New issue of Music & Copyright with Brazil country report

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

Tencent makes its assets sing in the global music business
China’s Tencent Holdings is building an impressive portfolio of entertainment assets, including stakes in recorded-music companies, in its home market, in Asia, and in Western markets. The technology giant certainly has global ambitions, and music sits at the heart of its entertainment empire. Interestingly, Tencent, which is on one long acquisitions spree right now, has been successful in monetizing music content in China—no mean feat—and is seeking to squeeze even more value out of the segment by combining it with its significant social media and gaming operations. Always quick to spot opportunities, Tencent has been using the dearth in live music performances due to COVID-19 to launch a live-streamed concert business. The group is well on track to becoming a major global music industry player.

Jay-Z and Beyoncé accused of copyright infringement over Black Effect intro vocal
Rapper Jay-Z, his performer wife Beyoncé, and company BJC Touring are being sued for copyright infringement, a violation of publicity rights, and unjust enrichment by a Jamaican choreographer who claims she was duped into providing a vocal that was used on the track Black Effect. The track was included on the Jay-Z/Beyoncé collaboration album Everything is Love, which was released in June 2018 and went on to achieve commercial success. The choreographer said in the court filing that she was required to sign an agreement to provide services to the defendants without having any legal counsel check over the agreement. Also, the use of the vocal was supposed to be limited to a promotional video but found its way on to the track without permission or credit.

Washington district court grants Amazon motion to dismiss copyright infringement claims
A district court in Washington has dismissed copyright infringement claims made by the heirs of three US authors against the online retail giant Amazon. The heirs had claimed that Amazon was part of an unlicensed process to make available numerous classic works by the authors. Although Amazon did not source the recordings, a separate company pulled together the tracks and through a distributor, made the albums available for sales through Amazon’s download store. Amazon filed a motion to dismiss the authors’ claims and the in June the court granted Amazon’s request. In a published opinion, the judge in the case decided that for a copyrighted work to be considered as distributed as defined by section 106 of the US Copyright Act, actual dissemination of the work must have taken place, rather than simply placing the work in a store for purchase.

Brazil country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Brazil music industry report. Following two consecutive years of contraction, retail sales of recorded-music in Brazil have risen for three years in a row. Streaming, and to a much lesser extent vinyl and synchronization, were the growth drivers with income from access services more than offsetting a collapse in sales of physical formats as well as a dip in performance rights. Umbrella rights organization ECAD reported a return to growth for collections and distributions following a decline in 2018. Brazilian events promoter Time For Fun (T4F) registered a big fall in revenue from live music promotion in the first quarter of this year due the shutdown of the live performance sector.

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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.

Measuring the impact of a global recession on music spending
An economic recession experienced by a single country or at a regional or global level has inevitable implications for households. Depending on the depth or cause of an economic downturn, effects on consumers may be minor, or could result in bigger changes to their way of life. The current move towards economic contraction for almost all countries affected by the COVID-19 pandemic falls into the latter category with real hardship set to fall on many of those affected. National governments are reporting the beginning of recessions (two consecutive quarters of negative growth) but also some optimism that the recessions will be short-lived. However, the consequences will be anything but short-lived with unemployment rates around the world rising fast. How the current situation will impact on the music industry remains to be seen. However, past research suggests that spending patterns on entertainment services change at a slow pace during recessive economic periods with many consumers choosing to cut back on other outgoings instead.

Fair use ruling saves Amazon, Apple, and Netflix from the fishhook
Three of the world’s biggest OTT video streaming services have been granted a motion to dismiss a copyright infringement claim brought by three authors of a children’s song. The claim centered on the use of a short section of the song in a film documentary about a group of burlesque dancers. The film was made available on the services operated by Amazon, Apple, and Netflix. The authors said that the use of the song was unauthorized and subsequently filed a legal case at a New York district court. The three services followed with a motion to dismiss on the grounds of fair use. The court found that the film’s incorporation of the song qualified as fair use under section 17 of the US Copyright Act and so granted the motion.

Video games stepping up to fill the live music event space
The live music business continues to have a seriously difficult time of it during the global COVID-19 pandemic. While the livestreaming of music performances initially looked to provide relief, that particular technology does not hold out much commercial promise for artists. Gaming, however, is having something of a good pandemic as citizens forced to stay in place in their homes up their domestic entertainment consumption. Hugely popular titles such as Minecraft and Fortnite are increasingly hosting music events within their gaming environments, with more in the pipeline. Paid-for festivals could prove a lifeline for live performances, while the gaming crowd’s microtransactions habit may prove lucrative too.

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 returned to growth in 2019 after two years of modest decline. Continued interest in subscription and streaming sales just managed to offset the drop off of physical formats and downloads. Notable in last year’s sales figures was that access service revenue accounted for more than half of the combined physical and digital total for the first time. Digital generated close to two thirds of the retail total. Sales of physical formats were down year-on-year, but the rate of decline was lessened by a return to growth for sales of vinyl and a slowdown in the demise of the CD album. International pop was again the most popular genre but a sharp rise in spending on hip-hop/rap saw the genre move second and overtake rock. Collections for authors’ society GEMA returned to growth, although the total just missed topping the record set in 2017. Ticket sales to live music events registered another record 12-months. However, the impact of the COVID-19 pandemic is expected to hit the sector hard.

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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.

How podcasts are carving out a space in the music business
Leading music companies are pushing their way into podcasts as a means of expanding their core audio entertainment bases beyond music performance. UMG is currently focusing on music-related content, for example, while SME is looking for opportunities beyond the music business. Thanks to an aggressive—and ongoing—acquisition strategy, Spotify has emerged as a major player and is now in a position to significantly develop both new business models and the format itself. Expect to see some more experimentation in and around podcasts, with Spotify the mover and shaker behind much of the action.

US Copyright Office report on safe harbors recommends a rebalance is required
The US Copyright Office has published a report looking at the impact and effectiveness of the safe harbor provisions contained in section 512 of the Digital Millennium Copyright Act (DMCA). The study is the first conducted by the government on the effectiveness of the notice-and-takedown system since its enactment more than 20 years ago. Guiding its analysis, the office said it followed a number of principals and subsequently concluded that the operation of the section 512 safe harbor system has become unbalanced. The report highlights areas where current implementation of section 512 is out of sync with Congress’ original intent, including eligibility qualifications for the service provider safe harbors, repeat infringer policies and knowledge requirement standards. The report is not advocating big changes to section 512 but has instead identified certain areas where Congress could fine-tune section 512 to achieve a better balance between the rights and responsibilities of online service providers and rights holders in the creative industries.

JASRAC reports new highs for collections and distributions
Japanese authors’ society JASRAC has reported a second straight year of growth for collections and distributions with receipts and payments in the 12 months to end-March 2020 hitting new records. Broadcasting collections, JASRAC’s biggest income source returned to growth after a fall in the prior 12-month period. General performance income was also up, along with receipts from cable and satellite as well as background music. A new milestone for digital saw collections top mechanicals for the first time. Digital income was boosted by the uptake of music and video subscription services. CD and video mechanicals were hit by falling sales of hard formats, while games mechanicals registered another positive year on the back of rising games sales. In line with the rise in collections, distributions to its members hit a new record in the latest financial year, with broadcasting the biggest single source of earnings for Japanese authors, ahead of digital and mechanicals.

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. Up to the end of last year, the UK’s music industry had experienced a positive few years with all of the major sectors on the up. After several years of decline, recorded-music trade revenue has risen for five years in a row with rising subscription sales and streaming growth, along with rising performance rights and synchronization income more than offsetting the steady decline in spending on physical formats and downloads. Last year the UK maintained third spot in the IFPI’s global ranking, ahead of Germany with trade sales surpassing £1bn ($1.2bn) for the first time for more than 10 years. UMG extended its market share lead over second placed SME with the former gaining share and the latter suffering a small. Royalty collections in the UK are on the rise with both PRS for Music and PPL continuing to register record receipts.

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UMG increases recorded-music market share lead, indies enhance publishing dominance

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. In a repeat of the last review, UMG enhanced its position as the global leader. The company registered gains in both digital and physical market shares, while the publishing unit UMPG saw its share rise. Second-placed SME had a flat year for digital but lost share overall because of a dip in the company’s physical format share. For publishing, Sony’s share was down for the second consecutive year. Smaller major WMG saw its digital share rise but the overall recorded-music performance was unchanged year-on-year because of a dip in the company’s physical share. The independent sector had a mixed year with a fall in its digital recorded share more than offsetting a slight rise in the physical share. The sector enhanced its publishing dominance with a second straight year of share growth.

UMG makes share gains at the indies expense
According to Music & Copyright, UMG increased its share of combined physical and digital recorded-music trade revenue last year, to 31.8% from 29.8% in 2018 (see Figure 1). For digital revenue only, UMG’s share was up to 33.8% from 32.4%, while its physical share grew to 25.8% from 23.4%.

Figure 1: Record companies, physical- and digital-revenue market shares, 2018 and 2019
Source: Music & Copyright

SME was the second-largest record company, although its combined physical/digital market share slipped slightly last year to 19.8% from 19.9% in 2018. For the third consecutive year, SME registered a year-on-year fall in its physical format performance with a dip in share to 18.3% from 19.2%. However, following two years of decline, SME’s digital market share was unchanged last year, at 20.2%. 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, edged down, to 20.3% from 20.5% (see Figure 2).

Figure 2: Record companies, total recorded-music-revenue market shares, 2018 and 2019
Source: Music & Copyright

The smaller of the three majors, WMG, experienced a reversal of its 2018 results, when the company’s digital share was down and its physical share up. Last year. WMG’s digital share increased slightly to 17.9% from 17.7%, while its physical share slipped to 11.7% from 13.4%. Overall, WMG’s combined physical/digital share edged down to 16.4% from 16.5%, while its total revenue share was unchanged at 16%.
Despite the changes in the majors’ shares, independent record companies’ combined physical/digital revenue share remained ahead of UMG’s, but only just. The independent company sector’s physical share stayed high at 44.2%, but a fall in the sector’s digital share resulted in the physical/digital share decreasing to 32% from 33.8%.

Slowdown in music publishing
In line 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 2.2% last year to $5.59bn from $5.47bn in 2018. The growth rate was notably lower than the 11.4% rise in 2018 and 11.2% increase in 2017. Sony maintained its leading position ahead of UMPG but suffered a fall in share for the second consecutive year. Sony’s share, which is made up of revenue from Sony/ATV, EMI Music Publishing (EMI MP), and Sony Music Publishing Japan, was down a single percentage point, to 26% from 27% (see Figure 3). Sony took the top spot in 2013 following the purchase of EMI MP by a Sony-led consortium in 2012. Sony then acquired the approximate 60% of the interest in EMI MP held by the consortium in November 2018, resulting in EMI MP becoming a wholly owned subsidiary of Sony.

Figure 3: Music-publishing companies, revenue market shares, 2018 and 2019
Source: Music & Copyright

UMPG was the second-largest music publisher last year. Music & Copyright estimates the company’s share grew for the second year in a row, to 21% from 20.2% in 2018. Furthermore, UMPG was the only major publisher to increase its share. Third placed Warner Chappell Music’s share was down last year, to 11.6% from 12.3%. The collective share of independent music publishers was up, to 42.3% from 41.4%.

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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 increases recorded-music market share lead, indies enhance publishing dominance
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. In a repeat of the last review, UMG enhanced its position as the global leader. The company registered gains in both digital and physical market shares, while the publishing unit UMPG saw its share rise. Second-placed SME had a flat year for digital but lost share overall because of a dip in the company’s physical format share. For publishing, Sony’s share was down for the second consecutive year. Smaller major WMG saw its digital share rise but the overall recorded-music performance was unchanged year-on-year because of a dip in the company’s physical share. The independent sector had a mixed year with a fall in its digital recorded share more than offsetting a slight rise in the physical share. The sector enhanced its publishing dominance with a second straight year of share growth.

PRS for Music reports record year but warns of difficult times ahead
UK authors’ society PRS for Music has reported a record year for royalty collections and distributions. Despite a flat year for international income, the three main domestic revenue sources of public performance, broadcasting, and digital all registered growth. The continued shift in recorded-music sales in the UK from ownership to access boosted streaming revenue. Digital overtook broadcasting in 2018 to become the second biggest domestic income source, and last year’s rise closed the gap on leading source public performance. Distributions to PRS members benefitted from sharp growth in public performance payouts while international distributions were inflated by backlog payouts and settlements related to prior periods. Inevitably, collections for this year will be greatly affected by the COVID-19 pandemic. PRS noted that public performance and international income will be hardest hit but said it was too early to say how big the financial impact will be.

Early moves to break the live lockdown illustrate the difficulties in a return to performance
The live music sector has been completely devastated by the COVID-19 pandemic. However, in those markets that are seemingly past their peak infection, governments are gradually relaxing social-distancing measures and are drawing up schemes to enable live entertainment events to return. But the restrictions that look set to be placed on small music venues and festivals alike will financially hamstring them and strangle any large-scale renaissance. That means alternatives will need to be found to enable operators to survive. Already we are seeing how some sector players are falling back on older infrastructure in order to enable live performances before paying audiences, while others are leaning on innovative technological platforms to reimagine the concert. It may well take a good many makeshift solutions to get through 2020 in any kind of shape to return to better days, perhaps next year.

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 one of Europe’s smaller countries. Despite having a land area rivalling the region’s leaders, the population of Finland ended last year at just 5.5 million. In recorded-music terms, Finland sits just outside of the global top 20. However, despite its modest standing, the country is a market leader with regards to progress in the digital transition from ownership to access. Subscription services already generate close to 80% of combined digital/physical trade income and this share is expected to continue rising as sales of the once-dominant CD album drop away and downloads disappear.

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New issue of Music & Copyright

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

Digital gains continue to boost rights collections for KOMCA
South Korean authors’ society KOMCA has reported an increase in collections. However, in contrast with 2018, when all the main revenue sources registered growth, 2019 was mixed. Given South Korea’s advanced recorded-music market, much of KOMCA’s gains in recent years have come from digital sources, and last year was no exception. Digital is now the biggest revenue source for local authors and publishers, having overtaken performance in 2015. Streaming receipts registered healthy growth, boosted by the continued uptake in music subscriptions. Audiovisual income rose sharply due to the increased use of short-form video services. Performance collections, which are mostly generated by karaoke, suffered a small decrease. A solid year for live concerts almost fully offset the dip in karaoke income. Broadcast collections are split evenly between cable TV, IPTV, and terrestrial TV, but all three suffered a decrease in collections. The deregulation of the broadcast sector is bringing big changes, with mergers and acquisitions reshaping the landscape.

How Amazon Music got to grips with the world of music streaming
Amazon Music has, in a relatively short space time, become one of the world’s leading music streaming companies. The outfit has done this by leveraging the huge reach of Amazon’s online retail business, and by tailoring its services to attract a range of customers often beyond the core youthful demographic. Amazon Music now has designs on further growth, and may be able to achieve its goals, at least in part, via Amazon’s fast-expanding Echo speaker business that is clearly a perfect partner for music streaming. Amazon Music has also recognized the importance of creative talent and is making efforts to get closer to artists and to support them. However, Amazon Music’s expansion could be hamstrung by the COVID-19 epidemic that is pushing the world toward a serious recession. It needs to respond to the threat with typical Amazon commercial nous.

Examining the impact of Brexit on the UK music industry
The UK is the world’s third-biggest music market and has been one of the main forums within Europe in debating the hotly contested Article 13 (now 17) of the EU Copyright Directive 2019. The Copyright Directive has been among the most heavily publicized and lobbied pieces of intellectual property legislation in recent memory, seeking as it does to create a digital single market in Europe. Article 17 was passed into European law in 2018, its effect being to close the perceived value gap between remuneration for content creators versus the profits enjoyed by the tech giants, by making digital service providers (DSPs) liable for infringing material on their platforms. Following strong lobbying by the DSPs, the more restrictive effects of Article 17 were somewhat watered down, but the article still imparts a substantially heavier burden on DSPs in relation to infringing content than they previously faced. The final text of Article 17 was approved in March 2019, and the directive is now in force, with a two-year implementation period (though EU member states are not obliged to implement it until June 2021). The Brexit vote, and the subsequent Parliamentary approval of the Withdrawal Agreement in January 2020, led to concern that the Copyright Directive would not be adopted into UK law. This fear was given credence by a statement made by Chris Skidmore, at the time the Minister of State for Universities, Science, Research, and Innovation, who confirmed that the UK “ha[d] no plans” to implement the directive. The government has since sought to distance itself from these comments, and indeed, in the context of the Withdrawal Agreement, it is highly likely that the UK will not implement the exact text of the directive per se. It remains to be seen, however, whether the UK will implement local legislation in the spirit of the directive, providing UK creators with similar rights to those now enjoyed by their European counterparts, or whether it will consider a US-style approach, which could be interpreted as more DSP-friendly. Either way, the impact on UK artists and songwriters could be substantial.

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New issue of Music & Copyright with South Africa country report

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

Lockdowns set to take their toll on the recorded-music and music publishing sectors
Like all other creative industries, the recorded-music and music publishing sectors are having to adjust to the impact on their businesses from the spread of COVID-19. Working conditions are unprecedented, and such is the fluidity of the situation, announced plans to support all those affected mark the start of what is certainly going to be a long road to recovery. There are some early indicators from a number of research and digital music services that show the initial impact on listening with some optimism that the initial fall in streams served may be short-term. However, the hit on many other music industry sectors will take time to filter through. Growth in music subscriptions over the last few years should allow the recorded-music sector to continue to grow, albeit at a much-reduced rate. But music publishing will take the biggest knock from the halting of live performance and the temporary closure of the retail and hospitality sectors.

Music livestreaming playing center stage as festivals and venues stay dark
Music livestreaming has long been touted as the next best thing to standing in front of a stage and enjoying a band’s latest song. However, while the technology is certainly up to the task of providing quality experiences, long-distance video performances have so far failed to gain real favor among audiences. But the global outbreak of COVID-19 has closed down the live sector and given livestreamed music the opportunity to shine. Right now, and certainly for a few months ahead, livestream operators can show a wider public just what they have been missing, while also enabling funds to be raised to combat the pandemic and allow independent artists to earn a living. However, providers need to ensure that the performances they offer are engaging enough to retain audiences in the COVID-19 aftermath, as well as giving artists the revenue they need to survive.

Madras High Court reaffirms movie producers’ music rights
A recent court ruling in India has illustrated the differences in the terms “author” and “owner” when dealing with musical works used in movies. A court in Madras heard a case brought by the music label the Indian Record Manufacturing Company (IRMC) against a composer of musical works for movies, who had claimed ownership of the copyrights to his compositions and had tried to assign them to a music company in Malaysia. While changes to Indian copyright law in 2012 provided greater certainty to authors of music used in movies regarding royalties and reuse, the Madras case showed that movie producers are still deemed copyright owners of movie music and so are able to assign those rights to other companies without the authors’ permission.

South Africa country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed South Africa music industry report. Despite its geographic location, South Africa more closely resembles a Western music market and has far more in common with countries in Europe and North America than it does with its neighbors. However, although this means the country has a more developed music market, per capita spending on recorded-music is very low. Moreover, the same problems encountered in the developed world in the shift from physical formats to digital and downloads to access, have been experienced in South Africa. But, even though the rise in high speed internet access has exacerbated problems associated with the unauthorized distribution of music, higher digital sales, rising smartphone penetration, and the rollout of several international streaming services suggests the market has a bright future.

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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.

Creativity survives as COVID-19 hits the music sector hard
The COVID-19 pandemic has slammed the music industry, with the live music and physical retail segments the hardest hit. Around the world, there has been a swathe of live performance cancelations and postponements, with many, many more to come. This is hitting large live entertainment providers like Live Nation, and is threatening the futures of independent venues, while also impacting the livelihoods of those working in the sector. With city shutdowns already in place or imminent, music retailers will really suffer in the short- to medium-term at best. Also, music streaming providers might not be as secure as they seem at first glance with the global economy set to crater. The best we can say to those hit by the COVID-19 is be creative, and above all, stick together.

California judge overturns Katy Perry plagiarism ruling but leaves door open to an appeal
US performer Katy Perry, her coauthors, and music companies behind the 2013-released hit single Dark Horse are not liable for damages following a ruling at the US District Court for the Central District of California. The court decided that the Perry single did not plagiarize the Marcus Gray-created track Joyful Noise. Perry and her coauthors, associated record companies, and publishers had been hit with a sizable damages ruling following a trial last July, but the latest decision means they are off the hook. The case centered on an eight-note ostinato – a short musical phrase or rhythmic pattern repeated in a musical composition. Gray had argued that the ostinato in his track had been used by Perry and her coauthors. Although the two eight-note sections sounded similar, the California court ultimately decided that the ostinato did not qualify for protection. Gray is, however, able to appeal the decision, so the case is not yet closed.

Four straight years of revenue growth for UK recorded-music sector
UK music trade association the BPI has published trade sales for last year, with streaming gains and increased sales of vinyl, along with higher revenue from performance rights and synchronization more than offsetting declines in CD album sales and downloads. In a repeat of 2018, the big success story last year was subscriptions, with revenue from the likes of Apple Music and Spotify registering another strong year. The BPI figures show that income from subscription services accounted for more than half of the trade total for the first time. Advertising revenue from audio on-demand services also grew last year, along with video streaming income and sales of vinyl albums. UK trade sales have now risen for four consecutive years and are the highest for 13 years, but remain below the post-millennium peak year of 2001.

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 the fourth most populous country in the world, behind China, India, and the US: the country ended 2019 with 269.1 million inhabitants. Despite its large population, Indonesia has always underperformed as a recorded-music market with the legal sector struggling to gain a foothold because of high piracy rates. However, the success around the world of music streaming is starting to be felt in Indonesia with a mixture of services now available offering access to several million local and international recordings. The collection of royalties is undergoing change with the government and the different collective management organizations agreeing on one-stop-shop administration with a single agency given the authority to collect and distribute royalties from commercial music users. The live sector is facing a tough year with the spread of COVID-19. This year’s Java Jazz Festival went ahead at the end of February and beginning of March, but others are set to be cancelled or rescheduled.

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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.

Brands partnering with music specialists to get closer to consumers
Brands have long relied on music to get closer to consumers and are always looking to refine their strategies to boost engagement. Many are now, wisely, joining forces with brand music specialists to fine-tune their offerings, and this music-for-business space is proving attractive enough to entice big hitter Apple Music to enter the fray. Launching new standalone record companies has been – and continues to be – a popular ploy, though such label output has tended to be rather limited, and brands appear to have little desire to participate beyond the short-to-medium term. Strategic alliances with music companies might be the way to take the concept beyond mere marketing tactics. Plus, there’s one major thing for brands to watch out for – make sure those content rights are sorted.

Charter claims music companies’ misregistered sound recordings in latest ISP copyright infringement case
Buoyed by the success of their copyright infringement legal action against the US ISP Cox Communications, a group of record companies have now turned their attention to Charter Communications. According to court filings, the companies have accused Charter of secondary copyright infringement based upon the ISPs subscribers’ infringing of close to 7,000 sound recordings. In an effort to invalidate a large share of the songs at issue, Charter has claimed that the music companies incorrectly registered a large number of the sound recordings at issue with the US Copyright Office as works for hire. Deliberately misstating to the Copyright Office who a work’s author is can invalidate the copyright registration, Charter has argued, and so could prevent the record companies from suing for any copyright infringement. Disputing Charter’s claim, the companies said in a court submission that no court has ever invalidated the registration of a copyrighted work because it was incorrectly designated as work for hire.

SAMRO reports steady year for collections but SABC cashflow problems hit distributions
Africa’s largest authors’ society, the South African Music Rights Organization (SAMRO), has reported a flat year for music royalties for the 12 months ending June. Difficult trading conditions affected SAMRO’s operations in the year, with a number of businesses forced to close due to economic pressures, while others defaulted. Although broadcasting collections were almost unchanged year on year, the authors’ society’s biggest income source was impacted by financial difficulties experienced by the public broadcaster the SABC. Missed payments by the broadcaster also resulted in lower royalty distributions to SAMRO members. Overseas collections increased in the financial year, although the size of the rise was exaggerated by exchange rate fluctuations and the timing of revenue receipts from foreign societies.

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 an ever-present in the top-10, the country has slipped a couple of places in recent years, with China and Australia registering higher gains in trade sales. We expect Canada to maintain its lead over Brazil when the IFPI publishes its global roundup later this month, but it will remain ninth, behind Australia. Recorded-music consumption levels were up last year, and the likelihood is trade sales will have grown also. Although streaming income is expected to register healthy growth, a slump in CD album sales as well as the continued decline in sales of single track and album downloads will have dented the overall market performance. UMG and SME enhanced their market-share lead over WMG, with the formers gaining share at the latter’s expense. Preliminary results from SOCAN show royalty collections were up for the eighth year in a row, with the level of royalties collected breaking the previous year’s record. Canada’s live sector is thought to have registered a positive year, with attendance at music events up year on year.

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New issue of Music & Copyright with China country report

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

On-demand music subscription sector hits new milestones despite slowdown in overall growth
The on-demand music subscription sector experienced a positive 2019, with several international and local services reporting solid operating details. Spotify ended the year in the driving seat, with subscription gains boosting the service’s market share. Apple Music also registered growth, but the service lost market share to both the leader and Amazon. The three major music groups are benefiting from the rise in access services, with all reporting favorable financial results driven largely by streaming. The rise of the paid subscription from a niche revenue source not so long ago is impressive, and the year-end record company results have illustrated the importance of access services to the companies’ bottom lines. Despite the inevitable slowdown in service take-up in Western countries, developing markets are starting to show that they are well placed to step in and soften any decline.

French recorded-music sales see fourth consecutive year of growth
French music trade association SNEP has reported a fourth straight year of growth for trade earnings from recorded-music sales. For the first time, revenue from audio streaming generated more than half of local record company income. In another first, sales of premium subscriptions overtook physical formats. Subscription sales recorded a very positive year, with the number of net new subscriptions rising sharply. However, it was advertising revenue from audio service that scored the highest growth of any income stream. With the exception of music video, all the buy-to-own formats suffered year-on-year declines. Trade earnings from CD album sales continued to fall, and the vinyl revival took a hit, although the number of units shipped to retail continued to rise along with sales of turntables.

Time for record companies to push the music and gaming space convergence
The gaming sector continues to grow apace, with esports events capable of attracting large in situ and online audiences. While a number of music industry players having recognized the potential of adding music – both recorded and live – to the gaming mix, many have yet to take even baby steps into the space. Esports arenas can clearly double up as music venues, and a number of such mixed-use facilities are either up and running or in the pipeline around the world. Expect to see more of these spots as well as – finally – an increasing number of music companies coming onboard as partners in gaming ventures. More experimentation is necessary to ensure that esports doesn’t remain an electronic music enclave.

China country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed China music industry report. China’s relatively buoyant economy is reflected in several sectors of the country’s music industry. Often described as an emerging market, retail sales in the country show the country is more than living up to its long-held potential. China’s digital infrastructure is highly developed and with smartphone penetration on the rise, all the requirements for digital growth are firmly in place. Royalty collections have grown consistently for the last nine or so years but given the size of the population and level of music use, rights holders’ earnings measured at a per capita rate are tiny.

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