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.

Pressing vinyl problems need tech solutions
There’s no sign yet of a collapse of the vinyl revival, and audience demand for the format is in sharp contrast to that of its onetime nemesis, the CD. The segment does face challenges, however, as supply problems continue to dog record companies – while there are no hard numbers available, there are plenty of reports to suggest that long wait times for orders tend to be the norm. The answer would normally be increased capex to build big plants and boost capacity, but that is not likely to happen. Rather, the pressing sector is increasingly characterized by small operations owned and run by audiophiles. The solution, then, is to increase productivity, and that means investing in technologically innovative production facilities that finally do away with antiquated machinery.

Apple issues its response to Spotify’s claims of discrimination
In March Spotify filed a complaint against Apple with the European Commission (EC), complaining that the US tech giant has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience. Spotify accused Apple of acting as both player and referee to deliberately disadvantage other app developers. The company also said that after trying unsuccessfully to resolve the issues directly with Apple, it had made the request to the EC for action to be taken to ensure fair competition. The following day, Apple published a statement refuting the Swedish streaming service’s claims. Apple also accused Spotify of suing music creators following a decision by the US Copyright Royalty Board to increase royalty payments to authors and publishers over the next five years.

Tencent Music Entertainment publishes the first financial results since its December IPO
Chinese music giant Tencent Music Entertainment (TME) has published its first financial results since the company’s IPO in December 2018. Although TME’s move to go public involved the publication of documents detailing historic financial and operating details, the latest results provide a good indication of how the company is currently performing. Moreover, the dominance of TME in the music subscription space also illustrates how China as a country is shaping up in the face of considerable expectation from both local and international record companies. Revenue for TME last year was up along with net profits. The number of monthly active users of the company’s music and entertainment services also increased, as did the number of paying users. The popularity of music was confirmed by the publication of the latest China Internet Network Information Center (CNNIC) report on the use of different services by online and mobile users in the country.

Indonesia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Indonesia music industry report. Indonesia is one of a number of countries in Asia that is considered by music companies to offer real prospects for future growth. Although the success of music subscription services in developed markets has turned around the fortunes of recorded-music sales, in most cases sales are slowing, and the likelihood is that there won’t be a return to the record years of the late 1990s. So, continued expansion at a global level beyond the next five years or so must come from the so-called emerging markets, and Indonesia has the potential to be front and center in this future growth.

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New issue of Music & Copyright with South Africa country report

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

US Supreme Court rules that copyright registration is required to begin an infringement claim
To make a copyright infringement claim in the US, rights holders must first have registered their work with the US Copyright Office. However, courts engaged in infringement claims have disagreed on the nature of registration, with some happy that a registration with the Copyright Office be made when an application has been submitted and others requiring that an application be granted. Authors have complained that the problem with waiting for a Copyright Office grant can lead to a lengthy delay in making a copyright infringement claim. However, proponents of the procedure suggest that the requirement to have a work registered before infringement claims can be made acts as encouragement to register works prior to their release. Now, the Supreme Court has provided clarity on the issue by ruling that rights holders must wait for a copyright registration to have been completed before an infringement claim can be made.

Recorded-music industry makes slow progress in efforts to tackle gender imbalance
Despite a rise in the number of initiatives to increase female participation in the performance, management, and technical sides of the music business, women remain severely underrepresented across the board. New research from the USC Annenberg’s Inclusion Initiative has highlighted the low numbers of women featuring in the performance of top-selling tracks, authorship of those tracks, and their production. This year’s Grammy Awards was a successful night for some of the world’s leading female artists, but their success masks a very real problem of gender exclusion. Although the USC Annenberg report spells out relatively simple solutions to overcome the lack of female opportunities, putting those solutions into practice and changing the mindset that songwriting and music production are jobs for men will be a long process.

SoundCloud must keep artists happy to thrive
Music streamer SoundCloud looked as though it might be on its way out a little over a year ago, but a spot of belt-tightening, an injection of finance, and a new CEO have improved performance. Now the company is upping its game and looking to make more of its large and dedicated artist community by providing a gateway to many of the world’s digital music providers. That pits it against the streaming sectors’ big boys, however, and SoundCloud will need to work hard to ensure that it gives its artists the tools they need both to create music and to distribute it easily and efficiently.

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. Despite its geographic location, South Africa more closely resembles a Western music market and has far more in common with many countries in Europe and North America than it does with its neighbors. Although this means per capita spending on music is high compared with other African countries, South Africa has experienced the same problems encountered in the developed world in the shift from physical formats to digital and from downloads to access. But 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 rollout of several international streaming services suggests the market has a bright future.

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New issue of Music & Copyright with China country report

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

As endgame nears for the Copyright Directive, opponents plan their final hand
The European Union (EU)’s key institutions – the Commission, Council, and Parliament – have finally agreed on new copyright rules, in the face of intense opposition and lobbying from internet giants. The agreed deal between the institutions – the outcome of the so-called trilogue process that underpins EU rule-making that had already been subject to delay in December – includes the controversial Article 13, which will put the onus on the likes of YouTube to remove copyright-infringing material without being asked, something that online platforms have long resisted. For the measure’s supporters, Article 13 reinforces the position of content rights holders and enables them to be properly remunerated. But for some of its opponents, who have tended to rail against it in near-apocalyptic terms, it means the effective end of the internet as we know it.

Class action lawsuits against SME and UMG are set to clarify entitlement to US termination rights
Major labels SME and UMG are facing class action lawsuits filed at the New York District Court in an attempt by a number of authors to reclaim the copyrights to their music under the so-called 35-year law. David Johansen, John Lyon, and Paul Collins were named in the legal action against SME, while John Waite and Joe Ely are part of the action against UMG. According to the lawsuits, both record companies have refuted the artists’ termination rights claims on the grounds that the sound recordings are “works made for hire” and so not available for termination under US copyright law. In addition to copyright infringement claims, the artists have asked the court for declaratory relief that sound recordings cannot be considered “works made for hire,” and that the release of sound recordings created by a particular recording artist in album form does not constitute a contribution of a collective work. Although these two challenges to the record companies’ refusal to recognize the termination rights requests are not the first, they could prove to be the first to go all the way to trial and finally provide resolution to a problem in the making for more than 40 years.

It’s now “game on” for the music industry
Music and gaming are clearly natural bedfellows but the music industry has yet to fully exploit the potential of games and gaming audiences. The reach of some gaming platforms is vast, offering great marketing prospects for the recorded-music business, while esports events can attract sizable audiences that are also looking for content beyond the core tournament battles. Plus, as games developers have shown recently, there is real appetite for virtual concerts inside the titles themselves – and that really should be a cue for physical festival promoters to deploy gaming at events to further develop those live music experiences.

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’s relatively buoyant economy is reflected in several sectors of the country’s music industry. Recent trade results published by the IFPI show the country, often described as an emerging market, is starting to live up to its long-held potential with previous glimmers of optimism now turning into real sales. 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 eight 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 very small.

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New issue of Music & Copyright with India country report

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

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

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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