Domestic market hit by October recession

The predicted massive autumn sales have failed to materialise - the domestic Norwegian phonogram market has been hit by a whopping 25% setback in volume compared to last year.

Over the last two years, the Norwegian phonogram market has experienced a healthy growth that has nearly restored sales levels to the all-time high in 1998. Accumulated sales in the first half of this year made for a strong 6% increase compared to 2002. The Norwegian phonogram industry is now facing a different picture with decreasing sales and a lower domestic percentage. The industry is now bracing itself for a possible upcoming recession.

The latest sales figures from the Association of Norwegian Record Distributors indicate a slump in phonogram sales of as much as 25% in volume compared to October 2002. Sales of CD albums are down 26% while singles are down a whopping 40%. Other formats such as music DVDs are assuming a bigger stake of the market with a strong 104% increase since last year.

The domestic percentage of phonogram sales in October was 23%. In comparison, sales of Norwegian releases in September represented a 27% stake of the market, while the October 2002 figures were 29%.

Total accumulated sales in 2003 are down 8% compared to last year.

Several factors have been cited as causes for the slump in sales. Internet piracy and illegal downloading are being singled out as central culprits. Says Universal Music Norway’s CEO Petter Singsaas to the Norwegian Broadcasting Company: “For some time, Norway has been spared for massive and extensive internet piracy. I believe that we’re now beginning to get a grasp of the problem’s true proportions. Still, it’s difficult to identify the causes for the slump in sales. Increasing sales of new formats such as DVD, DVD-Audio and Super Audio CD can also be factors that influence record sales.”

Jan Paulsen, head of the Norwegian Independent Record Producers Association, is also concerned with the impact of internet piracy: “The smaller, independent record labels are the losers here. The record stores and chains are reluctant to stock anything that’s not well known, and debuting Norwegian acts experience difficulties in selling their releases to the shops. We’re facing a grave situation.”

Several of the hot-tipped acts that were expected to shift six-digit figures of units have failed reach estimated sales. Neither Limp Bizkit nor former Aqua front-woman Lene Nystrøm have been able to match past sales levels with the latter having reportedly sold only a few hundred copies (a stark contrast to Aqua’s multi-million sales). The second album from Universal flagship Briskeby was also expected to make a substantial impact on the Norwegian charts. The band’s debut album; the 2000 “Jeans for Onassis” went multiple platinum, creating massive expectations for the bands follow-up “Tonight Captain?”. The band’s second album was met with variable reviews and has failed to match its predecessor’s sales levels. As of writing, the album has shifted less than 25000 units and has fallen out of the national Topp 40 sales charts.

As a consequence of the global slump in sales and in preparation for possibly difficult times on the domestic market, Universal has axed 7 jobs of a total of 32 at its Norwegian branch.

The industry is now betting on the upcoming Christmas season and the traditional lucrative December to improve on dismal sales statistics.

Market shares October 2003:

Universal 27,9%
BMG 15,2%
EMI Recorded Music 14,5%
Warner 13,3%
Sony 10,5%
Bonnier Amigo 3,9%
Tuba 3,3%
Master Music/Naxos 2,6%
Playground 1,9%
KKV 1,8%
VME 1,8%
Bare Bra Musikk 0,6%
Tylden 0,4%
Other 2,4%

Total market shares – January to October 2003

EMI Recorded Music 23,5%
Universal 23,3%
Other 21,8%
BMG 10,3%
Warner 9,9%
Sony 11,2%

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