European Retailers Unite For Statement

Europe's leading retailers are urging suppliers to take decisive action to secure the future of their joint businesses.

The plea comes in a mission statement issued by the Global Entertainment Retail Assn. Europe (GERA-Europe).

The content of the Oct. 16 statement was drafted after a late-September meeting in Brussels of the chief executives of Virgin Megastores (U.K. and France), FNAC, HMV Europe, Free Record Shop, Entertainment U.K. and World of Music.

Representing businesses in all of Europe's major entertainment markets, the CEOs comprise the new GERA-Europe Advisory Group. The meeting was chaired by GERA-Europe president Simon Wright, the CEO of Virgin Entertainment Group.

"The GERA-Europe presidency rotates; this is the U.K.'s year. So I said, 'Let's get all the retailers around a table and get GERA kick-started,' " Wright explains.

"The powerful thing that's come out is that it didn't matter whether you were talking from a German market point of view or the U.K. or France or whatever—there was agreement on what the real issues are," he says.

GERA-Europe members include entertainment retail associations from Austria, Belgium, France, Germany, Italy, the Netherlands and the U.K.

TARGETING THE MUSIC BIZ

The statement is aimed at the music, video and gaming industries, but the key points squarely target the music industry. According to GERA-Europe, "The quality and timing of music releases needs urgent attention."

The statement notes that piracy is portrayed as the main cause of decline in the music markets around the world when in fact the decline in quality and diversity of releases should be seen as an equally large problem. Retailers want increased investment in artist development to counter that.

"We all want to do whatever it takes to fight piracy," Wright says, "but everybody around that table was screaming out, 'If only I had good product, I could sell loads.' "

A spokesman for the International Federation of the Phonographic Industry confirms that it received the statement but declines to comment.

One source says the IFPI "prefers to deal with this behind the scenes."

British Phonographic Industry chairman Peter Jamieson did comment, insisting, "British music is as vibrant as it has ever been. The problem is that fewer and fewer people are paying for it.

'PIRACY BIGGEST BREAK'

"If GERA believes the music could be better and more diverse," Jamieson continues, "it has to recognize that piracy is the biggest brake on investment and risk-taking in new talent."

In its statement, GERA-Europe calls on content owners to speed up efforts to digitize content for retail use and offer licenses immediately to let retailers develop commercially viable digital download businesses.

It also welcomes recent price-structure changes implemented by EMI in Europe, which lowered the dealer price of premium back catalog.

In an apparent nod to Universal's recent aggressive price-cutting moves in North America, GERA-Europe says it is concerned by the implications of trading policy changes that undermine the entertainment retail business model.

The statement also calls for the continuing development of such new formats as DVD-Audio and SACD to drive market growth.

Wright says the formation of the Advisory Group and the mission statement is the first step toward putting retailers in the middle of driving consumer interests and consumer demand in the market.

"The bottom line is that here are pretty hefty retailers across Europe talking to each other and getting organized—and trying to improve the market," Wright says.

The next GERA-Europe Advisory Group meeting will take place at the MIDEM music industry trade fair in Cannes in January.