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An Upstart Makes Money on High Culture.
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Author: Wooster, Martin Morse
Section: Enterprising
| AN UPSTART MAKES MONEY ON HIGH CULTURE |
Business as an act of creation
Most classical music
recording companies these days suffer from falling sales and rising
costs. Many of the once-great labels, such as RCA Red Seal, Deutsche
Grammophon, and Decca, have dramatically cut back or even eliminated
new record releases.
But one skyrocketing
upstart shows that it's still possible to produce great classical
records and make money. Naxos, a budget-priced line, produces nearly
200 new recordings every year. And while classical music lovers are
ignoring highly promoted $20 discs from the major labels, they eagerly
purchase Naxos's $6 albums, knowing that Naxos products are just as
good as their higher-priced competitors--for a lot less money.
"The increasing
success of Naxos," Britain's Guardian recently observed, "has given the
big record companies plenty to think about. It has shown that the
demand for budget-priced works is by no means confined to the most
popular works, and that CD buyers are willing to explore the byways of
the repertory when the cost of a disc is so low"
Naxos is a transnational company. It is based in Hong Kong, was founded by a German, and much of its staff is British.
The visionary who
created Naxos is Klaus Heymann. Now 67, Heymann got into the recording
business relatively late in his career. He began doing publicity for
Max Braun AG, the appliance and electric-shaver manufacturer. During
the Vietnam War, he moved to Hong Kong to head the branch office of an
American weekly newspaper. After the war, Heymann became the Chinese
and Hong Kong distributor for Revox tape recorders and Bose
loudspeakers.
To promote his
clients, Heymann began to organize concerts in Hong Kong sponsored by
Revox and Bose in the 1970s. This led him into the world of classical
music. He began to import records, and also joined the board of the
Hong Kong Philharmonic, where he met--and married--orchestra violinist
Takako Nishizaki.
Heymann then started
a small record company, Marco Polo, to record esoteric compositions.
But it was the introduction of the compact disc in the mid 1980s that
made Heymann a major player in the classical music world. He saw that
the big music companies were charging $20 for compact discs, while
comparable LPs were sold for $6. If he could sell good compact discs
for $6, he could make money.
So in 1987 Heymann
launched Naxos. The name comes from Greek mythology; it is the island
where Ariadne was abandoned by her lover Theseus after being seduced
with music. Richard Strauss later made this legend into an opera.
From the start,
Heymann made several strategic decisions which ensured that Naxos would
succeed. Instead of hiring high-priced orchestras, he would use
talented regional orchestras and rising young stars. (Initially, he
relied heavily on high-quality but low-profile Eastern European
orchestras.) And while the major companies were locked into expensive,
long-term royalty agreements with major orchestras, Naxos paid its
orchestras only for specific recordings, helping to keep costs down.
And because Naxos
does not hire stars, it doesn't have to shell out money for
advertising, hype, or perks needed to avoid temper tantrums from prima
donnas. "No money is wasted on unnecessary expenses such as large
delegations of hangers-on at recording sessions and expensive artist
promotions" says a statement on the naxos.com Web site. "Naxos artists
do not get famous through glossy brochures and full-color
advertisements in the international press, but by producing first-class
recordings which sell in large quantities throughout the world."
Naxos's thrift
extends to its American offices. Instead of buying high-priced space in
Manhattan or Hollywood, Naxos of America is located in Nashville, where
the company found reasonable rent with an abundance of skilled
freelance recording engineers and other technical people who normally
work on country and contemporary Christian albums. Naxos has also
contracted with the Nashville Symphony to record several albums.
Another Naxos policy
is that, with rare exceptions, it only records a composition once. This
enables the company to continually extend its catalog and avoid
duplication. Thus, instead of having several versions of Beethoven's
symphonies competing against each other in the market, Naxos uses its
time and energy to record fine but obscure compositions by Beethoven's
contemporaries that don't currently have good modern recordings. (For
very obscure recordings, Naxos retains its full-priced Marco Polo
line.)
Thus the Naxos
catalogue is a treasure trove for fans of particular styles willing to
take a $6 gamble on an unfamiliar composer. Say you like late-romantic
British composers. A big music company might only stock the symphonies
of Ralph Vaughan Williams. Naxos is happy to sell you the six
symphonies of Vaughan Williams's neglected contemporary, Sir Arnold
Bax. Then it can sell you the nine symphonies of Sir Malcolm Arnold, a
contemporary composer who is the best modern successor to Vaughn
Williams, Bax, and Sir William Walton.
In the past two
years, Naxos has begun extensive recordings of American music. For
example, Meredith Willson is best known as the composer of The Music
Man, but he also wrote two symphonies, available on one Naxos disc.
Naxos has even unearthed the work of William Henry Fry, best known in
music history as the composer who, in the 1850s, was the first to
denounce the New York Philharmonic for playing music by foreigners
rather than good old Americans such as himself. According to New York
Times music critic Joseph Horovitz, Fry's "Santa Claus Symphony"
recorded by Naxos, was "too bizarre" for the Philharmonic, but a great
success at a more popular venue known as "Monster Concerts for the
Masses" where the people enjoyed Fry's "programmatic cues...blatantly
signaling a snowstorm, a perishing traveller, Santa's sleigh and the
like."
At the other end of
the spectrum, Naxos also finds a market for difficult avant-garde
composers. The company is committed to recording all the compositions
of Sir Peter Maxwell Davies, Britain's most eminent contemporary
composer, and has even commissioned him to write ten string quartets.
The company has sold 20,000 copies of a disc of the piano sonatas of
Pierre Boulez, the well-known French conductor also known for his
radical compositions.
Klaus Heymann told
orgalt.com (a website for enthusiasts of organ music) that Boulez
probably doesn't have tens of thousands of fans of his compositions,
but buyers "may have recognized his name as a conductor, and thought,
'Well, that looks interesting,' and taken it. And they bring it home
and play it and many will say, 'Oh my God! What is this!' and then it
goes onto the shelf. But then, some will play it and think it sounds a
bit strange, but they will try it again, and maybe get into it."
The Boulez story
shows the secret of Naxos's success. Because buyers can get three Naxos
discs for every one they purchase from a larger company, they don't
feel cheated if one of the three discs contains music that is
unappealing to them. And because Naxos discs are high-quality
recordings that routinely win commendations from critics and music
magazines around the world, buyers know they won't get junk.
Since Naxos is a
privately held company, it's hard to gauge its success financially. But
it seems to have between 15 and 20 percent of the classical music
market in the U.S., Britain, and Scandinavia, with somewhat smaller
shares in other European countries. Another sign of Naxos's financial
health is that it has 200-300 projects in production at any one time.
Naxos's larger rivals
have tried to compete with its moldbreaking formula. But these
companies, burdened with overhead and expensive royalty agreements, can
only offer comparable-priced discs from their limited backlists. Some
orchestras have decided to produce their own discs at Naxos-style
prices. In December 2000, for example, the London Symphony Orchestra
began issuing its own recordings at [JO-substitute British pound sign
before the 5] L5 a disc. Other orchestras are likely to follow,
particularly if broadband technology becomes common enough that
orchestras can easily download music directly onto the computer
terminals of consumers.
But until that
happens, Naxos has ambitious plans. They're continuing their efforts to
record the complete works of most great composers, such as a 75-disc
compilation of the piano compositions of Franz Liszt. They are
expanding into operas, including producing some on DVDs. Naxos is also
edging into audiobooks. And they still have plenty of obscure music to
record. Coming up on the American Classics line, for example, is at
least one composition by actor Lionel Barrymore.
Klaus Heymann's
entrepreneurial vision has boldly demonstrated that it's quite possible
for a company to greatly enrich our cultural life, while at the same
time serving myriad consumers--and making a handsome profit.
~~~~~~~~ By Martin Morse Wooster
TAE associate editor Martin Wooster owns many of the discs discussed in this article.
Some items on this website are used by permission granted
in the Fair Use guidelines of the 1976 U.S. Copyright Act.
info [at] singlearticles.com
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