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.

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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%.

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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.

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.

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