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Business maestro: Klaus Heymann

  • Story Highlights
  • Heymann's classical music label, Naxos, sells over 7 million records each year
  • No music industry experience prior to starting the record label in 1987
  • Naxos undercut the competition with a no-frill approach to CD production
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HONG KONG, China (CNN) -- From piano concertos to violin masterpieces, Klaus Heymann knows his classical music -- and the classical music business.

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Klaus Heymann, CEO of Naxos, speaks at his Hong Kong headquarters.

His career path includes stints as a tennis coach and stereo equipment distributor, and he married a world class violinist before making his unlikely entrepreneurial debut in the music industry.

Today he has every reason to celebrate. His music label, Naxos, which quietly undercut the classical music market 20 years ago, is now selling more than 7 million records a year.

Andrew Stevens met the business maestro at the Naxos headquarters in Hong Kong to find out how he did it. Below is a transcript from the interview.

Heymann: I think the biggest advantage I had was that I did not come from within the industry. I looked at everything with fresh eyes. I never worked for another record company, I don't read music, I cannot play an instrument, I have no preconceived ideas. I was lucky to marry a world class violinist in 1974 and I think she has been my main, not mentor, but my main adviser.

Stevens: What drew you to music?

Heymann: Well, that's all my parents ever played at home so the very first record in our family was Hebrides Overture by Mendelssohn. I went to my first concert when I was nine years old at the end of the war in a place where we had been evacuated to. It just became an ingrained thing, I mean music [to me] was classical music.

Stevens: You started a business which was basically selling much cheaper CDs to a global market, how were you able to make them so much cheaper and able to make a profit?

Heymann: Well at the time the target was to be at one third of the price of the full price CD. We pegged the price at the ideal price point that would have been the lowest denomination bank note, and we had to start at the time in Eastern Europe, what we now call Central Europe, Czechoslovakia, Hungary where the orchestras were affordable and willing to work for us.

It was foreign currency income, the musicians were happy with the income. And of course because of the low price we sold lots and lots of CDs. We sold typically ten times what a full price recording of the same recording would have sold.

Stevens: How were you able to establish Naxos really as a leading global brand without your major rivals, the big labels coming in and trying to close you down?

Heymann: That's something I had been worrying about for the first 5 years. I was always looking over my shoulder and thought, "Well, they must catch on to what I am doing and then release also low price CDs with very valuable back catalogues."

But nobody took me seriously; "That crazy German in Hong Kong with the sponsored label, he won't survive much longer you know" and that really was very good, you know, uh, they really didn't pay enough attention to what we were doing.

Stevens: What's the most difficult thing about your job these days?

Heymann: It's really keeping up to date with what's happening on the Internet. The new business models that are being tried out. That's where it's happening, and nobody knows what our industry will look like five years from now.

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Stevens: Exciting or daunting?

Heymann: We've never had the reach we have now through the Internet. We have many more subscribers to our web site than people subscribe to the big music magazines. No, it's very exciting. E-mail to a friend E-mail to a friend

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