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Teutons take big labels in for tune-up

Majors reap benefits of Germany's local talent

Germany may be suffering from unemployment and a comatose economy, but the country’s music biz has found a lucrative groove with local talent.

And the major labels are reaping the benefits.

A hefty 40% of albums sold in Germany last year were by local talent. Thanks to pop acts like Juli, Silbermond and Rosenstolz, German music has become vital for labels like Universal and Sony BMG.

At Universal, the four biggest-selling albums last year came from Rosenstolz, Sohne Mannheims, Rammstein and Juli. Their chart success helped boost U’s profits to $40 million on sales of $398 million.

“The tail is starting to wag the dog and the big companies are realizing there’s money to be made in the individual territories,” says music journo and longtime industry observer Ed Ward.

Indeed, Sony BMG also saw annual figures boosted, thanks to German pop acts like Silbermond, Andrea Berg and rock band Oomph! About 32% of Sony BMG’s German repertoire is made up of local artists. This year the group invested $33 million into the development of homegrown talent — a 20% increase over 2004.

The BMG half of the merged group saw a $16 million increase in profit to $26.5 million on sales of $265 million.

Warner Music also profited from the success of pop singer Sasha Schmitz‘s rockabilly outing as Dick Brave & the Backbeats.

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