Zappa Looks East From The West
By Lee Zhito
When Frank Zappa, who is better known for his anti-establishment views than entrepreneurial exploits, recently emerged as an East-West wheeler dealer, IM&MC decided to bring him aboard this year's conference as a keynote speaker. His topic, Rock Around The Bloc, promised to enlighten registrants with his experience in doing business in the East. Unfortunately, illness has forced Zappa to cancel his address. Unable to deliver the man himself, Music & Media interviewed him so that conference delegates will not be denied his thoughts on the subject. The interview was conducted at Zappa's Hollywood Hills home by Lee Zhito, Billboard's former editor and publisher.
Q: You have the image of being quite an authority on Eastern Europe, how did this happen?
A: I went there for the first time in February of last year, I've since been to the Soviet Union five times and to Czechoslovakia once. I wouldn't say that makes anyone an authority but that's five times more than my next-door neighbour. The first time I went was just as an anthropologist; I just waited to see what was really going on. I didn't go there to play, I didn't have an instrument with me, I didn't have a concert engagement, I didn't have any business deals either. But, by the time I finished my first week there I'd already started making deals.
Q: Will you be spending more time over there?
A: Yes, once my health problems clear up.
Q: Will you be exploring entertainment deals?
A: No, I'm not interested in that. I find it more interesting to talk with a guy from a tractor company than a record label. The tractor helps clear land and grow food. Everybody is always ready to be entertained but if you want a stable world you have to rely on things which generate political stability. What makes things stable, food or rap records?
Q: What opportunities do you see for the entertainment business in Eastern Europe?
A: You'll face a lot of problems in the entertainment field over there. Most of us in the West are shortsighted. We want profit right away. You'll get paid in soft, non-convertible currency. Booking a concert there means you won't get paid for the performance.
Other business people with products to sell or consumer goods to develop will be more likely to take the risk to establish themselves in a market. Little or none of the business I'm doing there is related to entertainment.
Aside from soft currency, Western investors face the basic problem of dealing with individuals who simply lack business knowledge. The people in the East have been living under a system that for years would not allow investment. They don't know the basic business terms we use in the West. You have to be prepared to be patient and give them some business education on the spot while you are dealing with them.
Q: Are the East European countries moving too fast to adopt Western methods?
A: It depends. I think the Soviet Union is moving too slowly. Other countries are progressing at about the right pace, although some of their people in their impatience, contend that they too are dragging their heels.
In Czechoslovakia, for example, there's debate within the government as to how fast the economy should be changed. If they take the fast route, as they attempted in Poland, then it's going to mean unemployment and hardship. There are those who have seen what's happened in Poland and fear fast change.
Q: Did Poland falter in its eagerness to get going?
A: Poland is a different situation. Their economy is in such bad shape. The people were deprived for so long. The type of deprivation they're experiencing now might not be that much worse than what they suffered before. Whereas in Czechoslovakia, their standard of living was actually pretty good. If the Czechs were to take the same approach that Poland did they would feel the crunch. Furthermore the population is much larger in Poland, thus aggravating the situation.
Q: How do Eastern Europeans view those Western firms that come over?
A: That depends on who you talk to. There are some in government who worry about large Western companies coming in virtually buying their country, changing their culture. There are others who are not that concerned. They would be inclined to say "sure, just as long as you bring cash".
There's no question that not only US firms, but some multinational companies, have exploited the people of countries they've dealt with. Eastern Europe does not want that. They want companies to come in and do business but they want to control the manner in which that business is done. They also want to control the extent to which foreigners can threaten their culture.
Q: What has been your experience in dealing with Eastern Europe?
A: Their lack of knowledge in business procedures and the language of business is a primary hurdle to overcome, particularly in the Soviet Union. They have exaggerated expectations of what doing business with a Western firm will bring them. They think that just because they sign a letter of intent to do a deal that this means instant millions.
Sometimes you have to explain to them the way things really are and hope they understand. This is what I've found in serving as a consultant and a matchmaker for people over there looking for a Western partner or a Western business that wants to take a product into Eastren Europe. Of course, I get paid a finder's fee for putting the deals together.
Q: What aspect of Western music and media have you found Eastern Europeans most interested in?
A: You'd be surprised at the sophistication of some of the rock presentations in the Soviet Union. For all the rest of the primitive state of their economy and the primitive state of parts of their society, I've seen rock shows mounted there with lasers, smoke, lights, big sound systems, group lip-synching, the whole thing.
Q: How do they get the equipment?
A: The groups I saw were all government approved so they wouldn't have any problems getting what they wanted. Furthermore, the performance was for a TV special. There were 10 or 20 groups with each doing two selections. They were all well rehearsed, dancing, singing, performing with ease in front of the cameras.
The audience appeared unimpressed. Periodically, a few would stand up and shout "Yeah!" but they weren't dancing. There was nothing spontaneous about it. They understand the music but they don't know how to dance to it. If a few tried to dance, a soldier would come over and tap them with a stick. Actually, this was rather bland rock. A few heavy metal groups appeared but most of them on this particular TV show were basically very AOR.
Q: Are there any outstanding groups worth mentioning?
A: In Czechoslovakia there is a guy named Michael Kocab. He also happens to be a member of parliament now. Prior to this he had several albums to his credit. I saw a couple of unapproved groups that were interesting: Brigade C and a group called Nuance. Neither have a record deal yet although Brigade C are negotiating with Phonogram. Melodiya is the only state record company. It releases some rock, approved groups that won't do anything that might get them into trouble.
Now, Stas Namin has just established one of the first independent record companies. He's going to distribute his label through the stores owned by Melodiya which is a rather unique arrangement. He's also made a deal with Soviet Television to buy time, purchasing one hour every week on Saturdays. He will be able to promote the acts on his label. He also made a deal with a Finnish publishing company that has a rock newspaper that's also being published in the Soviet Union. Now he'll be able to promote his acts in print, on TV and get the product into the stores.
He's an interesting guy. His grandfather was Anastas Mikoyan, the Soviet leader between Stalin and Krushchev. He became a rock performer in the 70s selling millions of records and his connections in government have obviously helped him to get on.
Q: What advice do you have for companies wanting to break into Eastern Europe?
A: If you are a record company and you want to bring product into the Soviet Union the first thing you should do is have a discussion with Stas Namin. You have two choices when doing business there: you either go with the government because they own everything or you go with the entrepreneurs. If you get an entrepreneur who doesn't know what he's doing then you are in trouble. Stas knows what he's doing and my advice would be for record companies looking for a distribution deal to contact him.
It's different elsewhere in Eastern Europe. There is a company in Vienna called Globus which is now distributing throughout the region. It presses the records in Hungary and distributes them in Czechoslovakia, Poland and Hungary. Each of the communist countries had a central record company which was state owned. That monopoly controlled how many units were pressed and made available to the public. It was just another form of censorship. But, now you're beginning to get privately-owned labels operating.
Q: What timetable do you suggest? Should companies wait or move now?
A: It depends on the region. For instance, the largest group of consumers is in the Soviet Union with a population of 280 million. But investment there has to be seen as long term. Throughout Eastern Europe the markets are developing at different rates.
Q: Which countries do you believe offer the best opportunities?
A: Czechoslovakia and Hungary. Hungary started early but East Germany is developing very fast. Poland and Romania will have problems for some time to come because of the political infighting still going on. Yugoslavia is doing well, the Soviet Union will take a long time but Albania will take the longest.
Q: Is there an insatiable interest in the music of the West?
A: No. There is an insatiable desire for freedom. They want to feel free to be themselves not free to eat hamburgers or drink cola. Sure, there's an interest in music but they didn't have a revolution to buy Beatles records.
Q: What are the chances for Western-type broadcasting in the East?
A: Of course, all radio now in the East is state-owned, but I foresee tremendous opportunities for Western-style radio in Eastern Europe within the very near future. Even now there are some people who can't wait for privatisation and are already talking about setting up a pirate rock operation. If this becomes a reality the transmitter will be based in Estonia and the signal will span an area between Norway and deep into the Soviet Union.
Q: What would have been your main message in your keynote address?
A: If there are Eastern European acts attending the conference I would tell them not to base their expectation about the Western music business on pure fantasy. The entertainment business in the West is corrupt. Success here is not based on merit or artistic value. It is based on payola. It is based on the same kind of bureaucratic corruption that was to be seen under communist rulers in the East. The West pretends to be good and to give awards for things that are excellent when in reality those things are pure shit.
I would tell them they must understand when signing that big contract with a Western company that their records will not be played unless they do these things: give the person drugs or give the person money otherwise your record will go nowhere. Never confuse art with the shit that comes out through the record companies in the West. It is product, not art. Nothing gets signed unless some guy taps on his calculator and figures out the sales potential of the product.