The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.
Streaming the case to Vivendi for a UMG sell-off
Vivendi investor and hedge fund P. Schoenfeld Asset Management (PSAM) has presented a case to Vivendi to spin off UMG and create a stand-alone company. According to PSAM, UMG would benefit from operational and structural advantages as an independent company. Included in its presentation are forecasts for the global music sector, in particular, some fairly optimistic projections for the growth of streaming. PSAM suggests that an independent UMG would become an attractive strategic acquisition target for companies with digital streaming platforms since royalties and performance rights capture 50–70% of digital streaming revenue. PSAM bases its revenue projections on a big rise in the installed base of smartphones, which the hedge fund claims will act as a catalyst for the transformation of the recorded music sector.
19 Recordings fends off SME’s dismissal motion in royalties dispute
Recorded music major SME has failed in a bid to have a case brought against it by the record company 19 Recordings dismissed. A New York federal court judge ruled in March that several of the claims brought by 19 Recordings should be heard at trial. SME was accused by 19 Recordings in February 2014 of underpaying royalties amounting to $7m earned by a number of contestants on the TV show American Idol including Kelly Clarkson, Clay Aiken, and Carrie Underwood. 19 Recordings, which is the subsidiary record company of 19 Entertainment, the creator of the show, signed the contestants to exclusive recording agreements and licensed the winners and runners up to SME to exploit their music releases. SME filed a motion in June to dismiss all the claims, which were uncovered by 19 Recordings after an audit of SME’s accounts.
Mixed fortunes for the major music groups in 2014
All of the major music companies have now published their financial details for 2014. A comparison of their respective performances reveals differing fortunes for the three in terms of earnings from recorded music and music publishing sales. Consolidation in the two sectors and exchange-rate fluctuations has greatly muddied the year-on-year performance waters in the last couple of years. When these distortions are factored in, the financial details suggest that, in group terms, SME and WMG made gains in 2014 while UMG suffered a decline. Recorded music earnings for UMG came under pressure last year. However, the global leader can draw some relief from a good performance from its publishing division UMPG.
Streamers look for pole position in in-car entertainment
Apple is building a very strong presence in in-car entertainment via its iOS-based CarPlay system, with that position set to be bolstered by the imminent launch of a new – and likely to be very competitive – music streaming service. The company, along with rivals like Pandora and Google, has been busy ensuring that its music gets onto vehicle dashboards to take advantage of the forecast growth of in-car entertainment consumption likely to come with the surge in production of connected vehicles. However, streamed music will not have everything its own way as it still has work to do to convince consumers to give up on a very popular incumbent in the shape of much-loved AM/FM radio, while services need to be much easier to use than they are at present if they are to gain mass acceptance.
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 profile. Canada experienced a second consecutive year of recorded music contraction in 2014. Trade revenue figures will be published by the IFPI later this month, but, according to Nielsen SoundScan, unit sales of recorded music were down. Streaming gains are expected to have reduced the rate of contraction in trade revenue in 2014 compared with 2013 and continued gains could well result in growth in 2015. Preliminary details published by authors’ society SOCAN show royalty collections were up for the second year in a row. Canada’s live music industry also had a good 2014.
If you want to know more about Music & Copyright then follow the below links.