UMGI, First Music Major Sets Up in Romania

UMGI Sets Up Romania Affiliate
B I L L B O A R D . B I Z • M ay 0 8 , 2 0 0 6
Lars Brandle, London

Universal Music Group International is in the process of establishing a wholly-owned affiliate in Romania, one of the European Union’s accession countries, has learned.

UMGI is targeting June 1 as the official launch date for the new company, which will gather 10 staffers in downtown Bucharest, the capital. It will become the first music major to establish an operating company in the eastern European market.

“We aim to benefit from this untapped potential and enter the market on our own,” explains Victor Antippas, UMGI’s president for Eastern Europe. “It brings advantages because having your own company gives you much more flexibility in the activities you undertake.”

The new business will be UMGI’s fifth operating company in Eastern Europe after Poland, Hungary, Czech Republic and Russia. Until now, UMGI has been represented in Romania by licensee Zone Records, a subsidiary of conglomerate RTC.

The new firm will be helmed by GM Ioana Fesnic, who previously managed the media division of RTC. Fesnic also serves as head of the national record industry group UPFR.

The Romanian affiliate is expected to improve upon Zone’s claimed 13% share of the international albums repertoire market initially through expanded wholesale distribution and higher retail penetration.

“A fair portion of Romania’s music sales are represented by mass market and wholesalers,” notes Fesnic.

Big international mass market chains such as Carrefour, Cora, Metro, Kaufland and Selgros are also active on the Romanian market and represent a significant quota of the music sales.”

“Gas station chains also sell music products,” she adds. “They represent a priority for us because in smaller cities across the territory gas stations are the only music retailers available. Gas stations are also important sales-savers over the summer.”

Romania and Bulgaria are on track to become members of the EU on Jan. 1, 2007, a move that will enlarge the Union to 27 states. In order to meet integration requirements, the incoming members must achieve improvements in the area of copyright protection and complete various economic and political conditions.