The Finnish music business: Stronger than ever

by Jonathan Mander :: 2005

The Finnish music business is at an interesting stage. The past decade has been an intensive period of progress, which has resulted in a more professional industry. On top of that Finns are focusing on the international music market more than ever.

The Finnish music industry has been evolving at a rapid pace in recent years. And the changes that have been happening are not only related to the over-all structural change the record business is experiencing around the world due with digital distribution and increasing piracy.

In Finland this change has been linked to a more international focus as well as an increased professionalism in the music business. These two things are also linked to each other, and continue to feed each other.

But before going too far into what has changed, and where the Finnish industry is headed, we should take a look back. The change that has been going on in the Finnish music really started in the early nineties, and in part the spark for the change can be found in events that aren't specifically related to the music industry. The collapse of neighbouring Soviet Union in the early nineties was a change of direction for Finland. Until then a lot of Finnish trade was heavily linked to the Soviet Union, so the collapse of the country opened up trade. Part of the same change continued when Finland joined the European Union in the mid-nineties. Later the country also joined the common currency, the euro.

These changes not only brought on a more open attitude to taking business abroad, but also a more international outlook in general. All of these things are broad topics that relate to many facets of Finnish life, but the music business is one of those areas.


Finns buy Finnish music

Since the Finnish music industry is small, even in relation to the small population of the country (five million people), changes can spread throughout the business quickly. Besides being small, the music scene is characterised by its emphasis on the local: almost 58 % of music bought by Finns is local repertoire. In recent years, sales of foreign music have been falling drastically, whereas local produce has increased sales or stayed level.

Despite being a small music market dominated by local repertoire Finnish music has begun to travel in the last five years in an exceptional way, which shows the strength of the local talent.


First export success in 2000

The major record companies (Universal Music, Sony Music, BMG, EMI and Warner Music) had a strong hold of the Finnish music industry by the end of the nineties. A generational change had also been going on with e.g. BMG Finland and EMI Finland hiring managing directors who were barely over 30. When the new millennium began EMI Finland and Universal Music purchased the biggest independent companies in the country, which left a void in indie sector for a few years.

First EMI bought Poko Rekords in 2001 and the following year Universal took a majority role in Spinefarm Records. At the time they accounted for 13 % of sales together, and their share was even bigger in local repertoire. Both Poko and Spinefarm have been, and even under the new ownership continue to be, involved in exporting music from Finland. Spinefarm specialises in metal music. In Finland the label became used to releasing albums that go to number one in the album charts even before Finnish metal group Nightwish, which mixes almost operatic singing to its music, broke into charts abroad in 2002.

The year 2000 is a watershed moment for the Finnish music industry. In the history of Finnish music export there is the time before 2000 and the time after 2000. In that year Finnish acts scored their first real international chart hits. Bomfunk MC's, HIM and Darude all broke through with singles 'Freestyler', 'Join Me' and
'Sandstorm' respectively.

It was a huge change for the mindset of exporting Finnish music. Until then success had been marginal, and more genre-related with bands like Stratovarius and Amorphis doing well in the metal genre. Before 2000 it was common to wonder why "Finns never make it abroad". After 2000 everyone in Finnish music realised that international success is possible even from the northeastern corner of Europe.

Finnish record companies didn't lose their cool despite the newfound international option. Record executives emphasised that the home market was still their focus, and there'd be export pushes only if the act, the time and the plan fit together. In their opinion the chart success followed naturally from developments in the Finnish music business.

The cool attitude is a perfect example of the Finnish music business: people have their feet firmly on the ground. In many other places a few chart hits would immediately be followed by big investments into new companies and trying to score more hits with the hope of being successful quickly. But for the Finnish record business that wouldn't have been typical. People in the music business point out that it has been sad how slowly the government has realised the potential of music as an exportable product.


The sleeping indie sector wakes up

The independent music business remained silent for a few years at the turn of the decade. At the time it was hard to say where the next strong label would come from after Spinefarm and Poko. The majors hired several young, talented and experienced players, who had a past in independent companies. They were also the first to go when the majors continued their worldwide staff cuts.

In 2004 it became evident that Finland still had a vibrant independent sector. Record buyers were finding the exciting new music released by companies such as Verdura, Merceedee's, If Society and Fullsteam.

The new rise of the independent labels is another reflection of the increased professionalisation in the Finnish music business. The indie attitude used to mean that when an act completed an album it was manufactured, and only afterwards the label began to think of possibly offering the new record to stores. Now the indies act as professionally as the bigger companies in regard of planned marketing and promotion. The development from an emphasis on major labels to independent companies has been happening in other genres besides rock and pop as well.


Majors nurturing new business talent

The majors continued to make staff cuts, which meant that several talented people were left without a job. When Sony Music and BMG merged in 2004 people from both companies either left the company or were left out.

Many of those ex-employees set up their own companies in 2004 and 2005. Former BMG Finland managing director Niko Nordström and A&R manager Asko Kallonen now run Helsinki Music Company, which has thus far signed three new acts, and released HIM's 'Dark Light' album in Finland. Kallonen and Nordström worked together with the band already at BMG, and the cooperation continues despite HIM having signed to Sire Records in the United States. Other companies have been set up by former BMG Finland A&R manager Kari Hynninen, Sony's A&R manager Jani Jalonen and Universal's former A&R manager Teja Kotilainen, who originally discovered The Rasmus and managed them before moving to Universal.

Besides being labels, many of these companies share 360 degrees model. They discover new acts, do A&R work, and also act as promoters setting up shows.

The new companies are a part of a more diverse Finnish music business. Until now marketing, production and other areas have been quite centralised to record companies. Now, however, there are several independent entrepreneurs in the business doing freelance promotion, production and A&R work.

Another significant independent company with a 360 method is King Foo Entertainment, which handles Nightwish among other metal bands. The company was set up by Ewo Pohjola, who used to be the A&R manager of Spinefarm Records.


Focusing on export

A more professional industry has better potential to do international business. And with international business comes the need and the capability to be more professional. So the Finnish industry is at a good stage now.

Music Export Finland (Musex) was born a few years ago to help Finnish companies concentrate their efforts. The export office arranges joint Finnish pushes to the main popular music conventions, and can really help local companies get organised for the export market.

In addition to Musex, the Finnish Music Information Centre (Fimic) plays an active role in spreading the word about Finnish music. Fimic is defined by the fact that it operates in all fields of music: besides popular music the organisation also promotes more marginal genres.

Musex releases annual figures of the total market value of Finnish exports. The change between the years 1999 and 2004 has been massive. The total market value has grown from 3,8 million euros to 21,7 million euros in those five years. Between 2003 and 2004 there was a growth of one million euros.

The figures show that export has become a relevant business in Finland. It also means that in addition to hit artists such as The Rasmus, HIM and Nightwish there are other bands whose efforts are registering beyond home borders. These acts include The Crash, The 69 Eyes, Redrama, Värttinä and Children of Bodom.


The makers and shakers

The true pioneers of Finnish music export are Poko Rekords' Kari "Epe" Helenius and Rockadillo's Tapio Korjus. They have had faith in Finnish music, and they've travelled to music conventions around the world for years. Both have been in the business since the seventies, and started heading abroad at a time when even talking of international commercial success was deemed crazy. Since the Finnish music industry is small the example set by these two music entrepreneurs has had a tremendous impact. Especially since they've been more than willing to share their knowledge of how the business works to newcomers.

Spinefarm's Riku Pääkkönen started working actively towards export in the early nineties. Helsinki Music Company's Niko Nordström has seen several Finnish export success stories from close-by. When he worked as managing director of BMG Publishing Finland, he cooperated with Darude (signed to 16 Inch Records) and Bomfunk MC's (at the time signed to Sony Music Finland), and helped them on their international career. In both of those cases producer and founder of 16 Inch Records was working with Nordström. Next Nordström became managing director of BMG Finland, where he worked with HIM, who had already had their international breakthrough with 'Razorblade Romance' in 2000.

Another big player in the Finnish music business is Seppo Vesterinen, who has managed HIM from early on in their career, and started as The Rasmus' manager before the release of 'Into', their first step to becoming an international hit. Vesterinen had his first experience as managing a Finnish band with an international career in the eighties with hard rock band Hanoi Rocks.

The new generation of Finns working in the music business have the advantage of being raised to think internationally. Speaking English comes to them naturally, which helps doing business abroad. The new more outward-oriented generation includes Nordström and even fresher faces in the ranks of independent labels such as Fullsteam Records whose Deep Insight and Disco Ensemble are heading for an international career.

This means that there is a strong case to believe that Finnish music will be exported in growing quantities in the future. Musicians in Finland are now hungrier than ever, and have the talent and work ethic to succeed.

The advantage Finland has compared to many other countries is the uniqueness of the market. People in the Finnish music business believe anything is possible, because it is rarely predictable what will break through in Finland. Because the market is small and the country has a strong indie-tradition, even the majors to some extent have to think like a smaller label.

Being chosen to co-host the opening night of the 40th MIDEM is further evidence of the strong streak in Finnish music right now. And the shows during opening night will emphasise this.

Text originally published in Finnish Music Quarterly 4/2005