New issue of Music & Copyright

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

EC backs blockchain with the rollout of Observatory and Forum
The European Commission (EC) has created the EU Blockchain Observatory and Forum (BOF) to highlight key developments in blockchain technology and promote European stakeholders actively involved in blockchain activities. The BOF is set to work alongside established funding projects and research programs. Blockchain technology, on which cryptocurrency Bitcoin is built, is being held up by reformers in the music industry as a means of creating a fairer distribution system for content creators. Proponents say it could bring transparency to rights metadata, instant remuneration to artists, and new forms of monetization to music.

Appeals court orders new trial in Cox–BMG copyright infringement case
US ISP Cox Communications and music rights management company BMG must face each other again in a copyright dispute, following a decision by a Fourth Circuit panel of judges to remand for a new trial. Cox was sued for copyright infringement by music companies BMG and Round Hill Music in 2014. Round Hill was removed from the case on the grounds that the publisher had not proved exclusive ownership of the rights to the music cited as being infringed. A Virginia district court ruled at the end of 2015 that Cox was guilty of willful contributory copyright infringement and awarded BMG $25m in damages. The ISP appealed the decision, but the district court dismissed the claim. Cox subsequently filed an appeal with the Fourth Circuit. That court has now upheld the district court’s decision that the ISP is not entitled to the safe harbor protection defense, but ruled that a new trial must be held because of certain errors in jury instructions.

New York court rules no copyright infringement in U2 plagiarism claim
A New York federal judge has ruled that U2 did not copy any part of English songwriter and performer Paul Rose’s track Nae Slappin for the creation of the band’s hit song The Fly. Rose had claimed that U2 had infringed his copyright by willfully copying fragments from his track to create a guitar solo for The Fly. However, the judge found that Rose did not plead a plausible claim of infringement and that his claims were too vague. The judge also said that no reasonable juror listening to the entirety of the two songs could find that they were similar. Most music plagiarism cases rarely reach court given the difficulties for authors in establishing whether another author has copied their work. Equally problematic is the cost of bringing cases to court, particularly given that an accused will often have significant resources with which to defend any claim.

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New issue of Music & Copyright with Canada country report

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

Apple betting on the HomePod to close the gap with Spotify
Apple has finally confirmed the rollout date for its HomePod smart speaker. The US, UK, and Australia will be the first countries to receive the device when it goes on sale February, followed by France and Germany in a couple of months. Marketing for the HomePod is focusing heavily on the device’s music capabilities and audio quality, and Apple is hoping that sales will boost subscriber numbers to its music subscription offering and close the gap on the leader Spotify. The price of the HomePod is significantly higher than that of the smart speakers currently on the market, but Apple is probably hoping that it will be able to repeat its success in the portable music and smartphone sectors and turn what looks like a late entry to market into an advantage.

Rights-owning Facebook looks to make music much more social
Having recently signed a series of music industry agreements, Facebook is beginning to show real intent in music, while at the same time ramping up the pressure on YouTube. The driving force behind this is the social network’s belief that it can make its platforms more engaging with video. And the experience of its new Watch video hub suggests it might well be right. However, with the new rights deals in its back pocket, Facebook now needs to develop new products that will deliver immersive “social music” experiences to its users – and Asia’s Tencent may well already be showing the way forward.

Japan set for a full-year fall in recorded-music sales
New figures published by Japanese recorded-music trade association the RIAJ show that the total production value of physical formats and the number of units produced were down last year compared with 2016. Both audio and video formats suffered a production dip, although, in a repeat of 2016, the rate of decline was fairly modest compared with some of the sizeable falls experienced in a number of other developed markets. Full-year figures for digital trade earnings are set for publication in February, but 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 decline.

Canada country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Canada music industry report. Canada is one of the world’s larger music markets. For recorded music, it sits just outside of the top five, behind France. However, last year saw recorded-music consumption increase at more than double the rate of the previous year. Growth in on-demand audio streaming easily offset declines in download and CD album sales, while the vinyl revival continued with sales of the age-old format rising for the seventh consecutive year.

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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.

Smaller streamers look for an edge in a big-player market
The music-streaming sector’s leading lights made serious moves at the tail-end of last year, and the battle to dominate the subscription segment is set to sharpen in 2018. Amazon, Google, Apple, and Spotify are all looking to gain extra edge in a competitive market, making it difficult for the smaller services to remain relevant and play a leading part in the rapidly evolving sector. However, Pandora, Deezer, and Tidal haven’t given up the fight and are looking to carve out their own segments, largely with the help of bigger partners.

UK ISPs ordered to block access to illegal streaming service servers
Last year, the UK High Court issued its first order to block access to unlicensed streaming service servers. The handing out of blocking orders to an ISP by a court is quite common, and rights holders for several years have 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. Given the shift in the way recorded music is accessed now, rather than owned, unlicensed streaming services are growing in number, and so blocking internet users from visiting certain websites is no longer the answer to the problem. At the end of last year, the High Court issued a new blocking order. Like the previous order, the block was to prevent internet users from viewing live soccer matches. The High Court action could have implications for the recorded-music industry’s attempts to prevent internet users from accessing unlicensed content.

Publisher Wixen files copyright infringement lawsuit against Spotify
Spotify has been hit with new legal action accusing it of willful copyright infringement. The lawsuit, filed by Wixen Music Publishing at the US District Court for the Central District of California, Western Division, claims that Spotify has reproduced and streamed music penned by its songwriters without permission. The lawsuit, which is requesting the maximum statutory damages for each infringement, described a previous settlement between Spotify and a class action group concerning similar claims as inadequate. It accused the service of building a multibillion-dollar business without ensuring that the music available had been properly licensed. The timing of the lawsuit’s filing was prompted by the introduction of the Music Modernization Act into the House of Representatives which aims at overhauling the US mechanical royalty system. The bill includes a clause preventing rights holders from filing similar mechanical rights–based copyright claims after the end of 2017.

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, it 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, despite the fact the country’s collection agency, SoundExchange, only collects royalties from digital music services.

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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.

Flurry of deals and service announcements end a busy year for digital music
The battle for digital music supremacy took on new urgency in December, with a flurry of activity by several of the music streaming sector’s main players. The rumored rollout of a new all-encompassing service from YouTube was quickly followed by Amazon’s extension of its Music Unlimited service footprint. Not to be outdone, Apple then confirmed press reports that it had acquired song-recognition service Shazam. Spotify also confirmed reports that it would be exchanging minority equity stakes with Tencent Music Entertainment Group. Although Spotify has ended this year as the clear music subscription leader, the moves by the big names in the chasing pack suggest that there will be no letup in the push toward subscription service dominance.

Vinyl revival continues under the music streaming radar
Sales of vinyl in many of the world’s developed markets are on something of a roll at the moment. Although the vast majority of the recorded-music headlines are devoted to the business of music streaming, sales of the age-old vinyl LP continue are continuing to rise. New manufacturing plants are coming on line to meet the newfound demand for the format, and the likelihood is that vinyl will remain a part of the rapidly evolving recorded-music sector. Despite the high growth rates, vinyl still accounts for a small share of the physical-format sector. Moreover, the collectable status of the format means album prices are much higher than their CD equivalent. So the big question is: How long will the revival last for, and will consumers continue to be attracted by vinyl, or does the slowdown in global shipments mean the end of the vinyl road is already in sight?

IPRS receives reregistration notice, but collections fall for the third straight year
Indian authors’ society IPRS has reported a drop in collections for the financial year ending March 2016. With the exception of domestic radio broadcasting, all revenue streams suffered a fall. IPRS commented that unfavorable court rulings and litigation as well as issues concerning its registration as a copyright society and other enforcement matters were the main reasons for the collection reduction. Following a government investigation into the running of IPRS, the collection society has adopted a new set of articles of association. Moreover, elections resulted in the appointment of a new board of directors and governing council. In May, IPRS submitted to the commerce ministry an application for reregistration as an official collection society, and this status was granted in November.

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 major bounce back. Like most European music markets, the country suffered because of online piracy, as the shift from physical formats to digital resulted in big losses for record companies. However, for the last two years, trade revenue has risen sharply and continues to do so. Dutch authors’ societies BUMA and STEMRA reported a fifth 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 performance collections just offsetting lower mechanical rights. Producers’ and performers’ collection society SENA suffered 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. The live industry experienced a positive 2016 and the sector’s good performance looks to have continued this year.

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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.

Recorded music now firmly a growth industry, but for how long?
Ovum has published new forecasts for retail sales of recorded music which suggest that recorded music is now firmly a growth market. The value is expected to increase this year for the third year in a row and by 2022 retail sales will be at their highest level for almost 20 years. Virtually all developed markets are benefitting from rising consumer interest in subscriptions and streaming, and perhaps most importantly for record companies, emerging markets are beginning to show interest in these services too. Subscriptions will become the single biggest recorded-music category this year and will account for more than half the retail sales in 2019 and almost two-thirds of the total three years later. Ovum is also 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.

Live music sector set to maintain annual ticket sales growth
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, as in previous years, Ovum has taken guidance from the results of the corporate live leaders. Based on their financial details for the first nine months of last year, the live music industry is likely to have registered a positive 2017. Although the individual performance of each company differed, the combined earnings for the featured promoters showed positive overall growth, with combined revenue for the six set to top $11bn.

Control of in-car music slips toward the tech giants
Investments in the connected car continue apace as vehicle manufacturers keep on cutting technology deals. However, while until recently the in-car space looked to be the car manufacturer’s domain when it came to entertainment and information services, the auto industry is now set to be usurped in large part by tech giants Apple and Google. That’s because car makers saw little threat in letting smartphones get comfortably close to the dashboard, failing to realize that their customers’ intimate knowledge and everyday usage of mobile devices made bypassing often clunky in-car systems a frictionless way to enjoy their music on the road.

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 Australia music industry report. After a long difficult period for the recorded-music sector in Spain, trade sales have risen for three consecutive years and are likely to rise again when full-year results are published in early 2018. Similarly, Spain’s live sector has reversed a lengthy period of decline and registered three straight years of growth. Royalty collections in the country have been fairly flat for the last four years with annual changes in the low-single-digit percentages. Spain’s positive music industry figures come at a time when the Spanish economy is continuing to register real signs of improvement. However, in spite of the rising industry tide, the music sector, particularly recorded music, has a long way to go before it returns to the boom years of 20 or so years ago.

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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.

Record companies look to benefit from the music industry disruptors
Record companies are not renowned for embracing new technologies – quite the opposite, in fact – but right now they seem eager to get much closer to tech start-ups to tap into their expertise. The music sector has realized the need to engage with likely technology disruptors at an early stage as a means of obtaining a degree of control over the way innovations are used, as well as of extracting value from start-ups that may well be worth billions of dollars in just a few years’ time. The real challenge is deciding just which technologies and entrepreneurs to invest in.

Digital gains boost global creators’ rights collections to record high
Global royalties for creators have topped the previous year’s record, according to the latest report published by CISAC. Total royalties collected by the organization’s 123 country-based 239 member societies grew for the third consecutive year and exceeded the €9bn ($10.5bn) mark for the first time. CISAC says revenue from digital uses of all repertoires has nearly tripled since 2012, driven largely by streaming subscription services. However, the report notes that digital collections are still held back by poor returns from video streaming services. Europe was the source of more than half of global collections, with music maintaining the tradition of accounting for the vast majority of creators’ income. In addition to music, audiovisual and literary collections were up year-on-year, while dramatic and visual arts revenue both fell.

BUMA STEMRA publishes delayed accounts amid calls for greater transparency
Dutch authors’ societies BUMA and STEMRA have reported a fifth 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 performance collections just offsetting a drop in mechanical rights income. Continued strong growth in streaming in the Netherlands resulted in a positive year for digital collections for BUMA. However, digital remains a small source of revenue for authors and publishers in the country. STEMRA’s income suffered a big fall in private copying remuneration, after the previous year’s total was inflated by changes in rates and the extension of fees to e-readers. The publication of last year’s accounts was delayed by several months after an audit uncovered several financial irregularities.

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 recorded-music industry has shown some real signs that it is heading toward the end of what has been 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 two straight years of growth. In contrast to the recorded-music sector, royalty collections in Australia have risen year after year with authors’ society APRA AMCOS experiencing consecutive annual collection increases on the back of strong gains in digital income. Australia’s somewhat erratic live music industry registered growth last year after a decline in 2015. However, spending on tickets to live concerts and contemporary music festivals suffered a decline.

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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.

Producers’ and performers’ rights earnings see steady year
Performance-rights distributions broke new records last year, with total payment figures rising to their highest levels. The rights of record companies (producers) and performers have become an important source of income in recent years, given the long demise of recorded-music trade revenue. Although streaming has returned record-company earnings to growth, performance rights will remain a key source of revenue, 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 continued to increase its dominance as the biggest national source of performance rights, despite a slowdown in collections by SoundExchange. Regionally, Europe is the biggest source of performance rights collections, but the region’s share of the global total fell last year after slipping below 50% for the first time in 2015.

Sweden’s recorded-music fortunes in limbo as midyear trade sales fail to excite
IFPI Sweden has reported modest growth in recorded-music trade earnings for the first half of this year. Record-company earnings from access services increased, although the breakout of the different streaming revenue sources showed that paid subscriptions were up but that advertising-supported audio and video service revenue fell year on year. Continued gains in vinyl revenue lessened the overall decline in physical format income. CD album and music video sales tumbled in the six-month period, along with single-track and album downloads. While the short-term situation for recorded-music sales in Sweden remains positive, the slowdown in subscriptions suggests that the longer-term fortunes for Europe’s most advanced recorded-music market are starting to look a little shaky.

Radio adapts to growing digital challenges
Big-budget music streaming services and digital in-car infotainment providers hope to eat into radio’s engaged and loyal listenership – boosting subscriber bases and driving advertiser investment away from broadcast content and toward their own platforms. Radio networks have worked well to adapt to the pressures of digitization, launching their own online radio services for smartphone and in-car listening and introducing repackaged content for sale online. However, collaboration must continue across the industry to consolidate listenership, particularly across the younger people that have grown up using digital technologies. Networks must continue to deliver content in diverse formats to drive revenue to and maintain healthy advertiser investment in the platform.

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 arguably the most advanced in the world. Since the turn of the century, the sector has been through a massive transformation, from being almost overrun by piracy to one that is now dominated by digital access services. Surprisingly, sales of CD albums are still healthy in the country despite the continued rise of digital sales. Korean-produced music is popular worldwide with the K-pop genre benefitting from the “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 distribution of recorded music with the major labels accounting for a low market share.

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Music & Copyright is published by Ovum.