New issue of Music & Copyright with Germany country report

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

Standing Committee publishes review of Canadian copyright law
The Canadian government’s Standing Committee on Industry, Science and Technology has published its review of the country’s Copyright Act. Depositions and testimony from numerous industry stakeholders went into the review and the subsequent report makes a number of recommendations and observations to the government as to how the seven-year-old copyright law should be amended. Rights holders were keen on several changes, such as the introduction of greater controls on user-generated content services and the creation of an administrative body to deal with site blocking. Music industry stakeholders also pushed for the removal of the radio royalty exemption. However, the committee took a more balanced view of the necessary changes. The report has been presented to the government as guidance and the recommendations are advisory only.

Hungarian royalty collections see third straight year of growth
Hungarian authors’ society ARTISJUS has reported a third consecutive year of growth in royalty collections, with the total for last year topping HUF20bn ($74.2m) for the first time. Private copying was again the dominant collection source. However, after two years of growth boosted by increased receipts from mobile handsets, collections in 2018 were only marginally up on the previous year. Total collections were also boosted by positive results from public performance, with ARTISJUS reporting higher receipts from the hospitality sector as well as ongoing improvements in payment discipline. Digital collections were down for the second year in a row. Furthermore, digital remains a minor revenue source for ARTISJUS members. The authors’ society said in its business report that the shift to streaming has presented collection challenges, not least from the higher collection and distribution costs.

Music lines up its gaming partnership plays
Esports – video games played competitively in front of spectators – is already a major entertainment sector and is set to become even more significant in the next few years. Millions of gamers around the world play leading interactive titles while listening to music, while the esports events themselves – often taking place in large arenas – usually feature live music performances to fill out the experience. Unsurprisingly, this is attracting serious attention from the music industry. Partnerships are the best way into this business for gaming ingénues, but those eager to grab a share of esports’ fast-growing revenue need to quickly firm up strategies if they are to cut through and be successful in professional gaming.

Germany country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Germany music industry report. Retail sales of recorded music in Germany have plateaued in the last few years. Although subscription and streaming sales have registered healthy growth, the gains have fallen just short of fully offsetting the drop-off of physical formats and downloads. Notable in last year’s sales figures was that subscriptions and streaming overtook CDs to become the biggest single revenue source. While sales may have failed to increase year on year, the greater the share of spending on access services the better the chance Germany has of returning to growth. Authors’ society GEMA also suffered a decline last year with collections and distributions both unable to match the previous year’s record levels. However, the underlying performance was positive as collections in 2017 were inflated by one-off payments. Moreover, collections exceeded €1bn for the third consecutive year. Live music remains a stable sector. Ticket sales last year topped the previous year’s record, and live music event collections by GEMA have increased in four of the last five years.

If you would like more information about the newsletter or set up a subscription, then send us an email

Advertisements

New issue of Music & Copyright with UK country report

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

SGAE committed to reform after CISAC suspends the society’s membership
Troubled Spanish authors’ society SGAE has been suspended from CISAC over concerns about the society’s operations, discriminatory treatment of rights holders, and unfair practices relating to the distribution of royalties. A report from CISAC containing recommendations for changes to the society’s governance rules, statutes, and royalty distribution practices was presented to SGAE over a year ago. A lack of progress on the confederation’s requirements resulted in the opening of a sanction procedure. Although CISAC said it has been working with SGAE for a number of months, a lack of progress on change has led to the authors’ society’s expulsion. SGAE has been embroiled in a scandal involving an alleged inappropriate and unbalanced television broadcast distribution scam. SGAE’s offices were raided by local police investigating claims made by some of the authors’ society’s members, who stated that SGAE was complicit in the scam. Despite the expulsion, SGAE says it is confident that it will be readmitted to CISAC after required changes are endorsed at the society’s June general assembly.

Sweden as a model for developed countries’ music subscriber potential
When music industry analysts comment about the potential future size of the music streaming and subscription sector, they often look to developing markets such as China and India, both of which have been re-energized after years of stagnation under the cloud of piracy. Certainly, the world’s two most populous countries have a central role to play in continuing the rise in recorded-music sales, along with several of their smaller neighbors. But many developed markets are still a long way from reaching their potential, and so for the next five years at least, these markets will remain the backbone of global growth. The paucity of official subscriber details means approximations and forecasts are the only way to plot the future of recorded-music sales. There are, however, one or two countries where granular evidence can back more precise estimations. Moreover, given the advanced position of some markets, the recorded-music sector has a model on which to base its future potential.

Podcasts are starting to look like a good bet for music companies
Record companies and music streaming operators are seeing value in the podcast and are investing in the content and production sides of the business. While both see podcasting as a way of increasing engagement with audiences, there’s also an opportunity for music streamers to increase their revenue outside their core music-listening businesses. Success lies both in making podcast discovery an easier operation than it is right now and in developing strategies to grab a decent share of the growing podcast advertising market – as far as the latter is concerned, those with data expertise at the heart of their activities ought to do best.

UK country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed UK music industry report. The UK’s music industry is experiencing a positive period at the moment. After several years of decline, recorded-music trade sales have now increased for three years in a row. Going one better, the retail value of recorded-music sales has risen for four consecutive years. Trade and retail sales have benefited from rising subscription sales, and streaming growth has more than offset a drop in spending on physical formats and downloads. Last year the UK retook third place from Germany in the global trade revenue ranking (see Figure 1). UMG extended its market share lead over second-placed SME, with the former gaining share and the latter suffering a decline. Royalty collections in the UK are on the rise, with both PRS for Music and PPL continuing to register record receipts. Live music continues to be the UK’s most robust leisure sector, with tours and festival appearances still a secure way for artists to generate revenue.

If you would like more information about the newsletter or set up a subscription, then send us an email

New issue of Music & Copyright with Finland country report

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

UMG fires back in US termination rights class action case
Major record company UMG has hit back in a case involving termination rights claims made by two musicians in the US. In February 2019, the musicians filed a class action lawsuit against UMG in a New York court claiming that the major label had refuted the artists’ claims on the grounds that the sound recordings are works made for hire and so not available for termination under US copyright law. UMG has now filed a motion to dismiss the claims. In its filing, UMG described the claims as without merit and detailed a number of reasons why. The major label said the two musicians did not execute any of the grants of copyright rights forming part of their termination requests. These grants were made by third-party companies, so only those companies could file for termination. UMG’s motion also claimed that the termination notices filed did not comply with statutory and regulatory requirements. The label also said the Copyright Act’s three-year statute of limitations barred the musicians’ claims.

TONO hits a new collection record; KODA reports a second year of DKK1bn+ receipts
Norwegian and Danish authors’ societies TONO and KODA have reported their financial results for 2018. TONO registered a second straight year of record collections and distributions, while income for KODA edged down but remained above the DKK1bn ($158.5m) mark. TONO’s results benefited from growth in all its main income sources. Digital registered the highest year-on-year increase, but there were also rises in collections from broadcast retransmission, live concerts, background music, and overseas. KODA’s results were largely shaped by a fall in broadcast income, which was the result of back payments being included in the 2017 total. Online receipts for the Danish society were up following gains in collections from interactive TV services and TV, film, and series streaming. However, a loss of certain repertoire saw music-streaming revenue decrease year on year.

How a no-deal Brexit threatens the free movement of touring musicians
Live events are an essential economic driver for musicians and performers, and the Department for Digital, Culture, Media and Sport said late last year that the creative and entertainment industries were worth £101.5bn ($130.8bn) to the UK economy in 2017. However, a no-deal Brexit could see all this running into serious trouble, and the touring of artists, festivals, musicals, sports events, and live events generally could be under threat.

Finland country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Finland music industry report. Finland is not quite a top-20 music market, but despite its modest global stature, the country is a market leader with regards to progress in the digital transition from ownership to access. Subscription services already account for around three-quarters of recorded-music trade earnings in the country, and this share is expected to edge upward as the previous reliance on physical formats continues to fade and sales of downloads disappear. UMG enhanced its leading position last year, with a modest rise in market share. SME held on to second place, ahead of WMG, with both companies suffering a small dip in share. Royalty earnings collected by authors’ society TEOSTO returned to growth, with receipts from home and overseas rising year on year.

If you would like more information about the newsletter or set up a subscription, then send us an email

Global recorded-music and music publishing market share results for 2018

Music & Copyright‘s annual survey of the recorded-music and music-publishing sectors has revealed the changes in global market share for the three major music groups and the independent sector. Recorded-music leader UMG maintained the top spot, with an increased share of digital sales fully offsetting a decline in the company’s share of physical sales. UMG also increased the gap on second-placed SME, with the latter suffering a fall in both its digital and physical shares. WMG’s share of digital sales edged down last year, but a higher share of physical sales boosted the company’s overall recorded-music market share. A repeat of last year saw independent record companies collectively account for the biggest share. Sony was unable to repeat the record year of 2017 for music publishing, with the company suffering a dip in share. UMPG registered the highest share gain of all the major music publishers, but the collective share of the independent sector accounted for the biggest share of the music publishing pie.

Share gains for UMG and WMG at SME’s expense
UMG had a 29.8% share of combined physical and digital recorded-music trade revenue last year, up from 29.7% in 2017. For digital revenue only, UMG’s share increased, to 32.4%, from 32%, while its physical share was down, to 23.4%, from 25.4%.

Record companies, physical- and digital-revenue market shares, 2017 and 2018
Source: Music & Copyright

SME was the second-largest record company, although its combined physical/digital market share was down last year, to 19.9%, from 21.9% in 2017. For the second consecutive year, SME registered a year-on-year fall in both physical and digital market shares. Furthermore, the company’s share of all recorded-music trade revenue, which includes licensing and other revenue as well as income from physical and digital music sales, was down to 20.5%, from 22.3%.

Record companies, total recorded-music-revenue market shares, 2017 and 2018
Source: Music & Copyright

The smallest of the three majors, WMG, experienced a reversal of its 2017 results, when the company’s digital share was up and its physical share down. Last year. WMG’s digital share slipped slightly, to 17.7%, from 18.1%, while its physical share grew to 13.4%, from 12.8%. Overall, WMG’s combined physical/digital share increased, to 16.5%, from 16.2%, and its total revenue share was also up, to 16%, from 15.8%.

Aside from the changes in the majors’ shares, independent record companies’ combined physical/digital revenue share was higher than the leader last year, at 33.8%. The independent company sector increased its share of both physical and digital revenue, but there remained a sizable difference between its physical and digital shares.

Another positive year for music publishing
In line with the way in which Music & Copyright determines global recorded-music market shares, music publishing market shares are also based on revenue received by each company. Music & Copyright has calculated that global music publishing revenue grew 11.4% last year, to $5.47bn, from $4.92bn in 2017. Sony was unable to repeat its record performance of 2017 and suffered a decline in global publishing share last year, to 26%, from 27.3%. Sony took the top spot in 2013, following the purchase of EMI Music Publishing (EMI MP) by a Sony-led consortium in 2012. Sony acquired an approximate 60% of the interest in EMI MP in November 2018. In addition to revenue from EMI MP, the company’s publishing share includes Sony/ATV earnings as well as income from Sony Music Publishing Japan.

Music-publishing companies, revenue market shares, 2017 and 2018
Source: Music & Copyright

UMPG was the second-largest music publisher last year. Music & Copyright estimates the company’s share increased, to 20.2%, from 19.5% in 2017. Furthermore, UMG registered the biggest share growth of the three major publishers. Third-placed Warner/Chappell’s share was up last year, to 12.3%, from 12%. The collective share of independent music publishers was also up, rising to 41.4%, from 41.2%.

If you would like more information about the newsletter or set up a subscription, then send us an email

New issue of Music & Copyright with Canada country report

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

Difficult year for SME as UMG, WMG, and the indies make recorded-music and publishing share gains
Music & Copyright’s annual survey of the recorded-music and music-publishing sectors has revealed the changes in global market share for the three major music groups and the independent sector. Recorded-music leader UMG maintained the top spot, with an increased share of digital sales fully offsetting a decline in the company’s share of physical sales. UMG also increased the gap on second-placed SME, with the latter suffering a fall in both its digital and physical shares. WMG’s share of digital sales edged down last year, but a higher share of physical sales boosted the company’s overall recorded-music market share. A repeat of last year saw independent record companies collectively account for the biggest share. Sony was unable to repeat the record year of 2017 for music publishing, with the company suffering a dip in share. UMPG registered the highest share gain of all the major music publishers, but the collective share of the independent sector accounted for the biggest share of the music publishing pie.

GEMA sees third consecutive year of collections over €1bn
German authors’ society GEMA has reported its financial details for 2018. Although collections and distributions were unable to match the previous year’s record levels, the underlying performance was positive. Collections in 2017 were inflated by one-time payments, and the exclusion of those extras meant total income last year registered healthy growth. Public performance and broadcasting, the two biggest collection sources, recorded another year of modest growth, while digital revenue grew sharply. The private copying total more than halved, but the 2017 collection figure was inflated by extra payments, so a year-on-year comparison is not strictly accurate. Overseas income edged down, while mechanicals continued to suffer from lower sales of physical formats. Total expenses were slightly reduced, but the decrease in income meant the cost rate increased.

TikTok gets serious with music as it clocks up the hits
Short-video sharing platform TikTok has seemingly come from nowhere to garner a seriously large following among young demographics around the world. While the service does lean heavily on record companies’ existing catalogs, it has also proved adept at enabling its video “creators” to unearth offbeat atypical tracks that then get serious traction. And TikTok has recently demonstrated that it can not only break emerging artists but also serve as a platform that delivers hits in the mainstream charts. Now it is up to TikTok to take advantage of those capabilities to become a leading music discovery channel in its own right, while record companies need to put resource into the video network as part of their A&R efforts.

Canada country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Canada music industry report. Canada is one of the world’s bigger music markets. Although ever present in the top 10, the country lost a couple of places last year, slipping from seventh to ninth. Canada was overtaken by China and Australia, with those two countries registering higher year-on-year growth rates in trade sales. Recorded-music consumption levels were up last year, but the increase in trade revenue was more modest. Although streaming income continued to rise, a big slump in sales of CD albums dented the overall market performance. UMG maintained its market share lead over second-placed SME with the former gaining share and the latter suffering a decline. Canada’s live sector is thought to have registered a positive year with attendance at music events up year on year. Preliminary results from SOCAN show royalty collections were up for the sixth year in a row with the level of royalties collected and distributed breaking previous records.

If you would like more information about the newsletter or set up a subscription, then send us an email

New issue of Music & Copyright with Indonesia country report

The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.

Pressing vinyl problems need tech solutions
There’s no sign yet of a collapse of the vinyl revival, and audience demand for the format is in sharp contrast to that of its onetime nemesis, the CD. The segment does face challenges, however, as supply problems continue to dog record companies – while there are no hard numbers available, there are plenty of reports to suggest that long wait times for orders tend to be the norm. The answer would normally be increased capex to build big plants and boost capacity, but that is not likely to happen. Rather, the pressing sector is increasingly characterized by small operations owned and run by audiophiles. The solution, then, is to increase productivity, and that means investing in technologically innovative production facilities that finally do away with antiquated machinery.

Apple issues its response to Spotify’s claims of discrimination
In March Spotify filed a complaint against Apple with the European Commission (EC), complaining that the US tech giant has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience. Spotify accused Apple of acting as both player and referee to deliberately disadvantage other app developers. The company also said that after trying unsuccessfully to resolve the issues directly with Apple, it had made the request to the EC for action to be taken to ensure fair competition. The following day, Apple published a statement refuting the Swedish streaming service’s claims. Apple also accused Spotify of suing music creators following a decision by the US Copyright Royalty Board to increase royalty payments to authors and publishers over the next five years.

Tencent Music Entertainment publishes the first financial results since its December IPO
Chinese music giant Tencent Music Entertainment (TME) has published its first financial results since the company’s IPO in December 2018. Although TME’s move to go public involved the publication of documents detailing historic financial and operating details, the latest results provide a good indication of how the company is currently performing. Moreover, the dominance of TME in the music subscription space also illustrates how China as a country is shaping up in the face of considerable expectation from both local and international record companies. Revenue for TME last year was up along with net profits. The number of monthly active users of the company’s music and entertainment services also increased, as did the number of paying users. The popularity of music was confirmed by the publication of the latest China Internet Network Information Center (CNNIC) report on the use of different services by online and mobile users in the country.

Indonesia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Indonesia music industry report. Indonesia is one of a number of countries in Asia that is considered by music companies to offer real prospects for future growth. Although the success of music subscription services in developed markets has turned around the fortunes of recorded-music sales, in most cases sales are slowing, and the likelihood is that there won’t be a return to the record years of the late 1990s. So, continued expansion at a global level beyond the next five years or so must come from the so-called emerging markets, and Indonesia has the potential to be front and center in this future growth.

If you would like more information about the newsletter or set up a subscription, then send us an email

Family plans and bundling are a big hit for music service subscribers

Ovum’s Digital Consumer Insights 2018 survey has provided some interesting answers to the question of how consumers subscribe to music streaming services. Certainly, the availability of multi-user plans as well as bundled offerings with mobile access have been a big success but, until recently, the precise popularity of the likes of family and student plans was largely unknown. The results of this Ovum survey clearly show that family plans are a hit with subscribers, so much so that they are keeping a lid on music streamers’ average revenue per user (ARPU). Also, despite bundle deals for music services through mobile operators becoming less generous, a sizable share of subscribers still gain access to music through their mobile operator.

Driving sales of recorded music in the last few years has largely been the responsibility of a small number of streaming services such as Apple Music, Deezer, and Spotify. These services have successfully convinced consumers that they do not need to own music but, for a fixed monthly fee, can access pretty much every track that has ever been released, or will be released, so long as they keep up the payments.
How users pay to stream music

Direct or as part of a bundle
Payment for a music subscription service takes a number of different forms. Consumers can either go direct to the service and pay monthly or make one single payment covering a year. That subscription can cover one person or a whole family (usually up to six people, including the account holder). Services also offer reduced-rate access for students. For a few years, users have also been able to take advantage of bundle deals with mobile operators that either roll in access to a music service for free with a mobile tariff or give a discount on the direct subscription price. The benefit for consumers is clear – lower-priced access to music. Mobile operators also benefit from increased “stickiness” of certain mobile tariffs, which boosts customer retention. However, as noted in the last couple of financial results presentations by Spotify, the rising popularity of discounted access plans has impacted on ARPU. No service has published precise details on how the total subscriber share is split by the different plans, but Ovum’s Digital Consumer Insights 2018 survey, conducted at the end of 2018, has shed considerable light on the uptake of the different plans.

Multi-user access accounts for a growing number of users
According to the survey, which took in the views of around 6,211 consumers spread across Australia, Brazil, China, Germany, the UK, and the US in December 2018, 60.7% of respondents said they took out a music subscription through a single package, while 34.7% said they accessed it via a family package, with the remaining 4.6% being students (see Figure 1). By country, the split offers some notable differences. For example, in the US, currently the biggest streaming market in the world, the family share was 43.4%, while in Brazil the student share was 9.9%. Given that a family subscription costs 1.5 times a direct subscription but provides access for the account holder and five other users, the survey findings suggest that the impact on ARPU could be significant, particularly if uptake of family packages rises faster than single-user subscriptions.

Figure 1: Share of music streaming subscription users by package, December 2018

Source: Ovum

Ovum’s Digital Consumer Insights 2018 survey also revealed details of access via bundled plans. Overall, 66.7% of subscribers held a direct subscription, with 22.2% of subscribers accessing a service via some form of mobile bundle, and 11.1% through a fixed-line service deal (see Figure 2). As with package access, there were differences by country. The UK had the highest share of direct subscriptions (76.3%), with China being the lowest (57%).

Figure 2: Share of music streaming subscribers by access, December 2018

Source: Ovum

Although bundled offerings with mobile and fixed operators have shifted over the last few years from being included for free with an access plan to simple billing arrangements, there are still plenty of bundled offers that give discounts on music subscriptions or extended free trial periods. Moreover, when respondents were asked about the addition or removal of a service bundle in the past 12 months, 24% said they added online music streaming compared to just 6% saying they removed music service access. So, at the moment at least, music bundling is still important for a significant number of consumers.

Despite music streaming’s advances, it is worth noting that music access is still a relatively new way of listening to music, so slight reductions in ARPU through discounted plans and bundled access are not a problem at the moment. However, the issue of costs to services is something worth keeping an eye on. Eventually, services may be forced into looking at raising prices, and the obvious first target is the underpriced family plan. As Ovum’s Digital Consumer Insights 2018 survey has shown, the multi-user plans have proved popular, and a modest price rise is unlikely to result in mass subscription cancellations.

If you would like more information about the survey then send us an email