European Sales Growth Extends Into Germany

Europe's recorded music industry is re-emerging from the doldrums, with the biggest markets all reporting increased sales for the first half of the year. Sweden, the U.K., and France announced encouraging sales figures for the period, and now Germany has joined the pack, indicating a positive trend for the European industry as a whole.

Germany, the world's fourth-largest recorded music market, had its first positive results in two years during the January-June period. Industry executives attending the Popkomm convention in Cologne (see story, this page) told Billboard they were pleasantly surprised by the results—good news for an industry whose mood has been generally subdued this year.

The figures, published by label trade body Bundersverband der Phonographischen Wirtschaft (BPW), show that CD album shipments to the trade in Germany were 84.5 million units in January-June, up 5.5% from 80.1 million in the same period in 1999. Cassette shipments fell to 9 million units from 9.3 million, but that 3% drop compares favorably with the previous year's 20% tumble. The singles sector stayed virtually flat at 26.5 million units, vs. 26.6 million in 1999.

BPW does not publish shipment values with the six-month results. However, the statistics compare favorably with the overall growth in the German economy, which the Bundesbank reports is up 3.25% in terms of gross domestic product in the first half.

Another surprise from the BPW was the chart-share report, which shows that domestic repertoire accounted for only 15.8% of the Media Control album charts in the first six months, compared with 27.6% in 1999. BPW managing director Peter Zombik suggests this was partly due to the habit of major German artists releasing albums in the second half. Eight of the top 10 slots on this week's Media Control album chart—including the top four—are occupied by international acts, mostly American.

Zombik says that such international stars as Santana, Metallica, Tom Jones, AC/DC, Celine Dion, and Buena Vista Social Club kept national product out of the top 20 in the first half. However, as a number of key German releases have been postponed until the fall, Zombik assumes that the national share of the chart will increase substantially by the end of the year.

Michael Huchthausen, chairman of the German Record Retailers' Assn., says, "This does not mean that German product is weaker but merely that there were far more international releases. In addition, the success of German dance productions only shows up in the singles chart and not in the albums chart."

Industry vet Rudi Gassner notes, "I think when you look historically, the figures have always been up and down, so I would not put too much emphasis on these statistics. It's not a trend. If you look on the other hand at your German release schedule for domestic artists, there is a lot of new stuff coming out, and that may change the picture in the last six months of the year."

Thomas Stein, president of BMG Entertainment Germany/Switzerland/Austria and Eastern Europe, says, "International acts had a very strong first six months in Germany, with Santana, TLC, [and others]. But I'm surprised domestic acts were so low in these figures. I think the release schedule may have a lot to do with this, as I know that BMG's [sales] went from 70% down to 65% due to the [international dominance]."

The upturn in fortunes for the German market seems to reflect a healthy start to the new year across Europe. In the first six months, Sweden's record companies sold 18% more music at 16.6% higher value than in the corresponding period last year (Billboard, Aug 12), while the French music market grew by nearly 2% in value (Billboard, Aug. 12), and the market value of recorded music in the U.K. increased by 3% (Billboard, Aug. 26).