I R U N D T H E W O R L D nternationalT H E L A T E S T N E W S A N D V E W S F R O M A O Industries Take Issue With Government FNAC Signals Int'I Expansion Report Criticizes Japanese Price System Oz Parallel -Import Relaxation Blocked BY STEVE McCLURE concluded that there is not enough BY CHRISTIE ELIEZER with the that chang- Via Store reason for keeping the system ing the copyright act would destroy TOKYO -The Japanese record intact," the Recording Industry SYDNEY-The music industry here the independent sector and make BY REMI BOUTON industry is describing as "regret- Assn. of Japan (RIAJ) says in a has stepped up its campaigning the industry vulnerably to piracy. table" a government report critical of statement, noting that the subcom- after winning a temporary reprieve The industry has argued that drop- PARIS -The opening of a new flag- the country's controversial resale mittee stopped short of recommend- from the federal government's plans ping the 22% sales Lax on records, ship store on the Champs-Elysées price maintenance system, the sys- ing its outright abolition. to relax parallel import restrictions. which raises $120 million Australian here marks the kickoff of an ambi- tem that enables producers of copy- "We are determined to make fur- The Copyright Amendment Bill ($79 million) annually, would have tious international expansion plan right- related ther efforts to appeal for the need to No. 2 passed through the House of the desired effect. for leading French chain goods to set retail preserve the system," the RIAJ says. Representatives Dec. 2 but failed to The other two opposition parties, FNAC, which plans to be present in prices. The system (known as saihan in get Senate approval when it was the Democrats and the Greens, have Eastern Europe, Asia, and Latin "We cannot see Japanese) enables Japanese labels to presented there Dec. 4. The rebuff had no firm policy on the issue. But America within the next 12 to 18 any special rea- set the retail prices of domestically was a setback to Sen. Richard at the last minute, they both voted months. son for keeping pressed product, including non - Alston, minister for the arts and against the bill. The Democrats' The expansion strategy for the the current re- import foreign repertoire, for two communications, who claims widen- consumer affairs spokeswoman, chain, which accounts for 25% of sale price maintenance system in- years from the release date. ing the source of product from the Sen. Natasha Stott -Despoja, says in , was unveiled tact," the deregulation subcommit- Officially, Japanese record compa- multinational companies would that recent devaluation of the Aus- by the chain's tee of the government's admini- nies, publishers, and retailers sup- reduce the price of CD prices tralian dollar against the U.S. dol- chief executive, strative reform council said in a port saihan, saying that it nurtures here -by three Australian dollars lar (the value of one Australian dol- Francois -Henri report released Dec. 8. music culture by making it economi- immediately and at least six Aus- lar fell from 75 U.S. cents to 66 Pinault, Dec. 3, "Appropriate action should be cal for labels to release minority - tralian dollars in the long run (Bill- cents) made imports more expensive the day the taken swiftly after thorough discus- interest titles as well as million -sell- board, Nov. 1 and Oct. 16). The full than six months ago, making non- new Champs- sion seeking public consensus." ers. Privately, however, many in the price of a CD in Australia is $31 sense of talk about lowering prices. Elysées store The reform council is scheduled to industry say the current trend Australian (nearly $22). The Greens' leader, Bob Brown, opened, 100 present a final report to Prime Min- toward deregulation means the writ- The major opposition party, the asked for further research on pos- meters away from the Virgin Mega - ister Ryutaro Hashimoto Dec. 18. ing is on the wall as far as saihan is Labour Party, has steadfastly re- sible repercussions. store, which has been trading there "It is regrettable that the report concerned. fused to give its support, agreeing The bill has been sent for investi- since 1988. gation to the Senate Legal and Con- This FNAC store is the 50th in a stitutional Committee, under chair- chain that achieved a record revenue man Eric Abetz. The music industry of 12 billion francs ($2.4 billion) in Mega Returns To Centralized Structure gets the chance to pat its case to the 1996. FNAC, owned by retail con- Senate when hearings are held in glomerate Pinault - -La early February. The committee has Redoute -a company controlled by Indie Closes Affiliates, Restrengthens Danish Office to complete its report by March 23. Francois -Henri's father, Francois BY KAI R. LOFTHUS to focus on its creativity: "[Our leave the company when his con- "This will be an opportunity to air Pinault-is the leading retailer in intentions are] to concentrate sole- tract expires Dec. 31, 1998, unless our case," says Jeremy Fabinyi, France of cultural goods (books, OSLO -Indie- labels group Mega ly on A &R, while leaving sales and an agreement can be reached CEO of the Australasian Music Pub- records, video, multimedia) and TV Scandinavia has abandoned plans to distribution to another company." between him and Mega Scandinavia lishers Assn. Ltd. "We are hopeful electronics, photography, and stereo develop fully fledged record compa- He says he cannot confirm whether president Kjeld Wennick in regards that we can convince those senators equipment. nies in the Nordic territories and promotion and marketing duties to taking care of the current artist who hold the balance of power to Francois -Henri Pinault says the could once again end up as a label also will be handled by a joint-ven- roster in Norway. stand by Australian , store required a 40 million franc ($8 within a larger group, thereby ture partner. The managing director in Swe- publishers, artists, and record com- million) investment and "allows returning to the same type of Billboard has learned through (Continued on next page) panies." FNAC to be at last present on the it had with EMI sources independent from Mega most famous avenue in the world." throughout the '80s. that the label was close to combin- The opening of the store "marks On Dec. 1, Mega centralized its ing its operations with Virgin the kickoff of our new international A &R activities in its headquarters Records in Scandinavia last year. development policy" adds Pinault. in Copenhagen and closed its A &R Mega and Virgin executives were So far, the chain has eight stores operations in Oslo and Stockholm, involved in talks for five months in outside France -five in though its representative offices in 1996. The two sides were about to and three in , accounting for those cities remain open. The sign a deal that would have made 10% of revenue. Pinault says he aims restructure has been followed by Terje Engen, currently head of to boost international operations to instant resignations from the man- Mega in Norway, managing director 25% of sales within five years, aging director at the Norwegian of Virgin Records Norway, effective adding, "it means that, taking into affiliate; a termination of the distri- as of Oct. 1 last year, but the nego- account our local development, we bution deal with Warner Music in tiations failed for undisclosed rea- have to multiply threefold our inter- Norway, Sweden, and Finland as of sons. national business." Jan. 1; and continued joint- venture Continues Leitner, "For the past FNAC's most adventurous foray negotiations with the Dutch -based few years, Mega has traditionally outside France so far was its store Arcade Music Group. been the company that has had the in , which operated from Additionally, Mega has become greatest international success with December 1991 to the end of 1994 the licensee for Arcade repertoire acts like Stella Getz, Yaki-Da, Ace just off the Kurfurstendamm in an in Denmark, where Arcade does not Of Base, and Leila K. area where the presence of Virgin have an office. Material released "International exploitation of Retail and WOM stores made for a cutthroat environment. under this arrangement will be dis- local acts has been our core busi- Bonn Accord. German record industry executives and prominent artists are One senior observer of the global tributed by GDC. ness and given us the best results, pictured with the country's president, Roman Herzog, after the music industry's retailing sector says that such com- Mega Scandinavia senior VP Cai and we have chosen to concentrate first meeting with the German head of state Nov. 26 in Bonn (Billboard, Dec. 13). be the stumbling Leitner says that a deal with Arcade further on that. We're just focusing left, BMG artist Peter Maffay; Wolf -D. Gramatke, president of petition might Pictured, from are FNAC's new round of could be finalized before the end of on A &R in a different manner." He PolyGram and chairman of the German national group of the Interna- block to "FNAC have done well in the year. Arcade would be Mega's denies that there is displeasure with tional Federation of the Phonographic Industry; Herzog; Gerd Gebhardt, presi- expansion. France because, apart from Vugin, third distributor in two years, fol- the artists signed outside Denmark. dent of Warner Music Central Europe and chairman of the German Phonograph- who have given them a good run for lowing deals with Sony and Warner Engen says he was not notified ic Academy; Polydor artist Nena; BMG artist Jazzy; and Thomas M. Stein, their money, they haven't really had (EMI and Warner in Finland). about the changes until he read the president of BMG in the German -speaking territories and chairman of industry (Continued on page 77) Leitner says that a joint-venture company statement Nov. 29. He an- body BPW. deal with Arcade would allow Mega nounced Dec. 1 that he intends to

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