The classical music industry did reasonably well in 2010 but not as well as expected—we had hoped for a better year than 2009 but economic uncertainties in North America and Europe meant that business was not much better in 2010.
CD sales remained stable—some independent labels did better than in 2009, others did worse but sales were mostly influenced by whether a label had good recordings to sell or not.
We could see some impact of the Spotify service in the Scandinavian countries, especially in Sweden, where the sales of full-price albums dropped by almost 40% in the last few months of the year. Whether this drop was entirely due to the impact of Spotify is not quite clear. It’s an issue the industry has to address—how are we going to make money if we make our music available free of charge? I’m very much against any kind of service that allows people to listen to our music without paying. I might accept a service that lets people listen for free during a trial period but, after that, people should pay—otherwise, how are we going to fund all our new recording projects? This is an issue for all businesses that produce content, record companies, newspaper and magazine publishers and many others. Of course, there are also many new opportunities—the iPad and other tablet devices offer new possibilities of selling our content online—e-books, e-books with embedded music, applications, and so on. We will all have to look for a new sources of revenue if we are to continue to produce new recordings and develop new artists and repertoire.
Fortunately, Naxos has become very diversified—our group handles logistics and distribution not only for our own labels but for many third-party DVD and CD labels. We also handle the digital distribution of many independent labels and, of course, we operate no fewer than six digital platforms which are also contributing to our revenue:
www.Naxosspokenwordlibrary.com
I am optimistic about the classical music industry as long as we keep adapting to new developments as they occur. Long-term, we will have to form partnerships with performing organisations—after all, live classical music is a far bigger business than the classical recording industry.