Evolución del desarrollo del proyecto y descripción de la solución final integrada

According to the survey by F&L Management Service Ltd. (1998), the core sectors of the Finnish music industry are considered to involve creators and performers, music publishers, record companies, recording studios, manufacturers of recordings, and agencies and booking offices. Of these, music publishers do not have a distinct function in the Finnish music market. Instead, they are mainly connected to the record companies. Oesch (1998) also included in his mapping players operating in the field of musical instruments, as well as the music press.

The actual number of business units operating in the Finnish music industry is considerable. Oesch (1998) found in his research over 1,500 music industry enterprises in Finland. The largest sub-sector of the music industry, according to the survey by Oesch, is formed by agencies and booking offices with a 24 % share. Most of the firms engaged in the music business are very small, employing only 1- 4 people and creating an annual turnover of less than US$ 200,000. According to Oesch (1998), the share of companies with a turnover of more than US$2 million is distinctly highest among the record companies, while companies with more than five employees dominate in music press publishing, record companies, agencies and booking offices, and firms engaged in the retail sale of musical instruments. This large number of small firms offers substantial job opportunities, but can also be seen

as an obstacle. For example, the lack of financial resources of small firms can hinder progress in the Finnish music industry.

Table 4. Number of companies by sectors of the music industry in Finland (following the Standard Industrial Classification 1995)

SIC95 Standard Industrial Classification 1995 1995 1997 1999

22140 Publishing of sound recordings 218 273 313

22310 Reproduction of sound recording 33 52 47

24650 Manufacture of prepared unrecorded media 4 3 5

36300 Manufacture of musical instruments 40 55 56

51481 Wholesale of musical instruments and supplies 40 53 49

52452 Retail sale of musical equipment and supplies 222 244 256

92311 Artistic creation 650 893 1041

92312 Theatre and concert activities 95 147 151

92320 Operation of arts facilities 16 17 13

92340 Other entertainment establishments 115 177 212

Total 1433 1914 2143

Note: The figures only include companies that operated at least six months in the period under observation, created a total turnover of more than US$ 8,976, or employed more than half a person.

Source: Statistics Finland

The music industry is located mainly in the Helsinki metropolitan area and Southern Finland. According to Oesch (1998), about 40% of all firms can be found in Southern Finland, excluding the Helsinki metropolitan area. About half the performers and composers, and over 30% of the other business units of the music industry are located within the Helsinki metropolitan area, which can accordingly be considered the centre of the Finnish music industry. Most of the music business companies are legally organised as limited-liability companies or commercial name companies of “natural persons”.

In Finland, as internationally, the sound recording market is increasingly dominated by five multinational record companies: Warner, Sony, Universal, EMI and BMG. The subsidiary companies of these five majors control about 60% of the sound recording sales in Finland (Muusikko Online 2001). They can also be found in the background of the largest independent record companies. In 2001 an independent record company, Poko Records Oy, was sold to EMI Finland Oy, and in March 2002, Universal Music Oy became the majority shareholder in Spin-farm Oy. Concurrently with the “majors” taking over the Finnish sound recording market, the number of independent companies has also been increasing. Due to technological progress, the music business has also become affordable for smaller players, and new companies have entered the industry (Pekka Oesch 1998).

The subsidiaries of the five majors are also active in many other sectors of the recording market. The superior market leader in music publishing is Warner Chappel Music Finland Oy, holding a market share of more than 50% (F&L Management Service Ltd. 1998). The wholesale of records is dominated by Pec Corp., which is owned equally by EMI, Universal, Sony, and BMG.

Currently, only the record companies, music publishers and musicians have strong interest groups. The national trade association of record producers, ÄKT ry, has about 15 members that together control

some 87% of the recording sales in Finland (Muusikko Online 2001). The publishers’ interest group, the Finnish Music Publishers’ Association, has 34 members, including all the most important players. The most significant organisation for professional musicians, The Finnish Musicians’ Union, has about 3,300 members.

Table 5. Top ten record companies in Finland by turnover

Record company Corporate mother company

Net sales & other operating income

[million ¼@

Warner Music Finland Oy AOL Time Warner (US) 15.0

Oy Emi Finland Ab EMI Group (UK) 12.6

Universal Music Oy Vivendi Universal (France-US) 11.7 BMG Finland Oy Bertlesmann AC (Germany) 10.7* Sony Music Ent. Finland Oy Sony Corporation (Japan) 9.9 Edel Records Finland Oy Edel Company Music AC (Germany) 6.0 Spin-farm Oy Vivendi Universal (France-US) 4.5

Poko Records Oy EMI Group (UK) 3.5*

Oy Fg-Naxos Ab HNH International Ltd (Hong Kong) 2.1* Johanna Kustannus Oy Love Music Publishing Ltd. (Finland) 1.7

Total 77.7

Note: * Accounting period 2000. All the periods in the table are 12 months.

Source: Trade register of the National Board of Patents and Registration of Finland

Unlike many countries, the specialised music shops do not play a major role in the retail distribution of sound recordings in Finland (see Table 6). Instead the department stores, such as the 26 big Anttila stores, are the key retailers of recordings with a 36% market share. The rack sales are estimated to cover 25% of the recording sales, of which the Sokos, Citymarket and Prisma stores control about 8 to 10% (ÄKT ry). The record sales via the Internet consist mainly of mail-order type sales.

Table 6. Structure of the sound recording sales in Finland

Retail type % of sales

Department stores 36%

Rack sales 25%

Specialised shops 20%

Mail-order 15%

Internet shops + others 4%

Source: ÄKT ry 2002