Danish Market Down 22% In 2002

Hopes that a fourth-quarter sales boom might materialize to rescue a disappointing year in the Danish music market were dashed by a poor performance in the key month of December.

According to figures from the local affiliate of the International Federation of the Phonographic Industry (IFPI), recorded-music shipments in Denmark plummeted by 22% in unit terms to 11.95 million in 2002, with value falling by 16.6% to 789.5 million kroner ($115 million).

The much-anticipated strong Christmas sales required to buoy a dismal year did not appear, as December shipments fell 32% in value and unit sales dropped 20% from 2001. IFPI Denmark's members account for more than 95% of the Danish music market (including sales from the country's dependencies, Greenland and the Faeroe Islands).

IFPI Denmark marketing director Annette Tingstrup says there were "a number of reasons" for the slump. "One of them is that for several years, sales were unnaturally amplified by the results of [hefty] TV-advertising campaigns; a significant cut in advertising expenditures [during 2002] has been reflected in sales. Another reason is the priorities of young people, who spend money on their cell-phone bills, for instance, and they often get their music needs fulfilled via radio and illegal copying."

Unit shipments of international repertoire fell to 7.3 million with a value of 509 million kroner ($74.1 million) in 2002 from 9.98 million units valued at 652 million kroner ($95 million) one year earlier. The fall in domestic shipments fared better, dropping to 4.6 million units with a value of 280 million kroner ($40.8 million) from 5.3 million units valued at 294 million kroner ($42.8 million).

Tingstrup suggests that the effect of last year's sizeable cuts in TV-ad budgets are a relatively short-term problem for the Danish music industry: "How [our] target consumers use their disposable income—the fact that they use money other places and get or take music for free—is what we need to address in the long term."

At retail, Nicolai Skipper, purchasing manager at independent seven-outlet music specialist GUF, comments, "We're not hit like the mainstream market. The top 50 albums are hardest hit, but we've got a broad inventory, and our top 200-1,000 titles are still selling." Although IFPI Denmark's figures do not break out figures for the singles market, Skipper also claims that the singles market here has "collapsed."

There may be governmental assistance around the corner, however. Danish culture minister Brian Mikkelsen announced at the recent MIDEM trade fair in Cannes, France, that he would take steps to bring about legislation that would aid the industry, probably in the area of intellectual property.