Hungaroton, the acclaimed Eastern European record label that declared bankruptcy April 15, will be dissected and sold, according to the Hungarian State Property Agency.
Hungaroton’s record-pressing plant in the town of Dorog, its retail chain of 13 Hungarian shops, its Budapest recording studio and its warehouses in both Budapest and Dorog will be made into limited companies for individual sale by the SPA.
Hungaroton’s initial bankruptcy declaration, and the subsequent inability of the SPA and the label’s management to gather enough investment capital to keep the corporation whole, has stunned the local music industry.
The label, a world-renowned producer of rare classical collections, was considered one of the few successful state-owned ventures of the previous communist regime.
While Hungaroton’s music has died, Budapest is far from silent. The label’s market share is already being consumed by Europe’s most influencial recording labels — BMG, which arrived here in January l99l; EMI, which opened in June 1992; Sony Music, which started up in March1993; Warner Music, which set up shop last April; and, Polygram, which arrived May 18.
And according to industry analysts, Polygram’s arrival marked the end of one stage of the industry’s post-communist transition.
“This was the last and fifth step,” said Margit Geszti, general manager of the recording subsidiary BMG Hungary. “All the ‘majors’ are present in Hungary. BMG was the first in l991. But we knew there would be a time when all the major international recording companies would arrive…. Now the market is divided between the five.”