Berlin Picks Up More Music-biz Players

The German capital looks set to gain an even stronger role in the German music industry in 2003, with both MTV and the local office of the International Federation of the Phonographic Industry (IFPI) announcing plans to relocate to Berlin later this year. The moves follow both Sony and Universal migrating to the city in 2000 and 2002, respectively.

The latest moves are significant in one of the few international territories that does not have a centralized industry. They also reflect a continuing migration from Germany's traditional music base, Hamburg (Billboard, Aug. 24, 2002). The latter city currently hosts Warner Music, EMI Publishing, and Edel, plus a handful of respected independents.

Debate regarding moving to the capital has gone on in Germany since unification in 1990, but the reasons cited vary. For Gerd Gebhardt, president of the local IFPI branch and affiliated German label organizations Deutsche Phono Akademie and BPW, the reasons for moving his 20-strong team are clear. With his members suffering heavily from the effects of CD-burning and illegal downloads, lobbying politicians is a priority, not least because the German government failed to ratify the European Copyright Directive in time for the Dec. 22, 2002, deadline (Billboard, Jan. 18).

Gebhardt says, "It doesn't really matter where a [record] company is based, but a lobbying organization has to be close to the decision-makers."

At MTV Germany, managing director Catherine Mühlemann cites other reasons for moving from the channel's current base in Munich. "Since joining MTV, my aim has been to make the channel a flexible, cost-effective, and hard-hitting company," she says. "Centralization is crucial in order to achieve this."

Universal Germany chairman/CEO Tim Renner has also cited various factors for his company's move to Berlin last year. These include the city's reputation as a cutting-edge artistic hotbed and that it was better to relocate now while it was affordable than doing so in the future.

Virgin Germany's Munich-based head of promotion, Jeff Van Gelder, casts doubt on claims that the capital boasts a superior pool of talent. "The successful artists originate from the provinces," he says, pointing to such top-selling acts as Herbert Grönemeyer, Westernhagen, Xavier Naidoo, and Die Toten Hosen.

And Peter James, president of German independent-label association the VUT, cautions, "Moving to Berlin is not [only] a matter of cost but more a matter of how long it takes a company to re-establish itself in a new place. This is not so difficult for an independent employing 20 people, but it is a problem for a company the size of, say, Universal."

In early December 2002, James' own organization announced the formation of the Labels Commission Berlin, which will represent the interests of smaller record companies, publishers, and producers in the capital and the surrounding Brandenburg region. Yet while Berlin has attracted several key companies in the past three years, not everybody is convinced that it is the German mecca of music. Those based in other cities look set to stay put.

"I personally believe that Hamburg is still the No. 1 music city," Warner Germany president Bernd Dopp says. "The current discussion about 'Hamburg or Berlin' is exaggerated—as long as you have an A&R presence in Berlin, it is not necessary to move there."