Deutsche Grammophon
BERLIN — Deutsche Grammophon marked its 125th anniversary in Berlin last night (Dec. 6) at the first of three concerts to celebrate the classical music label’s legacy, as well as its current stars. At the city’s storied Konzerthaus, new signing Joana Mallwitz conducted her orchestra; violinist Bomsori Kim and cellist Kian Soltani performed Ludwig van Beethoven‘s Triple Concerto, and Bruce Liu played the German master’s Choral Fantasy. Liu, one of the label’s rising stars, in 2021 won the International Chopin Competition.
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The Berlin concert will be followed by concerts in Philadelphia and Seoul. The U.S. event, on Dec. 9, will feature María Dueñas, Hélène Grimaud and Moby, who has recently released some work on the label; and in South Korea, on Dec. 15, Vikingur Ólafsson will perform the “Goldberg Variations.”
“To this day, Deutsche Grammophon is home to the biggest classical stars of their time,” said Frank Briegmann, chairman and CEO of Universal Central Europe and Deutsche Grammophon, at a reception before the concert. “It is the guardian of a cultural treasure of incredible proportions.”
Deutsche Grammophon, a cultural institution in the classical music world, is the oldest operating record company. It was founded in 1898 by Emile Berliner, a German Jew who moved to the U.S. and in 1887 patented the “Gramophone,” a technology for recording and reproducing sound by engraving and tracing it with a stylus – initially on a cylinder and then on a flat disc. After licensing the rights to manufacture his invention, he sent his nephew, Joseph Sanders, to open a German subsidiary, which severed its relationship with the parent company in 1914.
In 1941, the company was purchased by Siemens & Halske, a corporate ancestor of today’s Siemens company. Over the next two decades, Deutsche Grammophone became known for its distinctive yellow logo and high-fidelity classical music recordings that were marvels of technology at the time and are still considered iconic today. As its rival recording companies shifted toward pop, Deutsche Grammophone focused on classical, and then also contemporary music. In 1962, Siemens formed a joint venture with the Dutch company Philips to run the company that became PolyGram International – which in 1999 was purchased by what was then the parent company of Universal Music Group and merged with it.
The company’s catalog, reputation and logo still endure, and about a year ago it launched Stage+, a high-fidelity subscription streaming service that includes access to performances on video. The label’s anniversary concerts will be shown on the service.
“Nothing has changed,” said label president Dr. Clemens Trautmann, referring to the company’s record for using the new technology of the time. “And everything has changed.”
Years ago, when the music business was at its low point, devastated by online piracy and struggling to sell one-dollar downloads, tech pundits used to ask why the major labels hadn’t just started their own online store. There are a few answers: They did (anyone remember PressPlay or MusicNet?), and a more serious effort would have outraged other retailers, which were still generating considerable revenue. Besides, consumers would have been reluctant to embrace a service with a limited selection, and getting too many labels together presented logistical issues (who would run it?) as well as legal ones, in the form of potential antitrust concerns. The result has been a business where technology companies have more control than rightsholders would like over pricing, promotion, and relationships with consumers.
That was then. It’s still hard to imagine any label creating its own mainstream streaming service – the kind that would compete with Spotify or Apple – but what about a smaller one, focused on a particular genre? It would be a tough sell now that consumers are used to getting all their music in one place, but the payoff – in profit, information about consumer preferences, and control of a direct marketing channel – could be significant.
As it turns out, there actually is such a service. On Nov. 21, Universal Music Group’s Deutsche Grammophon launched Stage+, which for $14.90 a month offers music from the label’s archive and that of sibling Decca Records, plus video programming and a new live performance every week. In terms of popularity, Stage+ can’t compete with mainstream platforms, but it’s not meant to – and it doesn’t even need to. It could make money with a number of subscribers in the low six figures, partly because it costs more than other services, and it gives Deutsch Grammophon a way to market other products directly to consumers.
Stage+, which was developed by Deutsche Grammophon president Dr. Clemens Trautmann under Universal Music Central Europe chairman and CEO Frank Briegmann, faces any number of challenges – consumer disinclination to subscribe to multiple services, existing specialist streaming platforms, even a rumored new project from Apple. But the product looks great, and it’s worth thinking about how a genre-focused, label-owned service might develop – and the issues it raises for the streaming model that has relatively quickly come to dominate the music business.
Right now, Stage+ only offers Universal Music content. But there’s no reason other labels couldn’t license it music. (Trautmann says he’s open to this, although he’s not seeking it out now.) Presumably, Sony Music Entertainment and Warner Music Group would be reluctant to license their classical music repertoire to a service run by their rival. But it might make financial sense to do so, since the subscription price for Stage+ would imply a better payout. Perhaps just as important, the Stage+ policy of dividing royalties according to listening time is fairer to classical performers than the standard number-of-tracks model. If you had spent decades mastering an instrument, how would you feel about hearing that your 20-minute recording was only worth a tenth as much as 10 two-minute pop songs that played for the same total amount of time.
This model could also work for other genres, which is where things really get interesting. The obvious candidate is jazz. Like classical music, it appeals to aficionados, many of whom might be willing to pay a premium price for a well-curated service that offers high-fidelity audio and video. As it happens, Universal has a substantial market share there, too: It owns Decca, Blue Note and Verve (which controls Impulse! Records) and has distribution deals with ECM Records and Concord Records (which owns the catalogs of the Prestige and Riverside labels). That’s far from everything – Sony has the important Miles Davis recordings, for example – but it would be one hell of a start. After that, who knows? Could there be room for an Americana platform, a service for independent punk, even one for jam bands?
The truth is that subscription streaming saved the music business, but the dominant model just isn’t great for some genres. Neither are the dominant services, which offer a mind-blowing selection of music but are aimed at a general audience. That has helped the music business grow, but it hasn’t always served fans focused on specific genres. Classical aficionados want better metadata to find specific performances of classic compositions, for example, while jazz devotees could use more information about which musicians play on certain recordings. Jam-band fans might want help figuring out the coolest versions of “Dark Star.”
These kinds of services probably won’t cost mainstream services many subscribers, but they could put a bit of pressure on them to reconsider some of the rules that favor pop at the expense of other genres. Why don’t services double-count songs that are more than 10 minutes long, for example, or create an easy and reliable way to search for albums based on the musicians that play on them instead of just the named artist? For the last few years, the music streaming market has been extremely competitive based on marketing and discounts – all the mainstream services offer the same music for about the same price, with a fairly similar experience. What would help record labels, as well as creators, is more competition in terms of business models, where services that offer different features face off against others that are aimed at different audiences. And who better to spark that competition than the labels themselves?
For the Record is a regular column from deputy editorial director Robert Levine analyzing news and trends in the music industry. Find more here.
BERLIN – Subscription streaming services have ushered in a recorded music business boom, but the medium’s focus on hit singles has boosted genres like hip-hop and Latin more than some others. Starting today, Universal Music Group’s Deutsche Grammophon is offering its own service, Stage+, which will offer music from its own archive and that of sibling label Decca Records, plus video programming and a new live performance every week — at a cost of $14.90, or €14.90, a month.
Universal Music has no plans to remove its classical recordings from mainstream music streaming services like Spotify and Apple Music. Rather, the idea is to offer a specialist service that can appeal to classical music fans and create a more favorable business structure for a genre that hasn’t been well-served by mainstream services. Since many artists and orchestras record some of the same compositions, it can be difficult for aficionados to find the recording they’re looking for — and the mainstream streaming services tend to curate music for a general audience.
“There’s the urge of consumers and artists to have everything in one place, with all the right data,” says Deutsche Grammophon president Dr. Clemens Trautmann. “You can punch in a work or a recording or an artist and you’ll see the next livestream, the archive, the albums, and if there’s a documentary, behind-the-scenes footage or interviews.”
So far, no big label has managed to build its own streaming service, and it’s hard to know how many consumers will be interested in one that only offers certain recordings. But Deutsche Grammophon, with its iconic yellow logo, has culturally significant repertoire going back more than a century, as well as significant stars like Lang Lang, Anne-Sophie Mutter and Max Richter. It also has enough brand equity to get streaming rights to major live events, and its first streamed performance will be Víkingur Ólafsson’s presentation of his album From Afar in the Harpa concert hall in Reykjavík, Iceland. (Some of the live performances featured on Stage+ will be time-delayed for various reasons.)
For Universal Music, Stage+ also offers business advantages. The price is higher than the current cost of mainstream services, although it includes high-fidelity audio as well as livestreamed events. The core classical repertoire is in the public domain, which means it will not have to pay publishing royalties on about three-quarters of the music it streams. The service can also operate in a way that makes sense for the genre, and it plans to divide up the royalty pool according to the time consumers spend listening to certain recordings, rather than paying a royalty on each track, which advantages shorter songs in a way that’s arguably unfair to genres with varied or longer track lengths, like jazz and classical music.
Stage+ faces competition — from livestreaming video services like Medici TV and Carnegie Hall+ on one hand and specialist streaming services like Berlin-based classical-focused Idagio on the other. And since so many households in the U.S. and Europe now subscribe to a mainstream streaming service, in many cases Stage+ will need to have enough appeal to succeed as a second service. Apple also seems to have plans that involve a classical music service; last summer it purchased the streaming service Primephonic, whose website says, “We are working on an amazing new classical music experience from Apple for next year.” (Apple did not respond to a request to comment.)
Trautmann says that Stage+ grew out of DG Stage, which was established during the pandemic and offered ticketed livestreams of performances by Deutsche Grammophon artists. A little over a year and a half ago, he started working to develop the service with Deutsche Grammophon vp of consumer business, Robert Zimmermann, under Frank Briegmann, Universal Music chairman and CEO, Central Europe, who also serves as chairman of Deutsche Grammophon.
“DG Stage is simple and very effective, but we realized that the artist community and consumers were looking for a service where everything our artists create can be presented holistically in one place and audiences can follow their journey,” says Trautmann, who is himself a Julliard-trained musician who plays classical clarinet.
It’s hard to imagine that Stage+ will ever have enough subscribers to rival the mainstream players, but its premium price could potentially allow it to make money with a number of subscribers in the low six figures. It also offers an interesting model for genres that don’t fare as well in the streaming world as pop music — especially if they have fans who can afford a premium price.
And although no major label currently runs a streaming service, there’s no reason that Stage+ couldn’t also offer music from other labels or rightsholders — and it could potentially offer them better deal terms as a more appealing cultural and commercial environment than Spotify and Apple Music. “We’d be open to enlarge the content offering, provided it’s the right match for our curated approach,” Trautmann says, although there are no immediate plans to do so. “It might be better coming from potential partners instead of us.”
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