French Music Biz Report Decried

PARIS‹A leading representative of the French record industry says the blueprint for the business's future produced by a government commission has been written in ignorance of the way record companies work.
The report, prepared by the National Commission on Today's Music, has just been delivered to Culture Minister Catherine Trautmann, though the document's contents were revealed earlier to Billboard (Billboard, Aug. 29).
Key points in the report include a call for a National Center on Music to support and regulate the music market; the establishment of set retail prices for records; a lower value-added tax (VAT) on music; financial support for indie retailers and labels; and a redistribution of state funds from classical music to contemporary.
But Paul-Ren Albertini, president of labels' body SNEP and chief executive of Sony Music France, says that "while there are in the report some ideas that are part of SNEP's platform, such as a call for a low VAT rate, we don't feel a connection in any way with most of what is in this report, at least from what I've read in Billboard."
Albertini goes further by suggesting that some proposals in the report "are as far as possible from the basics of our business." He says one of the main reasons was that "SNEP has not been associated with this report."
Continues Albertini, "When [Trautmann] launched the idea of this commission [at the end of 1997], it was right at the time when we were complaining about the lack of relationship with the government on key issues for our business. When [commission president Alex Duthil] asked SNEP's general manager Herv Rony to be part of the commission, but in an individual capacity, the idea seemed constructive and relevant."
But, adds Albertini, none of the 60 members of the commission were from a major record company, and, in his estimation, the only member who knew how the music industry functions was V2 France president Thierry Chassagne.
Albertini says there was "a deliberate intention" to avoid having record company executives on the commission. As a result, he says, "among that respectable assembly, there was no one who had the slightest knowledge of how the music business is run, how it works, who sells what to whom, etc."
Albertini claims that the commission has been ill-informed and that some of the measures could achieve the exact opposite of what they are meant for.
For example, Albertini says that if TV advertising on records is banned, as the commission is suggesting in return for a lower VAT rate, "it will result in a drop of 20% of the market." SNEP is also concerned that if TV advertising is banned, labels will have to invest more in in-store marketing, which will prove to be costly for smaller labels.
Albertini adds that another measure, a set retail price on records, which he admits has some supporters within SNEP, "will have an obvious inflationist effect, which will corrupt the market for at least five years."
"I understand the cultural concern of the commission," says Albertini, "and the need to protect French artists and the diversity of the music scene, but I don't think that you can solve problems by building walls. If the French market collapses, record sales in the country will be driven from London."
Albertini concludes by saying that "SNEP and its members are ready to contribute to a debate on the future of the industry and on questions of general interest."
Trautmann is now considering the report's recommendations. There is, however, no obligation on her part to take action, and she may choose to implement all, some, or none of the commission's recommendations.