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.

Music streaming faces longer-term questions over falling ARPU and rising prices
Recorded music is a growth sector, with record company financials and trade sales results all indicating a very bright future ahead. Forecasts for longer-term growth are all based on the continued uptake of music access services, and despite the inevitable slowdown in the developed world, music streaming in emerging markets is becoming popular, and so it is fair to say that the recovery in recorded music is firmly on track after so many years of decline. There are, though, some issues that require a little consideration, particularly regarding the price of a music subscription. Although the direct single user price is now firmly established and unlikely to change for the foreseeable future, the uptake of the family plan, whereby a single account allows access for six users, and its impact on streaming service revenue and user numbers, is starting to raise a few eyebrows.

Spotify turns a profit on rising subscription numbers and looks to podcasts for future growth
Spotify has published its fourth quarter and full year results, detailing both the company’s financial position and its operating details. Revenue continued to rise at a healthy rate and for the first time, operating income, net income and free cash flow were all positive. Totals for premium subscribers and monthly active users (MAUs) all hit the company’s guidance. Average revenue per user (ARPU) edged up in the quarter compared with the previous three months but was down on the prior-year period because of the popularity of the Family Plan and Student Plan. Spotify confirmed that it extended its footprint in the quarter by 13 markets in Middle East and North Africa, taking the total number of countries where the service is available to 78. The company also said it was in the process of acquiring podcast producers Gimlet Media and Anchor to aid the acceleration in podcast listening.

SiriusXM set to open Pandora’s streaming box with completion of service acquisition
While music streamer Pandora has long been popular with audiences, the company has failed to live up to its early promise on the financial side. The company’s decision to develop a model based on advertising rather than streaming looks to be the wrong one, given the growing appetite among consumers for rental rather than purchased music. However, the recent acquisition of Pandora by satellite radio provider SiriusXM brings new resources in-house, including an experienced executive team that isn’t short on ideas on how to bolster the streamer, as well as how to make it a useful addition to the SiriusXM fold. The satellite radio company has a proven track record in subscription, and the takeover could prove a turning point for Pandora.

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’s biggest obstacle to recorded-music growth is piracy. Retailers have always struggled to compete in a market flooded with illegal copies. Moreover, rising internet penetration has brought with it increased access to unauthorized music distribution sites and services. However, developments in the last couple of years have suggested that streaming may be the way out of the piracy problem, but the road to prolonged higher sales and meaningful returns is likely to be a long one.

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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.

The changing role of bundling in the ongoing digital music evolution
Music bundling with mobile subscription packages is a practice that has been around for almost 10 years. Credited with a major role in boosting the take-up of music subscription services, bundling has evolved over the years from the addition of a music service free with a mobile package to more discounted and promotional bolt-ons. There are exceptions, with some mobile operators persisting with the hard bundle. Moreover, the different regions of the world have distinct differences in what is an appropriate bundle. European mobile operators now offer the least friendly music bundles, while operators in Asia remain a mixed bag of hard bundles and promotional offers, with some persisting with their own-developed services rather than partnering with one of the international services. For a long time, US operators chose not to offer music services. However, two of the country’s mobile providers have defied the developed market bundle trend and gone all in with a hard bundle offering.

Japan set for a full-year rise in recorded-music sales
New figures published by Japanese recorded-music trade association the RIAJ show that the total production value of physical formats increased last year compared with 2017. Although audio formats suffered a decline in both value and volume, a big jump in the value of music DVDs and Blu-rays boosted the overall production value. Japan’s dominant physical music format, the CD album, suffered a fall in both value and volume. Only minor physical audio formats registered any growth. Full-year figures for digital trade earnings are set for publication in February, and based on digital revenue in the first nine months of the year, the world’s second-biggest recorded-music market looks set to register an overall increase.

Vivendi bets on streaming to get the most out of UMG sale
Vivendi is looking to sell a big slice of UMG to the highest bidder, at a time when streaming is making the music business a very attractive proposition indeed. Furthermore, UMG is a very appealing asset right now, based on its impressive lineup of artists and on their performances across platforms such as Spotify, Apple Music, and YouTube. There is much speculation regarding possible acquirers, with both private-equity firms and media corporations thought to be in the frame. Vivendi is naturally eager to get top dollar, but it has to ensure that any uncertainty created by the proposed sale doesn’t affect the performance of the very asset it is aiming to dispose of.

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. Not only does it account for around one-third of global recorded-music sales, the country is home to the world’s largest live music sector and the single biggest live music promoter, Live Nation Entertainment. The US also has two of the leading authors’ rights organizations, ASCAP and BMI, and has quickly become the biggest performance rights market for record companies and performers, even though the country’s collection agency, SoundExchange, only collects royalties from digital music services.

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New issue of Music & Copyright

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

Competing music sales monitors report good year for US music consumption
US recorded-music consumption registered a very positive 2018, according to consumer research organizations Nielsen and BuzzAngle. Both have reported an increase in the growth rate of recorded-music consumption, with on-demand audio streaming the main driver. Nielsen has so far only released top-line consumption details, while BuzzAngle has published a full report detailing sales and consumption across the different music formats and access platforms. Streaming has attracted all the headlines, but both research companies have also highlighted the continued revival in sales on vinyl albums. Nielsen analysis on sales by genre will follow with the release of its full report, but BuzzAngle has confirmed that hip-hop/rap is the most popular music genre in the US, although the share of sales of the genre varies greatly by format and access method.

Jury set to get it on in Ed Sheeran plagiarism case
Artist and songwriter Ed Sheeran’s attempt to have a copyright infringement claim dismissed has been denied by a New York district court judge. The claim was made by the heirs of Edward B. Townsend, who cowrote the track Let’s Get It On with soul legend Marvin Gaye in 1973. The heirs have claimed that Sheeran copied elements of the Gaye track for the million-selling 2014-penned song Thinking Out Loud, the third single to be released from the album Multiply. Sheeran filed for summary judgement on the grounds that the two songs were not the same and that any similar elements between the songs were not protected by copyright. The filing also questioned whether the daughter of Townsend was legally entitled to make a copyright claim.

Webcast and streaming gains boost IPRS collections
Indian authors’ society IPRS has reported a big rise in collections for the financial year ending March 2018. The increase was the first since 2014 and was largely the result of higher public performance collections and income from webcasting and streaming. Although the collection society only publishes limited revenue details, it did say that receipts from local online radio service Mix Radio and YouTube boosted the overall collection total. Ongoing and lengthy legal action against FM radio broadcasters has so far failed to reverse previous legal rulings that the broadcasters do not have to pay royalties to IPRS for the use of its members’ content. IPRS has also taken legal action to force mobile operators to pay royalties for the use of its members’ music in value-added services such as ringtones and ring-back tones.

UK music consumption and retail sales continue to rise
UK music trade group the BPI and retailers’ association ERA have reported respective growth in music consumption and retail sales. Strong gains in music streaming boosted UK consumption levels and retail sales of recorded music last year. According to the BPI figures, which were supplied by the Official Charts Company (OCC), streaming consumption topped the previous year’s record level, while the revival in vinyl LP sales continued, albeit at a slower rate than in previous years. Data from ERA, also supplied by the OCC, showed that retail sales of music subscriptions were particularly positive. Neither the BPI nor ERA figures included any music video details, and so the overall year-on-year growth rate of streaming and digital in consumption and revenue terms will most likely be higher than reported by the two organizations.

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New issue of Music & Copyright with Russia country report

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

Music-for-business providers need to play harder to cut through
Supplying music to stores and eateries and the like could be a highly lucrative activity for the recorded-music industry and for artists. However, research suggests that only a fraction of small business owners use legitimate services when playing music for their customers, with many of them unaware of the need to obtain licensed offerings to provide trade ambience. Currently, some newer music-for-business providers are pushing more aggressively into the space, but there’s a need to persuade potential clients that it is in their interests both to use correctly licensed services and to embrace more tailored music for their operations.

SAMRO sees mixed year, with music rights income up but total revenue down
Africa’s largest authors’ society, the South African Music Rights Organization (SAMRO), has reported a fall in license and royalty revenue for its financial year 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. SAMRO said the poor performance was also driven by reduced market confidence in the authors’ society, an outdated sales strategy, and inefficient licensing and collecting processes. Overseas collections were down year on year, though the rate of decrease was exaggerated by exchange rate fluctuations and the timing of revenue receipts from foreign societies.

Rights holders express concerns over looming no-deal Brexit
With just over three months to go before the UK is set to formally leave the European Union (EU), the details and manner of the exit after more than 45 years of membership is still unknown. Although the UK government and European leaders have reached a withdrawal agreement, certain provisions are not to the majority of UK MPs’ liking, and the deal in its current form will not pass a Parliament vote. Without a ratified withdrawal agreement, the prospect of leaving without a deal is becoming more likely. In preparation for such an event, both the European Commission (EC) and the UK government have published guidance for those potentially affected, addressing content portability, geoblocking, and rules government collection societies all addressed. However, despite the guidance, leaving the EU with no deal will mean a period of great uncertainty for rights holders.

Russia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Russia music industry report. Russia is Eastern Europe’s most populous country and the world’s biggest in terms of land mass, spanning 11 time zones. It ended last year with a population of 147.1 million. At 17.1 million square kilometers, Russia’s surface area covers around one-eighth of the world’s inhabited land area. However, despite its size, Russia’s two main music industry sectors have long underperformed. Recorded-music sales have always struggled to reach anything close to their potential with per capita spending below $1. The transition from physical to digital created a new market for unlicensed services, but the move from ownership to access is boosting legitimate sales, and prospects for longer-term growth are positive. Russia’s live-music segment has continued its recovery, bolstered by slow, yet steady economic growth. However, with various political and economic factors in place, the industry’s future looks uncertain.

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New issue of Music & Copyright with South Korea country report

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

Live music sector set to register another record year of growth in ticket sales
The live music sector may have been overtaken by recorded music in the last couple of years in terms of global consumer spend, but of the two, live has been the steadier earner. Measuring the annual performance of the live music sector on a global level is a speculative process. In contrast to recorded music, which is highly organized under the auspices of the IFPI, the live industry has no global trade association. Moreover, despite the recent emergence of a small number of corporate promoters, the live industry is not controlled by a few players, unlike the recorded-music sector, which is dominated by the three majors and music publishing groups. However, national indicators suggest the live industry is in good health. Moreover, based on the corporate leaders’ financial details for the first nine months of this year, the sector looks likely to register a positive 2018.

Napster shows the music industry a different way to generate music streaming profits
Once the nemesis of the recorded music industry, Napster may well now be showing the way for music streaming services to become profitable. The company struggled to make it pay when it first began offering licensed music services, but a refusal to hitch its wagon to a subscriber-growth-led strategy has seen it develop expertise in the niche. A new cost-control-oriented CEO has managed to stem the flow of red ink, and this year is set to be the first in the company’s history to return a profit. Napster clearly has a tightly focused business plan, and the service is benefiting from innovation and the creation of new personal listening experiences. But despite the service’s positive financial position, Napster needs to innovate further on both the content and technical sides if it’s to avoid becoming another streaming also-ran.

Gains in streaming and physical music video boost recorded-music sales in Japan
New figures published by Japanese recorded-music trade association the RIAJ show digital music sales grew in the first nine months of this year at a faster rate than in the same period of 2017. A big jump in trade earnings from audio subscriptions more than offset lower year-on-year sales of all unit downloads. The positive period for digital sales echoed the RIAJ’s previously reported results for the production of physical formats, and so taken together, Japan’s record companies look to be heading for a very positive year. However, questions remain over the longer-term fortunes for the recorded-music sector, given the ongoing dominance of physical formats. The trend in most developed markets has been for music subscriptions to assume dominance over the once popular CD album, but instead of following the global leaders, Japan may well be heading the same way as South Korea, where both music subscriptions and physical formats happily coexist.

South Korea 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 Korea music industry report. South Korea’s recorded-music industry is quite possibly the most advanced in the world. Since the turn of the century, the sector has been through a massive transformation: once almost overrun by piracy, it is now multifaceted with both physical and digital formats and services flourishing. Surprisingly for a developed market, CD album sales are still healthy in the country despite the continued rise of digital sales. Although spending on digital music accounted for the majority of music sales last year (see Figure 1), the growth rate in spending on physical formats in the year narrowed the gap. Korean-produced music is popular worldwide with the K-pop genre benefiting from the so-called Korean Wave, which began in the late 1990s and continues to boost the popularity of South Korean popular culture through online services and social media. Local music groups dominate recorded-music distribution with the major labels accounting for a low market share.

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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.

Live music aims for richer, deeper audience involvement
Live music is moving beyond mere artist performances as operators look to lean on technologies that make concert- and festival-going way more than mere acoustic forays. Hologram performances look set to move beyond passive – and sometimes prurient – experiences and evolve into more compelling events, while virtual reality’s time as a highly immersive experience may be about to come. Live music is also becoming a crossover phenomenon, and its intersection with fast-growing esports is a highly promising segment for artists.

Report finds paid-for streaming edges out free listening in three of the four Nordic countries
The four Nordic countries – Denmark, Finland, Norway, and Sweden – have become shining lights with regards to the shift in recorded-music distribution from music ownership to access. Sweden has long been a market to watch given that it is home to the world’s biggest audio subscription service Spotify and that smaller service Tidal was created from the acquisition of Swedish company Aspiro, owner of the Norway-based service WiMP Music. In all four countries, streaming accounts for the majority of recorded-music trade earnings with all ownership formats rapidly disappearing. A new report published by the Polaris Nordic Alliance has highlighted the digital music consumption habits of consumers in the Nordic countries and has identified which services are the most popular. The report has also provided a valuable insight into music discovery and shines an interesting light on the popularity of live music events in the region.

Mirroring helps music get out on the road
The in-car entertainment space has not developed in the way that automakers, who have invested heavily in sophisticated infotainment systems, had hoped. Those platforms have now pretty much lost out to mobile-based solutions such as Apple CarPlay and Google’s Android Auto, which provide a simple and smooth transition to the vehicle and enable users to easily take their music with them. Now even luxury car brands have accepted the inevitable and let such screen mirroring systems into their vehicles. The next major advance will inevitably be voice control, with Amazon looking to lead the way on the back of its Alexa speakers, though technological teething problems remain. But in-car radio has plenty of life left in it, with music streamer Pandora now set to make a play for the road.

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. The Australian economy is experiencing a period of solid growth, with quarterly and annual GDP rising at better-than-expected rates. Also experiencing growth are the main music industry sectors. Recorded-music sales are bouncing back after a long period of falling sales. Consumer interest in music streaming and subscriptions is strong, and access services have almost single-handedly boosted overall recorded-music trade earnings to three straight years of growth. The latest figures published by APRA AMCOS show royalty collections in Australia are continuing to rise, with digital now the biggest collection source. Australia’s somewhat erratic live music industry registered a second consecutive year of growth in 2017, with revenue in the year rising at the fastest rate for more than 10 years.

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New issue of Music & Copyright with Netherlands country report

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

The evolving relationship between record companies and music streamers
The number of music companies offering opportunities for unsigned artists to distribute their works to digital retailers and access services has risen steadily over the last few years. In most cases, a simple monthly payment allows unsigned artists to distribute their content directly to all the leading services, while at the same time keeping ownership of all the rights associated with their music. However, when the biggest audio-on-demand subscription service in the world acquires one of those companies that offers direct distribution, questions over the subscription service’s intentions are understandably raised. It seems highly unlikely and inadvisable that the likes of Spotify and Apple Music will risk upsetting the major record companies by engaging in record company activities on the eve of new licensing discussions. There is a big difference between greasing the wheels of direct distribution and becoming a record company. But that won’t stop questions being asked about the subscription services’ intentions, particularly if any more acquisitions of the kind described below are in the pipeline.

Record year for producers’ and performers’ rights despite a slowdown in revenue growth
Performance-rights distributions to record companies (producers) and performers registered another record-breaking year in 2017, with total payments rising to their highest levels. 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 will remain a key source of earnings, with collections forecast to grow steadily over the next few years. Measured at both reported and constant exchange rates, global performance-rights distributions increased year on year. The US remained the single biggest country for performance rights despite a slight decline in distributions. Europe is the biggest region, with its share of the global total rising for the first time in more than 10 years.

Tracy Chapman sues Nicki Minaj for copyright infringement in commercially unreleased track
US folk singer Tracy Chapman has filed a lawsuit at the US District Court for the Central District of California against Onika Tanya Maraj, professionally known as the rapper Niki Minaj, accusing her and unnamed defendants of copyright infringement. The claim centers on the unauthorized use of a section of lyrics from the Chapman track Baby Can I Hold You for the unreleased Minaj track Sorry. The filing claims that Minaj and a number of her representatives made several requests to license the Chapman composition for use in Sorry, but all these requests were refused. However, the Minaj track was recorded without permission and although it was not included on the intended album, the track was broadcast on several radio shows. Moreover, the track is currently available to stream on YouTube. Chapman is claiming the maximum statutory damages for the infringement.

Netherlands country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Netherlands music industry report. After more than a decade of falling trade revenue from recorded-music sales, the Netherlands is experiencing a sustained period of growth. In common with most developed markets in Europe, Dutch record company earnings were hit by the effects of online piracy as a result of the shift from physical formats to digital. However, for the last three years, trade revenue has risen sharply, and further growth is expected for this year and beyond. Dutch authors’ societies BUMA and STEMRA registered a sixth consecutive year of annual growth in joint collections after three consecutive annual falls. Combined income for the two collection societies edged up last year, with gains in both performance and mechanical collections. A rise in domestic collections for producers’ and performers’ society SENA boosted total receipts despite a second straight year of falling overseas income. The live industry experienced a positive 2017, with an increase in both visitors to events and revenue from ticket sales.

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