The extent of the crisis in the German music industry became clear Friday when two of the big five record companies lost their leaders.
In a surprise move, Universal Music Germany chairman/CEO Tim Renner announced his intention to exit, citing disagreements over company direction with his boss Jorgen Larsen, the London-based Universal Music Intl. (UMI) chairman/CEO. Larsen will assume Renner’s responsibilities until a successor is appointed in the second half of the year.
At the same time, sources have confirmed to Daily Variety that Thomas Stein, president of BMG for Germany, Switzerland and Austria, is also on his way out. No reason was given for Stein’s exit and BMG was remaining tightlipped on the subject, but it is understood that BMG in Germany will now fall under the stewardship of Maarten Steinkamp, BMG’s New York-based president of international.
UMI says the deteriorating situation in the German market — which has been devastated by rampant CD burning and illegal downloading of music — is forcing the company to make “substantial savings in all areas of the business.”
For his part, Renner states he disagreed with Larsen’s wish to cut German investment in local artist development. “I sincerely believe that the market also needs repertoire from scenes and niches in order to develop credible content,” says Renner. “Although the music market has declined dramatically, we managed to increase our sales of German artists — contrary to the market trend.”
In the wake of Renner’s departure, the company will refocus on developing mainstream artists.
Stressing that he regrets Renner’s decision, Larsen says: “Tim’s numerous achievements for the company include the founding of Motor Music, the acquisition of Koch, the move to Berlin and a 3% increase in our market share. In 2003, Universal Music Germany achieved its best chart performance and highest market share in the history of the company.
“I am confident that, together with Universal Music Germany president Vico Antippas and the existing, successful management team, we will be able to steer the company through this delicate phase,” adds Larsen.
Renner had been chairman of Universal Music Germany since October 2001. He was appointed president of the music group in December 1998 after the merger of PolyGram and Universal. He originally joined PolyGram in Hamburg in 1986.
Stein joined BMG in 1988 when he joined the company as managing director of BMG Ariola Munchen. In 1998, he assumed responsibility for BMG’s activities in Eastern Europe and after that, he served as president of BMG Europe until early 2003, when BMG adopted a regional structure.