The Musical Savings Account - Made In Germany
Burghard Genz explains his business model of pooling resources to help independent labels in Germany stay productive
Frank Schenker and Burghard Genz of Berliner Label Kontor
Burghard Genz of Berliner Label Kontor (BLK) and United One Music Publishing explains his business model of pooling resources to help independent labels in Germany stay productive
How does Berliner Label Kontor operate with respect to the labels that you work with? How did it begin?
Burghard Genz I came to Berlin as a musician in the early 1980s, then went into producing musicals at Theater des Westens in Berlin. The first thing I did was to try my hand at music publishing and setting up a label to help build marketing structures for the musical productions. The challenge for our label was to have a debut release so we could apply for GVL membership (GVL is the German performing rights society for labels and performers covering proceeds from neighboring rights exploitation of sound recordings on radio, TV etc.). We weren't ready to record our latest musical production, so I had to find something else that would qualify for membership. Someone recommended an Egyptian percussionist to me, we ended up working together with me doing production for him, and he sold 350 CDs the first night of the release. This is how I became involved in the world music genre. When looking at the overall market of recorded music sales, the share of world music is rather small, about 5%, similar to jazz genres. We quickly saw a need to expand sales to territories outside of Germany-Switzerland-Austria (GSA), so we went to MIDEM in 1997 for the first time. Over the years, we've been adding England, Scandinavia, Spain, Portugal, Israel, Taiwan, Japan, the USA, etc.
What was your bigest challenge working with the world music genre and artists?
Burghard Genz Initially, it was difficult to convince the "world music die-hards" that a world music cross-over was feasible (i.e, blending world music and jazz. And, there are unimaginable hurdles involved with getting the musicians from other ethnical, cultural and political environments to Europe to record their albums. Getting Visas for an entire band is a part-time job in itself. Somewhere around 2006 or 2007, we realized that illegal downloading and pirated recordings were not just a problem specific to the major labels. It was back then that I finally decided to bundle a number of labels together in Berliner Label Kontor to save on overhead while helping independent labels, particularly in Canada and Australia, gain a foothold in our home markets. This includes networking and establishing relationships with booking agents and other players internationally and also here, as we did with MusicDish Edelweiss for example.
You offer a wide variety of services. What you can do for an act who contacts you? And what would the differences be in what you'd offer to an artist in the GSA area versus an artist outside of that territory?
Burghard Genz Ok, let's start with an artist based outside of GSA. First of all, a prerequisite for working with them would be that they had acquired some status in their home market, maybe with distribution or management, or having released a CD with a barcode. They would just send us their album, we'd register it with all relevant databases (like Phononet), and have them aggregated for online CD sales. Now, addressing the issue of working with an artist from within GSA territory - this is a little more complicated because we always prefer to add labels to our roster. If it is a band who is acting as their own label, then we'd register them with GVL, and gave them the LC (label code) for Germany. This also helps everyone involved to evaluate radio promotion effort.
What is your definition of success with respect to promotion?
Burghard Genz Success to us is having 1,000 CD units sold each year. This involves spending between $500 - $800 on radio promotion, networking, and sending out some review CDs and info about the artist or band as well. The label views it a little differently, seeing a few hundred more dollars in GVL royalty sales (which of course are actually in Euros). So, while we might not be talking about huge sums of money that are being generated it, it's a profit nonetheless. So the more labels we add, the more profit there is for Berliner Label Kontor. We have projected that controlling 2,000 albums means covering our cost for running the bundled label structures. We also do 50/50 deals with master-use licensing, but we aren't involved in sales made at live performances.
How many labels are currently involved with Berliner Label Kontor?
Burghard Genz Right now, Berliner Label Kontor is comprised of 8 labels, all from a wide range of genres. We haven't covered mainstream pop yet, but even industry people who are into mainstream pop showed interest at working with us during Popkomm 2010, as long as they were comfortable with our being able to handle the workflow and logistics, which we were. What we do not provide is the “financial support“ major labels generally offer. However, we are planning to do this in the future on a different level. I've suggested to all of our labels that we should, based on the 6-month account periods we have, use pooled funds of 5,000-6,000 euros before providing payment for label shares. This money could be used for funding new productions, paying the label shares back with interest added, of course. Some of the labels might not plan to release new albums, so this would put their money to work.
So, is this kind of a musical savings account? Cross-collateralization "fair trade"?
Burghard Genz Exactly - it is a musical savings account. But the "cross-collateralization" only refers to links between labels; no one holds "shares" in the act, so there are no bonuses or royalties on top. Our model was not implemented for short-term profit maximizers or big investors.
We're also now working with Frank Schenker from Los Angeles to help international artists gain a foothold in the US market. And, in addition to organizing touring in GSA for the world music performers on our label rosters, we are involved in gig-swapping between GSA bands and Australian bands, and within the GSA market, we doing some video production.
BLK 5 years from now?
Burghard Genz I think my assistants will represent BLK and everything we do at Popkomm 2015. By that time, I will have selected one act to become involved with as a producer, and maybe even as a musician again.
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