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Musicedia®

NOVEMBER 21, 1998

Volume 15, Issue 47

£3.95DM11FFR35

US$7DFL11.50

we talk 1CIOradioM&M chart toppers this week

European Radio TGEORGE MIC

Outside(Epic)

Inside M&M this week

EUROPE'S TAMING THE EMUEurope's Economic and MonetaryUnion (EMU) takes a giant step for-ward on January 1 next year when11 countries enter the new commoncurrency "eurozone." In associationwith KPMG, M&M presents a specialfour -page supplement outlining howEMU will affect the workings of themusic and broadcasting businesses.Centre pages

ROCKING THE CHANGESWith career sales of 10 mil-lion albums already underhis belt, Italian superstarZucchero (pictured) hasopted for a contemporaryrock style and a more inter-

national sound with his new set, Blue -sugar (Polydor). Page 13

RADIO RESEARCH 2000As radio professionals gather inMadrid for NAB Europe 1998,M&M's six -page research speciallooks at the key issues facing radioresearch in the new millennium.Pages 7-12

Warner adds newregions to Europeby Emmanuel Legrand

LONDON - Warner MusicInternational (WMI) is ref-ining its management stru-cture in Europe, and elevat-ing two of its senior execu-tives to newly -createdregional positions.

Warner Music Italy/Greece president GerolamoCaccia is appointed presi-dent southern Europe,

responsible for France,Spain and Portugal, inaddition to the two coun-tries he already oversees.

Warner Music Europecontinued on page 33

Radio minds meetat NAB in Madridby Mike McGeever

MADRID - Plotting thefuture of radio in Europe.

That will be the mindsetfor more than 300 radioindustry delegates fromEurope, the U.S. and otherparts of the globe at theannual National Associa-tion of Broadcasters (NAB)Europe Conference inMadrid November 15-17.

The number of dele-gates registered forthe event-now inits sixth year-is up50 percent on lastyear's total, accord-ing to its organisers.

"NAB Europewill contain cutting -edgeinformation on all aspectsof radio," comments PeterWaak, managing director

continued on page 33

by Christian Lorenz and Raul Cairo

LONDON - They may be set to stormEurope's singles charts together withtheir duet When You Believe, butWhitney Houston and Mariah Careywill be battling it out this Christmaswith rival album releases.

At presstime, Houston's first newstudio album in eight years, My LoveIs Your Love (Arista), was scheduledto be released on November 16,exactly the same day as Carey's "bestof album on Columbia, #/s. Both

albums feature When You Believe,which was recorded on August 7 forDreamworks/Universal Pictures' up-coming Christmas movie The PrinceOf Egypt.

Columbia has the single rightsfor When You Believe, which isscheduled to be released on Novem-ber 30. Serviced to European radiotwo weeks ago, the track is current-ly bubbling under in Music &Media's European Radio Top 50 air-play chart, standing at number 52this week.

The song is waiting to receive aboost from music TV plays-thevideo will be premiered on MTV U.S.on November 17-and from theworld wide film release of The PrinceOf Egypt on December 18. "Weexpect to enter the German Top 100airplay charts this week with thestart of Universal Pictures' TV cam-paign for the movie," says ColumbiaGermany product manager KimSchafer.

"I think When You Believe is one ofcontinued on page 33

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SemisonieClosing Time

Music & Media: No.44 in the Top 50 European Radio ChartFono: No. 44 in the Fono Eurohit 100

-Belgium: No. 13 in the Studio Brussels Top 30, playlisted on French side at Radio 21Italy: New entry at No. 31 on the National Singles Sales ChartPortugal: National Airplay Chart. Playlisted at Antenne 3, Radio Marginal,

Radio Commercial and RFMSpain: No. 20 (72) on the National Airplay Chart

Sweden: The most played single on National Radio. Playlisted at Radio Rix,Radio Stockholm, Radio City & Bandit. No. 29 on National Airplay Chart

Video: Breakout rotation on MTV Europe (all feeds). Heavy rotationin Finland on MTV3. Heavy rotation on ZTV in Sweden.

On luw low lii bermany, ilUlidilL1 Italy, apditi oweden

:AMERICAAmericanRadioHistory.Com

NEWS

MusicMedia.Call M&M on:

tel (+44) 171 323 6686fax (+44) 171 323 2314/16

Editor -id!Editor in chief: Emmanuel LegrandManaging editor: Tom FergusonNews editor: Jonathan HeasmanFeatures/specials: Terry HeathMusic business/talent editor: Christian LorenzProgramming editor: Mike McGeever

ChortS 8c researchCharts editor: Raul CairoCharts researchers: Menno Visser,Siri Stavenes

ProductionProduction manager: Jonathan CrouchDesigner: Dominic Salmon

Correspondents:Austria: Susan L. Schuhmayer - (43) 1 334 9608Belgium: Marc Maes - (32) 3 568 8082Classical/jazz: Terry Berne - (34) 9 3458 3791Czech Republic: Michele Legge -(42) 2 248 75000Dance Grooves: Gary Smith - (34) 9 3488 2180Denmark: Charles Ferro - (45) 3391 9156France: Remi Bouton (radio and musicbusiness) - (33) 1 4586 8466; Cecile Tesseyre(artist profiles) - (33) 1 4909 0896Germany: Ed Meza - (49) 30 4239782Greece: Cosmas Develegas - (30) 935 65641Italy: Mark Dezzani - (39) 0184 292 824The Netherlands: Robbert Tilli - (31) 20-672 2566Norway: Kai Lofthus - (47) 918 21 208Spain: Howell Llewellyn - (34) 9 1593 2429;Sweden: Fredrik Nilsson - (46) 8 735 9750

Soles and Marketing;Director of advertising sales:Christine ChinettiInternational sales director:Ron Betist (UK, USA) - (31) 299 420274;mobile: (31) 653 194133Sales executives: Christine Chinetti (G/S/A) -(44) 171 323 6686; Igor Rooselaar (Benelux;Scandinavia) - (31) 299 420274Francois Millet (France) - (33) 145 49 29 33Beth Dell'Isola (US Radio) - (1) 770 908 8373;Lidia Bonguardo (Italy, Spain, Greece,Portugal) - (39) 31570056.Sales & marketing co-ordinator:Claudia EngelInternational circulation director:Tim FreemanEuropean circulation promotionmanager: Paul BrigdenFinancial controller: Kate LeechAccounts assistant: Christopher BarrettOffice manager: Linda Nash

Music & Media23 Ridgmount St, London WC1E 7AHUNITED KINGDOMPhone numbers : (44) 171 323 6686, (44)01858 435326 (subscriptions)Fax numbers : (44) 171 323 2314 (editorial)(44) 171 631 0428 (sales), (44) 01858 432164

Subscription rates :United Kingdom UK£160 ; Germany DM399;Benelux Dfl 397 ; Rest of Europe US$ 269; USA/Canada US$ 275; Rest of the world US$ 275Printed by:Headley Brothers Ltd, Queens Road, Ashford,Kent TN24 8HH

ISSN : 1385-612© 1998 by BPI Communications Inc.All rights reserved. No part of this publicationmay be reproduced, stored in any retrievalsystem, or transmitted, in any form or by anymeans, electronic, mechanical, photocopying,recording, or otherwise, without the priorwritten permission of the publisher.

BIlboard Music Group

President: Howard LanderSenior VP/general counsel:Georgina ChallisVice presidents: Irwin Kornfeld, KarenOertley, Adam WhiteDirector of strategic development:Ken SchlagerBusiness manager: Joellen SommerBPI Comr-nuniccstionsChairman: Gerald S. HobbsPresident & CEO: John B. Babcock, Jr.Executive vice-presidents: Mark Gooey, Robert J. Dowling,Howard LanderSenior vice-presidents: Georgina Challis, Paul Curran, AnnHaire, Rosales Lovett, Craig ReissVice-president: Glenn HeffernanChairman Emeritus: W.D. Littleforrl

Upfrontby Emmanuel Legrand, Music & Media editor -in -chief

A key European music industry executive was recentlyasked by this magazine what the advent of the euro willchange about the way his company conducts business."Nothing!" came the answer.

Loathe it or like it, the advent of a single Europeancurrency marks a new era in the construction of Europe,and its impact has probably not yet been fully assessed.

This week, in partnership with KPMG, we publish aspecial supplement on European Monetary Union. Ithighlights the fact that companies will, with the arrival ofthis new currency, have to answer a massive set of ques-tions regarding the way in which they operate. Gettingtheir act together will take some time, but ultimately

companies will be able to do business in Europe using onesingle currency. This will radically affect the way businessis run.

Once those technicalities have been addressed, theimportance of the euro will start to be felt. The euromeans more than just a way of enabling consumers inEurope to go shopping in Dublin, Paris or Berlin with thesame bank notes.

The biggest change the euro will bring will be in thethinking and attitudes ofEuropean citizens. For thefirst time, in an act bringingtogether millions of people ofdifferent cultures and lan-guages, they'll be able to settheir hands on a truly tangibleexpression of European sover-eignty-a common currency.

And then Europe will reallystart to exist.

RTL 102.5 soars in latest Italian ratingsby Mark Dezzani

MILAN - RTL 102.5 Hit Radio hassurged up the ratings table to becomeItaly's second most popular commer-cial radio network, according to thelatest official audience figures fromAudiradio.

The CHR broadcaster registeredrecord quarter -on -quarter gains ofover half a million average daily lis-teners during the third quarter sur-vey period, overtaking both CHRrival Radio Deejay and Italian musicnetwork Radio Italia SMI.

Luca Viscardi, who was promotedto senior programme direc-tor of RTL 102.5 a year ago,attributes the gains to thestation's recent consistentcyin its programming. "In thepast we made formatadjustments every threemonths, now I have beenable to introduce an ele-ment of stability and maintain a con-sistent programming policy," saysViscardi. Improvements in transmit-ter coverage in the central Italianregions of Umbria, Lazio and theAdriatic coast region also contributed

to RTL's spectacular gains.Despite its name, RTL

102.5 is independentlyowned and has no linkwith Luxembourg -basedmedia giant CLT-UFA,which uses the RTL brand-ing on many of its TV andradio stations aroundEurope. The "RTL" in theItalian network's namederives from Radio TeleLombardia, the small localstation from which itdeveloped.

Viscardi adds that RTL 102.5'sgains are particularlyimpressive given that thenetwork is independentlyowned. "Our main competi-tors are either owned by, orhave close ties with, majormedia groups. [CHR net-work] RDS closely collabo-rates with, and has regular

access to, Mediaset's three TV net-works, whilst Radio Deejay is ownedby the Espresso publishing group andbenefits from daily promotion in theirnewspapers and magazines."

RDS (Radio Dimensione Suono)

Top 10 Italian networks(Average daily listening, in millions)

Station (format) Q3 '98 Q2 '98RAI RadioUno (news/talk) 5.53RAI RadioDue (full -service) 5.82 6.21Radio Dimensione Suono (CHR) 5.17 4.97RTL 102.5 Hit Radio (CHR) 4.41 3.90Radio Deejay (CHR) 4.27 4.40Radio Italia SMI (nat. music) 4,.19 4.07Radio 105 (CHR) 3.45 . 3.65Radio Montecarlo Italy (AC) 2.35 2.14Radio Lattemiele (nat.music) 2.03 194Radio Italia Network (CHRidance) 1.73 N/A

Sourer: Auritrad, .

consolidatot its position as Italy'sleading commercial network, gainingan extra 200,000 average daily listen-ers. Public broadcaster RAI's twomain radio networks lost listeners,but kept their positions as Italy'smost popular networks overall. RadioMontecarlo maintained its lead as thecountry's leading AC network, gain-ing over 200,000 new listeners quar-ter -on -quarter. National music for-mats also prospered, with RadioItalia SMI gaining 100,000 daily lis-teners and Bologna based syndicatednetwork Radio Lattemiele passingthe two million audience mark.

Chained Melodi seeks Norwegian femalesby Kai R. Lofthus

Oslo -A new chain of soft AC stations,all carrying the Melodi FM branding, isscheduled to launch in Norway onNovember 16.

Modelled on CLT-UFNs successfulsoft AC station in Stockholm, LugnaFavoriter, Melodi FM is targeting"modern females" aged 25-45. Thenew stations will replace local goldoutlets Radio Classic in Oslo andTrondheim, Puddeord Radio inBergen and Stavanger Radioin Stavanger.

Melodi FM project director Alf Lande,a former executive of national hot ACchain Radio 1 and a shareholder in RadioClassic, says: "So far only Radio 1 hassucceeded significantly in the majorcities. We wanted to develop a joint con-cept for these [local] stations, in order to

create a much more powerful whole."An agreement has been inked with

Radio 1, which will handle airtime salesfor the Melodi FM and provide technicalsupport for its stations. Radio 1 alreadyoperates stations in all the broadcastareas concerned. "Our intention is tobuild and accumulate new listeners, andwe are confident that there will be nocannibalisation of [Radio l's] audience,"says Lande.

Melodi FM will be headquarteredin Bergen, where five people will beemployed. Just one person will beemployed at each of the affiliate sta-tions, which means that extensive useof automation will be required to keepthe stations within Norway's broad-casting legislation, which permits only25 percent of programming on localstations to be networked. The chain'smusical direction will be supervised

by Puddefjord Radio's editor -in -chiefFrank Johannessen.

However, the local record industryseems less than enthusiastic about thenewcomer. V2 Records' head of promo-tion, Julie Forchhammer, comments:"People have easy access to this kind ofmusic already, and [Melodi FM] isn'twhat we actually need here. Radio lis-teners have been underestimatedagain, and it happens time after time.If The Beatles or Rolling Stones hadreleased their debut records today,they would never have been playlistedon Norwegian radio."

Adds EMI Norway radio promotionmanager Petter Stokken: "This kindof radio doesn't break new talent. It'shealthy that [national commercial ACstation] P4 will get more competition,but I won't be giving them the highestpriority."

MUSIC & MEDIA 0 NOVEMBER 21, 1998AmericanRadioHistory.Com

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NEWS

88.6 confirms Vienna leadby Susan L. Schuhmayer

VIENNA - The second set of ratingsfigures to be released since the fullroll -out of commercial radio in Austriaon April 1 shows that 88.6 has consol-idated its position as the most popularcommercial station in the country'smajor population centre of Vienna.

Although still dwarfed by nationalpublic CHR station 03, which holds acommanding 34 percent market sharein Vienna, AC/gold formatted 88.6 hasleft the other new commercial sta-tions standing with its 18 percentmarket share, although that figure isslightly down on its debut results inthe second quarter. "It is a confirma-tion of the first results which also put88.6 at the top of the Viennesecharts," says 88.6 general managerBernd Sebor.

The third-quarter results, com-piled by market research instituteFessel Gfk on behalf of public broad-caster ORF, show that AntenneWien, the other Vienneseregional station, only manageda lowly four percent share-adecline of three percent on theprevious quarter.

Since that debut survey, sev-eral of the new broadcastershave changed both their formatsand staff. Antenne Wien, forexample, has sacked several ofits managers and presenters,and has abandoned its CHR for-mat in favour of an AC/gold offer-ing closer to that of 88.6.

Meanwhile, 92.9 RTL hasswitched from AC to dance, while

Radio RPN, the regional station forthe province of Lower Austria, hasswitched from rock to soft AC.

Erich Krapfenbacher, generalmanager of EMI Austria, says hewasn't surprised by the downturn infigures for some of the new commer-cial stations, which are virtually allmusic -based. "The only exceptionwas Antenne Wien, whose figureswere worse than we had expected,"he says.

Alexander Spritzendorfer, labelmanager of Spray records (a divisionof BMG-Ariola), says most of the newstations are still copying 03. "As faras I can see, this survey proves thatthis country needs more innovativeradio formats."

In the provinces, however, severalof the new commercial stations havemade a strong showing. Life Radio, inUpper Austria, took a 16 percent mar-ket share, while Vorarlberg's AntenneVorarlberg scored a 17 percent share.

Vienna radio listening(% market share)

Station (format) Q2 '98 Q3 '9803 (CHR) 33 3488.6 (AC/gold) 20 1802 Vienna (gold/talk) 14 1402 Lower Austria (gold/talk) 12 1001 (classical) 5 702 Burgenland (gold/talk) 4 6Antenne Wien (AC/gold) 7 4Radio Energy (dance) 2 392.9 RTL (dance) 1 3Radio RPN (soft AC) 0 1

Source: Fessel Gfk

Open mikePeter SmidtDirector, Noorderslag seminar/fes-tival and Eurosonic showcase

Organised by Dutchmusic foundationConamus, the 13thNoorderslag sem-inar and festival willtake place in Gron-ingen on January 8-

,A 9 next year. Its firstVA night will feature

the fifth edition ofEurosonic, a

showcase of newEuropean talent.

Q: How does Eurosonic fit withNoorderslag?A: Day two of Noorderslag presentsnew local talent to the Dutch industryand public, whereas Eurosonic is aplatform for European talent. ManyEuropeans haven't got a clue aboutwhat's happening in other markets.When we first set up Noorderslagback in the '80s, we wanted to createawareness of home-grown talent.Eurosonic pretty much goes along thesame lines, only internationally.Nobody has ever heard, for example,Danish band Speaker Bite Me

[Zomba/Rough Trade]. In eight differ-ent locations around town, Eurosonicwill be the ideal stage to introducesuch unknown bands to an enthusias-tic crowd. Eurosonic also serves astesting ground for Yourope, the unionof European festival organisers.

Q: How was the Eurosonic line-upput together?A: Foreign record companies whichwant to launch artists in theNetherlands nominated their candi-dates, which were then thoroughlychecked out by concert promoter BuroGoGo and [public broadcaster] VPRO,which is our radio partner for the event.

Q: Does Eurosonic have anyinvolvement with European radio?A: This year we've managed to get theEBU [European Broadcasters Union]on board, which will provide liverecordings of the showcase to its [pub-lic broadcaster] members, who can airmaterial live or at a later stage. Allradio affairs are being supervised byNOS, the umbrella organisation inDutch public broadcasting, andVPRO is effectively operating as theproduction company. European sta-tions have also recommended us oneband each from their own territory.For instance, [public CHR station]NRK P3 from Norway will be sup-porting Motorpsycho.

Interview by Robbert 7111i

BIG BIG WORLD

MUSIC & MEDIA 0 NOVEMBER 21, 1998AmericanRadioHistory.Com

Ni\h

CDN I I B ATTELEVISA TO QUIT RADIO ESPAICIAMADRID - Mexican media giant Televisa wants to sellits 25 percent stake in Grupo Radio Espaiia. The newswas announced by Televisa president Emilio Azcarragaduring a short visit to Barcelona on November 6. Azcar-raga said that the withdrawal would not be immediate,as it was studying the value of its stock. Radio Espanarecently relaunched its commercial CHR network Cade-na Top as Top Radio Espana (M&M, October 10), as partof the group's ongoing expansion plans.

U.K. GV'T PUTS A PRICE ON CREATIVITYLONDON - The U.K's "creative industries," whichinclude the music and broadcasting businesses, are worth£60 billion ($90 billion) a year to the British economy,according to a report from the government's new CreativeIndustry Taskforce, which was set up by culture secretaryChris Smith after the 1997 general election. The reportestimates that the creative sector earns Britain £7.5 bil-lion per year, and employs 1.4 million people (or five per-cent of the U.K workforce). The report says that themusic industry is the most labour-intensive of the creativeindustries, employing some 160,000 people.

POLYGRAM ITALY REPORTS RECORD MONTHMILAN - PolyGram Italy isreporting an all-time recordturnover for the month of October,with shipments reaching L26 bil-lion ($16.25 m), with an additionalL12 billion of orders taken duringthe month. In a reference to Poly -Gram's impending merger withUniversal, PolyGram Italy presi-dent Stefano Senardi comments:"In this particularly difficult peri-od I am extremely satisfied by theexceptional results reached byPolyGram Italy, thanks to strong

product and above all the determination and profession-alism of our staff."

SPREERADIO MOVES TO ENGLISH FORMATBERLIN - Berlin -based commercial station Spreeradiois hoping changes in format and improved transmittercoverage will help it attract more listeners. The threeyear -old schlager/MOR station faces strong competitionfrom public broadcaster SFB's Berlin 88.8, which alsocarries a schlager format. In programming changesintroduced earlier this month, Spreeradio has drastical-ly cut the amount of German -language music in favourof English -language easy -listening sounds. Meanwhile,a new transmitter in Berlin's Alexanderplatz districtshould make the station easier to pick up in those partsof Berlin -Brandenburg where Spreeradio's signal hadpreviously been difficult to receive.

BRITS BUY SPANISH CHART COMPILERSMADRID - British market research group MillwardBrown has acquired the other 50 percent of Alef-Mill-ward Brown, the Anglo-Spanish company which com-piles the official Spanish sales charts for labels' associa-tion AFYVE. However, a spokesman said the purchasewill not affect the workings of the Spanish sales charts.

LISTENERS VOTE FOR CLASSIC ROCK TRACKSBRUSSELS - Listeners to southern Belgium publicCHR/rock station RTBF Radio 21 have been voting onthe Internet for the tracks which will form the ninth vol-ume of the station's compilation album series, Les Clas-siques de 21. The Virgin album is based around Radio21's long -running classic rock Sunday show, Les Clas-siques, hosted and produced by Marc Ysaye. "For theninth volume, we decided to open up our Internetadd.ress to the audience and let them have the choice,"he explains, "and guesswhat: Led Zeppelin isstill the public's mostwanted classic rock act."

radio21

British indies lead parallels fightby Jeff Clark -Meadsinternational news editor, Billboard

LONDON - U.K indie labelsare leading the battle againstparallel imports being allowedinto the EU.

The music industry hasstepped up its lobbying on theparallels issue since it wasrevealed in the summer thatthe European Commission hadtaken the first steps towards apossible removal of the presentbarriers to the trade.

Now the U.K labels are esca-lating their efforts to demon-strate how damaging parallelimports would be to them inparticular and to the Europeanrecord industry in general.

London -based research andconsultancy firm the NationalEconomic Research Association(NERA) was tasked by theCommission's internal marketdepartment DG15 to investi-

gate how parallelimports wouldaffect a number ofindustries thatrely on trade-marks, includingmusic and video.

The first draftof that report wasdelivered to DG15 on October30. NERA is now involved in aconsultation process based onthe first draft prior to complet-ing a final version by the end ofJanuary. Details of the firstdraft have not been publishedor released.

At the core of the indies' con-cerns is a fear that they would bethe first sector to be affected byany relaxation of controls on par-allel imports. It is widely heldthat parallel imports destroyestablished trading bases andundermine labels' ability toinvest in local talent. Indepen-dent labels, with their lower rev-

enues and smaller cata-logues, are seen as beingparticularly vulnerable.

That argument, amongothers, will be taken toNERA by the U.K. labels'body the British Phono-graphic Industry (BPI)later this month. BPI

director general John Deaconsays a delegation representingall the organisation's member-ship, but with particularemphasis on the indie sector,will meet with NERA execu-tives to express "deep concern"about how a relaxation of con-trols on parallels could affectthe smaller companies.

However, senior sourceswithin the European Commis-sion suggest DG15 is likely touse the NERA report to pre-serve the status quo, as it ishighly unlikely to permit a mea-sure that would undermine thehealth of European companies.

Alanis Morissette recentlypaid a visit to one of Ger-many's largest rock sta-tions, Kiel's Delta Radio,to talk to programmedirector Adam Hahneabout her new album Sup-posed Former InfatuationJunkie (Maverick/Rep-rise). The station's listen-ers recently selectedMorissette's 1996 hit Ironicas their favourite summerrecord in Delta's MegaRock Countdown.

Spanish stations provide hurricane reliefby Howell Llewellyn of food and medicines, gathered

after eight days of on -airappeals. The two morningshows broadcast included livemusic from local bands, and var-ious interviews, including onewith the Dominican Republic'spresident, Leonel Fernandez.

It is not the first time M-80has travelled to countries in

MADRID - Spanish radio hasbeen at the forefront of fund-raising efforts following therecent natural disasters whichhave devastated the Caribbeanand Central America.

In the aftermath of hurri-cane Mitch, which wreakedhavoc in Honduras and severe-ly affected Nicaragua, Guat-emala and El Salvador, a pro-gramme on the disaster broad-cast by public news/talk stationRNE Radio 1 raised somePta350 million ($2.5 million) ina single day.

Meanwhile, AC/gold networkM -80's popular morning showGomaespuma was in theDominican Republic deliveringfood and medicine and broad-casting live on November 3 and4, following the earlier hurricaneGeorges which caused devasta-tion there and in other parts ofthe Caribbean in late September.

Goinaespuma presentersGuillermo Fesser and Juan LuisCano arrived on the island witha team of 20 to supply 125 tons

need of aid. So far this decade,programmes have been broad-cast from Bosnia, Cuba, Mauri-tania, and the Saharan refugeecamps at Tindouf. Fesser, whobroadcast from the town ofGuerra-whose sugar -cane hutshad mostly been washed away-described the latest experienceas "highly emotional."

internet in -siteThe Complete Fatboy Slimwww.astralwerks.com/fbs

Norman Cook pro-vides details of hismany roles aswriter, artist, DJ,performer and par-ticularly his FatboySlim alter ego,through this newweb site. One nicetouch is the way information is provided in layers; visitors whoclick on Bio, for example, are presented with both a synopsis andthe option to click onward for much more depth. This is a partic-ularly useful approach when it comes to understanding Cook'srather tangled discography. Exclusive remixes of selected tracksgive fans a worthwhile reason to drop by regularly. There's also a

Ifun scrapbook of photos taken "behind the scenes" at video shoots,parties and other personal appearances. Chris Marlowe

Welcome to the House of Love

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NAB

Radio research in the new millenniumAs radio executives andbroadcasting -related profes-sionals from across Europeand North America convergeon Madrid for the NAB EuropeConference 1998, the chal-lenges and opportunities ofthe new millennium are atthe top of the agenda. Digitalbroadcasting, consolidation,competition and brandingstrategies are the issues:accurate, relevant informa-tion is the primary weapon ofbroadcasters looking for suc-cess. Music & Media' TerryHeath outlines current profes-sional thinking on the role ofresearch in achieving broad-casters' commercial andcreative objectives in theyear 2000 and beyond.

The maturing European radiomarkets now embrace audienceresearch as a necessary adjunctto programmers' skills. Theenvironment is more competi-

tive and more crowded, and the oldreliance on "gut feel" alone has beenreplaced by an altogether more busi-nesslike drive towards serving targetaudiences in an increasingly seg-mented marketplace.

Both research organisations andprogrammers agree that the individ-ual human skills of programmingremain the defining factor in a radiostation's output, and that researchdata are a vital support, not a replace-ment, for those essential skills. AsTim Grunert, programme director ofcommercial outlet Energy 103.4/Berlin puts it: "Research is a veryimportant tool for programming. It'snot the Bible, but it's very useful inconfirming one's gut instinct. It helpsconfirm one's feelings about program-ming decisions."

The use of the term "gut feel" or"gut instinct" is still common curren-cy among European programmers. Itis a way of describing the humaninput which makes the differencebetween a competitive, choice -richradio environment, and a slavishlyresearch -led landscape in whichradio clones must rely on devicesother than programming-such asprize competitions-to enhancetheir ratings. "Market research isnot a machine I activate and get ananswer," Grunert continues. "Youhave to interpret the data.Research itself doesn't automatical-ly decide for me. I still make the ulti-mate decisions, but it does help me."

Vision plus dataLori Granger, head of The ResearchGroup-Radio International, theWashington -based group with exten-sive experience in European radio,supports Grunert's contention thatradio research is about skilled profes-sionals using relevant information."The biggest change that I've seen [inEuropean radio]," she says, "is thatthose programmers who have beenrelying on their 'gut' to make pro-gramming decisions for the durationof their radio careers are realisingthat, in order to compete effectively

and either protect or gain marketshare, they need perceptual researchto read their markets."

Describing the fast -developingEuropean radio scene, she continues:"As markets mature, as competitionheats up, programmers need to applyproduct marketing principles in theircompetitive battles. Successful mar-keting of audio products can only beaccomplished when the programmeris completely in touch with the needsand expectations of the listener, andunderstands how the listener definesand ranks the existing radio formatsin the market."

Any idea that research is-orwants to offer itself as-a replace-ment for professional skills and visionis scotched by Frank Cody, CEO ofNew Jersey -based research and con-sulting service Broadcast Archi-tecture, which has radio clientsworldwide. "As a research organisa-tion we have to have respect for thepeople with a vision of how they wanttheir radio station to be," he says. "Wework best with strong-willed broad-casters who have a sense of purpose.We help them achieve their goals."

Notional Association of

BROADCASTERS®The view of research companies as

facilitators, as providers of informa-tion which is not an end in itself butcan be put to competitive use by tal-ented broadcasters, is a strong ele-ment in the sense of teamwork whichpervades the business on the eve ofthe new millennium. Cody likens hisrole to that of a sports strategist andtrainer, providing support and spe-cialist input which will give the giftedathlete a competitive edge in competi-tion. "We act as much as coaches aswe do as Cassandras," he asserts. Theimplication is that there is no substi-tute for broadcasters who have thevision and the talent and the will tosucceed. Research is simply another

"We encouragestations whowant to play anew track toplay it heavily.Light rotationsdo no-one anygood."

Frank Cody,Broadcast Architecture

means of enhancing existing talent.

The consolidation challengeDifferentiation, branding, "stationsound," become even more importantwhen consolidation puts pressure onbroadcasting groups to optimise perfor-mance of individual stations in a mar-ket. Europe in the new millennium isfacing that particular challenge."There have been dramatic changes as

the result of market development,"says Hal Rood, research and mar-keting associate at BroadcastArchitecture.

"When a company owns morethan one station in a market, itbecomes critical to protect both toavoid them cannibalising eachother. If you've got more than onestation, you should be taking out alarger proportion of the revenue inthat market. But," he adds, "some

overlap may be advisable to give amargin of safety. For example, an ACoperator may have two stations cover-ing two age demographics relevant tothat format in the same market."

Under those circumstances,research becomes more important as ameans of keeping stations within theirdesignated lanes. "Where it used to beO.K. to do a test a year, it becomes nec-essary to do strategic as well as tacticaltesting," says Rood.

The U.S. radio experience may beof some value here, as long as theunderlying differences between U.S.and European markets are kept inmind. "In terms of competition formarket share," says Lori Granger,"Europe is becoming more like theU.S. because the advertising pie isbeing divided among more and morecompetitors. As competition increas-es, formats become more niched.

"However," she adds, "due to con-solidation in the U.S., many program-mers there have changed their focus,and make format decisions based onthe best combination of formats tocover the broadest demographic mix.Ratings for each of the outlets is notnecessarily priority one for groupowners in these days of multi -owner-ship consolidation."

More choice for listeners?Regulation permitting, Europe maybe heading towards a situation where

MUSIC & MEDIA 0 NOVEMBER 21, 199:8AmericanRadioHistory.Com

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\AB SPOTLIGHTmajor broadcast groups will maximisemarket share across a number of sta-tions in a market, by using strategicand tactical research to keep each sta-tion within its own distinct formatniche, with just the right amount ofoverlap. This is already beginning tobe the case in markets such asFrance, Spain and the U.K.

Is this a positive trend for listenersseeking choice? Frank Cody believes"the ultimate potential of consolida-tion is greater diversity." But, hewarns, "consolidation is a painfulprocess," evoking the Darwinian prin-ciple of survival of the fittest. Part ofbeing the fittest, he implies, is beingarmed with the weapon of knowledgewhich research, properly commis-sioned and skilfully interpreted, canprovide.

Lori Granger adds further evi-dence that programming skills andresearch need to work together."Commercial broadcasting is still inits infancy in many European mar-kets," she says. "The belief is stillthere among public broadcasters thatthe quality of their personalities, thecredibility of their news or the compe-tence of their music department atpicking hits will win out in the com-petition with commercial outlets.However, in most markets, whereperceptual research tools are appliedand the programming team shapesprogramming to meet the needs of avery well defined demographic target,the commercial stations have realised

great success in segmenting the mar-ket share of public broadcasters."

As Hal Rood points out, "Seven,eight, 10 percent of a market repre-sents great success. Radio is a tightgame, and the ability to increaseaudience by a few percent can make ahuge difference."

What can we test for?The core of much audience researchremains music -based, with testing ofindividual tracks being the primarypurpose, but overall programmingquestions can also be addressed. AsEnergy 103.4's programme directorTim Grunert says: "Music remainsour main focus when using research,but we also use it to determine thequality of our programming. We askwhether listeners like our morningshow, our presenters, whether theyfind our news presenters believable ordo they sound artificial? We ask aboutspecific interests like football orentertainment news. It helps us toimprove overall programming byinforming us which programmes aregood and which need improving."

As an identifier of listener -friendlytracks, testing has to be used withsome caution and skill, warns Cody."As a programmer 15 years ago Iresisted research," he says, "because ittended to penalise new music and theunknown." That is why, today, he adds,"We are not asking people to play`name that tune.' We're not asking 'areyou familiar with?' but 'do you like?'An

elementary caution to all program-mers is that new music does not testwell. So we encourage stations whowant to play a new track to play itheavily. The investment in the songand the artist will enhance the station.Light rotations do no-one any good."

The techniquesDigital technology has promised a rev-olution in radio research, makingminute -by -minute monitoring of audi-ence technically possible, and openingup the prospect of programmers beingable to identify specific songs, presen-ter -led features or other programmeelements which trigger tune -out.However, this sort of precision, alliedto technology, is further down the lineand will need to be evaluated for pro-gramming and management relevancebefore there is wholesale adoption.

In the meantime, Lori Granger con-tends: "The most significant needs ofthe European broadcaster into the nextmillennium will be the application ofthe tried and true perceptual toolswhich were developed years ago to fightsmart in tight competitive battles." Onthe question of embracing technology asa further tool in the increasingly sophis-ticated armoury of radio research, sheadvises caution. "Technology helpsresearchers to be more efficient, and tolower their costs, but not necessarily tobe more accurate."

As an example, she offers the"interactive music testing technolo-gies" developed by The Research

Group and being used more frequent-ly in the U.S. The interactive tech-nique gives listeners an opportunityto indicate their reaction to a songusing a dial or hand movement. "[It]is not more accurate than traditionalauditorium testing in putting theright songs in the right rotations,"Granger asserts.

"Music testing using a dial or per-ception analyser gives the program-mer a more visceral reading on asong. It looks sexier than pencil andpaper, where a respondent makes amark on a page which says the song isone of his favourites. But real state-ments about a song -1 love it,' hateit' or 'I'm tired to death of it' can beread and acted upon much moreclearly than a sweeping hand move-ment, which for some respondentsmay mean favourite, and for othersmay just mean the song is O.K.' "

The single most important focus -point for radio research in Europe inthe short- to medium -term, accordingto Granger, should be what she callsthe "three -step perceptual approach."In practical terms, this consists of:strategic market study, with clusteranalysis to define or refine formatand clearly target a station; auditori-um testing for gold rotation; and callout for current tracks to get the musicright and avoid tune -out due to burn.

These are concepts which willalready be familiar to programmersaround Europe. Granger advises that"if you use this three step plan regu-

NAB programme for the new millennium

Nab Europe speakers (from top);

Martin Brisac, Bob Geldof, Richard

Park and Augusto Delkader

NAB Europe 1998 looks ahead to the 21st. century with a programme focusing on fourmajor areas of radio: management; programming; marketing & promotions; andsales. Cross-fertilisation between disciplines is encouraged, and delegates are free toattend all sessions, not just those designated as of special interest to their job function.

Keynote speakers include:Martin Brisac, CEO, EuropeDeveloppement Inter-national, whose address istitled "From Radio Station to

Radio Group"; and Jeffrey R.Smulyan, chairman of the board,Emmis Communications Corporation.

Feature presenters include: AugustoDelkader, general manager, CadenaSER/Spain and president, AERC; BobGeldof, chairman, Planet 24/U.K; andRichard Park, group director of pro-grammes, Capital Radio plc/London,who talks about the relaunch of Londonalternative rock station Xfm after itsacquisition by Capital.

Selected sessions to note:Pay for Play: In the U.S., pay -forplay schemes between radio stationsand record companies are becoming alegitimate part of music broadcast-ing. Could it work in Europe, and howwill it affect your programming deci-sions? Panel session moderated byMike McGeever, programming editor,Music & Media.

Air Staff Crises for 2000: Are wefacing a "more stations, less talent" cri-

sis in radio? New ideas for discovering,training, coaching, developing andkeeping presenter talent in the new mil-lennium, presented by Dennis Clark,Morning Shows Inc.

Formats and Music: Is the broad-casters' search for acts to "suit their for-mat" and labels' development of acts tofit existing formats stifling new, creativemusic? Panel session moderated byEmmanuel Legrand, editor in chief,Music & Media.

Research in the NewMillennium: As consolidation, alreadywell advanced in the U.S., progressesacross a maturing European radio mar-ket, it is critical for broadcast groups tomaximise individual station revenueswithout cannibalising listeners orincome. Accurate targeting based on tai-lored research is the answer, say FrankCody and Hal Rood of BroadcastArchitecture, and Keith Pringle ofChrysalis Radio.

Morning Shows in 2000: The newgeneration of morning shows in theU.S., Canada, Australia and Europeexamined for clues to building audiencefor this critical daypart. Presented byDennis Clark, Morning Shows Inc.

How to attract and retainBrands as Partners: What do com-mercial radio and brands expect froma partnership? Does commercial radioneed to improve its techniques indealing with brands? Presented bySimon George, joint managing direc-tor, Drum PHD.

Webcasting: Should it be in yourFuture? Case studies of how broadcast-ers are experimenting with the nextgeneration of radio on the net, and howto assess its relevance to your opera-tions. Presented by Peggy Miles,Intervox Communications; and JohnOusby, Ginger Media Group/VirginRadio.

DAB: A Source of Revenue: Aguide to making money from DigitalAudio Broadcasting. Presented bySimon Spanswick, director of corporateaffairs, World Radio Network; and RickDucey, senior vice president, NAB.

Format your Station forMaximum Profit: Practical ideas forenhancing your bottom line throughunderstanding the dynamics of refor-matting. Presented by Peter Waak,managing director, 104.7RTL andBandit 105.5

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NAB SPOTLIGHTlarly, and establish a database forpromotion, you can create radio thatlisteners will be passionate about andremain loyal to, even in the face of ris-ing competition."

Keeping the basicsAsked about this view of a digital -led,minute -by -minute stream of informa-tion being available to programmerssome time in the future, Frank Codyconcedes: "Anything's possible." But,he adds pragmatically, "it still comesdown to vision. Seeing a need and ful-filling it."

Cody emphasises that, eventhough the European market, hasdeveloped, the basics of producingsuccessful radio are still valid. "Mostpeople [in Europe] know how to usethe radio," he says, referring to theacquired sophistication which nowallows listeners to make choices andact upon them quickly by re -tuning."That's one way Europe has changed."

However, that sophistication hasnot changed, Cody asserts, the basicparameters of the researcher/listenerinteraction. "The place on the dial,the name of the station, and thenames of perhaps one or two 'person-alities' are all the listener generallycan remember about a station." Giventhat premise, the message whichneeds to be targeted to the listenerseems to be a simple and direct one.

How to give programmers andradio managers the tools to make the

"What broadcasters will need tolearn next is how best to reach thelistener on a one-to-one basis."

Lori Granger,The Research Group -Radio International

message effective is somewhat more navigation instruments off. In thecomplicated, and this is where fresh same way, we need to check in withdevelopments in research presenta- listeners enough to be aware of shift-tion techniques may be valuable. "I ing moods and tastes."am personally attached to our abilityto present 'research you can see,' " Widening the netsays Cody, referring to Broadcast Beyond testing of individual songs orArchitecture's developing visual tech- programming elements, research isniques. "We do visual explanations, also taking on the task of enhancingand this can demonstrate relative branding, shaping strategies and feed -product quality with great impact." ing into other marketing activities.

As well as this, Cody recommends "What broadcasters will need to knowgreater research frequency in markets next," says Lori Granger, "is how bestwhere staying on track within precise- to reach the listener on a one-to-onely drawn lines is vital. "We advocate basis and build loyalty. In most mar -systems which test efficacy [of pro- kets in which we've worked, the cleargramming decision] rather than just winners are the Hot AC/Adult CHRchange the music balance. We can outlets which deliver demos 25-45.help stations create prototypes, and European markets have evolved sotest them relative to current perfor- quickly, but the sales houses have not.mance and relative to competitors." I am told constantly [by them] that

But, as with an aircraft, course older demos are worthless. So, inchecking has to be frequent. "A com- order to be market leader in the demomercial aircraft needs its instruments 25-45, programmers need to look atfor the whole flight. They don't just stealth marketing tools to build loyal -plot the course and then turn all the ty. Database marketing is the biggest

trend to build loyalty and achievemarket leadership in the 25-34 demo-graphic. One-to-one marketing toolsthat we use in the U.S. with great suc-cess can be adapted for use in specificEuropean markets. Building partner-ships with European database mar-keting firms is the next step."

As Tim Grunert concludes,research has changed at Energy overthe years. "It's become a lot better. It'sbecome more detailed and it coversbigger parts of our programming.Research has also become more reli-able. It's not just about music anymore. Market research helps us to seewhere we are and what our image is;it helps us form our image. That'swhere radio is going. Radio is becom-ing a brand image."

Additional reporting by Ed Meza in Berlin

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ARTISTS & MUSIC

Zucchero still enjoying sweet success

by Mark Dezzani

MILAN - Zucchero 'Sugar' Fornaciari's newalbum Bluesugar (Polydor) is a turning point,says the artist, signalling a more internationalsound and contemporary rock style. Releasedglobally (except UK, Spain and Latin America)on November 5th, the album was recorded usinga new 4 -piece band, with strings arranged byWill Malone whose orchestration credits includeThe Verve.

"I used to have a lot of Delta Blues, Gospel andMemphis influences," explains Zucchero. "Thisalbum is more British in its feel, and I describe itas a voyage from [Delta Bluesman] RobertJohnson to [Brit rockers] Radiohead, passingthrough Italian melodic song." In addition tovocals, Zucchero also plays the mellotron organ,synths and rhythm guitars, and his longstandingproducer Corrado Rustici plays lead guitar.Stevie Winwood guests on Hammond organ onthe haunting rock ballad Arcord, and MarkFeltham plays harmonica on the first track, clas-sic Zucchero stomper You Make Me Feel Loved.

The lead-in single, Blu, was released toradio on October 1st in both Italian andEnglish versions, with the lyrics of the latterwritten by U2's Bono. Blu enters Music &Media's European Top 50 airplay chart at 31.It is this week's highest new entry in the

charts thanks to initial airplay in Italy,Switzerland and Poland.

Zucchero has sold more than 10 millionalbums worldwide since his first album (Un Po'di Zucchero) release in 1983. "Over half ofthose sales have been for his last two albums,1995's Spirito DiVino and two versions of TheBest Of Zucchero in 1996 and 1997," commentsElena Zannoni, international exploitationmanager at PolyGram Italy. The 1997 Best Ofincluded an extra track, Va Pensiero, an oper-atic ballad composed by Giuseppe Verdi, whichas a single helped break new territory. "VaPensiero charted in Sweden and Finland, andhelped the Best Of album to enter the charts inboth countries [Finland no.23 and Swedenno.53]," says Zannoni. "With the Bluesugarrelease we are looking to establish him as amajor artist in Scandinavia."

A duet version of the single Blu with Spanishstar Rosana Arbelo, titled Blu-Lo Que Sueno, isdue for release next February and will set up theBluesugar album for release in Spain and LatinAmerica next March. In the UK, releases of theBest Of album and a duet of Va Pensiero withSinead O'Connor are scheduled around 5 UK livedates in March 1999, according to Zannoni. Afteran autumn promotion campaign of press, radioand TV showcases in Europe, Zucchero embarkson a world tour starting in Italy on February 12th1999, including European gigs in the Spring andSummer for the rock festival circuit, and endingin Japan/Asia December 1999.

Robert Dekker, product manager, pop atPolydor Holland, says they expect to equal thegold status achieved by The Best Of Zucchero inthe Netherlands last year. "The key for us is theAC stations Radio 2 and Sky Radio," saysDekker, adding: "The ballads go down better herethan the rock songs, and the album has 3 or 4very strong ballads which are potential singles.Holland is very open to Italian artists and I'msure that Bluesugar will do very well."

Hunter: Knee -Deep In The Hoople (Again)by Paul Sexton

It was pure Mott The Hoople. Atthe London launch of the firstboxed set to honour those loveableoutsiders of the '70s glam scene,All The Old Dudes turnedup...except for Mott themselves.

A planned performance byseveral members of the band'sclassic line-up never took place,although frontman Ian Hunterand keyboard player VerdenAllen were on hand for a signingsession last September on theoccasion of the release of the 3 -CD Columbiaset All The Young Dudes-The Anthology andthe companion biography by Campbell Devine,published by Cherry Red Books.

The current revival of interest in glam rock,prompted by the new movie Velvet Goldmine,has boosted the package, lovingly compiled byDevine together with Mott's Dale Griffin as pro-ject consultant. Three Mott hits also appear oncurrent glam rock compilations, All The YoungDudes and All The Way From Memphis onVirgin/EMI's The Best Glam Rock Album In TheWorld...Ever! and Roll Away The Stone onDebutante's Flares & Velvet Collars album.

"I thought it was going to be the usual," saysHunter. 'They'd dig out the catalogue, it doesn'tcost much to do, and bung it out. But then Buff[Mott's Dale Griffin] got involved; he's very thor-ough and wanted it done properly, and Columbia

started going for it."Hunter remains fond of the

group's glory years, even if, as hesays, "Mott never really mademuch money. The most we evergot was £75 a week." It was notall glamour behind the makeupand silver flares, with successoften depending on basic sur-vival instincts. Hunter fondlyrecalls how Stan Tippins, theband's original singer and thenroad manager, made sure of agood turnout at a homecominggig at the stadium of Hereford

United soccer team. "We heard they'd only soldabout a couple of thousand tickets, and I think itheld about 8,000. So Stan goes into the two pubshe knows in Hereford and says 'Oh, I hear MickJagger's turning up!' It spread like wildfire andthe place sold out that night."

Mott eventually split up acrimoniously, butHunter is not one to wallow in the past. "I don'tseem to have got to the carpet slippers stage,looking back on days gone past. I'm a songwriternow. I manage quite well, thanks to other artistsrecording my songs."

Hunter's 1975 solo hit Once Bitten 7lvice Shybecame a top five U.S. hit in 1989 for GreatWhite, and the 1979 album You're Never AloneWith A Schizophrenic contained both Ships, aU.S. top ten single for Barry Manilow, andCleveland Rocks, now the theme of US TV'sDrew Carrey Show.

CD(DincrecpcDvs

by Gary Smith

HOUSE OF PARLIAMENTAlready receiving airwave and club support from Pete Tongand many others, Mothership Reconnection by Scott Groovesfeaturing Parliament/Funkadelic (Soma/UK) also packs adeeply sexy Daft Punk remix and radio edit. Based aroundthe original chorus of Mothership Connection, this is ashockingly good record with an off -kilter pop feel. The trackalso packs enough bass end punch to keep the clubs happy.One of the best singles of the year.

JAGUARAfter the Scandinavian suc-cess of Angels Crying, set forDutch, German and Frenchrelease this month, E -Type'sfollow-up, Here I Go Again(Stockholm Records/Sweden),once again goes for the jugu-lar. Packing several hooks anda peppy eurobeat, the track islushly produced with morethan a hint of Jim Steinman's"more is better" approach.Pure pop, very Scandi andvery programmable.

STRANGENESS AND CHARMU.K.-based Rephlex has already boldly and conclusivelyproved that a bit of strange is a very necessary aspect of

firstby Pop Device combines sassy keyboards, a gritty vocaldelivery reminiscent of Captain Beefheart and a thunderingheadnod beat. Second Track, by Indigenous Tribe, is a moreorthodox slice of hip hop with a dreamy chorus and dualvocals. Excellent.

A NORWEGIAN THANGNorwegian label Thang Records has a well defined mission:to produce music modelled on the underground sound ofAmerica. Hence the fact that their first compilation, Dusty &Dirty Thangz Volume 1, is unapologetically a party album.Combining funky garage, deep house and dirty disco, this isone more album that proves one is not obliged to be fromNew Jersey to make deep, funky music with an edge. Fromthe pure garage of N.U.G. feat. Easton Davies to DJTripman's trippy High and the glutinous Dig This by NubianSoul, this is a very solid collection.

ROLL OVER KING TUBBYFollowing ecstatic reactions to Superth.ruster I BallisticAffair from Gilles Peterson at Radio 1, Jonathon More fromKISS FM and a uniformly enthused specialist press, PalmPictures have released two more EPs by Sly & Robbie/HowieB. Over six tracks the trio mix deep and dirty dub with tone,rhythm and texture that owe much to the '90s.

The pairing has, on Into Battle, resulted in spacy, mini-mal but highly charged music with one foot in all thingsrootsy and the other charging into the next millennium.Drilling For Oil echoes the lush ambience of the Art Of Noisewith piano and synthesizers weaving a genteel tune, whilePscionce Merge sounds like Grace Jones' My Jamaican Guycoming live from outer space.

Exodub Implosion pushes the envelope further.Combining an upful groove with a riffy bass synth, melodicguitar, horns and tibetan drones, the track is one of the mostsuccessful stylistic collisions of this year.

A further EP with an Ashley Beedle remix of SoftcoreSurge is out in January.

All new releases, biographies and photographs for con-sideration for inclusion in the Dance Grooves columnshould be sent direct to: Gary Smith, c/o. Roger deLluria 45 -3° -2, 08009 Barcelona, Spain.

MUSIC & MEDIA NOVEMBER 21, 1998AmericanRadioHistory.Com

.

'

AmericanRadioHistory.Com

The 30 TrackDouble Album

Includes:I Believe I Can Fly

Gotham CityHome Alone (featuring Keith Murray)

Half On A BabyI'm Your Angel (duet with Celine Dion)

OUT NOW

Management / Direction Barry HankeisonMidwest Entertainment Group

AmericanRadioHistory.Com

SALESweek 47/ 98 Eurochart Hot 100® Singles ©BPI Communications Inc.

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Believe A.B.DK.F.D.IRE.NL.S.CH.UK0 3 4 Cher - WEA (Rive-Droite 'Warner Chappell) 34 I Just Wanna Be Loved18 4 Culture Club - Virgin (EMI)D.IRE.UK Calcutta (Taxi Taxi Taxi)

*65 16 Dr. Bombay - WEA (EMI /TG)DKD.N.S

No Matter What A.B.DK_DIRE.1VL.N.S.CH.UK.HUN2 2 15 Boyzone - Polydor (Really Useful I PolyGram) 10How Deep Is Your Love D.NL.CH.UK

88 4 Dru Hill feat. Redman - Island (EMI I Various)Are You That Somebody? D.NL098 2 Aaliyah -Atlantic (Virgina Beach IWC I Herbalicious I Black)

I Don't Want To Miss A Thing ARDKERGREJRKIELIV.S.C.BUK3 1 Aerosmith - Columbia (Realsongs) C.1)* Ta.Daydreamin'na

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Pras Michel feat. ODB & Mya - Interscope (Alley Gaily/Joe P)Home Alone UK

rEI- P R. Kelly feat. Keith Murray - Jive (Zomba I MCAT Price Is Right)

Flugzeuge Im Bauch5 6 7 Oli P. - Hansa (Gronland)AD.CH

C)I Want You Back B.F.D.1REIVL.S.CH

45 9 Melanie B. feat Missy`MisdemeanorElliot Virgin (WarnerChappellIWindswept Pacific) 72 57 21Bailando A.D.NL.CHLoona - Motor (PolyGram)

Outside AB.DKFIN.F.D.GREIRE.INLISLE.S.CH.UKHUN6 4 4 George Michael - Epic (Dick Leahy)Viva Forever B.F.D.I.NL.S.CH.HUN

39 33 17 Spice Girls - Virgin (Windswept Pacific I PolyGram) 73 60 5How Much Is The Fish?Scooter - Club Tools (Loop Dance I Hanseatic)

B.NL

On Crush AB.DE.F.D.IRE.NL.N.E.S.CH.HUN8 10 Jennifer Paige - Edel (Various) I Want To Spend My Lifetime Loving You F:NL76 2 Tina Arena & Marc Anthony - Columbia (Not Listed) Believe11982 3 Antiloop - Stockholm (Not Listed)DKNS

Belle BY8 7 22 Daniel Lavoie - Pommel Sony I Universal (Not Listed) 3

Guess I Was A Fool IRE.1VL.UK" Another Level - Northwestside (Yab Yam I Rondor) 75 44 4Gym And TonicSpacedust - East West (EMI)

EIRE. UK

***** SALES BREAKER *****If You Buy This Record FIRE.LUX

0 70 2 The Tamperer Feat. Maya - Jive/Time (Inflatable Love) JaimzlWarner Chappell)

La Tribu De Dana27 Manau - Polydor (BMG)

B.F.NL Are U Ready?*83 2 Organic' - M6 Int. (Not Listed)F

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Would You...0 11 3 Touch & Go - Oval IV2 (Oval)IRE.NL.UK Little Bit Of Lovin' UK

'la .3 Kele Le Roc -1st Avenue !Wild Card IPolydor (Warner Chappell) ®Ds'On Top Of The WorldDiva Surprise feat, Georgia Jones -Do It Yourself( Position (Scorpio I MCAIEME

UK

C)12 6

C)23 13

C)50 4

Chanter Pour Ceux Qui Sold Loin De Chez EuxLaam - DLA (Not Listed)

5_F Deeper Underground46 37 17 Jamiroquai - Sony S2 (EMI)

B.F.D.1VL.CHRUN

55 63 3 S.O.S. (The Tiger Took My Family)Ns

Dr. Bombay - WEA (EMI /TG)

SimarikTarkan - Podis (Not Listed)

B.F This Is How We Party BY47 21 17 S.O.A.P. - S.OAP. I Sony (EMI I Copyright Control) 011>

This Kiss UKFaith Hill - Warner Bros. (Puckales a INamad-Noman I WC I Almo I Anwa IBNC)

FAnother One Bites The Dust AB.DK.D.IRE.NL.CH.UKQueen feat. Wyclef Hean & Pras Michel - Dreamworks (Queen I EMI) @

Boom, Boom, Boom, Boom51 3 Vengaboys - Violent /Jive (Violent' Peermusic)

13.NL

8279 4FreeBacon Popper - S.A.I.FAM. (Not Listed)

15 Thank UAB.D.GRE.IRE.LNL.NS.CILUK

9 4 Alanis Mmissette - Maverick 'Warner Bros. (MCA)Bye Bye49 28 23 Menelik - S.M.A.L.L. (BMG)

BY

83 48Sex On The Beach UK

9 T -Spoon - Ala Bianca I Control / Edel (Ala Bianca/ More/ EMI)

God Is A DJ A.B.DK.D.GRE.NL.N.S.CHis 13 11Faithless- Cheeky I Zomba I Intercord (Champion 'Warner Chappell I BMG)

1417

Brother Louie '98 FSis Modern Talking - Hansa (Blue Obsession I Warner Chappell /Intro)

Music Sounds Better With You A.B.DKF.D.GREIREDILAS.CH.IX

18 10 16 Stardust - Roul /Virgin (Zomba I Delabel /Daft /EMI)

Brand New Start'KV Paul Weller - Island BMG)

C'Est Beau La Vie0 ISV Doc Gyneco & Bernard Tapie - Virgin (Not Listed)Girlfriend

52 32 5 Billie - Innocent 'Virgin (Chrysalis)

UK

IRE.S.UK

Celebrate D.CHD.J. BoBo - Metrovinyl (Capricorn I EAMS)

Keini Triine MehGala - Phonag (Not Listed)

Straight From The HeartDoollally - Locked On (MCA)

CH

UK

Doo Wop (That Thing)Lauryn Hill - Columbia (Obverse Creation !Sony ATV) 53

Protect Your Mind D.CH39 6 D.J. Sakin & Friends - Club -Tune I Intercord (EMI) 87 85 12

Personne Ne SauraitPoetic Lover & Carole Frederick - M6 Int. (Not Listed)

ft" Immortality A.D.S.CHAU 19 22 Celine Dion feat. The Bee Gees - Epic 'Columbia (Gibb Brothers I Career I BMW

Falling In Love Again F.D.1REUK0 IN4r Eagle -Eye Cherry - Superstudio I Polydor (Warner Chappell)All About The Money54 41 4 Meja - Columbia (Lacarr I MCA)

F.D.NL.UK Lords Of The Boards*96 2 Guano Apes - Supersonic' GUN I Ariola (Artist Station I EMI)

C)Perfect 10 D.GRE.IRE.UK

55 8 Beautiful South - Go!Discs 'Mercury (Island) 89 78 2Body Movin' NL.UKBeastie Boys - Grand Royal /Capitol (PolyGrarnIWindswept Pacific)

Millenniumn 20 10 Robbie Williams - Chrysalis (EMI I BMW

That's My Way To Say Goodbye D.CH58 40 7 Christian Wunderlich - Chlodwig (Chlodwig I Grundy I Ufa) 90-58 5

Gangster Trippin' IRENL.UKFatboy Slim - Skint I Epic (MCA I PolyGram)

23 14 24 The Boy Is MineB.F.D.GRE.NL.S.CH

Brandy & Monica - Atlantic (EMI /Bran -Bran /Famous alenchi)57 42 8 Panique CeltiqueManau - Polydor (BMG)

BY8266 2 TestifyM People - M People I BMG (EMI I BMG)

IRK UK

We Like To Party B.D.L.NLCH0 30 12 Vengaboys - Violent I Jive (Violent I Peermusic)A.D.GRE.IRE.NLCH.UKDaysleeper

89 5 R.E.M. - Warner Bros. (Warner Chappell) 52 87 6Top Of The WorldBrandy feat. Mass - Atlantic (EMI I Ensign 'Zomba I M. Betha)

F.D.IRE.NL.CH

23 15 22 LifeABDKEDNL.E.S.CH

Des'ree - Sony S2 (Sony ATV I Ogidni)Rollercoaster 1RE.NL.S.UK

59 46 8 B*witched -Epic (19 I SugarFree IBucks IBMG IPolyGmmChtysalis)53 75 2 What's Your Sign

D.NL.UK

Des'ree - Sony S2 (Sony ATV 'Copyright Control)

Big Big World0 27 6 Emilia - Rodeo (Not Listed) ADKFINNL.N.S Wish (Komm Zu Mir) AD.CH60 49 13 Franka & Thomas Potente - Four/Columbia (EMI I BMG Ufa I MdE) CD r* Gell ABDJ Visage - Antler -Subway I EMI (Not Listed)27 22 20 Come With Me

Puff Daddy feat. Jimmy Page - Epic (Warner Chappell IEMI 'Remarkable)

A.B.F.D.GRE.IRE.NL.S.CHon 52 11 nlicFamily - Epic (Sony ATV)

AD.CH95 81 18 Amokk

B.DICYS

666 - House Nation 'Dance Street (I & Ear I Activate)

2626 4Once Upon A TimeDown Low - Zyx (Famous I BMG Ufa)

AD.CH ADIRE.UKHUNTrue Colors62 56 2 Phil Collins - Virgin I WEA (Sony ATV) 95 93 3

I Belong To YouLenny Kravitz - Virgin (Miss Bessie I EMI)

FORE

29 25 29 Stand By Me4 The Cause - RCA (Melodie Der Welt)B.FIRRNL.S.UK Tell Me Ma IRE.UK

63 53 2 Sham Rock - Jive (Skin -Rome I Leosong I Zomba)PrayTina Cousins - Eastern Bloc /Jive (Not Listed)

NL.UK

Si 'Eu M'Aimes0 36 9 Lara Fabian - Polydor (Not Listed) BY Mysterious Times B.DILF.CH64 59 16 Sash! feat. Tina Cousins - X -IT (Step By Step) CD0 Solo Una VoltaAlex Britti - Universal (Not Listed) I31. 29 5 My Favourite Game

D.GRE.IRE.NL.S.UK

The Cardigans - Trampolene I Stockholm (PolyGram) @If You Believe

71 2 Sasha - WEA (Click I BMG Ufa)

D.CH Love Like This UKFaith Evans - Puff Daddy 1 Arista (EMI 'Warner Chappell I Sony ATV)

Lambe An Dro111-- 4' Matmatah - Trema /Sony (Not Listed)0 Egoist38 10 Falco - EMI (Gluck /Diana) AD. CH @ Doodah77 6 Cartoons - EMI -Medley (Not Listed) B.DK.S

Blue Angels RIRE.S.LIK33 24 2Pras - RuffhouselColumbia (Sony ATV 'Tete San Ko GibbBros I BMG IT -Bass) 0 Everybody Get Up67 11 Five - RCA (Rah /Sony ATV I Mega) B.D.IRE.NL.S A= Austria, B Belgium, CZE = Cseeh Rebublic, DK = Dolma, FIN = Finland, F =France,D,. Germany, IRL = Ireland I ultalgHUN= Hungary,NL= Netherlands, N =Nonvey. E=Spain.S. Sweden, C71= Switsetiand, UK _,Illited1Cmgdom0 SALES MOVER [2:00, NEW ENTRY I:1>s RE-ENTRY

*****A SAIES BREAKER *Irk*** indicates the single registering the biggest increase in chart points.The Eurochart Hot 100 Singles is compiled by Music & Media and based on the following national singles sales charts: ChartTrack (UK); Ireland; Full chartserviee by Media Control GmbH 0040-7221-366201 (Germany); SNEIMFOP Tite-Live (France);

singles, Musics E DischifMario De Luigi, albums: FimiNielsen (Italy); Stichting Mega lip 100 (Holland); Stichting Promuvi (Belgium); GLF(IFPI (Sweden); DTI/Nielsen Marketing Research (Denmark); VG (Norway);ALEF MB)AFYVE (Spain); YLE 2 Radiomarm/IFP1 (Finland), Austria Top 30 (Austria);Full chart service by Media Control AG 0041-260-4455 (Switzerland); IPSOS/Mabasz-IFPI (Hungary) IFPI (Czech Republic).

MUSIC & MEDIA 0 NOVEMBER 2 1, 1 9 9 8AmericanRadioHistory.Com

50FVf4°

1001111 --

Economic andMonetaryUnion inEurope

and its effect onthe music industry

1 January 1999, eleven European nationalcurrencies will be replaced by a single currency-the euro. Economic and Monetary Union (EMU)will change fundamentally the business landscapeof Europe.Doing business in this new "eurozone" will be

radically different. New rules will apply.Competition across borders will increase and itwill be harder to maintain price differentials indifferent markets.What impact will it have on the prices of CDs?

Which territories does it affect? Will there be apush towards centralisation of distribution? Howwill it affect financing arrangements?To help you develop your response to EMU, this

guide has been prepared by Music and Media inassociation with business advisers andconsultants KPMG. It sets out the key facts aboutEMU and outlines the issues for record labels anddistributors, retailers and other companiesconnected with the music industry. We haveincluded a checklist to help you identify your EMUrisks and opportunities.

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The background on EMUWhat is EMU?EMU is a process which began with the 1992 Treaty of Maastricht, designed tocreate a single, borderless and unrestricted European trading zone. The intro-duction of the euro is intended to remove the key obstacle to that ambition:the presence of local currencies whose values fluctuate against one anotherand which are subject to the influence of national governments and banks.

Who will jcriraIn May 1998, at a summit in Brussels, EU heads of government selected themember states who will participate in the first wave of EMU, using criteriadesigned to ensure that the combined economies of countries joining the singlemarket would create a stable environment. Twelve of the 15 EU memberstates said they wanted to join. Eleven were accepted: Austria, Belgium,Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands,Portugal and Spain.

The result will be a euro-market of some 289 million inhabitants, containingmost of Europe's largest economies with a combined GDP of$5.7 trillion (or 4.75 trillion euro)-a figure surpassedonly by the USA.

The timetableFrom I January 1999, the 11 participatingcountries will lock their currencies toone another and to the new Europeancurrency unit-the euro. The eurowill become the currency for theeurozone and national currencyunits become local "expressions" ofthe euro.

Control of monetary policy willpass from national banks to theEuropean Central Bank (ECB), anda single official inter -bank base ratewill apply across participating states.Currencies of participating states willonly be listed on foreign exchange mar-kets as national currency units of the euro.No euro notes or coins will be issued for thefirst three years. The euro will start life as a sole-ly electronic currency.

On I January 2002 euro notes and coins will be issued.From that date all business activities undertaken in the eurozone willhave to be conducted in the euro. Old national currencies will be given a maximumof six months to be withdrawn, meaning that by I July 2002 at the latest, the oldnational currencies will cease to be legal tender. In some countries, such asGermany, France and the Netherlands, this process is likely to be much shorter.

You can find current approximations of the exchange rates of the nationalcurrencies against the euro in the Financial Times. The driving point at 1January 1999 is to translate 1 ECU to equal I euro.

Countries not in the first wavesGreece was excluded from the first wave, and Sweden, Denmark and the UKhave elected to stay outside the eurozone, at least for now. But businesses inthese countries will still feel the effect of EMU even if they do not seek toexploit any of the opportunities the single market creates. As an example, forthose companies trading in the eurozone, there will be implications for curren-cy hedging strategies. Domestic companies could find there are changes in theinward and outward investment flows in their sector, and the sectors whichthey supply.

What does EIVILI mean for themusic industry?What will your cashier do if presented with a euro cheque? How well will yourpurchasing department be able to respond if a key supplier asks to be paid ineuro? How will your salesforce react if a buyer requests quotes in euro?

The impact of EMU can be divided into two main areas: strategic and oper-ational. At a strategic level, the introduction of an alternative currency for theconsumer requires retailers to reassess how they sell music products. In partic-ular, a review of pricing policies is advisable, at both micro (particular store ormarket) level, and at macro (comparative pricing across territories in the euro-zone) level. This re-evaluation of pricing will lead to a re-evaluation of the dis-tribution processes. The record labels and their distribution arms will need tounderstand how best to adapt to the consumer pressures which the retailersare experiencing. This may lead to increasing centralisation of manufactureand supply. Operational issues will include the adaptation of information sys-tems to accept and correctly translate euro denominated prices. EMU may

"It is going tohave to take its time

to work through. In theshort term, euro adds toour problems. In the longterm, it sounds attractive

and sexy"Rupert Perry

president Europe, EMI

also influence the management of supplier relationships and human resources,as well as posing financing, accounting, tax and legal issues.

Strategic issuesChoosing the pricing pointFrom 1 January 1999, consumers in the eurozone will be able to pay for pur-chases with a euro cheque or credit card. The processes needed to accepteuro payments, including IT, will have to be reviewed. Retailers should alsoexamine their price planning strategies.

Some retailers are planning to display prices of the product in both local cur-rency and in euro. This has significant implications for price planning. In manyenvironments, the psychological price point of 99 is used (eg £14.99). If wetake the example of a CD retailing in France for 99 francs, a direct equivalentprice would be about 14.78 euro. There is a logic which might "round -up" thepricing point to 14.99 euro. However, the trust of the eurocustomer is criticalin ensuring acceptance of the euro. Practices which attempt to hide priceincreases behind the mask of euro translation will be condemned. If dual prices

are displayed, it will be necessary to ensure that there is a directexchange translation.

The retailer is then faced with the choice of which curren-cy is used as the "driving" price point and how to manage

the transition from 'old' national currency price pointsto "new" euro ones. In our example, the retailer

may decide to use the 14.99 euro as the drivingprice point, and to use a domestic currency

translation of100 francs.Many observers anticipate that psycho-

logical allegiances to national currencies willremain for as long as paypackets remain innational currencies, and thus the euro willnot be the driving price point for sometime. However, some retailers are alreadyinvestigating various pricing strategies.

Different territories are adopting differentapproaches. In the Netherlands, for example,

retail groups have argued against dual pricingand the practice of accepting euro denominated

payments, on the grounds that dual pricing will beconfusing to the consumer and expensive in terms of

IT and financial costs.But in France, by comparison, some supermarkets,

restaurants and other retail outlets have already begun issuingreceipts which translate the total into the euro equivalent.

Prices harmonisationacross the esurcszconeCurrently, the prices of CDs and other sound carriers vary throughout theeurozone. At retail, variation is largely blamed on differing VAT levels betweenthe territories. At distributor level, exchange rate fluctuations are often citedas a reason for the differences. The fixed nature of the euro conversionsremoves this factor, and will lead to more questioning of the price disparitiesbetween territories.

Consumers will be able to compare prices more easily. For people who trav-el around the eurozone, significant differences in euro prices may be noticed.This will be particularly relevant to pan-European retailers such as FNAC andVirgin Megastores. Consumer pressure on retailers will be passed on to suppli-ers as pressure to equalise their prices.

The ease of mail order and the rise of the Internet as alternative distribu-tion channels are likely to act as additional forces for price harmonisation.Current large price differences will attract parallel imports, forcing prices downin retail outlets. National consumer groups and the media could also exertdownward pressure on prices. Ease of price comparison will be particularly rel-evant to on-line retailers. On-line purchasers will need only a few clicks tocompare CD prices on different websites.

These pressures will challenge the current practice among retailers and dis-tributors of negotiating different contracts for different territories. Retailerswill seek to obtain from their distributors distributors the best supply priceavailable in the eurozone. Pan -European retailers may seek to aggregate theireurozone sales to push for better supply discounts and volume rebates. Inresponse to these pressures, pan-European contracts, denominated in euro,may be forced upon distributors. At a certain point, it may be appropriate tocentralise all distribution for the eurozone. This will alter the myriad regionalretailer/supplier relationships which currently exist.

Centralisation will give an advantage to those organisations which canexploit the best supply prices, and those which can gain economies of scale byaggregating contracts over their European activities. For this reason, manyobservers see that the French hypermarket groups, which have already used

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similar concepts to gain market advantage in their home territory, are in a par-ticularly strong position to take advantage of trading across the eurozone.

Impact on costsCentralisation of distribution poses a number of challenges, but principally howto optimise response time to customer ordering. Supply chain processes willneed to be modified to meet this challenge. Cost structures will also have to bereviewed to try to maximise efficiency. Companies may well revisit their man-ufacturing costs since the single currency will enable them to compare oneeurozone location with another more easily.

Cost reviews could also drive companies to consider shared services, or theoutsourcing of non -core activities. Current collaboration in the distribution ofmusic will gain added impetus. We may see retailers turning to separate suppli-ers to negotiate purchase terms, while ordering and physical distribution are sat-isfied by one or two key specialised companies with networks of supply outlets.

Strong or weal< euro?The euro will become the reference currency for Europe. The economichealth of the eurozone as a whole will thus determine the strength of the cur-rency against other major currencies such as the US dollar, Japanese yen, andSterling. This will influence exports of music to non-eurozone territories. If theeuro becomes particularly strong, the price of eurozone exports may be pro-hibitively expensive, and cheaper imports more accessible.

Issues for broadcastersFor radio and other broadcasters, strategic issues will be less complex. Theymay find a shift in advertisers' methods of obtaining coverage across the euro-zone. A desire to centralise marketing campaigns may result in agencies seek-ing media outlets which can easily deliver a pan-European audience.

Operational issuesIn addition to the strategic impact, there are key operational factorswhich need to be addressed following the introduction of the euro.

Systems: the biggest costFor companies with operations in the eurozone, and those trading with euro-

zone countries, IT systems will need to be upgraded or changed to enablethem to recognise and process the euro. This is seen as potentially the largestsingle operational cost companies face in becoming "euro ready." It is worthconsidering carefully the future benefits and costs of either upgrading yoursystem or changing it completely.

Any systems handling financial data, such as accounting, billing, payroll androyalty systems will be affected. Of particular importance will be the informa-tion systems which handle stock records. Retailers and distributors will need tohave systems which are able to hold prices in both local currency and euro.The systems will need to address both the purchasing cost side and the sellingprice side.

When an amount in local currency-such as French Francs-is convertedinto euro, rules apply about the number of figures and decimal places whichshould be used in the conversion calculation before rounding the final figure totwo decimal places. There is an additional complication for systems to dealwith if a company wants, for example, to convert French Franc data intoItalian Lira. EU regulations state that this calculation must be done through theeuro: so, French Francs are first converted to euro and then into Italian Lira.IT systems must be capable of complying with this rule on currency triangula-tion in their multicurrency functions.

But the cost of upgrading your systems to be able to trade in euro does notstop there if you have operations in the eurozone. As the euro becomes theonly legitimate currency on 1 January 2002, systems will have to run conver-sion routines before this date to convert the base currency of the business tothe euro. Companies should pick their conversion date carefully, since once allfinancial data have been converted to euro it will potentially be expensive-and in some countries impossible-to return to local currency.

Client and supplier relationshipsIt's advisable to talk to your key clients and suppliers about their plans for eurotrading and agree a way forward. Where the trading relationship is within theeurozone, the question is: can you agree a mutually convenient date forswitching from a national currency to the euro? If one party is outside, theoptions are either to move to the euro or to trade in a non-eurozone currency.While the "no prohibition, no compulsion" rule is designed to allow companieswithin the eurozone to move over to the euro when it is convenient for them,those firms operating in the zone in a national currency of the zone will belegally obliged to accept payments in euro from January next year. Although

Understandingdigital.

Digital technology is revolutionising the broadcast

and music industries - and raising countless

questions about how you should respond.

As one of the world's premier business advisory

firms, KPMG can help provide the answers. Our

specialist Information, Communications &

Entertainment (ICE) practice offers its clients the

support necessary to address the digital revolution.

From licenses bids to the tax implications of internet

sales, we are here to offer analysis, guidance and

advice on the business issues you face.

For expert assistance you can count on, contact:

Kevin Parry, kevin.parry@kpmg.co.uk or Paul Styles,

paul.styles@kmpg.co.uk or call on 0171 311 1000.

www.kpmg.co.uk

It's time for clarity.

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companies based outside the eurozone may technically not haveto, in practice UK or US based companies are unlikely torefuse to accept euro payments from a valuable cus-tomer or supplier.

During the three-year transition period, busi-nesses should consider if they want to have dualdisplay invoices showing the payable amount inboth local currency and euro. Such a decisionclearly has implications for IT systems.

FinancingThe bank is a key organisation to contact earlyon in your EMU preparations. You need to estab-lish if it will be able to accept euro payments,whether this will involve opening a new accountand if there will be any charge for convertingbetween the euro and national currencies. If you area company running separate European currencyaccounts, the introduction of the euro will enable you torationalise the number you hold. Companies will have lessneed to translate currencies, resulting in lower transaction costs.They may also be able to pool cash resources, gaining financing efficien-

cies.

Deeper integration of European capital markets, coupled with a single cur-rency, will enable firms to benefit from new funding and investment opportu-nities. Southern European eurozone members especially should see significantreductions in base rates as they link to EURIBOR (the new Central Bank inter-bank base rate). This new economic environment, together with increasedcompetition in the financial services sector, should enable companies to getbetter credit terms and better returns on their investments.

Accounting 8L taxationCompanies or subsidiaries based in the eurozone should decide when theywant to start filing accounts in euro, bearing in mind that accounts will have tobe presented in euro from I January 2002. The ability of the statutory authori-ties to accept tax and social security returns will have an impact on the deci-sion. These vary in different eurozone countries, and companies should checkor seek advice about the approaches adopted in different nation states.

Although the introduction of the euro is regarded as a "tax neutral" event,tax regulations regardin