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Egotronic - a Berlin electro-punk band under the Hamburg label Audiolith Records - playing live
Egotronic is a Berlin electro-punk band under the Hamburg label Audiolith RecordsImage: audiolith.net

Money for melodies

December 11, 2009

Hamburg is the first German state to subsidize small, independent music labels. The hope is that lesser-known musicians can better weather the storm of digitals downloads and the market slump.


It's music to a musician's ears: money to make music. The city-state of Hamburg will provide 150,000 euros ($221,000) annually for four years to independent music labels to help support them. It is the first German state to make such a decision.

"I welcome it wholeheartedly," Peter James, founder of the German Association of Independent Music Companies (VUT), told Deutsche Welle.

"The entire music industry is and has been undergoing massive changes," he explained, pointing to digital downloads being the downfall not just for major music companies, but particularly for smaller labels.

A computer and MP3 player
Digital downloads: from the Internet into one's pocketImage: AP Graphics

While the larger companies have suffered dramatic drops in sales, unfamiliar musicians and independent labels face extinction without support, he said.

With the plethora of downloads, "music stores have rolled back their own selections, so fewer musicians have a chance to draw attention to their music," James said. "That also means fewer press reviews and lesser-known musicians fading into obscurity because they cannot afford big marketing campaigns."

Banks not giving out loans

Lars Lewerenz, founder of the label Audiolith Records in Hamburg, agreed that the decision to subsidize independent labels was a good one. "Large music companies are also suffering, but they are so big, they are often inflexible," he said. "Smaller labels are a lot more flexible and can react to the market and also be very creative in getting a band out of the rehearsal room and onto the stage quickly and smartly. To do that, though, every euro counts."

Hamburg band Juri Gagarin in front of a red car
Hamburg band Juri GagarinImage: audiolith.net

Lawerenz founded his label six years ago, but ran it parallel to his job as an educator. In 2007, he was able to turn his music hobby into a full-time job and make a living, but only by being a music label manager and publisher, a merchandizing salesman, bassist and DJ all at once.

He's unsure whether he will actually apply for the new funding for labels, but does not believe the subsidies would make an independent label "dependent."

"First of all, the labels will have to fulfill certain requirements to be able to apply and receive funding, and they will have to decide for themselves if that kind of the funding is right for them - if it suits their philosophy," he told Deutsche Welle.

"Also, I think it's nearly impossible for a label to survive without it, especially since banks aren't giving out loans anymore."

The musician and businessman said he believed labels would become a lot more dependent if they accepted sponsoring from restaurants, say, or large companies, who could dictate the color of the lights on stage, for example.

"Besides, most of the founders of the small labels put their heart and soul into them, so I don't think they're going to allow their creativity to become restricted," he said.

Hamburg as a music city

The Christian Democrats (CDU) and Greens, in a ruling coalition in the city-state of Hamburg, pushed the music label funding proposal through the government.

Jan Delay lives in Mannheim
Jan Delay's scope includes hip-hop, soul, funk and reggae, which resonates all over the chartsImage: picture-alliance/ dpa

"It's the indie labels who support young artists and try to foster their talents," said Brigitta Martens, spokeswoman for cultural affairs for the Christian Democrats (CDU) parliamentary group in Hamburg. "Our motivation for making the proposal was to help give new, unknown musicians a chance."

Another motivation was to get Hamburg back on the music map. While some musicians and independent labels base themselves in Germany's other larger cities, like Munich and Frankfurt, many have meanwhile gravitated toward the country's capital, Berlin - a magnet for artists of all kinds.

Hamburg itself has some 70 to 100 small labels, and has produced indie pop-rock bands like Tocotronic, Blumfeld and Die Sterne, and hip-hop, soul and funk musician Jan Delay, who are better known because they've made the charts. Labels of note include Grand Hotel Van Cleef, Tapete Records and Sounds of Subterrania.

Still, James - whose association was based in Hamburg until 2004, and is now located in Berlin - said that labels are actually scattered throughout the country. The association has around 1,800 members, some 180 of them in Hamburg. Many others are based in the southern state of Baden-Wuerttemberg, smaller towns or even rural areas.

Everything just a click away

"A lot of these independent labels are 'two- or three-man bands' and simply work from their homes," he said.

Black-and-white photo of Hamburg's
Hamburg's "Star-Club," where the Beatles, Fats Domino and Ray Charles playedImage: picture-alliance/ dpa

The decision to fund indie labels in Hamburg could pull more to the city. "We're paving the way for the Beatles of tomorrow," said Farid Mueller, a Greens member of the Hamburg senate.

The Beatles, after all, partly kicked off their career in the northern Germany city in 1960 - but whether a make-shift indie label can repeat the success of one of the biggest-selling bands in history remains in the stars. And 150,000 euros a year is a bit like peanuts in the scheme of things - considering production, marketing and distribution costs, to name just a few.

"Yes, 150,000 isn't much, but the national government's 'Initiative Musik' music funding program began with only a one-million-euro budget and has grown to over 2.5 million," Martens told Deutsche Welle. "It's a small start, but at least it's a start."

Even if it is a small start, James said it is important because it could help keep some indie labels afloat. "Germany places a lot of emphasis on classical music, and sometimes jazz, but other kinds of music suffer.

"Culture is based on all kinds of creativity, all sorts of styles - only then is society balanced," he said.

In that case, it's the mix that makes the melody.

Author: Louisa Schaefer

Editor: Kate Bowen

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