Bontonland CEO: Half-crazed kids won’t save music industry

Apple’s iTunes,  Supraphonline, MusicJet and Spotify ... is there room on the Czech market for another legal download model?

„Přežít na tuzemském malém trhu je strašně těžké, pokud se z vás nestane Lucie Bílá anebo Michal David. Všichni ostatní živoří. Showbyznys nefunguje.“ foto: © ČTKČeská pozice

„Přežít na tuzemském malém trhu je strašně těžké, pokud se z vás nestane Lucie Bílá anebo Michal David. Všichni ostatní živoří. Showbyznys nefunguje.“

In April, a fourth strong player arrived on the Czech digital music scene. Following Apple’s iTunes, the Supraphonline store and the startup of the MusicJet streaming service, digital music sales were launched in the Bontonline store by Bontonland, the largest domestic chain of music, film and computer game stores.

Just under a year ago, the entrepreneur and producer Lešek Wronka, who discovered, for example, the singer Ewa Farná and who is also in charge of the Anděl music awards, became the owner of Bontonland. In an interview with Czech Position ahead of the launch of Bontonland’s new digital music service, Wronka also spoke about what he sees as the deplorable state of the Czech music industry.

According to Wronka, the industry itself is responsible for the current crisis: “The offerings are bad; artists don’t create much and publishers don’t invest. Everyone expects rewards without effort.” Wronka says he would certainly not recommend a singing career to his daughter.

On digital sales

Q: Why did you decide in May 2011 to enter Bontonland? I expect that the biggest chain of music stores was not doing particularly well at the time?

WRONKA: Whether Bontonland was doing well or not is very relative: Bontonland faithfully reflects developments on the music and film market.The company’s year-on-year drops reflected the year-on-year drops of the industry as a whole. The development of physical media sales, though, is demonized in the Czech Republic. Some people talk about a 20-30% decrease.That’s nonsense. Physical media sales fell last year by only 7%. It is the prices that are falling primarily.

If Bontonland had in the past Kč 300 million and now only Kč 260 million, it’s not at all because fewer CDs were sold but primarily because the average price was different. I’ve been working for years in the area of show business. When I bought Bontonland last year, it was the logical culmination of my activities. I have an agencythat represents and creates artists. I simply wanted to add retail to reinforce distribution. Today, I can offer artists coaching, management, CD publication and sales.

Q:When did you decide to start the digital music store?

WRONKA: When you look at how our business is developing today,there’s nothing else you can do. We have no intention, though, of building a competitor for iTunes or some other mega-companies. We simply want to offer our customers optionsthat we have not had in our portfolio before.... [Bontonline launched in early April] and it will be the biggest internet store in the field of music in the Czech Republic.

We figured that it probably makes no sense selling Brazilian performers or folk creations from Norway.We’re restricting the offer to the type of music that is regularly sold here. We’re offering approximately half a million tunes, which corresponds to the portfolio that we have in our physical media offerings. We want to be comparable price-wise to legal servers, stores and the like. We tried in all the main stores offering music online to select the best, so that our service would be first and foremost as simple as possible for users, and at the same time be linked visually to the current Bontonland e-shop.

Q:In recent times several services offering digital music have appeared in the Czech Republic.Why only now,ten years after iTunes?

WRONKA: There have been attempts here already. For example, the server ilegalne.cz appeared in the past. Only it was complicated and the record companies had high demands on protectionof the MP3 digital formats, which was costly and not attractive enough for the user because they couldn’t share music. What’s more, they could easily download free music illegally. Today, a store like that could be built relatively cheaply, and I thinkwe’ll be bursting at the seams with them soon.In addition, all internet servers will have to transform gradually into legal services under pressure fromthe International Federation of the Phonographic Industry(IFPI), etc.

Q:Will you be selling music in Bontonline without DRM anti-pirating protection?

WRONKA: Yes.D igital tunes from us will contain information, though,about who bought itand a transaction number. If the tune in question appears on some illegal server, it will be clear who uploaded it. The content suppliers demand that of us.

Q:Have you calculated how many tunes you will have to sell every month for the launch of the new service to make sense?

WRONKA: We don’t have to sell anything. The investment was programmed in advance. Due to the factthat we also sell physical media,this product is more a sort of bonus for our customers. If it turns out that the product is successful, we plan further investment. Obviously, we can’t sell 10 tunes a month — that would be absurd — but at the same time we’re not compelled to sell thousands. We didn’t build Bontonline out of nothing.

Q:Why should people buy music from you and not from iTunes?

WRONKA: We have steady customerswho are used to buying physical media from us. We inform them about what’s new via our e-mail serviceand they are able to navigate through our pages. The things that people like from usthey can find a lot easier on Bontonline than on iTunes. What’s more, oniTunes you’ll find almost no Czech show business,certainly not a comprehensive offer. After all, this giant isn’t interested whether someone apart from Tomáš Klus is doing anything here.

Q:Would it not be fair to customers who buy a CD in the shop to offer them the digital version for free?

WRONKA: There are various marketing modelsthat we are currently debating. More likely, though, we will offer standing customers discounts. In the coming months, the Bontonland chain will change fundamentally. We no longer want to support the whole business on the three pillars — CDs, DVDs and computer games — and we’d like to gradually expand the assortment to include other goods from the entertainment industry field.When you go into Megastore in London, you can buy earphones, MP3 players and the like. Regular customers get discounts on these goods and so forth.

Q:The Swedish Spotify service, which was launched last monthin Germany, streams music free-of-charge with advertising. Is this kind of model applicable to the Czech market?

WRONKA: Personally, I think this isn’t the way forward. If I had to listen to an advert for car tires before my favorite song, it would probably put me off. Only in Sweden the state gives a PC to every family and they have high-speed internet connections there that we can only dream about here. Millions of people listen to music regularly there; they buy tariffs. Clearly, even 100,000 people can be found there who don’t mind advertising. I wish all of us who work in this business had as many potential customers. For the time being, though, everyone is fighting very hard for customers. It’s not as easy as it might seem.

Q:Spotify argues that you can’t easily persuade a 16-year-old boy to suddenly start paying for music...

WRONKA: I think that in our environment this model won’t work. Young people have to mature to shopping. Back in the day, we also used to “download” by copying onto cassettes and then distributing this content illegally. As soon as you mature, though, and want to be a collector, for example, then you simply buy the media. Today, it wouldn’t even occur to me to download music somewhere illegally, and people like that are the majority here, too. The problem of the music industry is elsewhere.

On the crisis of the music industry

Q:Where?

WRONKA: It has become a matter of rapid consumption. The offerings are bad; artists don’t create much, at most some single and then fluff. The publishers have no money togive them marketing support. The market is saturated with TV series of the type Superstar (Pop Idol) and Hlas (Voice). Some face is produced there, not an artist at all, who then sings some covers and who’s replaced a few months later by someone else. People today don’t believe they can buy a worthwhile CDthat they will enjoy and that they’ll come back to again.When you devalue music in this way,you can’t be surprised that no one wants to buy it.People buy classical as well as jazz and country. These are the kinds of music that haven’t experienced such a drop. It’s the mainstream that has an enormous problem. How many people do you think download Mozart and Smetana?

Q:So the music industry itself is responsible for the crisis?

WRONKA: Certainly. The only solutionthat the music industry came up with in recent yearswas attaching free disks to publications. They trained people into buying magazines with a CD or DVD for Kč 50.You can hardly persuade them afterwards, though, to buy a new recording for Kč 300. It was big business for a year or two, only no one thought through what’s next. It’s the same with TV shows. Every few months you produce eight faces that no one works with, so it doesn’t lead anywhere.

The only successful Superstar was Aneta Langerová; the rest have big problems.It’s because the publishers have turned their backs on clearly set, working mechanisms. In earlier days, you would first find an artist, think up what and about what he would sing, a single would follow, agreements were made that the radio stations would play itand when people showed an interest you’d shoot a clip and it went on TV —one hit parade, a second hit parade, then the artist would go on tour and fans would come and buy records. These mechanisms simply don’t work here anymore.

Q:What would launch a renaissance of the music industry?

WRONKA: Quantity must be replaced with quality. Publishers have to find courage to invest in talent again, to be willing to take on business risks and not just keep selling Rihanna. There is talent here. There are really excellent hip-hop, jazz and country musicians here. Only there’s no one who would start promoting them in some wayand get them into the media. Why? Because today the publisher lives by the motto “Big rewards for no effort”! By means of TV you can easily produce a face. Then 10,000 half-crazed kids come to the autograph signing and you sell everything to them. You quickly cash in on momentary fame and then just wait until another season of Superstar begins.

This leads, however, to the total disintegration of the music industry. The craft of the music manager, the producer and the composer has faded away. It’s not worth their while doing it. No one today will pay you a fee for spending time thinking about what a young performer should sing. Composers would rather write a musical or a few commercials and the smartest ones drop it entirely.

A quality product can never come out of that kind of environment, though. And when there’s nothing to sell, then they think up all kinds of gimmicks. It's no wonder then that peopleprefer to spend their money on bread anddownload the latest superstar illegally. So publishers will either disappear and the artists themselves will look for distribution and promotion channels via the internet,or the publishers must rapidly change their approach and begin investing,  like every proper investor,so they get a return on their money.

Q:Cutting out the middle man is the pirate’s dream! Do publishers have any meaning at all in this day and age?

WRONKA: Obviously, if they operate properly.You have a song and you don’t know what to do with it. So you knock on the door of an institutioncalling itself a publishing house. You say: “Hello.I’ve written a hit.” The publisher listens to it and says: “Wow, Joe, that’s a hit!” He signs a contract with you and takes care of distribution. This shouldn’t mean, though, that he just calls me and asks me to start selling it in Bontonland because I’m going to ask what support it has. And because they don’t shoot videos and don’t know how to deal with radio and TV, they just stick it on the market and then wonder why no one buys it. Well, of course! After all nobody knows about it!If it’s to work, then the publisher has to support the artist. That’s the fly in the ointment today.

Publishers are cutting corners everywhere.They don’t even want to pay for studio time.If you don’t have a sponsor for a CD,then they don’t want to collaborate with you at all.Only, which CD should a publisher have a cut of somethingthat he played no part in at all? When the artist himself thought it up,published it and promoted it,then I’ll be happy to begin distributing it and I’ll even do a promo for him in our own stores.In such a case,publishing houses no longer make any sense.

But at the moment a publisher calls me and say she’s going to put out a Joe Bloggs CD and has a promotional strategy prepared for it,then I can do my business and we’re all satisfied. I don’t want to be a publisher, but it’s more like the situation is forcing me to be. Who would have put out Neckář disks a couple of years ago? Nobody! Then all of a sudden he sings one song and it turns into such a boom that everyone goes mad and starts fighting over who’s going to publish his record. It’s all upside-down. It wasn’t a publisher who was behind his comeback but someone completely different.

Q:Does it pay at all anymore to be a singer in the Czech Republic?

WRONKA: My daughter wants to be a singer and I keep telling her she’d better do something else. Surviving in the tiny domestic market is terribly hard unless you turn out to be a Lucie Bílá or a Michal David. All the others are scraping by. Show business doesn’t work. Singers appear in musicals because they have to pay the bills and they have no time for their own recordings. Then they sing six songs that sound the same and they wonder why their popularity is falling. Then I see people coming into Bontonland but not buying anything. Then I look to see how that’s possible and I realise there are no new Czech recordings. It’s a big slump. We’re all waiting now for Neckář to put out an album.