Record company pleas for more music cash falling on deaf ears

By Peter Chapman

Date: 22/04/04

RECORD labels and artists can forget any hopes of a large EU programme devoted to bolstering the Union's faltering music industry, the European Commission's top culture official has warned.

Nikolaus van der Pas, director-general of the Commission's education and culture department, told European Voice the EU's soon-to-be 25 member states would never agree to release the cash.

Instead, he said industry groups eyeing EU funds must "make do and mend" with small grants available from broader Union initiatives aimed at the entire culture sector.

"I am aware that there are some who say there should be a specific music programme.

"I told them [industry] that it's simply not on the cards for the moment.

"The budget which we have for the Culture 2000 programme is around €35 million a year. We can help them in that programme but to think that we can get agreement between 25 member states [for a specific programme] is not realistic."

Van der Pas said the Culture 2000 programme, which comes to an end in two year's time, has already invested in a handful of pilot projects targeting the music sector.

This includes a plan to set up an office in New York to promote music exports from artists and labels across the EU.

But he said the industry - split between a handful of major labels and the independent sector - must form a more united front if it is to win further funding when the programme is replaced.

The New York project is run by partners the European Music Office, the Dutch "Noorderslag Foundation", the Finnish Composer's copyright society, the "Fundacion Autor" from Spain, the Music Information Centre from Austria and IMPALA, the Independent Music companies' European Alliance.

"When co-financing these projects, we try to enhance circulation and promotion of music within Europe and to encourage lasting cooperation between professionals. Their success is thus very important for us," said Van der Pas.

The culture chief was speaking after jetting back to Brussels from an Irish presidency conference in Dublin devoted to finding new forms of finance for the music sector, hit hard by a global downturn in record sales.

Philippe Kern, secretary- general of IMPALA, said Van der Pas' comments are further proof that the EU is turning its back on the music industry at a crucial time.

"Think this is the Commission playing it very moderate on the basis of budgetary restrictions. People have highlighted the priority to support biotechnology, the internet and IT - they are considered growth sectors," he said.

"The creative industries are looking for similar support. They take the view that they have as much growth potential yet they are being left behind or marginalized in some underfunded cultural programmes with no real political focus," he added.

Kern, a former PolyGram executive, said the sector has massive growth potential - but it has been hit by the current financial frailty of major labels.

This has had a ripple effect lower down in the industry - with far less cash invested by majors in the independent sector and nurturing of new repertoire and signing distribution deals.

The drying-up of funds is exacerbated by a reluctance of banks to invest in the risky sector.

The European Investment Bank has not adapted its lending schemes to the small-scale financing that is most needed by record firms.