Category: Collection societies

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.

Plotting the rise of paid audio subscriptions and the end of smooth lines and growth curves
Earlier this year, global trade body the IFPI reported that audio subscriptions were on course to become the biggest source of revenue for music companies. Digital as a whole overtook physical in 2014, and streaming became the biggest revenue generator in 2016. However, although the CD album was still the single revenue source when streaming is broken out into its three constituent parts, paid audio subscriptions is set to take the lead this year. The rise of the paid subscription from niche revenue source just a few years ago can only be described as rapid, and recent record-company results have illustrated the importance of access services to the companies’ bottom lines. As part of our annual look at the latest developments in the music subscription sector, we explain why streaming is now so important for the recorded-music industry and why the rise of access services is the beginning of the end for the well-established trend of straight-line growth and decline.

ECJ issues ruling on internet sharing platforms’ role in copyright infringement
The European Court of Justice (ECJ) has issued a preliminary ruling in a case referred by the Supreme Court of the Netherlands on the legality of websites and services offering the indexation of metadata relating to protected works, which enable internet users to locate copy-protected works and share them online. The ECJ said that making available and managing an online platform for sharing copyright-protected works may constitute an infringement of copyright. Even if the copyright-protected works are placed online by the users of the online sharing platform, the ECJ confirmed that the operators of that platform play an essential role in making those works available. The case was first brought by Dutch antipiracy organization Stichting Brein against internet service providers (ISPs) Ziggo and XS4ALL to force them to block the domain names and IP addresses of torrent tracker site The Pirate Bay.

Sharp rise in private copying collections boosts ARTISJUS results
Hungarian authors’ society ARTISJUS has reported a return to growth in royalty collections following a fall in 2015. A boost from retroactive private copying collections in 2014 was the main cause for the year-on-year decline the following year. However, sharp organic growth in private copying income last year, along with positive results from public performance and cable retransmission, took ARTISJUS’s total revenue close to the 2014 record. Digital collections were particularly positive, although they still accounted for a minor source of income for Hungarian authors. ARTISJUS noted in its business report that the focus of digital exploitation has shifted from downloading to streaming, resulting in much heavier administration in the course of the collection and distribution of royalties. Local VOD services generated around three-quarters of digital royalties, with international music services accounting for the remainder.

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. The UK’s recorded-music industry is experiencing something of a growth spurt at the moment. Three straight years of decline ended in 2013 with a rise in trade earnings from recorded music. Although revenue slipped back in 2014, the country has subsequently registered two consecutive years of growth. The retail value of recorded-music sales has also risen year on year with subscription sales and streaming growth more than offsetting lower spending on singles and albums. Royalty collections in the UK are also showing positive signs, with both PRS for Music and PPL registering annual growth. Live music continues to be the most robust leisure sector in the UK with tours and festival appearances still the most secure way for artists to generate revenue. However, despite the relatively buoyant stadium and arena sector, the ongoing decline in the number of smaller music venues is a cause for concern.

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Music & Copyright is published by Ovum.

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.

Spotify agrees to settle US copyright-infringement claims
Spotify is settling a legal claim made by a group of authors that accused the streaming service of reproducing and distributing sound recordings without the necessary license. At the end of 2015, the artist David Lowery filed a class-action copyright lawsuit at the Central District Court of California, claiming $150m in damages because the service had failed to identify or locate the owners of certain compositions for payment that it has distributed, and had not issued a notice of intent to employ a compulsory license. This was followed a month or so later by a second lawsuit filed at the same court by artist Melissa Ferrick claiming the same copyright infringements but with a damages claim of $200m. The settlement will see Spotify create a fund to compensate class members for the service’s past streaming and hosting of tracks. Spotify will also assist class members to determine which of their music works have been streamed by the service and compensate the authors for any ongoing use.

Digital takes the domestic lead for Swedish authors and publishers
Swedish authors’ society STIM has reported record financials, with total collections and distributions to its members topping the previous year’s high. Collections from online and new media services were again the standout revenue source. Although the growth rate has slowed, digital is now the biggest source of domestic royalty receipts for Swedish authors and publishers. The previous leader was broadcasting, and a slight overall slip in collections from radio aided digital’s rise to the top spot. Collections from overseas remained the biggest income source for STIM’s author and publisher members despite last year’s slight dip in foreign earnings. Royalties from festivals and live music concerts reversed two consecutive years of decline and grew sharply. Collections from hotels also registered notable growth, along with music in the workplace.

Brands look to place music at the center of the evolving marketing mix
Brands have been quick to associate themselves with music-oriented social media networks as part of a push to communicate with young audiences. Video social networking platform Musical.ly has emerged as a favorite for a number of brands looking to market their product to younger demographics. Brands are also looking to create retail ambiences based on more tailored playlists. However, there are risks involved in leaning heavily on influencer marketing associated with social platforms. Also, despite the increased brand-associated marketing engagement, music companies and brands need to work harder on using music to get closer, and to provide something more engaging and useful than a mere lifestyle soundtrack.

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. For many years, Indonesia has been considered a music market in the midst of development but one that offers great potential. The marketplace for creative content has suffered over the years from widespread piracy, with unauthorized CD albums on sale for a fraction of the price of legitimate copies. More recently, digital piracy has grown in line with internet access. Indonesia is no different than several other Asian territories in that unlicensed content is widely available. But, unlike most other countries in the region, it has made notable progress with regards to protection of intellectual property rights.

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Music & Copyright is published by Ovum.

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.

Digital and private-copying gains boost SACEM collections
French collection society SACEM has reported a second successive year of growth in collections with income and distributions both topping previous record levels. Domestic income and collections from mandates all registered a year-on-year rise in 2016. Although collections from broadcasting edged down and income from mechanicals continued to fall, collections from the main income sources registered growth. Moreover, in a repeat of 2015, private copying and online were the biggest gainers. Authors’ rights distributions to SACEM members increased year on year, along with payments for cultural projects and social programs. Despite the collection growth, a higher rise in operating costs meant the authors’ society’s net operating cost-to-royalty ratio edged up.

Vinyl market keeps on turning as providers get innovative
The headline story for the recorded-music business at the moment is all about streaming and the ongoing shift from ownership to access. However, the resilience of vinyl suggests that the age-old format still has a part to play in the music industry’s future. While sales have grown rapidly for a number of years, the vinyl segment still accounts for only a small percentage of recorded-music revenue. But underneath all the headlines, the vinyl sector is showing signs of innovation, on both the technical and commercial sides. Moreover, ongoing high prices for the format look set to keep on attracting new entrants with new ideas to the market.

SABAM reports a flat year for collections but a fall in distributions
Belgian authors’ society SABAM has reported a flat year for collections, with gains in public performance and broadcasting unable to offset collection decreases elsewhere. All the main public performance income streams, except for cinema, registered growth last year. Although overall broadcasting collections were up, the different broadcast sectors experienced differing performances. Digital collections were lower year on year, with a sharp drop in royalties from downloads and simulcasting wiping out the growth in earnings from streaming. Total phono-mechanical collections edged down, but the sector experienced big variations by income source. Distributions suffered a big decline and operating costs edged up.

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 the Africa’s biggest music market. Consumer spending on recorded music and live performance as well as royalty collections are significantly higher in the country than in any other market in the region. Despite its geographic location, South Africa is more akin to a Western music market and has far more in common with many countries in Europe and North America than it does its closest neighbors. While this means per-capita spending on music is high compared with other African countries, the same problems encountered in the developed world in the shift from physical formats to digital and, more recently, downloads to access, have been experienced in South Africa. Although 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 move into South Africa by several international streaming services suggests the market is on the right road to a brighter future.

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Music & Copyright is published by Ovum.

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.

WMG makes recorded-music market share gains, while indies extend publishing lead
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. For the second consecutive year, recorded-music leader UMG lost market share, while smaller major WMG closed the gap on second-placed SME. Increased granularity of published music company data meant for the first time the annual survey contained market share figures for music streaming. Sony remained the leader in terms of corporate control of music publishing, though its share has fallen for two straight years. Little change in share for second-placed UMPG meant the company narrowed the gap with Sony. The collective shares of the independent publishing sector registered the biggest publishing share increase, with leading indies BMG and Kobalt both making market share gains.

Domestic collection growth for SENA, but lower US income hits overall total
SENA, the Dutch collection society representing performers and producers (record companies), has reported a fall in total licensing income for 2016. Although domestic receipts were up year on year, lower income from the US meant international collections were down sharply. Similarly, total domestic invoiced licensing revenue registered growth, but overseas invoiced revenue fell. Distributions in the Netherlands and abroad were also down last year. General licensing was the biggest collection source for SENA members, ahead of broadcasting. SENA noted in its annual report that a joint-venture service center created with the authors’ society BUMA began dealing with its individual and collective licensing agreements from the beginning of last year. The aim of the venture is to create efficiency savings for the two societies.

ECJ backs Stichting Brein in media player copyright case
The European Court of Justice (ECJ) has sided with the Dutch antipiracy group Stichting Brein in a case concerning the sale of a multimedia player that enables copyright-protected audiovisual content to be viewed for free. The defendant in the case is an online retailer of a multimedia player that contained open source software that enabled video files to be played through an interface. The court decided that the multimedia player enabled a communication to the public of audiovisual content as described in the 2001 European Copyright Directive and so breached European law. The court also ruled that temporary acts of reproduction as carried out by the multimedia player of a copyright-protected work obtained by streaming on a website belonging to a third party was not exempt from legislation covering the right of reproduction.

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 just outside of the global top 20 in terms of trade revenue from recorded music. But, despite its small size, the country is a market leader with regards to progress in the digital transition from ownership to access. Subscription services already account for around two-thirds of recorded-music trade earnings in the country, and this share is expected to rise further as the previous reliance on physical formats slips away and sales of downloads disappear. UMG took the top spot in market share terms last year, replacing WMG, which had been the leader for several years. Royalty earnings were positive, with collections from music use maintaining a well-established growth trend. The country’s live sector also registered a good year despite attendance at festivals suffering from poor weather conditions.

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Music & Copyright is published by Ovum.

New issue of Music & Copyright

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

IFPI reports second consecutive year of recorded-music income growth
International music trade body the IFPI has reported the second straight year of growth in trade earnings from recorded music. Moreover, the growth rate was the highest this century, with income from streaming more than offsetting declines in income from physical formats and downloads. Significantly, digital accounted for half of the trade revenue total, with streaming making up close to two-thirds of the digital total. The IFPI noted that digital accounted for more than half of trade earnings in 25 markets, with five of those markets crossing the digital tipping point last year. However, the global trade body reiterated previous concerns about the fact that although music is being consumed at record levels, artists and record labels are still not receiving fair remuneration.

ASCAP, GEMA, and PRS for Music all report record financials
Three of the world’s biggest collective management organizations (CMOs), ASCAP, GEMA, and PRS for Music, all registered increases in collections in 2016. US CMO ASCAP reported a new record for royalty collections, with revenue exceeding $1bn for the third straight year. Distributions also edged closer to the $1bn mark. Collections by German CMO GEMA also topped previous records and exceeded the €1bn level for the first time. The CMO said that one of the main drivers of growth was its agreement with YouTube and subsequent retroactive licensing payments. UK CMO PRS reported a record year for performance royalty collections, with almost all the main income sources registering a year-on-year rise. Digital income was boosted by streaming gains, and international royalties – the biggest income source for PRS – registered a big rise, though the growth rate was inflated by exchange rates. Distributions topped £500m for the first time.

Voice set to take command of music listening
Voice recognition is set to become a key battleground for music as smart speakers gain traction among consumers. The appeal of using audio commands to make listening choices and do away with screens and multistep functionality is clear, though it is also evident that the technology needs to be significantly improved to make voice the primary method for navigating extensive digital music libraries. The trailblazer right now is Amazon and its proprietary Alexa platform, which has already found its way into millions of homes via the online retail giant’s Echo home speakers. Amazon has established a lead here and is committed to putting serious resources into voice recognition going forward.

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Music & Copyright is published by Ovum.

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.

UK High Court orders ISPs to block servers of illegal streaming services
The handing out of blocking orders to an ISP by a court is nothing new in several developed countries. Rights holders have for several years applied to courts to force ISPs to prevent their subscribers from accessing websites or torrent trackers that host or provide access to unlicensed music and media content. However, in line with the shift in legal content distribution to access from ownership, illegal services offering streams of copyrighted content are now common. Website blocking orders are unable to prevent these streams from reaching consumers. In the UK, the first legal order to block access to unlicensed streaming service servers has been granted, effectively paving the way for rights holders to extend the use of blocking orders far beyond their current reach.

Georgia court clears iHeartMedia in pre-1972 master rights claim
The Georgia Supreme Court has ruled that iHeartMedia does not have to pay mechanical reproduction royalties for the broadcast of sound recordings fixed in copyright before Feb. 15, 1972. The class action claim was brought by Arthur and Barbara Sheridan, master-rights owners of several 1950s and 1960s recordings performed by influential musicians of the era such as the Flamingos, Little Walter, and the Moonglows. The Sheridans had claimed that iHeartMedia never received authorization to stream their owned recordings. However, the Georgia court ruled that the streaming services provided by iHeartRadio qualify as a related use to a radio broadcast transmission due to their substantial similarity and the fact that streaming of sound recordings and broadcast by AM/FM radio are essentially the same in nature. As AM/FM radio broadcasters have the right to transfer sound recordings as part of radio broadcast transmissions, the court sided with iHeartMedia.

Music begins to get serious about music tech startups
The music industry is pouring resources into technology startups, at the same time as venture capital money looks for opportunities in the music-tech space. More music companies are joining forces with investors to seek out and advance tech-based business concepts inside accelerator/incubator programs, with a view to being part of the “next big thing.” In addition, leading firms with startup mentalities in their own DNA are on the lookout for early-stage developments, with a view to boosting their operations in highly competitive sectors.

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’s two main music industry sectors, recorded and live, have endured contrasting fortunes for much of this century. Recorded-music sales have always struggled to reach anything close to their potential, while the live sector has gone from strength to strength. The last few years have seen a reversal of fortune, with recorded-music sales benefitting from increased consumer interest in streaming and the live sector suffering a downturn, largely because of the devaluation of the ruble.

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Music & Copyright is published by Ovum.

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.

Much of MEA’s digital music fortunes lie with carriers and RBTs
Music revenue in the Middle East and North Africa is largely in decline, while revenues in Sub-Saharan Africa are growing at a relatively vigorous pace. But, overall, the Middle East and Africa (MEA) region generates negligible digital music revenue other than that derived from mobile – a reality that is unlikely to change in the foreseeable future. In essence, virtually all digital music revenue produced throughout most of the region comes from ring-back tones (RBTs), and the lion’s share of that revenue is ending up in the hands of mobile operators, which have a monopoly over the delivery of RBTs. Unfettered piracy; limited access to broadband; high data charges; low smartphone penetration; consumers’ inability or unwillingness to pay for music; insufficient spending on digital advertising; inexistent or inadequate royalty-collection systems; and, in a fair number of countries, political unrest and war, are all factors conspiring against the success of digital music services – both a-la-carte and all-you-can-eat.

Vivendi hits back over Spinal Tap fraudulent accounting claims
Vivendi has filed a motion with a California district court to dismiss claims made by the co-creators of cult movie This Is Spinal Tap. Late last year, the co-creators accused Vivendi and its movie studio subsidiary, Studiocanal, of engaging in anticompetitive and unfair business practices as well as fraudulent accounting, and sought compensatory and punitive damages of $400m. Vivendi and Studiocanal claimed their motion to dismiss was brought because the co-creators had failed to state a claim upon which any damages could be granted and because they had not provided any evidence of fraud as required under federal rule of civil procedure. The two defendants also refuted the termination rights claims, since the music in the movie was made as a work-for-hire.

Premium subscriptions now one-third of total Belgian music sales
Belgium’s recorded-music sector has registered a second consecutive year of growth in retail spending. According to new figures published by the Belgian Entertainment Association (BEA), total consumer spending on recorded music grew 6.9% year-on-year in 2016, around the same rate as in 2015. The improved performance was almost all down to a big rise in spending on subscription services countering falls elsewhere. Vinyl sales also increased, although the format accounts for a minor share of total spending. Despite the growing interest in streaming, Belgian music consumers continue to support the CD album, with the format accounting for the biggest share of retail spending. The second year of overall growth is positive news for Belgian record companies, given the numerous years of decline the industry has seen. It should, though, be remembered that record company earnings from recorded-music sales in the country are still less than half what they were at the turn of the century.

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 close to 1.4 billion people. It is also home to the second-biggest economy. Despite a slight slowdown in economic growth last year, the latest figures from China’s statistics bureau suggest the country is on course to meet the government’s aim of doubling GDP and per capita earnings between 2010 and 2020. In line with this optimistic outlook, China’s music industry is starting to show signs that it is living up to its long-held potential. In the past there have been several false starts. More recently, though, glimmers of optimism look set to turn into real sales. The latest IFPI figures show that trade revenue was up sharply in 2015, with a number of digital formats and services the growth drivers. Ovum estimates that growth continued last year and that more is set to come. China’s digital infrastructure is highly developed, and with smartphone penetration on the rise, all the requirements for further digital growth are firmly in place. However, some creative sectors continue to suffer against a backdrop of unlicensed services and restrictive practices. Royalty collections have grown consistently for the last seven 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 still very small.

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Music & Copyright is published by Ovum.