Germany's Struggling Music Industry Seeks Fresh Talent

After taking a brutal beating from the twin towers of the global financial crisis and the ongoing online digitization of music, the German music industry has found itself in dire fiscal straits. Though the German sector was among the world's first to hop on the digital distribution train, it has recently struggled to combat online piracy and illegal downloaders. Such calamity has forced many execs to consider a shocking alternative business model: focusing on the talent their signing instead of revenue figures.

According to Deutsche Welle, industry revenue in 2009 fell by almost 5% since 2008, and has diminished by a staggering 41% since 1999. As concert organizer Marek Lieberberg put it, "I think the state of the industry currently is worse than it ever was." Experts are hopeful, however, that by narrowing their focus more on pure, unique talent, the German music distribution factory may just revive itself. Espousing for a return to the roots of music, and for the departure from a strictly commodified, capitalist approach, Lindberg argued that German record labels "have to bring back music into the minds and into the hearts of the people."
Unlike in the U.S. or other major markets, Germans still buy CDs, which accounted for a steady 81% of music sales in 2008, according to the Federal Association for the German Music Industry. Whereas artists in other markets can feasibly hope to attain fame via Internet-fueled self-promotion, many German artists still rely on the traditional corporate framework--and German labels still rely on CDs to bring in cash.

Internet piracy and rampant downloading, however, has proven to be the bane of the industry's existence, and has spurred these recent calls for an economic realignment. Any such change, though, will have to be pretty radical. As Liederberg says, "We cannot rule art in the same way we rule the rest of the economy."