The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.
Streaming the case to Vivendi for a UMG sell-off
Vivendi investor and hedge fund P. Schoenfeld Asset Management (PSAM) has presented a case to Vivendi to spin off UMG and create a stand-alone company. According to PSAM, UMG would benefit from operational and structural advantages as an independent company. Included in its presentation are forecasts for the global music sector, in particular, some fairly optimistic projections for the growth of streaming. PSAM suggests that an independent UMG would become an attractive strategic acquisition target for companies with digital streaming platforms since royalties and performance rights capture 50–70% of digital streaming revenue. PSAM bases its revenue projections on a big rise in the installed base of smartphones, which the hedge fund claims will act as a catalyst for the transformation of the recorded music sector.
19 Recordings fends off SME’s dismissal motion in royalties dispute
Recorded music major SME has failed in a bid to have a case brought against it by the record company 19 Recordings dismissed. A New York federal court judge ruled in March that several of the claims brought by 19 Recordings should be heard at trial. SME was accused by 19 Recordings in February 2014 of underpaying royalties amounting to $7m earned by a number of contestants on the TV show American Idol including Kelly Clarkson, Clay Aiken, and Carrie Underwood. 19 Recordings, which is the subsidiary record company of 19 Entertainment, the creator of the show, signed the contestants to exclusive recording agreements and licensed the winners and runners up to SME to exploit their music releases. SME filed a motion in June to dismiss all the claims, which were uncovered by 19 Recordings after an audit of SME’s accounts.
Mixed fortunes for the major music groups in 2014
All of the major music companies have now published their financial details for 2014. A comparison of their respective performances reveals differing fortunes for the three in terms of earnings from recorded music and music publishing sales. Consolidation in the two sectors and exchange-rate fluctuations has greatly muddied the year-on-year performance waters in the last couple of years. When these distortions are factored in, the financial details suggest that, in group terms, SME and WMG made gains in 2014 while UMG suffered a decline. Recorded music earnings for UMG came under pressure last year. However, the global leader can draw some relief from a good performance from its publishing division UMPG.
Streamers look for pole position in in-car entertainment
Apple is building a very strong presence in in-car entertainment via its iOS-based CarPlay system, with that position set to be bolstered by the imminent launch of a new – and likely to be very competitive – music streaming service. The company, along with rivals like Pandora and Google, has been busy ensuring that its music gets onto vehicle dashboards to take advantage of the forecast growth of in-car entertainment consumption likely to come with the surge in production of connected vehicles. However, streamed music will not have everything its own way as it still has work to do to convince consumers to give up on a very popular incumbent in the shape of much-loved AM/FM radio, while services need to be much easier to use than they are at present if they are to gain mass acceptance.
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 profile. Canada experienced a second consecutive year of recorded music contraction in 2014. Trade revenue figures will be published by the IFPI later this month, but, according to Nielsen SoundScan, unit sales of recorded music were down. Streaming gains are expected to have reduced the rate of contraction in trade revenue in 2014 compared with 2013 and continued gains could well result in growth in 2015. Preliminary details published by authors’ society SOCAN show royalty collections were up for the second year in a row. Canada’s live music industry also had a good 2014.
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The world of online advertising is a pretty complex business. Media agencies buy advertising space on behalf of clients through ad exchanges with automated processes matching advertisers’ criteria to inventory offered by online publishers. This enables advertisers to gain placements and reach their target audience across a much broader selection of websites. From the loading of a web page to an ad being displayed, an auction has taken place and the winner’s ad is presented, all in just a few milliseconds. However, the process can sometimes result in ads showing up on sites they shouldn’t. Some brands take steps to avoid this and others act quickly when notified. But some don’t, and that is a big problem for content rights holders.
Big brand ads funding pirate music sites
Ovum has just published Music & Copyright’s fourth annual survey of ads on pirate music sites. This time around, the survey focused on the popular site Hulkshare and a search for the Rita Ora track Will Never Let You Down. Big name brands with ads found on the site included Lloyds Bank, Eurostar, Ford and Scottish Power. However, most troubling from UK rights holders’ point of view was the presence of so many ads for ISPs and mobile operators. Even an ad from a UK government department made it onto the site. Continue reading
Today is a big day for all of us at Music & Copyright as we have just published our 500th issue. When the first issue was put together back in September 1992, little did we think that Music & Copyright would still be as popular with subscribers as it is today. A lot has changed in the recorded-music and music publishing sectors over the last 22 years or so, but one thing has remained unmoved, and that is the importance of copyright.
Challenges to rights holders to maintain the value of copyright in an increasingly digital world have meant changes to the way rights are protected and administered. The launch of new digital-music services and means of distributing recorded-music has seen rights administration evolve at national, regional and global levels. However, central to this evolution has been ensuring that rights holders are rewarded for their creative work.
Looking back at some of the early editions of Music & Copyright, most of the names have either long since left the music industry or been swallowed up as part of industry consolidation. However, the headlines for several stories resonate closely with happenings today. For example, the first issue led with the headline European tape levy income may top US$600 million a year and described how the European Commission was examining proposals to protect private copying remuneration. Fast forward to last week and we see that the European Parliament voted in favor of new proposals to modernize the current private copying remuneration system. Other articles in the latest issue also resonate with days gone by with format changes impacting on sales figures and record company consolidation affecting financial results.
As we now look forward to the next 500 issues, I hope Music & Copyright is still delivering the right balance of news and views and that its own evolution has improved the news service. Certainly our feedback since I became editor five years ago (has it really been that long?) would suggest it has.
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Earlier this month Music & Copyright conducted its third annual survey of unauthorized music download sites. Like last year and the year before, advertising for a large number of blue-chip companies and media-content services was found on several of the sites surveyed. Most of the companies contacted by Music & Copyright were fairly oblivious to the fact that their ads appeared alongside promotions for “Russian wives” and “Asian babes.” None of the companies placed the ads on the websites, but were displayed through the use of blind advertising networks.
The current issue of Music & Copyright gives all the details on which companies were the worst offenders and which were doing their best to control advertising overspill. But what was interesting this time around was the realization of the problem rights holders face when trying to have content removed from unauthorized music download sites and the support these sites receive from the big social networks. Continue reading
Talking to rights holders in the run up to the CISAC World Creators Summit in Washington, it seems that few agree that any country has the right balance between certain technology companies’ use of music and the abuse of copyright. Google has been on the receiving end of several legal actions by a number of rights holders that have claimed its online video service YouTube has either not acted quickly enough to remove content when asked, or is using content that it has no license for. Ever-troubling for rights holders is the fact that it is their responsibility to check whether music is being used correctly and not the responsibility of the digital-music service. Continue reading
Depending on where a musician sits in the music industry value chain, a top-10 list of what’s most important to an unsigned artist will differ greatly to one compiled by a million-album seller. Scratching a living out of music is something tens of thousands of musicians do every day. Although the Internet has opened up the promotion and distribution of music to anyone with a computer, it has also made selling music a lot more difficult as almost every single release in a digital-music store is available for free somewhere online. Continue reading
In the past 20 years or so, all sectors of the music industry have been through massive change. Format transitions, company consolidation and greater scrutiny of copyright and licensing have changed the industry beyond all recognition. But have the changes made for industry improvements, and more important, have the main players learned from their mistakes? The recent discovery of the first issues of Music & Copyright has allowed for a unique look at just how much certain things have changed, and how much they haven’t.
The newsletter’s 20-year anniversary came and went in September, but thanks to a long-standing subscriber, copies of the first 24 issues published have been found and make for interesting reading. Despite containing names that have either long since left the music industry or been swallowed up as part of industry consolidation, the headlines for a number of news stories resonate closely with happenings today. Continue reading