Martin Engstroem: 'This game is almost over'

Martin Engstroem has quit his pivotal role at Deutsche Grammophon. He tells Michael Church why it's getting tough for the industry

We're currently hearing a lot about the latent power of taped interviews: reading that Martin Engstroem has just vacated his pivotal role as A&R vice-president of Deutsche Grammophon, I go back to an interview I did with him in the Swiss resort of Verbier last month, where he was running the annual festival which is music's nearest approximation to Hollywood. Much of his talk was about the joys of the festival, but we did also deal with the record industry.

Engstroem radiates the good life and he wasn't thrown when confronted by the standard opening question about the record industry (and DG in particular) being in its death throes: "No, DG is still in the black." But the releases are steadily getting fewer! "No, 50 last year, and almost as many this. But it is getting tough. Our biggest problem is that CDs, unlike LPs, never die."

There were other problems too, he admitted, notably the existence of small independents who produce top quality stuff at budget prices, and who, unlike big firms, can take risks. Engstroem agreed that it's the dark horses that make the profits: DG did that with the soundtrack to Frida last year, and he promised other stunts soon, "because we don't make money on Mozart or Beethoven any more". "This game, in its present form, is almost over. Record companies can no longer shoulder all the risks, and I don't think it's fair they should be expected to."

As DG's chief talent-spotter, Engstroem was also frank about the way his priorities had shifted in "artists and repertoire". "Our releases are primarily linked to the artist, the star. People go to a concert, fall in love with the artist and buy their record. Yes, it's a big change, but it's one we have to live with. Ten years ago, you went purely for quality." But not now? "Of course, you still go for that, because we're still talking DG. But quality is no longer enough on its own. You have to listen to the market. We've recently signed a lot of charismatic young artists like Lang Lang and Hilary Hahn, because we feel that's where the energy lies." He agreed this runs counter to the old assumption that age and wisdom make the best music. "But that is not what the public says. To keep our figures in the black, we have to listen to the market."

At no point did he let on he was about to vacate his job for a consultative role, but I suspect demob-happiness lay behind his candour, and that his successor Bogdan Roscic, if asked the same questions, would be more circumspect. But if this is the unvarnished truth from DG - still a beacon of quality - how much grimmer must things be for the other big labels?