Introduction to the German market
Germany is regarded as one of the Nordic region’s most important export markets. A number of Nordic performers and composers have experienced significant artistic and commercial success over the past 10 years. The market is perceived as very open to Nordic music and Nordic culture in general.
Germany has the third largest market for recorded music globally and a strong live sector. In 2015, the music market as a whole grew by 3.9%. Germany is the fourth richest country in the world in terms of nominal GDP. The country is the world’s second largest exporter and third largest importer. The music industry has close relations with neighboring countries Austria and Switzerland (popularly known as the GAS territories) and success in Germany often ripples across borders. Germany (and Berlin in particular) are notably close to the fast-growing Polish market. Indeed, Berlin has arguably become Europe’s entrepreneurial and start-up center and has nurtured a number of exciting developments at the intersection of music/entertainment and technology.
Record Labels, Licensing & Distribution
Germany is currently the world’s third largest market for recorded music. Physical formats still dominate and in 2015 it accounted for 69.1% of the recorded music market. The ratio between distribution of physical/digital is almost diametrically opposed to the Nordic territories. Streaming services came relatively late to the market (Spotify only launched in Germany in March 2012)
Even though physical is strong, digital revenues increased to 30% of the whole recorded music market in 2015. In 2015, roughly half of the digital revenue came from downloads and the rest from subscription-based streaming.
Streaming services account for a relatively small share of the market, but are growing rapidly. It is worth noting that even though Spotify is the most important player, there are over 14 services engaged in serious competition for market shares.
Also interesting to note is that the three majors are based in different cities – with Universal Music in Berlin, Warner Music in Hamburg and Sony Music in Munich. However, Sony has its offices for jazz and classical in Berlin, as well as the successful imprint Four Music.
The German market also sustains more than 1,000 independent record companies. Below is a small excerpt of those who work or have worked with Nordic rights holders:
City Slang (Berlin)
Ministry of Sound (Berlin)
Superstar Recordings (Berlin)
Bungalow records (Berlin)
Cargo records (Wuppertal)
Compost Records (Munich)
Jazzhaus Records (Freiburg)
Jazz Sick Records (Düsseldorf)
Get Physical Music (Berlin)
Bpitch Control (Berlin)
Nuclear Blast (Donzdorf)
Kontor Records (Hamburg)
Germany does not have a particularly developed market for sync and music supervision businesses. Aside from a few specialists, the majority of this work is undertaken by in-house production companies, advertising agencies or directly with copyright holders and publishers. Germany also differs sharply from US and European models in that licensees often have to pay to have their repertoire played on major commercial TV channels such as RTL and ProSieben.
Most major multinational publishers are represented in Germany and typically report back to head offices in London or New York. For several of these, A&R responsibilities for Nordic repertoire belongs to the Swedish head office – although this often depends on where the copyright holder is most active.
Rolf Budde Musikverlag (Berlin)
Peer Music Classical (Hamburg)
Roba Music Publishing (Hamburg)
International Musikverlage Sikorski (Hamburg)
AMV Talpa (Hamburg)
Freibank Musikverlage (Hamburg)
Hansa Musik Verlag (Berlin)
AMV Publishing (Hamburg)
Representing the rights of composers, authors and publishers, GEMA (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte) has reciprocal licensing agreements in place with all Nordic collecting societies. Despite some criticisms of its licensing policy towards certain digital services (notably YouTube) GEMA is considered a successful organisation within Germany. Nordic writers should contact GEMA if they believe their compositions are being played in Germany or if they plan to tour the country.
GVL (Die Gesellschaft zur Verwertung von Leistungsschutzrechten GmbH) represents and protects the rights of performers when their recordings are used in visual performance – for example, in video, DVD, TV or stage. GVL licences on behalf of all musicians and creative producers. Musicians may also be members of GVL as an ensemble/orchestra, but can not have a personal membership (as is the case with GEMA). Note that there is a more complex calculation of an artist’s income with GVL than with GEMA.
The German market is populated by a number of small companies working in management. For Nordic artists an alternative strategy might involve hiring a specialist music consultant with knowledge of the German industry and insight into contract negotiations, etc. Consultants who have already worked with Nordic clients include:
The trade body for German managers is the IMUC
The live sector is now the predominant force in the German music industry, and has grown rapidly since 1995 (Source: GfK 2009) although revenues have been turbulent over recent years. In 2013, the revenue of the whole live sector increased by 15% and the number of event visitors increased by ca 9% (BDV 2015).
The main cities for touring are Berlin, Hamburg, Cologne, Munich and Frankfurt . Other relevant destinations on the touring circuit include the Leipzig/Dresden region, Stuttgart/Karlsruhe, the Ruhr, Hannover and Düsseldorf
The country has a good transport infrastructure and, given its geographical position, Germany makes an ideal anchor for major European tours.
Unlike the US and the UK, the dividing lines between promoters and agents can be relatively diffuse and they can broadly be divided by:
Agents: who work on a commission – either exclusively for Germany, GAS or occasionally throughout Europe.
Tour Promotors: who often work with British agents (or management) and sell concerts to the local/venue/festival promoters.
Promoters: who taken on the organiser role (along with any financial risk).
In practice, most of these players tend to work closely with British agents and arrange some of Germany’s (and Europe’s) largest festivals. FKP Scorpio with Folkert Koopmans is now the largest festival organiser in Europe, with a number of events in their portfolio including Hultsfred, Best Kept Secret, Southside, Hurricane and Greenfield Festival.
The German festival market is diverse and well established and host to some of the world’s most iconic events. Those of interest to Nordic artists and music businesses include:
Rock am Ring / Rock im Park – around 90.000/75.000 capacity – owned and run by MLK (Nurbürgring Eifel / Zeppelinfeld Nürnberg).
Wacken Open Air – around 70,000 capacity (Wacken, Schleswig-Holstein).
Nature One – around 61,000 capacity (2009)(Raketenbasis Pydna, Kastellaun/Hunsrück)
Southside / Hurricane – around 50,000 capacity (Take-Off Park, Neuhausen Ob Eck / Eichenring in Scheeßel) – owned by FKP Scorpio booking agency
Fusion Festival – around 50.000 capacity (2010) (Mecklenburg)
Sonne Mond Sterne – around 30,000 capacity (Saalburg Beach)
Highfield – around 25,000 capacity (2009) (Störmthaler See, Grosspösna/Leipzig)
Melt! Festival – around 20.000 (2011) capacity – is owned and run by the Melt Festival
Berlin Festival (Berlin)
Haldern Pop (Haldern)
CTM / Transmediale (Berlin)
Enjoy Jazz, Heidelberg, Mannheim, Ludwigshafen
Münster International Jazz Festival (Münster)
JazzFest Berlin / Berliner Festspiele
MaerzMusik / Berliner Festspiele
Moers Festival (Moers)
An overview of German jazz festivals can be found here:
Electronic music festivals:
CTM Transmediale (Berlin)
C/O Pop, Fusion and Melt! have great focus on electronic music.
Other festivals with a specific focus on Nordic artists include:
Nordischer Klang(Greifswald), Nordwind (Berlin), Enjoy Jazz, CTM Transmediale, Nordklang (Sveits).
For up to date information, Intro Magazin has published a guide (www.festival-guide.de) that contains a good overview of both German and international festivals.
Media, PR & Promo
Because of its geographical split into separate states, the media landscape in Germany is decentralised. Therefore it can be important to set aside additional time for promo for an artist to achieve maximum impact. Due to the diversity of the various national and regional media, it is recommended that Nordic businesses recruit a professional promotion agency.
The media is dominated by public broadcasting and a handful of private players. In total there are 9 public broadcasters in Germany. The most famous are the television channels ARD and ZDF – although both TV and radio have a strong regional focus. Additionally, Germany is home to some of Europe’s strongest European private entertainment companies such as RTL, SAT1 and PRO7.
The German radio market is relatively fragmented, with over 380 stations (including 250 commercial channels). Key music programs and stations include:
1Live (Westdeutscher Rundfunk)
Radio Eins (Rundfunk Berlin-Brandenburg)
Radio Fritz (Rundfunk Berlin-Brandenburg)
SWR3 – broadcasting group in the region of Baden-Württemberg and member of ARD.
Flux FM – Berlin-based innovative online radio
Byte FM – relatively small but influential
FM4 (public broadcaster in Austria, but with a large impact area in Bavaria, similar to the BBC’s 6 Music)
Links to charts and sales
In terms of print media, the main music-based titles are:
Musik Express, magazine / online – national monthly magazine featuring music news
Rolling Stone Germany, magazine / online – German Rolling Stone
Intro, magazine / online – free music magazine with interviews and reviews
Visions – magazine, pop, rock, metal
Spex – “intellectual” music magazine with varied coverage. Also available online.
Key German-specific online music and entertainment magazines, include:
Motor – including reviews and interviews.
Tape – editorial website for streaming music videos etc.
Tonspion – news blog featuring music downloads, video, news and comments.
Mitvergnuegen– “hip” page that recommends events etc.
Vice/Noisey – Vice’s online video venture in partnership with YouTube.
A more detailed list of German entertainment magazines can be found here.
Other important genre specific titles include:
Jazz: Jazz Thing, Jazzthetik, Jazz Podium, JazzZeitung, Jazz-Thing, Jazz Echo,
Art music: FonoForum, Party Tour, Neue Musik Zeitung, MusikTexte, Neue Zeitschrift für Musik, Position – Beiträge zur Neuen Musik.
Hard rock/metal: Metal Hammer, Visions, Sonic Seducer (Dark Wave).
Electronic music: Electronic Beats, Groove Magazine, De:Bug, Resident Advisor, Rave Line.
Germany also has two trade magazines focusing on industry news for Germany and Europe:
Industry Networking Arenas
Reeperbahn (Hamburg) Germany’s largest showcase for pop/rock that incorporates more than 400 events across 70 venues as well as an extensive conference programme. Taking place in September, the festival brings together music industry players from all over the world, but especially from Germany and continental Europe.
C/O Pop (Cologne) A festival and music conference focused mostly on the pop/rock and electronic music scenes – as well as new media/technology. Taking place in August, the industry program involves a network of international festivals, matchmaking and panels.
Jazzahead (Bremen) Jazzahead has established itself as the most important meeting place for jazz in Europe with over 7,000 visitors, including 2,250 professional participants from 31 different countries. The exhibition hall features over 500 exhibitors including record companies, agents, venues and media.
Berlin Music Days (BerMuDa) A specialist conference and festival for electronic music. BerMuDa takes place in November and is spread over several clubs in Berlin. There will be no 2015 edition.
Introducing (Berlin) Introducing is a series of concerts organised by Intro Magazine and Melt Booking. The series focuses on ‘new’ talents and it is usually a full house as the evenings are free.
Ja Ja Ja (Berlin) Modelled on their successful UK initiative,NOMEX are currently developing a similar showcase concept for Germany.
Value-added Tax (VAT)
B2B trade between businesses eligible to pay VAT is generally tax-free inside of the EU. In B2B-trade it is the buyer who is responsible to deduct, register and pay the VAT according to the buying country’s laws. However, the buyer is allowed to apply for a refund when submitting their taxes, which makes the transaction practically tax-free. When selling to consumers, tax is collected by the country of the provider.
In practice, this means that it is the responsibility of the promoter or booking agent to pay the VAT when buying services from a non-German artist.
The standard VAT tax-rate for Germany is 19%. For imported works of art the VAT-rate is 7%.
If a business is not registered for VAT in Germany, but sells and delivers goods to customers in Germany who are not VAT registered to a value of € 100,000 per year (or more), then they are required to register and to account for VAT in Germany (www.kpmg.com).
Useful questions to consider in terms of VAT are:
- Who is buying, who is selling – is it a consumer or a B2B transaction?
- Which country is the providing country – whose tax legislation should be applied?
- When it is clear whose tax legislation should be applied – is this a taxable or a tax-free transaction?
- Who pays the tax – the buyer or the provider?
Further information about the taxation processes can be found at: http://www.steuerliches-info-center.de/EN/Home/home_node.html http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/vat-gst-essentials/pages/germany.aspx#14
It is also advised to check best practices with your local tax authorities and your accountant.
An artist is eligible for reduced taxes in Germany if he or she has income in Germany and is a non-resident – ie if the artist remains in the country for less than 180 days during any twelve-month period. Anyone who stays in the country for longer than that is taxed in the same way as a German citizen.
As a rule, an artist needs to pay income tax on performance fees – unless their fee is € 250 or less per performance (Milderungsregelung). This rule can be applied to all performers individually if they choose to be paid as individuals. If the fee is paid to a company (a booking agency, or if the band/artist is also a company) the rule is only applied to the company as a juridical person – ie if the fee is higher than € 250, then the company must pay tax on that income. It is not possible to split the income between a company and individuals in order to make the Milderungsregelung-rule apply.
An artist who is paid more than € 250 per performance needs to pay tax on that income. The standard income tax rate for artists is 15.825% and there is also a solidarity levy of 5.2%. These taxes apply to both real individuals and juridical persons (companies). Be aware that these taxes are also applied to revenues gained through means other than performing, for instance sales of recordings or merchandise.
Deposits are also subject to tax. Therefore, from a tax-point of view, it might be a good idea not to ask for a deposit, but instead ask the promoter to pay some of the expenses that can be estimated in advance.
As a non-resident with reduced taxed rates, it is possible to obtain refunds and deductions for traveling and accommodation expenses. This might not always be profitable for individuals, since the income tax rate is then raised to around 30%. For all juridical persons the rate stays at 15.825%.
It is the responsibility of the promoter to deduct, register and pay taxes. Therefore it’s possible that all relevant invoices need to be sent to them. It is recommended to ask for a receipt in order to prove that any taxes have been paid, and in order to avoid double-taxation when returning to the home country.
Sources and additional information:
Jazz in Germany
Export Music Sweden arranged a seminar October 10 2016 at Nalen in Stockholm with a focus on the German music industry. Here you can see one of the topics, which deals with Swedish jazz music in Germany. In the panel we see Karin Inde from Svensk Jazz and Nils Landgren, trombonist, singer and arranger among other things.
Please contact us if you need advice or if you have any questions about the German music industry!