New issue of Music & Copyright

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

UMG and SME put the market share squeeze on WMG and the independent sector
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 growth in its recorded-music market share, while the publishing unit UMPG saw the biggest share gain for any music publisher for more than 10 years. SME saw its total recorded-music share return to growth after three years of decline. Although Sony’s publishing share was down year-on-year, the company’s market share for total music revenue edged upwards. Smaller major WMG suffered a share fall for both recorded-music and music publishing. The independent sector also saw its recorded-music and music publishing shares edge down. Although the indie grouping remained the clear leader for publishing, recorded-music gains for UMG saw the combined indie company share slip to second spot.

Another year of rising rights collections for South Korea’s KOMCA
South Korean authors’ society KOMCA has reported a record year for collections. 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, which overtook performance five years ago to become the collection society’s biggest revenue source, accounted for close to half of domestic receipts last year with both streaming and audiovisual registering a particularly positive 12 months. However, income from mechanical reproduction scored the highest growth with a boom in CD sales driving up the collection source. In contrast, performance revenue was down almost one third with both karaoke and live concerts suffering from measures imposed to limit the spread of the COVID-19 virus. International income topped the previous year’s record with the popularity of K-pop boosting the overseas total.

National trade groups detail recorded-music sales with streaming and vinyl the big positives
In March, the IFPI published global recorded-music trade results for last year. Total sales, which were made up of physical and digital formats and services, performance rights, and synchronization revenue, increased 7.4%, to $21.6bn from $20.2bn in 2019. The rise, which compared with an uptick of 9.7% in 2019, marked the sixth consecutive year of growth. Since the global results were released, a number of national trade associations and retail groups have published local market figures. Although the level of detail differs between countries, all the results show a year-on-year rise in trade/retail sales with streaming the big growth provider. Most countries suffered a drop in sales of physical formats, with the size of the decline exaggerated by the impact on each countries’ retail sector from the COVID-19 pandemic. However, the vinyl revival continued and, in some countries, revenue from the age-old format overtook CDs.

Indie music moves the needle in a hot Asian recorded-music market
The Chinese music market, as well as other territories in the Asia region, is attracting a lot interest from recorded-music’s big guns at the moment as revenue continues to rise. There’s also a sizable amount of focus on the independent music scene with both WMG and Merlin among those making significant plays across Asia. This is a hugely diverse region, however, and the one-size fits all strategy traditionally adopted in western markets won’t work in Asia. Local knowledge will be a key determinant of success, so the business of both hiring experienced Asian executives and allying with national independent record companies will be crucial.

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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.

Music subscriptions boost global recorded-music trade sales to a sixth consecutive annual increase
International music trade body the IFPI has reported another year of positive results for the global recorded-music sector. In a year greatly affected by the COVID-19 pandemic, total revenue increased at a healthy rate with streaming gains more than offsetting declines in sales of CD albums, music downloads, performance rights and synchronization revenue. Such was the rise in streaming, revenue from access services accounted for almost two thirds of global trade sales. Vinyl also had a particularly good year with income from the age-old format soon to surpass CDs. Performance rights suffered a second straight year of decline with the fallout from lockdown measures impacting public performance. Synchronization revenue also took a hit because of video production delays caused by pandemic restrictions.

Tower of Power front man takes on music major at the Ninth Circuit
US singer songwriter Lenny Williams is attempting for a second time to have his claim against WMG and the subsidiary label Warner Bros. Records certified as a class action. Williams first brought a case against WMG at a California state court in October 2018, accusing the music company of making intercompany revenue deductions when music is streamed overseas. The process of transferring revenue through different subsidiaries means that royalties paid to artists are based on a lower amount than they should be, leaving artists shortchanged. The case has made its way to the Ninth Circuit after a California district court ruled that the claim could not be certificated as a class action due to the differences in contracts between artists are record companies. Oral hearings were heard in March before a panel of three judges.

NFTs are lining up to become blockchain’s chance to remix music
Non-fungible tokens (NFTs) are most definitely a thing in the music industry as leading artists participate in highly lucrative asset auctions. However, a commercial activity built on esoteric technologies such as blockchain and cryptocurrencies is a hard sell, and the activity is seriously in need of digital- and music-savvy intermediaries in order for a wider range of artists and the average fan to be able join the party. There are signs this is happening and that the current wave of expensive token sales is merely an entertaining warmup act. While there is certainly a pipeline of high-price tokens aimed at collector and investor (speculator) types, expect tokens to gradually become more mainstream as they permeate the merchandize, music format, and ticketing businesses.

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 2020 with 273.9 million inhabitants. Despite its large population, Indonesia has always underperformed as a recorded-music market with the legal sector long-struggling to gain a foothold because of persistently high piracy rates. However, the success around the world of music streaming is being 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. In 2019 the government and the different collective management organizations agreed on a one-stop-shop administration with a single agency given the authority to collect and distribute royalties from commercial music users. The live sector suffered a particularly bad year because of the COVID-19 pandemic and the measures introduced to control the spread of the virus. Some live performances are set to resume later this year, but ticket sales are not expected to return to pre-COVID-19 levels until 2022.

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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.

UK High Court issues orders to ISPs to block access to copyright infringing sites and services
The UK High Court has granted 10 recorded-music companies two blocking orders, forcing six of the country’s biggest ISPs to prevent access to a number of stream-ripping services and the cyberlocker Nitroflare. The legal action was coordinated by the BPI on behalf of the companies. The ISPs were presented with evidence at the end of 2018 of the copyright infringing activity by some of their subscribers when accessing the stream-rippers and cyberlocker. Although ISPs in the UK will not impose blocks to sites and services without a court order, the big six did not oppose the application for site blocks. After the orders were granted, the BPI said stream-ripping and cyberlockers were the music industry’s current biggest piracy threats and were responsible for part of the £200m ($279m) a year that is illegally taken out of the music industry ecosystem.

Streaming and vinyl the big positives for German recorded-music sales
The German recorded-music trade body BVMI has reported a second straight year of growth for retail sales of recorded-music. Consumer spending on physical and digital formats and services was the highest for almost 15 years. Moreover, total revenue, which also included performance rights and synchronization income, topped the €2bn mark. Increased interest in paid subscriptions boosted overall streaming sales and for the first time, access service revenue accounted for more than half of the music total. Sales of physical formats were down year-on-year with lockdown measures introduced to limit the spread of the COVID-19 virus affecting spending. However, a sharp rise in vinyl sales partially offset the decline in CD sales. International pop was again the most popular genre, ahead of hip-hop/rap and rock.

Silicon Valley music startup UnitedMasters wires in indie artists
Independent music distributor UnitedMasters has been built with Northern California funding and has tech company financial backing to show for it. The company is able to boast major music notables too, while also having a way with leading brands. The idea is that all that know-how is placed at the disposal of up and coming artists to enable them to truly emerge. UnitedMasters is very much in sync with the rise and rise of independent music and its recipe has so far proved a hit, especially with hip-hop acts. The outfit may have to learn to live with the major record companies poaching its successes but the recent tie-ups with TikTok and Twitch are good deals and ought to provide a rich talent funnel going forward.

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. South Africa is Africa’s biggest music market. Consumer spending on recorded-music along with royalty collections are significantly higher in the country than in any other market in the region. 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 South Africa 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 the country. 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 China country report

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

Ninth Circuit set to decide whether royalties are payable in California on pre-1972 recordings
The almost never-ending legal battle between artists Flo & Eddie and the satellite radio broadcaster SiriusXM is currently the subject of a Ninth Circuit appeal. Almost seven years ago, a California district court ruled that SiriusXM should pay royalties for the broadcast of pre-1972. SiriusXM appealed the decision, but only after agreeing an out-of-court settlement with the two artists. The size of the damages payment by SiriusXM to the artists was dependent on the outcome of the appeal in California, as well as two other appeals to district court rulings in New York and Florida. In its Ninth Circuit challenge, SiriusXM claimed that California has historically recognized a performance right in sound recordings under state copyright law and so no royalties are due for the broadcast of legacy recordings. However, Flo & Eddie claim that California state law grants authors exclusive ownership of sound recordings and so royalties on pre-1972 works are due.

Science backs a return to controlled live music performance
The live music industry is approaching the one-year anniversary of the shuttering of its business. Single performances, tours, and music festivals were ruled no-go activities as part of a global move to prevent the spread of the COVID-19 virus. Venues have been left empty and music promoters have seen revenue almost dry up. There is though some optimism that all is not lost. In addition to national vaccination programs rolling out around the world, a number of experiments and studies have shown that under certain controlled conditions, the spread of the virus and the rate of new infections can be minimized. Already governments are looking at ways of opening up events to paying visitors and although numbers for the first set of live concerts and festivals will be reduced, there is a real possibility that performing in front of a live audience will return sooner rather than later.

TikTok ups the tempo to become a key music force
TikTok continues to take the music business by storm. The company had a very strong 2020 when it more than proved its ability to both promote hit songs and break new artists. It’s little wonder, then, that TikTok has been able to sign a raft of licensing deals over the past 12 months, agreements that will see the video platform collaborating with rights holders, artists, and record companies around the globe over the course of this year and beyond. Expect to see longer-form content becoming more prevalent this year, with live-streamed performances the obvious way to go during the pandemic. In addition, TikTok is proving a great platform for identifying emerging artists while clubs and arenas are mothballed. But record companies need to ensure that they are not edged out in this space by new rivals.

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 is the world’s most populous country with slightly more than 1.4 billion people. Although the population is set to keep rising for the next 10 years or so, the impact of the one child policy will come in to play from 2030 onwards when the population is expected to edge downwards. China also has the world’s second biggest economy, behind the US. For the final quarter of last year, GDP increased 6.5% compared with the prior year period. 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 China 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. However, 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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New issue of Music & Copyright with India country report

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

BMG pushing the music industry to follow its artist-centric model
BMG is looking to remake the music industry in its image. The recorded-music and music publishing company has created, and is constantly developing, a model that it says better serves the artist and song writers, while also building a thriving business for itself. BMG is taking a stance on discriminatory contracts and streaming royalties. It is hoping that while it is a mere minnow compared to the industry’s leading music companies, its arguments can get traction among artists and, eventually, with the major movers and shakers. The company is now pushing into new operating areas and looking to bring its ethos to different music segments. It remains to be seen whether its practices are able to win over the competition and bring any significant change to the music business.

Court filing reveals Schneider and YouTube entrenched positions in ongoing copyright infringement case
The class action complaint filed at a California district court by composer Maria Schneider and rights management company Pirate Monitor against online video service YouTube and search giant Google in July last year is very much ongoing, according to a case management statement (CMS) presented to the court at the end of January. Schneider/Pirate Monitor filed the claim on the grounds that smaller rights holders are denied access to the online video service’s Content ID system of copyright protection. Denying the use of Content ID means smaller rights holders are forced into trawling YouTube for unlicensed content and then sending individual takedown notices to the only video service via either a web-form, email, or postal mail for each video their searches identify. The court filing accused YouTube of operating a two-tier system with the rights of large creators given preference over the rights of smaller independent creators. The CMS details the current positions of both sides in the case, illustrating an almost total lack of any common ground with little prospect of agreement out of court any time soon.

Investors unimpressed by Spotify’s positive end to the year
Music streaming service Spotify has published its 4Q and full year results for the 2020 financial year. Total revenue for the three-month period was at the top end of the guidance provided with the 3Q results. Also, the number of premium subscribers added in the quarter exceeded the guidance. Spotify ended last year with net 30 million more subscribers than it began the year with. Furthermore, premium ARPU grew in the 4Q20 compared with 3Q20, the first quarter-on-quarter rise since 2Q19. However, despite the positive results, questions over the guidance for 2021 resulted in a big hit to the company’s market cap. Spotify said in its results statement that it faced uncertainty versus prior years due to the unknown duration of the pandemic and its ongoing effect on user, subscriber, and revenue growth. The day the results were published, Spotify’s share price fell 8%.

India country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed India music industry report. India is the second most populous country in the world. The size of the population is edging ever closer towards 1.4 billion and, according to recent United Nations projections, India will overtake global leader China before the end of this decade. However, despite accounting for almost 20% of the global population, India’s music industry has always underperformed. Recorded-music sales have been stymied by widespread music piracy, rights collections have suffered from adverse legal rulings and a lack of licensing, while the live sector struggles from infrastructure shortcomings. Most recently, the country has been ravaged by the COVID-19 pandemic. However, despite the problems, there are signs that the world’s biggest emerging market is starting to live up to its billing. In the last few years, retail sales of recorded-music have been on the up and rights collections have benefitted greatly by a deal between authors’ society IPRS and Google for music use by YouTube. Live music remains the problem sector with all concert tours and festivals cancelled until the pandemic is under control.

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New issue of Music & Copyright with US country report

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

US music industry stakeholders breath a collective sigh of relief as the DoJ decides not to amend the consent decrees
US performing rights organizations (PROs) ASCAP and BMI can breathe a sigh of relief that the completion of the latest review by the Department of Justice (DoJ) of the consent decrees under which the PROs operate has ended with a recommendation of no changes. The previous two-year review proposed an end to fractional licensing (issuing licenses for only the percentage of compositions administered). A ruling by BMI’s rate court put an end to that proposal. This time around, the DoJ simply acknowledged that change was necessary, but stepped back from making any firm suggestions. The COVID-19 pandemic meant face-to-face meetings with stakeholders was more difficult and is likely to have weighed heavily on the DoJ’s decision to maintain the status quo. However, the DoJ did say that the consent decrees should be reviewed every five years to assess whether the they were continuing to achieve their objective of protecting competition.

Second straight year of INR1bn+ collections for IPRS
India’s authors’ society IPRS has reported a third straight year of growth for royalty collections and a new record for total income. Following on from a year that saw IPRS celebrate its 50th year in business, the authors’ society registered sharp growth in domestic receipts with the total boosted by a jump in TV broadcasting income. Radio registered the highest collection growth rate, but collections from radio broadcasters remain stymied by a legal dispute dating back eight years. Public performance income was flat year-on-year. However, the current financial year is likely to see a big fall in public performance receipts because of the impact on the live industry and the hospitality and retail sectors from COVID-19.

A good year for livestreamed music with more to come in 2021
Livestreamed music looks to have made the most out of 2020. When COVID-19 restrictions first closed down clubs, music halls, and festivals, virtual broadcast performances seemed to offer little more than comfort to a sector in shock. However, over the course of the year, artists embraced the medium in number, while the livestreamed events themselves grew in scale and scope. At the close of 2020, a series of richer streamed experiences demonstrated not only how far the format had come, but also where it was heading. There’s also opportunity for emerging artists as new, affordable products have come to market to service their needs. Livestreaming is set to become a significant part of the live music portfolio even after the pandemic.

US country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed US music industry report. The US is the biggest music market in the world. Each year the country accounts for around one third of the total global recorded-music sales and approximately 40% of spending on tickets to live music events. Furthermore, the US is home to the single biggest live music promoter, Live Nation Entertainment, as well as the two leading authors’ rights organizations, ASCAP and BMI, and the biggest performance rights organization, SoundExchange. On the not so positive side, the country boasts the highest number of COVID-19 cases in the world and the spread of the virus in the country has impacted on all music industry sectors. Live music has been the hardest hit with the concert sector effectively shuttered from the second quarter of last year. Given the popularity of music streaming, consumption stats for last year have proved something of a welcome distraction with the latest figures showing last year’s recorded-music consumption total beating the previous year’s record.

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New issue of Music & Copyright

The first issue of Music & Copyright for 2021 is now available for subscribers to download. Here are some of the highlights.

Ball starts rolling in the reform of the US Digital Millennium Copyright Act
US Senator Thom Tillis (R-NC), Chairman of the Senate Judiciary Subcommittee on Intellectual Property has published the first discussion draft of legislation aimed at reforming the Digital Millennium Copyright Act (DMCA). According to the Senator, the Digital Copyright Act of 2021 (DCA) would modernize current US copyright law by amending key provisions for dealing with online copyright piracy, as well as improving the exemptions available to users for circumventing technological protection measures (TPMs). The discussion draft also increases attribution protections so that authors can be properly credited, and makes the Register of Copyrights a Presidential appointee as well as placing the Copyright Office (the Office) under the Department of Commerce.

Revenue growth for SAMRO despite impact of COVID-19 in final quarter
Africa’s largest authors’ society, the South African Music Rights Organization (SAMRO), has reported a positive year for music royalties and distributions for the 12-months ending June. Despite difficult trading conditions exacerbated by the COVID-19 pandemic, total music rights receipts topped the ZAR500 million ($30.2 million) mark for the first time, while group revenue exceeded the previous financial year’s record. Distributions also hit new highs, although the total was boosted by backdated payments by the public broadcaster the SABC. Broadcasting receipts also benefitted from resumed SABC payments, while general licensing collections suffered from the impact of government-imposed lockdown measures put in place to combat the spread of COVID-19. Overseas collections fell in the financial year, although the size of the dip was exaggerated by exchange rate fluctuations and the timing of revenue receipts from foreign societies.

A flurry of deals suggests the time is right to make more of music rights
If anyone still doubted that music catalogs were set to remain a very hot property, the beginning of the New Year should have dispelled any skepticism. A leading producer, a veteran guitarist and even gold-plated Neil Young joined the music-rights sales fray through lucrative deals with an alternative investment fund. There will be further such multi-million-dollar transactions in 2021 as institutional investors seek good returns, but there’s also opportunity for those owning the rights to lower-profile songs that still manage to deliver decent royalty payments year after year. Royalty Exchange is one growing platform that caters to this particular segment of the market, and it offers rights owners the prospect of making the most of their IP assets to fund projects, or to provide financial relief for musicians hard hit by COVID-19.

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New issue of Music & Copyright with Chile country report

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

COVID-19 puts the brakes on recorded music sales, but growth is forecast for the next five years
Omdia has updated its forecasts for retail sales of recorded-music. In line with last year’s main conclusion, the recorded-music sector is firmly a growth market and Omdia expects sales in each of the years up to and including 2025 to rise. By the end of the forecast period, retail sales will have grown for more than 10 consecutive years. However, the global total is not expected to have topped the record high set in the late 1990s. Also, the impact of the COVID-19 pandemic on sales of physical formats as well as performance rights collections will limit the growth rate for this year to low single-digit percentage points. Subscriptions are the single biggest recorded-music category and will generate more than half of global revenue for the first time this year. Furthermore, income from advertising overtook sales of downloads in 2019, but will fall short of overhauling spending on physical formats at the end of the forecast period.

Japan heading for biggest decline in recorded-music revenue for seven years
New figures published by the Japanese recorded-music trade association the RIAJ show digital music sales grew at a faster rate in the first nine months of this year compared with the prior year period. All the streaming revenue sources registered positive results in contrast to the buy-to-own formats which all suffered a decline. Audio subscriptions’ dominance of digital sales was enhanced, following on from the previous year’s crossing of the 50% milestone. The positive period for digital sales contrasted with the RIAJ’s most recently reported COVID-19 impacted results for the production of physical formats. Taken together, Japan’s record companies look to be heading for a sizable full year decline. Aside from COVID-19, questions remain over the longer-term fortunes for the recorded-music sector given the continued dominance of physical formats.

Optimism returning to the live sector at the end of a year to forget
The two music industry sectors of live and recorded have operated with differing fortunes over the last 20 years or so. The decline of recorded-music sales for much of the previous decade contrasted with growth in live sales. The uptake of streaming returned the good times to record companies and both recorded and live experienced a period of growth. However, while spending on recorded-music is continuing apace, live music has suffered the worst year in modern times with the global spread of COVID-19 putting paid to almost all concerts and in-person music performances from March. US trade magazine Pollstar was first to signal how the sector was suffering and was followed by Japan’s live trade group the All Japan Concert & Live Entertainment Promoters Conference (ACPC), which reported a dire first six months for live performance in the country. As a consequence of control measures to limit the spread of the virus, all of the live sectors’ publicly-listed players have experienced sharp falls in revenue this year. However, the rollout of a vaccine program has seen live company share prices rise with the year set to end on an optimistic note.

Chile country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Chile music industry report. Chile is South America’s fourth largest recorded-music market, behind Brazil, Mexico, and Argentina. Following an almost decade-long decline, record company earnings have registered impressive annual growth since 2012. Increasing consumer interest in streaming saw retail sales of digital music overtake physical formats in 2015 and the gap has widened in each of the four subsequent years. Such is now the dominance of subscriptions, the impact of Covid-19 on retail sales of recorded-music this year is expected to be more measured when compared with markets that have a bigger physical sector. UMG maintained its distributor lead over second-placed SME, but both companies saw their shares edge down. Collection society SCD registered year-on-year growth in authors’ and neighboring rights receipts. Chile’s live sector is expected to take a sizable hit from the impact of the global pandemic and is not expected to return to pre-Covid-19 levels until 2022.

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New issue of Music & Copyright with Australia country report

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

The long ride to better streaming rates stops off at the UK parliament
Artist remuneration from streaming is a subject that can raise the blood pressure of many a music industry performer. Every so often an artist draws attention to their own plight by posting royalty statements on social media showing miserly payments from the leading music streaming services. Without a targeted price rise for a monthly subscription, the only way artists can receive better remuneration is for record companies to reduce their share of the revenue pot. Such a unilateral move is unlikely. However, the UK parliament is looking into the economics of streaming and in oral hearings at the end of November, some artists voiced the idea of creating a new source of equitable renumeration with certain streams resulting in payments bypassing the current royalty process and revenue going straight to artists.

YouTube set to lean more heavily on music to boost its advertising revenue
YouTube is looking to squeeze more money out of the vast amount of music consumption on its highly trafficked video platform. The company has unveiled a new advertising format along with targeted features that enable brands to align themselves with specific genres and artists. Given the size of YouTube’s audience, the move should generate significant revenue, though record companies need to ensure they get a satisfactory share of that from an infamously stingy company. YouTube’s other music asset, the YouTube Music subscription streaming service, is also gaining traction and has been consolidated with Google’s rival Play Music service. What YouTube Music needs to do now to make up ground on the likes of Spotify is to differentiate its offering—and it certainly has the ability to do that given the huge array of music content at its disposal.

How London is becoming the epicenter of music publishing as a premium financial asset class
New York-based investment fund Round Hill Music Royalty Partners confirmed in November the closure of its third private fund (Round Hill Music Royalty Fund III) and the raising of $291 million on the London Stock Exchange (LSE). Round Hill’s decision to engage in an Initial Public Offering (IPO), rather than taking a fund’s standard approach of exiting its fund after 10 years, is indicative of the rise in value of music publishing rights as premium asset and the increasing importance of the UK in this area. Round Hill’s first fund comprised 120,000 songs and the value of its fund has increased from $209 million to $363 million in only eight years. Cliff Fluet, partner at law firm Lewis Silkin, has provided his thoughts on why financial investors are so interested in music publishing as a financial asset, along with the reasons why Round Hill chose the UK market to launch its IPO.

Australia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Australia music industry report. Up to the end of last year, the Australian music industry was in the midst of a prolonged period of growth. Recorded-music sales had registered consecutive annual increases in trade sales with growing numbers of consumers happy to stream music rather than own it. Such had been the rise, digital now accounts for the vast majority of trade revenue. Authors’ rights collections were also feeling the streaming benefit while income from performance rights and ticket sales for live music events were topping record levels. However, as the COVID-19 pandemic reached Australia’s shores, much of the positivity and prospects for new records have ebbed away. There is a glimmer of hope with new vaccines set for national rollout in the next couple of months or so, but the damage caused to all the separate sectors will take time to properly heal.

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New issue of Music & Copyright with Italy country report

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

Global performance rights distributions set to fall for second consecutive year
Performance-rights distributions to record companies (producers) and performers fell short of registering another record-breaking year in 2019 as total payments slipped back below the $3 billion mark after reaching the milestone for the first time in 2018. Producers’ and performers’ rights have become an important source of income in recent years given the long demise of recorded-music trade revenue. The return to growth through increased consumer interest in streaming and subscriptions has somewhat overshadowed the importance of performance rights, but the revenue source remains a key earnings generator. However, unlike streaming and subscriptions, performance rights are set to suffer a downturn this year from the impact of COVID-19 and the subsequent measures introduced by governments to prevent the spread of the virus shuttering many license-holding businesses.

US Supreme Court asked to reconsider denial of Stairway to Heaven appeal
The legal team acting for the estate of songwriter Randy Wolfe has asked the US Supreme Court to reconsider its October decision not to become involved in the long-running copyright dispute over the track Stairway to Heaven. Earlier this year, the Ninth Circuit ruled that Led Zeppelin and its record company and music publishers should not face a new trial over accusations that the authorship of Stairway to Heaven borrowed from the track Taurus by the band Spirit. Wolfe, better known as Randy California, played guitar for Spirit and was the author of the track. In 2018, the Ninth Circuit decided that deficiencies in jury instructions at a district court hearing two years earlier meant the trial should be repeated. The district court found in favor of Robert Plant, Jimmy Page, John Paul Jones, and the music companies. Following oral arguments in front of a panel of judges, the Ninth Circuit affirmed the original district court decision. The Supreme Court’s pronouncement to not take up the case was thought to have brought an end to proceedings. However, the new application may breathe new life into the plagiarism claim.

Digital gains boost SOCAN collections to new record, but decline expected for 2020
At the beginning of this year, the Canadian performing-rights society SOCAN published preliminary financial results for 2019. The authors’ society said total collections comfortably topped the previous year’s record with growth largely down to a sharp rise in digital income. Also, the total was boosted by the first full year of reproduction rights collections following the authors’ society’s acquisition of SODRAC in mid-2018. SOCAN has now confirmed the preliminary figures in its annual business report. However, despite the new record, the results have been overshadowed by the likely impact on this year’s revenue from the global COVID-19 pandemic. In May, SOCAN presented a depressing picture of likely collections for 2020. That guidance has subsequently been revised, but collections are still set to fall for the first time since 2012.

Italy country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Italy music industry report. Italy’s recorded-music sector has experienced an erratic few years, largely due to the lingering dominance of physical formats. However, digital trade sales overtook physical formats in 2018 with a sharp rise in subscription sales more than offsetting falls in CD album sales and vinyl. The pattern of sales continued into 2019 but this year’s performance has been impacted by the COVID-19 pandemic, particularly physical sales, which tumbled in the first half of the year. UMG remains the clear leader in market share terms, ahead of SME and WMG with the largest major increasing its distributor share at the expense of the other two. Total income for the authors’ society SIAE edged up last year, with music collections returning to growth after a dip in 2018 (see Figure 1). However, like recorded-music sales, this year’s total will be heavily affected by the pandemic. Live sales in the country have effectively ground to a halt with no hope of any meaningful return before next year.

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