New Zealand Record Biz Faces Unrestricted Parallel Importing

NEW ZEALAND‹The record industry here is having to come to terms with unrestricted parallel importing after the removal of existing protections by the government.
The move has, though, prompted a mixed reaction. The Recording Industry Assn. of New Zealand (RIANZ) predicts that in the long term, less money will be available to invest in local musicians, while indie labels and major music retailers are unmoved, saying the new legislation will have little impact on New Zealand's comparatively small music market.
The new moves were announced in the government's annual budget reading May 14 and were pushed through Parliament under urgency two days later.
Special-interest groups, including RIANZ, have criticized the government for fast-tracking the new legislation without consultation. At press time, RIANZ spokesman Terence O'Neill-Joyce was unavailable for comment.
However, the organization has expressed in a statement its concern about the ability of labels to invest in domestic talent while having to fend off competition from overseas.
The lifting of import restrictions is considered a major victory for John Luxton, commerce minister and a longtime free enterprise champion.
In 1997, Luxton commissioned the New Zealand Institute of Economic Research to prepare an analysis of the effects of the ban on parallel imports under the 1994 Copyright Act. The report, released in February this year, focused on three product groups that could be drastically affected by parallel importing‹motor vehicles, books, and CDs‹and concluded that the overall impact of removing parallel import restrictions was "likely to be positive."
Luxton expects the new reforms will lead to "families and business being able to buy imported goods at world-best prices."
While consumer savings are expected particularly in the motor industry, local music retailers are not predicting a bonanza for record buyers, who currently pay up to $34.95 New Zealand ($18.72) for front-line releases.
Terry Anderson, music buyer for the Warehouse, the country's biggest nationwide retail chain, says the floundering New Zealand dollar means it is business as usual. "Because of the dramatic drop in the New Zealand exchange rate, it's not going to make a hell of a lot of difference in pricing structure; we can't buy any cheaper in the world anyway."
Chris Hart, owner of Real Groovy Records, Auckland's largest independent record store, says that the lifting of import restrictions will affect his business "hardly at all" and that he will continue to work with the local affiliates of the major record companies. "There's no point in us looking elsewhere; there's no price advantage to us with albums that are available on simultaneous worldwide release." Hart adds that the retail price of all imports will drop when the New Zealand dollar gets stronger, as the new importation law has ensured that "there isn't the mechanism whereby prices can be artificially fixed."
The introduction of parallel importing is a positive move for the major record companies as it will encourage the labels to improve their performance in the New Zealand market, says Anderson. "I think it's just going to keep the record companies on their toes to keep releases right up to date. They'll have to re-lease the same day as England and America. If they don't, an entrepreneur will beat them to it."
Murray Cammick, owner of Auckland independent label Wildside, has been involved in the local music industry for 21 years and believes that size does matter when it comes to the new importation laws.
In New Zealand, record stores and major labels are required to maintain a mutually beneficial relationship and are unlikely to be affected by the reforms, he says. "In a small market, wholesalers and retailers work closely together to successfully market music‹they are in bed together‹so the change of legislation will have limited impact."
The record industry's suggestion that decreased revenues at major record labels due to parallel importing will lead to less monetary in-
vestment in the careers of local musicians is not necessarily valid, says Cammick. "The new legislation will not necessarily lead to less funds being invested in New Zealand recording artists, as in the long term the viability of a major label's strong presence on the ground in the New Zealand market may be proportional to the company's success with their own local recording artists."
While similar changes to importation laws in Australia have prompted heated debate on the issue (Billboard, March 14), the reforms in New Zealand are of no major consequence, says the Warehouse's Anderson. "Any sort of scare-mongering is absolute nonsense. The record companies are still going to make a profit, and they're still going to support local artists."