To reduce impact of imports

Stig Anderson’s ploy: Hold hot product in France, Spain – Anderson’s answer: Delay release in Spain, France. By Paul Grein,

Los Angeles

Despite a move in some quarters to simultaneous worldwide release of blockbuster product, Stig Anderson proposes holding back albums in France and Spain about three weeks to ease the problem of exports from those two markets undercutting local licensees around the world.

The export problem, the global blank cassette boom and the difficulties involved in bartering in Communist countries are among the international issues concerning Anderson as ABBA continues its maiden North American tour (Billboard, September 29th, 1979).

In Anderson’s view, France and to a lesser extent Spain have replaced Canada as the chief culprits in the export game. “Before, we had a big problem in Europe because of the weak Canadian dollar,” he says. “We’d find Canadian records all over England, Germany and Scandinavia. But in the past half-year they’ve changed their prices and we don’t foresee any more problem from them.

“But now in France they have a very high value-added tax on their records. And when French exporters sell these records they can deduct the tax, which makes it possible for them to export into other countries very cheaply.

“It’s bad for your licensee to have foreign pressings imported into his territory because in many cases he still has a guarantee to pay.

“It causes us a little extra trouble since we have different licensees in different countries. It’s not really a pleasure for CBS in London to find Vogue records (from France) coming into the U.K. in big quantities. So what we’ll have to do is delay releases a few weeks in France and Spain so the other countries can at least get a head start at selling their own product.”

Anderson won’t hold the LPs any longer than that, he says, “Or our licensees in France and Spain will get into the same difficulties with importers shipping into those countries.“ Discos Columbia is ABBA’s licensee in Spain.

“When the dollar fluctuates downward,” Anderson says, “American records will always find their way into world markets, especially high-priced markets like Germany and Japan.”

Anderson has unmistakable proof that this is happening now. “On American pressings of ABBA’s latest album, Voulez-vous, we had an insert for a fan club which we’ve started here in the States. And we’re getting responses back from as far away as Germany.”

The export problem is aggravated by the cutout factor, according to Anderson. “In many cases albums are still in catalog on the local market, selling for full price, when all of a sudden they come in from the States as cutouts, selling for nothing.”

It was the export/import situation that led Anderson to try to barter with Russia, Poland, Czechoslovakia, Hungary and Bulgaria.

“These countries just have a certain amount of money for importing records from Western countries. So you get a situation where albums go on the black market: at one point ABBA albums were going for $US150 to $US200 in Moscow. I don’t like to see that, so I tried to barter for foreign oil.”

But the efforts at bartering have so far been in vain, according to Anderson. “The ministers of culture in these countries mostly just offer items that are not of any interest in Western countries. You can probably barter for musical instruments, old coins or art, but not oil.

“So far the solution has been for us to be paid in Western currency when we sell records to them and to pay in Western currency when we buy oil.”

ABBA has had three albums on Melodiya in Russia, with The-Album just released there. Negotiations are still underway for Voulez-Vous.” Says Anderson: “It’s just a question of how much currency they have available for this kind of product.”

ABBA sales in Russia average 200,000 to 500,000, according to Anderson, who says they’re hurt by taping off Radio Free Europe and stations beaming from such bordering territories as Finland and Poland.

Melodiya has made numerous requests over the past four or five years for an ABBA tour of Russia, according to Anderson, but all have been declined for lack of time. There has also been an offer to perform the night before the Olympic Games open in Moscow next Summer. “But we can’t set up a tour just for Moscow,” Anderson says. “The initial costs are so high we should do it while we are already touring.”

The blank cassette boom is another problem facing the international industry and one that Anderson sees as an even graver ill than piracy.

“When it comes to piracy,” says Anderson, “everyone agrees it’s illegal and in most countries we have the police and the law with us. But in the case of blank cassettes, this is 100% legal.

“We estimate that 18 million blank cassettes will be sold this year in little Sweden alone,” says Anderson. “But we’re working very hard on passing a new law within one or two years whereby every time anyone buys a blank cassette he pays a license fee. The money would go into a pot and be split between writers, publishers, producers and artists.”

Anderson acknowledges that the specifics aren’t set yet. “First we need a (court) decision that we are entitled to compensation; then the parties involved can meet to determine how much it should be.”

Anderson likens the Swedish proposal to a German tax in existence for about 10 years on open reel tapes.

While Anderson feels that strides have been made in the fight against piracy, he concedes that it is still a crippling problem in such territories as Malaysia and the Philippines, where he estimates that 80% of all cassettes sold are pirated.

But he notes that since he has been able to copyright ABBA’s latest album in Taiwan he has seen no pirated copies in that market. And in Hong Kong the situation has eased because the industry has the help of the police, he says.

Anderson will soon be reviewing ABBA’s foreign distribution contracts, all of which expire over the course of the next nine months.

There have been no changes in its network of licensees in the past three years and only two since 1974. In Greece an independent label was replaced by Music Box, and in Japan Phonogram was replaced by Discomate, a small label which is backed financially by the Tokyo Broadcasting System, according to Anderson.

Anderson, who earlier promoted Spotniks, a guitar group which enjoyed success in the early 1960s, says the reason he hasn’t launched an all-out global push on another Polar act since ABBA is that he hasn’t found an act that would be suitable in most of the world’s markets.

Ted Gardestad, billed simply as Ted, cut an English language album in Los Angeles which was released in most European territories plus Australia and Japan, but Atlantic turned it down for the U.S., says Anderson.

“His songs are real good,” Anderson says, “but he doesn’t have a real strong 45. And to launch a new act in a foreign market, you have to have a good single to start with.”Transcribed for ABBA World

Billboard (USA) · 6 October 1979 (Page 64)

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