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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New issue of Music & Copyright with Poland country report

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

Growth for global royalty collections continues at reported and constant currency rates
The world’s top 20 biggest collective management organizations (CMOs) registered an increase in collections last year at both reported and constant currency exchange rates. The listing, which includes just those CMOs that have published collection results, shows only three of the 20 registered a fall in collections compared with 2016. As always, currency fluctuations affected some CMOs more than others, and overall the growth rate last year of the combined 20 was higher at reported than at constant rates. SACEM remained the leader in terms of total revenue, with GEMA maintaining second place. The US is the clear leader in terms of collections at country level, with CMOs ASCAP and BMI recording record years for collections. Europe is the biggest region, accounting for close to 60% of the combined top 20 collection total.

Technology innovation driving live sector growth
Live music is a growth business. Global spending on ticket sales to live events has risen annually for several years, and forecasts suggest growth is set to continue. Although the live and recorded-music sectors are inextricably linked, the fortunes of the two industries were markedly different during the first part of this century. Recorded music’s transition from a physical to digital business got off to a very shaky start but, after a lengthy period of decline, spending is on the up. Technology developments enabling the shift from ownership to access have transformed recorded-music sales, and rising numbers of consumers are signing up to the likes of Apple Music, Deezer, and Spotify. The live sector has grown steadily and ticket sales to artist tours and festivals are largely positive. However, the industry is not without its difficulties. But, in common with the developments in recorded-music distribution, technology innovations are providing the live sector with an answer to its problems.

Access shift set to benefit the biggest and smallest markets
Ovum has updated its forecasts for retail sales of recorded music. Like last year’s projections, the main conclusion is that the recorded-music sector is firmly a growth market, and Ovum expects sales in each of the years up to and including 2023 to rise. By the end of the forecast period, retail sales will have risen for nine consecutive years. Virtually all developed markets are benefiting from rising consumer interest in subscriptions and streaming and, perhaps most importantly for the sector, many of the much-vaunted and piracy-dominated emerging markets will start to show their worth. Subscriptions are firmly the biggest recorded-music category and will account for almost two-thirds of recorded-music revenue in 2023. Ovum is still expecting the growth rate for recorded-music sales to slow over the next five years as the music subscription sector in most developed markets reaches maturity. But many markets lost to piracy are now being brought to life and are likely to play an increased part in the longer-term recorded-music market future.

Poland country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Poland music industry report. Poland is Eastern Europe’s second largest recorded-music market behind Russia. However, the country is the region’s leader for trade earnings from the sale of physical formats and revenue from performance rights. Although high levels of piracy have restricted efforts to establish a digital sector, rising consumer interest in streaming and subscriptions has meant digital is accounting for an increasing share of overall trade sales. Positive economic results have also boosted most music sectors in the country. Poland is unique in the European Union (EU) for being the only country not to have fallen into recession following the global financial crash 10 years ago, and the country’s economy is one of the EU’s success stories.

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New issue of Music & Copyright with Spain country report

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

Midyear results confirm the recorded-music sector is heading for a fourth straight year of growth
With all the world’s major recorded-music markets and several other smaller ones having published midyear trade figures, Music & Copyright’s annual assessment of the results suggests global recorded-music trade earnings from the sale of physical and digital recorded music and income from music access services will register a similar rate of growth this year as in 2017. All the trade associations that have published figures or provided guidance have shown continued gains from music subscription services, and this earnings growth in all but one of the countries has more than offset declines in revenue from other formats. The ongoing dominance of the world’s biggest markets is set to continue, but, as has been the case in the last few years, the rate of growth in the less developed and so-called emerging markets will be higher than that of the global leaders.

Tencent Music Entertainment’s SEC filing lifts the lid on the Chinese company’s inner workings
Chinese music giant Tencent Music Entertainment (TME) has filed the necessary documentation with the US Securities and Exchange Commission (SEC), confirming its move to go public. The company will list under the symbol TME in what is expected to be the biggest IPO by a Chinese company in the US. As is the case with all listings, documents filed with the SEC lift the lid on financial and operating metrics not previously available. In contrast to Western services, which have seen revenue rise but losses deepen, TME’s music platforms are profitable, despite the low share of users paying a regular subscription. The filing also offers a look at some of the service offerings and initiatives not provided by Western services. This research note picks out some of the more interesting insights surrounding the financial standing of the service, its popularity, and what the details tell us about the Chinese music-streaming sector.

The future of selling recorded music and the next phase of streaming service development
With music streaming and subscriptions now the main revenue generator for recorded-music companies, and sales of buy-to-own formats in terminal decline, the term “music retail” is quickly becoming obsolete. Consumers in increasing numbers are not buying recorded music; they are paying to access it. Trips to the record store are a thing of the past for all but a small number of vinyl connoisseurs. Moreover, there is nothing to hold anymore, apart from the credit card used to pay for the subscription, or the hardware used to stream the music. In short, the first phase of music streaming is effectively over and the second phase, where streaming companies go beyond simple service provision, is well underway. Each company has its own plans for competing with its rivals and attracting new subscribers who are yet to take the streaming plunge. New artist initiatives, service acquisitions, expanded rollouts, and wider music bundles are already shaping the access-service landscape, but this kind of activity will only intensify over the next couple of years, as services look to enhance their position in what has become a rapidly evolving sector.

Spain country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Spain music industry report. Spain is one of Europe’s mid-tier music markets. The country’s recorded-music sector has been one of the region’s worst hit by digital piracy since the turn of the century. Although piracy levels are still high, spending on recorded music has recovered somewhat, but the transition from ownership to access has not all been smooth sailing, and this year has seen the gains from higher spending on music subscriptions offset by the continued fall in download and CD album sales. Per-capita spending on recorded music is low and lags a long way behind Europe’s leading markets. The steady improvement in Spain’s economic fortunes will have a positive effect on the country’s different music industry sectors. However, the unemployment rate remains high, particularly among younger people, who are traditionally the biggest music consumers. UMG remained the biggest recorded-music company last year, while troubled authors’ society SGAE reported higher collections and distributions. Spain’s live music industry experienced a positive 2017, with sales boosted by the reduction in the VAT rate in June last year.

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New issue of Music & Copyright with Norway country report

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

Multicontent bundles and new social partnerships set to drive digital music’s evolution
Developments in the digital music sector inevitably touch on developments in other sectors where music players have found welcome bedfellows and beneficiaries. Although the leading music subscription services are continuing to attract new subscribers as they expand their reach around the world, in markets that have seen a drop in take-up, services have been forced to become more inventive to maintain the growth momentum. Furthermore, providing opportunities for consumers beyond a simple subscription will not only keep the music business on an expansive track, but also draw in users who have so far failed to be tempted by the simple single subscription. Ovum has picked out three key trends that prove that services and potential service partners need to look beyond straightforward service provision to benefit from a resurgent recorded-music sector. Each of the trends looks at how music streaming and the provision of music subscription services are likely to evolve over the next 12 months. However, we also detail how non-music-service players are increasingly becoming important to maintaining growth and, in some cases, providing whole new revenue streams.

Recorded-music sales in Australia see a positive first six months
Midyear trade sales figures published by Australian music trade association ARIA suggest the country is heading for a fourth consecutive year of growth. Big rises in audio and video streaming revenue more than offset declines in sales of CD albums and music downloads. Music subscriptions accounted for more than half of the total trade income in the six-month period for the first time, with streaming as a whole generating over two-thirds of the total trade revenue. The vinyl revival is still in full swing with sales of the format accounting for more than one quarter of the physical total. ARIA was upbeat about the results and the prospects for further growth, but the pattern of sales in the country over the last few years is similar to the Northern European streaming leaders, all of which are now heading for market stagnation.

Digital collections stall, but MCSC reports a new record for royalty receipts
Royalty collections in China increased last year for the ninth consecutive year. In September, local authors’ society MCSC published its business report for 2017, confirming that total collections had topped the previous record, set in 2016, and exceeded CNY200m ($29.2m) for the first time. Furthermore, the year-on-year growth rate was more than twice the rate in 2016, and collections have almost doubled in just five years. Digital was the biggest revenue source for Chinese authors, ahead of background music and TV. While MCSC welcomed the positive results, the authors’ society commented that the copyright environment in the country was slow to improve and that although progress has been made with regards to the licensing of background music, significant difficulties remain in many areas of royalty collection.

Norway country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Norway music industry report. Norway is part of a Northern European quartet of countries that have proved to be global leaders in the transition from music ownership to access. Despite having a population of just 5.3 million and ranking at the lower end of the global top 20 recorded-music markets, Norway’s share of recorded-music sales from access services rivals most others. Streaming accounted for 84.9% of trade revenue from combined sales of physical and digital formats and services last year and this share is expected to rise further as take up of subscription services continues to grow. UMG maintained its slim lead over second-placed SME for market share last year, with both companies suffering a slight share decline. Royalty earnings collected by authors’ society TONO hit record levels with growth boosted by a jump in digital receipts.

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New issue of Music & Copyright with Japan country report

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

Despite legal successes, stream ripping remains a significant threat to the recorded-music industry
Music streaming has quickly become the dominant revenue source for recorded-music companies. Moreover, recorded music is now a growth industry and is likely to remain so for the medium term at least. However, the process of stream ripping, where websites enable users to rip streams from audio and video services and convert them to permanent downloads poses a major threat to the growth of legal music services by undermining the services’ paid tiers that offer offline listening to subscribers. The most ripped copies are from YouTube, and music trade associations have claimed that inaction by the online video service to limit the damage of stream ripping exacerbates the value gap and increases the disparity between how much music consumption video streaming platforms enable and the relatively small amount sites like YouTube pay back to the industry. Some advocates of the free internet have claimed that stream ripping has legal uses and so qualifies as non-infringing fair use. However, the results of recent legal action suggest otherwise. There is, though, some debate over the extent of the damage caused by the existence of stream ripping and whether the illegal process is affecting the growth of the legal streaming sector.

Midyear sales results suggest no change to Italy’s erratic recorded-music sector
New figures provided to Music & Copyright by the Italian music trade association FIMI show that the erratic sales pattern of recorded-music sales in the last few years is set to continue. Total recorded-music revenue increased in the first six months of this year, with streaming and vinyl the main positives. Growth in trade earnings from streaming ground to a halt in 2017, so higher income this year will have come as something of a relief to local record companies. However, the rate of growth in the second quarter was notably lower than in the first. Vinyl was the only buy-to-own format to register increased sales in the six months, but there are clear signs that the revival of the format may well be running out of steam. The CD album is still a popular format for Italian consumers. Although streaming overtook CDs to become the biggest revenue source, the format still accounts for more than 30% of the total trade sales.

Classical music services bring quality to the stream
Recent moves from a number of music companies have suggested that the classical music genre could soon start appealing to music streamers and listeners who have remained loyal to music format ownership. Although a wealth of classical music is available on all of the international music-streaming services, classical music listeners have largely been put off making the switch from ownership to access because of concerns about sound quality. However, there are several services that are catering to classical listener preferences by offering higher-quality streams that in some cases can exceed that of the CD for depth and accuracy. These offers come at a price, with services often charging double the standard monthly rate of the likes of Spotify and Apple Music. But, if the services can find a way to convince the core classical audience that they offer more than the big-name services, the prospects of turning classical music streaming into a viable business are promising.

Japan country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Japan music industry report. Of the leading recorded-music markets, Japan is certainly the most erratic, with some sizable differences in annual performance. Looking back over the last five years or so, total trade revenue from recorded-music sales has been inconsistent, with one or two years of growth followed by a couple of years of decline. However, although record company income from physical formats continues to be unpredictable, the digital sector has become more stable. Moreover, after a lengthy reliance on downloads, the subscription sector is now generating more revenue for the local industry than any other digital income stream.

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