CD production in Macedonia started in the early 90's and replaced audiocassettes in a time where they dominated the music market. Our interest in CD-production was part of a larger pilot project to study the economic aspects of the CD-market in Macedonia.

    The music business has only a small portion of the market share of all business in Macedonia, but is showing steady growth, especially in the last decade. Because the entrance in the market is easy and unrestricted, there are new players with similar but not identical products. All of this defines the market as a monopolistic competition.

    In this paper, our interest in the music business in Macedonia will concentrate only on the aspects of CD-production. We selected three parameters which reflect the economic aspects of CD-production:
 

- Quantity

- Genre

- Cost of production

    The main problem we encountered during the data collection, was the limited, incomplete and in some cases distorted information.  To get more accurate data, we used a combined method of interviews with the producers, promotion materials for the new CD releases, and information from the Macedonian copyright society for mechanical rights. Still, we realize that our results only approximately reflect the real situation, and as we will see later, there is missing and incomplete data.

    The main sources for information were the following producers:
 

- Kokan Dimusevski from the Cassette production MRTV,
- Oliver Belopeta from the Skopje Jazz Festival

- Login Kociski  from Lithium Records

- Boban Milosevski from Avalon production

- Ivo Jankovski from Treto uvo (Third Ear Production) and

- Vlado Mandicevski

They represent the "big five" labels which dominate CD production and the CD market in Macedonia:
 

- the Music and Cassette production of MRTV

- the Skopje Jazz Festival

- Avalon production

- Lithium Records

-Third Ear Production

We will discuss these labels in terms of their number of titles, quantity, genre structures, costs of production and retail prices per CD.
 
 
 

1. Music and cassette production of MRTV
 

    This was the first and the oldest institution which initiated the production of records, then cassettes, and finally CDs in the 90's.

( Blagoja Ivanovski “Meditation” - Andante, Macedonian Philharmonic Orchestra  - MRTV production   MP3/Meditation.mp3  )
 
 

    As a part of Macedonian Radio and TV, which was a state-owned institution, this label made use of the recording facilities, and had access to the production budget.

    In fact, record and cassette production was established for the promotion of the recordings of the ensembles of Macedonian Radio and TV: folk instruments, traditional instruments, chalgia, big band, choir and chamber orchestra. These ensembles were very active in the 70's and 80's and had sufficient budgets for their concerts and their recordings. Nevertheless, the period of transition in the 90s contributed to constant cuts in the budget, and a decline to the extent that some of the ensembles do not exist anymore.
 
 

    The table and the graph show that MRTV production is oriented toward "pop" genres, and that MRTV organizes two festivals (Skopje 2001, and Cvetnici).

    The re-mastering and the printing of the CDs is done in Austria. Re-mastering costs are 20 000 denars and printing costs are 120 denars per CD. The retail price is in the range of 700-900 denars.
 
 

2. The Skopje Jazz Festival production

    The Skopje Jazz Festival is an institution which had consistent growth in the 80s and 90s. Even though it promoted a genre which at first glance looks distant from the local culture and tradition, it managed to attract a very large audience and to build a reputation as a prestigious festival not only in Macedonia, but in a wider sense in the Balkans and in Europe.

    In the mid 90s the Skopje Jazz Festival started a CD production promoting Macedonian musicians.

    This year, however, their production consists of only one CD:"Live at the Skopje Jazz Festival" with Toni Kitanovski (guitar) and Zoran Magirov (vibraphone).They printed the CD at "Sony Music" in Austria with the same costs as MRTV and issued 1000 copies. The retail price of the CD is 500 denars.
 
 

3. Avalon production

    Avalon production is a typical example of an emerging music business in Macedonia. Based on private initiative, the producers of this company managed to sign contracts with the most popular pop and rock singers from Macedonia, and promote them not only inside, but also outside of Macedonia. Their concerts are attended by thousands of teenagers who are in general the majority of the CD consumers.
 
 

The remastering is done in Austria, but the printing is done in Bulgaria for 60 denars per CD. The retail price for the CDs is 400-500  denars.
 
 

4. Lithium records

Lithium records built its "niche" in the CD market by promoting alternative, hip-hop, heavy metal and rock music. They also organize concerts for mostly teenage audiences. (AS 21)
 

( Superhiks  “Cekaj be vikam , kade be malku” -  Pesni glupavi lesni - Lithium records   MP3/Pesniglupavi.mp3 )
 

    This company owns the most popular CD-shop in Skopje (based on the results from the research on elasticity of CD demand in Skopje) and does its printing in Bulgaria for the price of 60 denars per copy. The retail price varies from 320-700 denars, depending on the popularity of the group (elasticity of supply).
 
 

5.Third Ear Production
 

    Third Ear Production dominated the production of CDs in 2001, mainly because of the success of two movie soundtracks.
 
 

The other two issues are in the broad category of ethno sound.
 
 

    They also print the CDs in Bulgaria for the standard price of 60 denars per copy, whereas the retail price per CD is 550-700 denars.

    In our next step we combined CD production data of the leading labels in Macedonia in order to get the results on the quantity of produced CDs, market share and genre structure.
 
 
 
 

As we mentioned at the beginning of our paper, this was a pilot study doing initial research on music businesses in Macedonia. We could only obtain some general information, which helped us come to the following conclusions:
 
 

 
 
 
 

- CD production in Macedonia grew in the past three years with the emergence of several new labels (Lithium Records, Avalon Production, Third Ear)

- there is a wide range of genres, so we can find almost all existing music genres typical of the global music environment, and genres typical of Macedonian music

- the movie soundtracks participated with the largest percentage in the marketshare

- the fixed costs for remastering are 20 000 denars and the fixed printing costs are in a range of between 60-120 denars per copy, depending on the printers (Austria or Bulgaria)

- the remastering and printing costs are the only reliable financial data; all the other costs are only rough estimations

- there are differences in the production costs, as some of the firms own production and recording facilities (MRTV) or use the recordings from concerts (live)

- the remuneration of the artists and other participants in the recording process is unknown

- we do not know the distribution and the marketing costs, which makes the final calculation of the profit of the different participants in the production and sale difficult to determine

- this results in problems in the collection of mechanical rights, as well.