What started as a tiny store literally on the underground, has become the most successful music outlet in Norway. Ten years after its foundation, Platekompaniet is acquiring even larger shares of the Norwegian music market.
Recently, Ernst & Young Norway awarded the two founders, Rolf Christian Presthus and Egil Dahl, Entrepreneurs of the Year, region east. Healthy financial results and a turnover of NOK 319 mill (USD 45 mill/ €39 mill) last year impressed the jury, as well as a growing crowd of enthusiastic customers.
They started their careers in a very modest store at the Grønland subway station in Oslo, then called “Platebaren på Grønland” (the Record bar at Grønland). As people rushed by on their way to work, they caught the glimpse of the two very dedicated guys behind the counter. Presthus and Dahl were still studying at the time. Since the start in 1992, music lovers have rushed to the growing numbers of Platekompaniet stores, now 14 all together included the online outlet (they only ship to Scandinavian countries), to buy music at a lower price than their competitors can offer. As well as nice prices, customers can choose from a wide selection of music. Through campaigns, festival support, and low prices, Platekompaniet is often given part of the credit for the remarkable interest in Norwegian music the last few years.
"Our business idea is to be the first choice for music interested people. We must be particularly good at music different from mainstream and we must be particularly good at Norwegian music", says Egil Dahl.
Why this focus on Norwegian music?
"Because Norwegian music is good and we want to sell quality. It feels great to sell Norwegian artists we feel we have brought into the limelight. Lots of our employees are engaged in their local music scenes. They know what is going on before the rest of the world, and they can introduce new bands for our customers as well as to other stores within Platekompaniet. I am not saying that we are doing the promotion job for the artists, they are working hard themselves, but we have very good interaction with bands and artists", says Dahl.
Platekompaniet has made life harder for their competitors in Norway. Since 1992, two of their competitors, Hysj! Hysj! and Virgin Megastore, have gone out of business, and Akers Mic have re-entered the market after they went bankrupt. Free Record Shop and the franchise-based Musikkverket are their main opponents, but Platekompaniet has the best grip on the urban youngsters.
According to numbers by the Association of Norwegian Record Distributors, the total sales of phonograms amounted to NOK 1,9 billion (USD270 mill/ €23 mill), and Platekompaniet’s share of the total market is about 20 percent, but they have a much higher share among music retailers, about 50 or 60 percent.
Within the nearest future, Platekompaniet have plans for expansion, but nothing drastic, as usual. Instead of opening up new stores, several existing stores will be enlarged with even more music from back catalogues and films on DVD. Music and film suit each other well, but not games, according to the founders.
"These days, we are giving more room to hip hop and rock", says Dahl.
He disagrees when critics say that Platekompaniet has dumped prices and squeezed smaller independent retailers out of the market.
"We have tried to negotiate the best deals for our customers and our company, and it seems like we have had a positive effect on the price level of music in Norway. Some have criticised us for reducing the value of the CD, but CDs have been too highly prized in lots of countries, especially in territories flooded with pirate low cost CDs. Still, our main competitors are the big chain stores, not the smaller indy outlets, and some of the mainstream chains may have gone bankrupt because of us. Mainly because we have a better product", says Dahl.
A helping hand
Platekompaniet has been of great support for Norwegian bands such as Kaizers Orchestra and Thomas Dybdahl, but they have also given a helping hand to foreign bands, and even distributed one act. The straightforward female rappers from New York, Northern State, got special treatment from Dahl and Presthus when they decided to distribute their debut album, “Dying in Stereo”.
The girls paid back by delivering one of the most vibrating shows at this year’s Øya Festival.
"- We had the coolest after party at the festival. But Northern States are distributed by Sony in Norway now".