Going Independent
Hungarian musicians relying less on big-name labels
written by Nancy Laforest

A newly-developing trend in international music markets is for musicians to take their chances with lesser-known independent record companies instead of contracting big, international labels. Some go so far as to finance their own releases. The question is whether Hungarian artists will succeed in following the example of their Western counterparts.

Hungary’s music industry is a small one. Although the record market has more than doubled in size in the past decade, there has been an estimated 5% drop in record sales in the past five years, a tendency very much in-sync with international drive. Musicians, however, continue to produce. Following a global trend, more and more Hungarian artists are recording, manufacturing, distributing and promoting their own albums with little or no help from major recording labels.

The financial risks that come with these independent projects are great, yet the profits, if a successful album is released, are greater. “When you sign with a major label, you lose most of the album’s rights, and you see very little money,” said Tamás Bárány, an independent producer and keyboardist who is currently recording his own album. “Of course we’re playing on a lower level than the majors, and maybe we’ll only sell 1,000 albums, but at least we’ll get to keep whatever we put into it.” Hungarian artists earn even less than their international peers due to the small size of the domestic market and the consequently lower demand. A quick stop in any Budapest music store is enough to see that most of the CDs displayed are not Hungarian. There is a wide selection of international talent, in many genres, while Hungarian music is mainly represented by pop or dance. Of course, you can find a few alternative rock albums, or the latest jazz favorites, but most local music available in stores is ‘disco.’ Obviously there is a demand for it, as a quick look at the charts confirms.

The mighty ones
As expected, the charts are dominated by releases from major labels. Five multinational companies: BMG, EMI, Sony, Universal and Warner, lead the way in the Hungarian music industry. Their main purpose in small markets like Hungary, however, is to import and promote their international acts, artists like Madonna or the Red Hot Chili Peppers. This doesn’t leave them much time, energy or money to focus on new local talent. Hungarian musicians agree, however, that the quickest and most effective way to exposure, if not fame, is by signing a contract with one of the majors. A Hungarian band, for example, who in 2001 won the Golden Giraffe award for best Hungarian modern rock album, released two albums with a major label before breaking the ties. Both albums were successful, and the guitarist for the band, credits some of their success to being signed to a big label. “It was important for us to stay under their umbrella for a bit, to have the support of such a worldwide entity. They have huge media power and their distribution is good,” says the guitarist, who asked to remain anonymous. Then why leave them? “If we want to have free license, we must be independent,” the musician explains. “Majors won’t let you travel freely with your album. Now we are our own producers and we own the rights. In whatever country we want to go to, we choose the partner that is best for us.”

Some Hungarian musicians are taking to independently produce their own records, although such a move comes with huge monetary risks

The members of the band still deal with their record label, but only where Hungarian distribution is concerned. Currently, they are using the experience and connections they have acquired, with the major label’s help, to release their latest album on an international level. “The sound quality is extremely important, and professional studios are expensive. Finding the money to start off with is the real problem,” concludes the band’s guitarist. “Once you have a high quality recording, however, then you can deal with the majors. It’s alright to do business with them, as long as you get to be your own boss.”

Who’s in control?
Being your own boss is the bottom line. That is why so many musicians invest in their own personal projects, or turn to independent recording labels for management. Restrictive contracts still exist with the indies, yet some believe that the services and money earned are better. “Musicians signed with us get about 30-40% more royalties than they would if they were signed with a major,” explains Gábor Molnár, director of Gold Record, a Hungarian independent record company currently dealing with two bands. “We have three people working on the two productions, so there’s more money to go around. Plus, we can focus on the musicians more.” Molnár estimates that there are about 10 successful independent labels in Hungary. Mahasz, the Association of Hungarian Record Companies, lists about 35. “A successful independent label has more than two productions,” claims Molnár, “but not too many. If you take on too many projects, than you become like a major. You don’t have enough energy to focus on the projects.” Molnár adds that it’s very difficult for an indie to stay up, especially in a shrinking market.

Are there other options for musicians? At a huge risk, it is possible for them to release their own album. Without the managerial or production backup of a known label, however, everything becomes more difficult. Contacts within the industry are crucial, especially for the promotion of a new release. Bárány and his band have decided to take the risk. A session musician for the past 10 years, he says he has a fairly in-depth knowledge of the industry in Hungary and has built up a network of connections. He estimates he can produce a high quality album for just over HUF 1 million.

Zoltan Herczeg is putting HUF 1.5 million behind his friend's independent record project

Bárány says he knows the musicians, and people in recording studios, TV stations and live music venues. He has acquaintances to do the photos, artwork and videos, and printing and manufacturing can be arranged at a friendly price. Plus, he has a sponsor. “I’m going to give (Bárány) HUF 1.5 million for his album because I believe in his music,” says Zoltán Herczeg, a friend, and as of late, a business associate of Bárány’s. Having worked in the fashion industry for the last six years, Herczeg says that joining his contacts in the media with Bárány’s musical connections could lead to success.
“I see definite business potential in this project,” says Herczeg, “and now I’m testing the market with it. Without risk, after all, there is no profit.”