Lately, the Norwegian phonogram industry has seen some significant developments. Despite an increasing market and a strong 2002 turnover, Music Network’s (MNW) Norwegian branch has been forced to shut down. Renowned indie label S2 joins pan-Scandinavian Playground for joint venture throughout the Nordics while Swedish media giant Bonnier-Amigo is poised for Norwegian market increase in the wake of MNW’s closure.
MNW Norway forced to close down
MNW has for a number of years held a position as one of Scandinavia’s biggest record companies. The label and distribution company, which was founded in Sweden in 1969, has maintained a share of the Swedish market of app. 6 % over the last years. However, during this year’s first quarter, MNW experienced a substantial drop in sales that amounted to 12,3 % in value and 8,5% in volume. The situation was further worsened in the second quarter, necessitating cuts in the work force. In all, MNW axed 45 employees out of a total of 53. Internet piracy was cited as the main reason for the massive drop in sales.
Said MNW CEO Niklas Nyman to Swedish daily Dagens Nyheter:” The total music consumption is on the increase, but the public no longer purchases the physical record – this development has hit us hard.”
The Norwegian branch of MNW had enjoyed healthy sales over the last years – 2002 resulted in a record NOK 27 mill. turnover. During the last two months prior to the end of trading, MNW Norway maintained a market share of app. 1,1 – 1,4 %. During the first half of 2003, the Norwegian phonogram market experienced a healthy 6% growth compared to last year – a stark contrast to falling international markets.
All staff manning the Norwegian MNW office have had their contracts terminated, and by the beginning of September, Music Network’s Oslo branch is no more. Several central Norwegian bands like Ricochets, Cadillac, Popium and Krøyt are signed to MNW or one of its imprint labels such as Yonada. As of writing, it is not clear what will happen to these bands and their contracts.
In the wake of MNW’s closure, key Swedish media player Bonnier-Amigo (BAM) moves in to grab a piece of the market. It is expected that Bonnier-Amigo will increase its turnover by NOK 7 to 8 mill. through distribution of such lucrative labels as Epitaph, Burning Heart and Roadrunner. MNW will now restructure its activity, outsource all distribution of external labels to BAM and focus on operation of its own in-house record labels.
S2 joins Playground for Scandinavian joint venture
One of the Norwegian market’s central independent labels, S2 Records, is teaming up with Playground Music for Scandinavian joint venture. Playground will distribute the Norwegian indie label as well as S2’s Glitterhouse catalogue throughout Scandinavia. The promotion department at Playground’s Oslo office will also handle promotion of all S2 artists on the domestic market.
Since its founding in 1998, S2 has made a significant impact on the Norwegian phonogram market with such artists and bands as Midnight Choir, Palace of Pleasure and Halfdan Sivertsen.
Says Head of S2 Terje Engen on the upcoming collaboration: “The current climate on international and Scandinavian phonogram market necessitates a reassessment of alliance partners by the smaller independent record labels – prior to the larger alliance partners assessing the smaller indies.”
Prior to the move to Playground, S2 worked closely with Universal Norway’s Sonet distribution division on the domestic market.
Playground’s Gard Rystad comments on the joint venture: “This agreement bolsters Playground’s efforts on the domestic market and increases our focus on Norwegian music. We look forward to resuming our collaboration with S2 with whom we enjoyed a fruitful, if brief, partnership a few years ago. Despite a turbulent market, Playground has enjoyed a very positive development - a development that will experience an adrenaline infusion through the S2 collaboration.”
These were last month’s market shares:
EMI Recorded Music 26,7% (+5,5%)
Universal 14,7% (-13,6%)
Sony 12,9% (-1,4%)
Warner 12,3% (+6,2%)
BMG 9,8% (+0,2%)
VME 6,4% (+3,9%)
Tuba 3,4% (+1,5%)
Bare Bra Musikk 3,3% (+1,6%)
Master Music/Naxos 2,8% (+0,9%)
Bonnier Amigo 2,1% (-1,4%)
Playground 1,7% (-0,5%)
Tylden 1,6% (-0,9%)
Arcade 0,8% (-1,7%)
KKV 0,5% (0,0%)
MNW -2,3% (-2,7%)
Other 3,4% (+2,4%)