment, and a weak economy for a 5.4% fall in the volume of music sales in the first six months of this year, compared to the same period in 1997. Sales volume was 122 million units, according to labels body the BPW, whose members account for an estimated 91% of the German market.

The BPW does not publish figures on the value of sales at the half-year point; however, it admits that they dropped 4% in the first six months. Estimated revenues for BPW members in the period are 2.3 billion deutsche marks ($1.29 billion).

In a statement issued yesterday in Cologne on the eve of the Popkomm music fair, the BPW says that full-price albums and TV-advertised product have suffered exceptionally in the first half of this year. Those drops, says the BPW, coupled with significantly higher costs--especially for advertising--will inevitably lead to shrinking profit margins. The BPW notes that sales volume of CD singles grew 5.9% to 25.2 million units.

Anecdotal evidence suggests that during some weeks in June and July, sales were 25% lower than in the corresponding weeks last year, with performance even weaker for top-10 chart product.

--Christian Lorenz, Music & Media



PolyGram Publishing Acquires Major Nashville Catalogs

PolyGram Music Publishing, due to become part of the Universal music family later this year, has acquired the hit-laden catalogs owned by Harold Shedd and Donnie Canada's Nashville-based Magna Sound Corp. The 20-year-old companies--Sheddhouse Music (ASCAP), Millhouse Music (BMI), and Wooden Wonder Music (SESAC)--have been administered by PolyGram Music for the last decade. No purchase price was disclosed.

The catalogs, totalling about 2,000 compositions, include such major songs as Billy Ray Cyrus' "Achy Breaky Heart," written by Don Von Tress; Toby Keith's "A Little Less Talk, A Lot More Action," by Keith Hinton and Jimmy Alan Stewart; and Keith Whitley's "It Ain't Nothin'," by Tony Haselden.

PolyGram Music VP of acquisitions Linda Newmark tells Bulletin that despite the pending acquisition by Universal, it's "business as usual" at her company. She points to a recent deal that brought to PolyGram copyrights by Herman Rarebell of the Scorpions.

--Irv Lichtman, N.Y.


Double-Digit Gains At Universal Music

Seagram's Universal Music Group posted double-digit increases in sales and earnings in the fourth fiscal quarter. Revenue was $377 million, up 16.7% from the same period a year ago, while earnings before interest, taxes, depreciation, and amortization jumped 30% to $13 million.

For the entire fiscal year, which ended June 30, the music group's EBITDA rose 25% to $90 million. Revenue was relatively flat, rising to $1.53 billion from $1.5 billion. For the first six months of this calendar year, Universal Music Group was in sixth place among the six major record companies in both total album market share (10.5%) and current album market share (11%).

Seagram's stock closed yesterday up 3.44 to 34.69.

--Don Jeffrey, N.Y.



Rob Cavallo Joins Hollywood Records

Look for official word soon that Rob Cavallo has exited as senior VP of A&R and staff producer at Reprise Records to join Hollywood Records as senior VP of A&R. He'll report to his father, Bob Cavallo, chairman of Hollywood parent Buena Vista Music Group, and David Berman, president of the group. Rob Cavallo, who has been with Warner/Reprise since 1987, has been associated with hit acts such as Green Day and Goo Goo Dolls. He will continue to work on an upcoming Reprise set by Chris Isaak.

--Irv Lichtman, N.Y.


Snoop's Big Bow

Snoop Dogg's "Da Game Is To Be Sold, Not To Be Told," his first album for No Limit/Priority Records, enters The Billboard 200 this week at No. 1, logging sales of 519,000 units, according to SoundScan. That's the second biggest debut of the year, surpassed only by Beastie Boys' Grand Royal/Capitol album "Hello Nasty." That set falls this week to No. 3 (197,000 units).

Also racking up a big first week was Squirrel Nut Zippers' Mammoth album "Perennial Favorites," which debuts at No. 18 (53,000 units).


Artist Developments

The Crystal Method launch a monthlong U.S. tour Aug. 25 in Albuquerque. The tour is sponsored by Fox Interactive, whose "Nitrous Oxide" game features the act's music.



Mikhail Gorbachev To Visit Germany's Popkomm Fair

Former Soviet president Mikhail Gorbachev is due to be among the 15,000 visitors expected at the 10th Popkomm music fair, which opens today at the Messe in Cologne, Germany. Gorbachev will be promoting the album "Russian Memories" by Ermitage, aka Munich-based Hungarian composer Leslie Mandoki. Sales of the CD--to be distributed by BMG Medien--will benefit Gorbachev's Green Cross charity, which supports humanitarian and ecological projects. The former premier is expected to appear at the BMG stand tomorrow at 1 p.m. and to participate in a presentation of the music and a panel session.

There are 801 companies from 24 countries exhibiting at this year's fair, compared with 668 from 23 countries last year. Some 37% of the exhibitors are from outside Germany. Other luminaries attending include Kurt Kember, head of the copyright law department of the World Intellectual Property Organization; Germany's federal justice minister, Dr. Edzard Schmidt-Jortzig; and the country's secretary of state for education, science, and technology, Stefan Engel-Flechsig.

--Dominic Pride, Londo


Trans World's Net Income, Sales Rise In Fiscal Quarter

Trans World Entertainment reports net income of $2.7 million for the second fiscal quarter, its fourth consecutive quarterly profit. In the same period last year, the Albany, N.Y.-based chain posted a loss of $834,000. Sales from the chain's 523 stores rose 35% to $142.2 million. Sales from stores open at least a year increased 10% over last year, the fourth consecutive comp-store sales gain.

Trans World also announced a 3-for-2 stock split payable to shareholders Sept. 15, the second split in a year. This will give the chain 32.7 million shares outstanding. After the earnings were released, Trans World's stock rose 3.38 on more than triple its normal trading volume on Nasdaq to close at 34.88.

Another U.S. chain, National Record Mart, reports a net loss of $1.2 million on $24.4 million in net sales for the first fiscal quarter, compared with a $907,815 loss on $21 million in sales in the same period a year ago. The loss was attributed to costs associated with opening 20 stores and closing 10 others. Comp sales rose 10.7% in the quarter. The retailer operates 156 stores.

NRM's stock fell yesterday .44 to 7.06.

--Don Jeffrey, N.Y.




IFPI Seeking Information On Attack In Romania

The IFPI is offering a $10,000 reward for information leading to the arrest and conviction of two men who allegedly attacked Sony Music's Romanian licensee for complaining about piracy (Bulletin, July 16).
The attack took place after Sorin Golea, head of Bucharest-based Media Services, visited the government's Copyright Office to protest the circulation of unlicensed cassettes of Sony's "World Cup 1998" album. Golea was beaten and threatened with a gun and had hospital treatment for a broken nose and the loss of two teeth.

IFPI head of enforcement Iain Grant believes the attack "was clearly linked to Sorin's complaint against music piracy." He adds, "IFPI will work closely with the police to ensure that the attackers are caught."

--Jeff Clark-Meads, London



Terri Clark, Manager In Joint-Venture Company

Mercury Records artist Terri Clark and her longtime manager Woody Bowles have formed a joint venture, Nashville-based Bowles-Clark Artist Development Inc., which will develop artists and songwriters. Bowles will maintain his separate management company and will continue to manage Clark through Oct. 1; she is expected to name a new manager soon.

--Chet Flippo, Nashville


Weiland Pleads Guilty To Heroin Possession

Stone Temple Pilots lead singer Scott Weiland was sentenced to three years of probation yesterday in Los Angeles Criminal Court after pleading guilty to felony possession of heroin. As part of the probation, Judge Larry Fidler ordered Weiland to spend 90 days in a drug treatment facility, and reportedly prohibited the singer from leaving the treatment facility for work-related reasons.

Weiland's record company, Atlantic, could not be reached for comment.

--Carla Hay, N.Y.