Category: Music industry

New issue of Music & Copyright with Sweden country report

The final issue of Music & Copyright for 2016 is now available for subscribers to download. Here are some of the highlights.

GMR hits back at RMLC with antitrust complaint
US performance rights organization Global Music Rights (GMR) has filed an antitrust complaint at the US District Court for the Eastern District of Pennsylvania against the Radio Music License Committee (RMLC), accusing it of collusive tactics to depress the royalty rates paid by radio stations to songwriters and of operating an unlawful cartel intended to stifle competition among radio stations. The lawsuit follows a similar filing in November by the RMLC against GMR which accused the performance rights organization (PRO) of attempting to charge the US commercial radio industry monopoly prices to publicly perform musical works in the GMR repertory. In response, the RMLC described the GMR lawsuit as nothing more than a ploy designed to pressure the RMLC into paying higher royalty rates for GMR content than it currently pays other US PROs. It also accused GMR of ignoring the long-established court-set royalty rate system.

OTT video service growth and the challenge to broadcast royalty collections
Over-the-top (OTT) broadcasting of audio and video is a delivery system that has rapidly grown in popularity, from the perspective of both distribution and consumption. With its divergence from traditional means of broadcast – in that content is delivered using the open Internet rather than a service provider’s own infrastructure – it is not an understatement to say OTT has revolutionized broadcasting. Multiple services, including those from pure-play providers, such as Netflix and Amazon, and those from national pay-TV operators, are available across the world, many offering compelling libraries that include content from linear pay-TV services. Revenue from OTT services is rising, and growing numbers of consumers are finding the flexibility and convenience of OTT offerings preferable to traditional broadcast services. Pay-TV services’ entry into the OTT sector is as much about attracting subscribers who have yet to engage with a full paid-for offering as it is about competing with the current pure-play services. However, with the competition for broadcast eyeballs intensifying, collective rights management organizations could be forgiven for feeling a little apprehension that broadcast royalties are going to come under pressure, particularly given that the income source has for so many years been their biggest revenue generator.

Pricing, bundles, and new hardware set to drive digital music subscription growth
The recorded-music sector is rapidly becoming reliant on service providers rather than music sellers. The term “music retail” is fading from common parlance, and those years-old brands that for so long formed the epicenter of young consumers’ music lives have all but been replaced by the faceless but logo-heavy new kids on the block. It is often said that no one likes change, but the opportunities now available to many music industry service providers and secondary facilitators mean the latest changes have been for the better. Ovum has picked out three key trends that both primary and secondary music industry players should take note of if they want to benefit from what is now being seen as an industry on the up.

Sweden country report
In addition to the usual set of music industry statistics and news briefs, Music & Copyright also includes a detailed Sweden music industry report. Over a relatively short period of time, Sweden has become the world leader in terms of music access, with home-grown service Spotify dominating not only record-company earnings from digital music, but also total Swedish recorded-music trade revenue. While there has been an inevitable slowdown in the take-up of music subscriptions, the local IFPI branch said earlier this year that it was confident there was still room for growth and noted that interest in music in the country remained high. One of the ongoing beneficiaries of the digital growth has been authors’ society STIM, whose collections last year rose to record levels on the back of authors’ growing digital earnings. The live sector also registered a good year, with ticket sales to concerts and festivals registering healthy growth.

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Music & Copyright is published by Ovum.

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.

Secondary-ticketing services thrive on the back of unique live-market economics
Media exposés and government investigations in some European countries have brought the thorny issue of secondary ticketing to the fore of music news reporting in the last month or so. Police in Italy are investigating two prominent promoters after a local TV program exposed a number of shady dealings, while a government committee in the UK questioned representatives of leading secondary-ticketing services over their business practices. However, despite the unpopularity of ticket resale services, few countries in Europe have gone as far as outlawing the practice and restricting services’ operations. In some cases, laws and regulations are not being enforced, and resellers are making huge profits at the expense of consumers. Most live-industry stakeholders would like to do away with secondary ticketing altogether, but while tickets to big events are continually sold way below market value, some believe that the problem of ticket resale is one of the live industry’s own making.

Court filing sheds light on the Flo & Eddie SiriusXM pre-1972 sound recordings settlement
In November, a joint notice filed at the US District Court for the Central District of California by artists Flo & Eddie and satellite radio broadcaster SiriusXM stated that the two parties had reached an out-of-court settlement in the long-running dispute over the payment of performance royalties for the broadcast of songs fixed in copyright before February 1972. Now, the artists and broadcaster have filed a joint motion for preliminary approval of the agreement. The filing details the potential payments SiriusXM might be required to make based on the outcomes of pending state court appeals. The case dates back to 2013, when Howard Kaylan and Mark Volman, founding members of 1960s group The Turtles who later became known as Flo & Eddie, accused SiriusXM of copyright infringement on the grounds that the broadcaster played their tracks without holding a license to do so.

Japan heading for flat year despite big rise in subscription revenue
Figures published by Japanese recorded-music trade association the RIAJ show that digital music sales for the first nine months of the year grew year-on-year at a faster rate in 2016 than in the same period of 2015. A big jump in trade earnings from subscriptions more than offset lower year-on-year sales of all unit downloads. Subscriptions are now the biggest digital revenue source for Japanese record companies, though combined sales of single tracks and albums still account for more than half of the online digital total. Despite the positive digital sales, the continued dominance of physical formats means the overall wellbeing of the country’s recorded-music sector is still largely determined by the performance of the CD album. Given that the RIAJ reported a decline in the production value of physical formats in the first nine months of this year, Japan looks to heading for a year of contraction.

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 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 almost single-handedly boosted overall recorded-music trade earnings to growth in 2015. However, the country looked to have turned the corner in 2012, with record company income from digital sales fully countering the drop in CD album sales. But trade revenue contracted in the two subsequent years. In contrast to the recorded-music sector, royalty collections in Australia have been on the up for several years, 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 suffered a decline last year after two years of rising ticket sales and attendance.

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Music & Copyright is published by Ovum.

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.

Prince’s estate files copyright infringement claim against Roc Nation
The estate of the artist Prince has filed a lawsuit at the US District Court for the District of Minnesota against Roc Nation, accusing the company of copyright infringement. According to the lawsuit, Roc Nation-owned and -controlled music subscription service Tidal has been streaming the late artist’s recorded-music catalog without the necessary license. Prior to his death in April, Prince had pulled his music from all streaming services and was a fierce critic of access services. However, an exclusive deal was agreed with Tidal in August 2015 to stream Prince’s final album, HitNRun: Phase 1. In June, Tidal added a number of Prince albums to its service, claiming to have signed a deal with the artist. Although the estate said it recognized the initial agreement for HitNRun: Phase 1, it said it was unaware of any further deal between Prince and Tidal.

Court rules GEMA should not distribute collections to publishers
A court in Germany has ruled that GEMA does not have the authority to distribute royalty collections to music publishers. A case was brought by two author members of GEMA, who successfully argued that they should receive both the publishers’ share and the authors’ share of collections, since it is the authors alone who introduce usage rights to GEMA. Although the full reasoning behind the court’s decision has not yet been published, the result echoed an April ruling by a different German court in a case brought by an author of scientific works against collection society VG Wort. In that case, the court ruled that WG Wort could pay out of license fees for statutory remuneration to publishers in exceptional cases only.

Podcast take-up is growing, but monetization remains a challenge
In the US, 89 million people have listened to a podcast, and 17% of the population are regular listeners, a proportion that has grown substantially in recent years. But while podcasts are popular, they generate strikingly little revenue. Audiences are fractured, and advertisers are skeptical of the medium. Nonetheless, nearly all newspapers, broadcasters, and other media organizations produce podcasts in some form. For them, podcasts are a low-cost means of building their multimedia offerings and developing their brands. Similarly, some specialist podcast producers use the medium for self-promotion, while others simply carve out a modest living talking about a subject they love. More effective monetization may be around the corner as technology improves and as growing podcast audiences attract more interest from advertisers. But while podcasts have considerable room for growth in profitability, they will remain challenging to monetize in the short term.

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’s two main music industry sectors, recorded and live, have both experienced positive times of late. Local trade association ZPAV signaled in September that strong midyear recorded-music sales in the country will result in a third straight year of growth. Higher trade earnings from physical formats and streaming were behind this year’s recorded-music gains. Although Poland has no live music trade association, local promoters have reported positive results for 2016 and are expecting a similarly good 2017. In contrast to recorded and live, royalty collections in the country have suffered two years of declines, with rising earnings from public performance more than offset by lower broadcasting collections.

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Music & Copyright is published by Ovum.

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.

Currency fluctuations affect global performance rights earnings in 2015
Given the long period of demise of recorded-music sales, producers’ and performers’ earnings from performance rights have become an important income source. Total collections in 2015 broke new records, with distributions to both producers and performers topping $1bn for the second year. Measured at reported exchange rates, global performance rights payments were down year on year. At constant rates, total distributions increased. However, the rate of growth was much lower than in 2014. Global receipts from performance rights remain dominated by the US organization SoundExchange. Although Europe is the biggest source of performance rights collections, the region’s share of the global total slipped below 50% for the first time.

France set to register annual growth in recorded-music sales
French music trade association SNEP has reported positive trade figures for the first nine months of this year. Total trade income increased year-on-year, and a good third quarter meant the rate of growth in the nine-month period was higher than the midyear rate. Subscriptions and ad-supported streaming were the two growth sectors, with sales of downloads down sharply. The overall performance was also buoyed by a rise in third-quarter physical-format income. Based on the SNEP figures, France looks well placed to register its first annual rise in trade earnings since 2013 and only the second for more than 10 years. The only worry for longer-term growth is that physical formats still dominate trade sales, and so a return to longer term growth is still dependent on how quickly local consumers turn away from CD albums.

Messaging is becoming the new battleground for music marketing
Fast-growing messaging services are gaining an increasing amount of consumer attention and younger demographics are spending more time on chat platforms than on social media. Music companies and artists are already using messaging to increase fan engagement and for promotional purposes, and this will accelerate. However, marketers looking to capitalize on messaging further will need to work hard to keep up with technological changes, particularly because messaging platforms are becoming increasingly automated. Chat bots are also coming to the fore, giving artists the chance to get even closer to their fans, but they are posing a threat to legitimate methods of selling concert tickets.

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’s two main music industry sectors, recorded and live, have both recovered in the last couple of years. Recorded-music sales have increased for two successive years on the back of greater consumer interest in music subscriptions and streaming. The live sector is seeing rising revenues despite high rates of VAT on cultural events. Royalty collections in the country have remained flat for two years with lower collections from some sectors almost offset by gains elsewhere. The optimistic industry figures come at a time when the Spanish economy is continuing to register signs of improvement. However, the Spanish music sector, particularly recorded music, has a long way to go before it can declare itself out of the woods.

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Music & Copyright is published by Ovum.

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.

Apple adopts a light approach to music bundling, reflecting wider trend
Apple is taking a route well-trodden by other music subscription providers and is partnering with mobile operators to add Apple Music to smartphone tariffs. But it is shying away from entering into full-blown “bundling” deals with operators, in which the cost of subscribing to a music service is incorporated into a mobile subscription plan – otherwise known as “hard” bundles. Instead it is offering Apple Music as a bolt-on tariff. The only difference to paying for the service via the usual means is that users get a longer free trial period – and they pay via their mobile bill or prepaid airtime credit. This echoes a wider market trend, since bolt-ons have accounted for an increasing proportion of music mobile bundle deployments this year.

Music subscriptions and the pay-TV blueprint for success
Just over 30 or so years ago, multichannel-TV services began tempting TV households to pay to receive their TV entertainment. Apart from a license fee in some countries, TV services had previously been provided free of charge. More channels, exclusive content, and better-quality pictures led households to sign up to TV-subscription services in their millions, and the pay-TV sector is now worth more than $200bn. Music-subscription services are riding a wave similar to the one the pay-TV sector experienced in its infancy, with rollout strategies strikingly similar to those used in the early days of multichannel TV. With recorded-music sales on the rise and with paid subscriptions soon to account for more than half of consumer spending on recorded music, access services are certainly bringing back the good times for record companies. The big question is whether the growth period for music subscriptions will be able to match the continued success of the pay-TV sector.

Flat year for RAO as government reform of royalty collections looms large
Russian authors’ society RAO has reported a flat year for royalty collections after four straight years of growth. Total income edged down year-on-year in 2015, with collections suffering from the ongoing economic recession in the country. The income figure was still the second-highest in RAO’s history, with increased collections from general performance, grand rights, and overseas. However, the decline in broadcasting and private copying income dented the overall total. The publication of RAO’s business report for 2015 comes at the same time news reports in the country suggested the Russian government was moving forward with is plans to reform the business of royalty collections. The current system of multiple collection societies may well be replaced by a government-run entity that manages all the different rights and issues licenses to music users and processes rights-holder distributions.

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 the most advanced in the world. In the last 15 years or so, the sector has been through a massive transformation, from being almost overrun by piracy at the turn of the century 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, 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 the distribution of recorded music and the major labels account for a low market share. Authors’ society KOMCA exceeded its budgeted collection total for last year and is expecting further growth this year. Live music sales continue to benefit from the popularity of K-pop. However, strained relations with China may affect exports of this music genre to the world’s most populous country.

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Music & Copyright is published by Ovum.

New issue of Music & Copyright with Mexico country report

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

Midyear trade results hint at a very positive year for global recorded-music sales
All of the world’s major recorded-music markets and a good number of smaller ones have published midyear trade figures. Based on the numbers, combined global trade revenue from the sale of physical and digital recorded music and income from music access services could rise at the highest rate for more than 20 years. All trade associations that have published figures, with the exception of Japan’s RIAJ, have shown continued gains from music subscription services, with the growth more than offsetting declines in earnings from other formats. The ongoing dominance of a small number of markets means a return to global growth will remain in the hands of the few. However, a good performance from some of the world’s so-called emerging markets will determine just how big the annual rise will be.

Music industry takes aim at stream-ripping site Youtube-mp3.org
Two weeks after the IFPI published the results of a study that identified a rise in the use of stream-ripping services, US and UK music trade associations have ramped up the pressure on the world’s biggest such site, Germany-based Youtube-mp3.org. In the US, legal proceedings have been filed in a federal court in California against the site and its owner for copyright infringement. In the UK, the BPI has put the stream-ripping site on formal notice of intended legal action if it does not cease infringing. The practice of stream ripping has been around for several years, and legal action has only once before been brought against Youtube-mp3.org. That case had little effect on the workings of the service, and the number of stream-ripping sites available to Internet users has subsequently grown unchecked. However, with concerted legal action taking place on both sides of the Atlantic, Youtube-mp3.org and other stream rippers are facing a new reality.

Post-pirate Napster needs new friends to stay in the music stream
File-sharing pioneer Napster is back in the US market, badging the established Rhapsody music-streaming service. After being acquired by Rhapsody in 2011, the Napster brand finally replaced Rhapsody in June in the US, the only market not to be fronted by the famous cat logo. However, while Napster proved to be a major disruptive force at the turn of the century, its current iteration is no match for leading streamers such as Spotify and Apple Music. That leaves the offering competing against a raft of lesser, but still powerful, undifferentiated streaming platforms. Nothing in Rhapsody/Napster’s history suggests that its music offering can cut through, and its fate might well be to be of streaming’s also-rans.

Mexico country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Mexico music industry report. Mexico is Latin America’s second largest recorded music market and the region’s biggest live market. After two years of decline, record company earnings from recorded music sales and services registered impressive growth in 2015. This rise was driven solely by a big jump in music subscriptions. Mexico crossed the digital tipping point in 2014, and the gap between digital and physical widened significantly last year. SME maintained its lead as the biggest record company in Mexico with a slight increase in market share over second-placed UMG. Mexico’s biggest events company, Interamericana de Entretenimiento, registered a big rise in earnings in 2015, and results so far this year from the company suggest that 2016 will be another profitable year.

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Music & Copyright is published by Ovum.

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.

ECJ clarifies the copyright infringement rules concerning hyperlinks
The European Court of Justice (ECJ) has ruled that the posting of a hyperlink on a website to works protected by copyright and published without the author’s consent on another website does not necessarily constitute a communication to the public, so long as the person that posts the link does not seek financial gain and acts without knowledge that the works have been published illegally. The Dutch Supreme Court had asked the ECJ for clarity in a case brought by Sanoma Media, the local publisher of Playboy magazine, against GS Media, owner of the online news service GeenStijl. Sanoma had accused GeenStijl of repeatedly posting links to websites hosting unauthorized Playboy photos of the Dutch TV presenter Britt Dekker. Although the case centered on photos, the ruling could have major implications for a wide range of media services and search engines.

MCSC reports another record year for royalty collections in China
Royalty collections in China are on something of a roll at the moment with total income for authors and publishers last year rising sharply. In September the local authors’ society MCSC published its business report for 2015, confirming that total collections had increased for the seventh consecutive year. In addition to a record total, collections grew at the fastest rate since 2011, with domestic and foreign income both registering growth. Despite only a slight rise in digital income, the collection source was the biggest single income stream for Chinese authors and publishers. The growth predicted in the uptake of digital music services in the next few years should provide a significant boost for digital collections. Although MCSC welcomed the positive results, the authors’ society noted that it been forced to take out a high number of copyright infringement lawsuits against various music users. MCSC did note an improvement in the legal environment and copyright law enforcement.

Flexible pricing is key to longer term music subscription growth
Music subscriptions have quickly become the mainstay of the recorded music sector. The leading streaming services are boosting record company earnings and returning global trade revenue to growth after many years of decline. The number of subscribers to the likes of Apple Music, Spotify, and Tidal is continuing to rise, and consumer interest in music access rather than ownership is showing no signs of slowing. Perhaps surprisingly, the business model behind music subscriptions has changed little in the short time that the now-familiar brands have been operating. In most developed markets, there is a standard price across different streaming services and little difference in the amount of songs they offer. Free access is probably the biggest distinguishing factor, with some services maintaining an advertising-supported tier while others limit free access to a trial period. There is, however, a likelihood that some changes will have to be made to maintain the momentum. Because offering exclusives is currently a contentious move, streaming services may have to consider adjusting their prices to ensure future success.

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. Japan is the second largest recorded music market in the world. According to the IFPI, the country ended 2015 behind the US in terms of overall trade revenue but was comfortably the global leader for trade income from sales of physical formats. One of only two Asian countries in the global top 10 (South Korea is the other), Japan is unique in several ways, with trade revenue from sales of physical formats still accounting for more than 80% of total record company income. After several years of decline, digital earnings have started rising again and subscription services are growing rapidly. The dominance of major record companies is being challenged by a number of local independent companies. Japan boasts one of the world’s largest authors’ societies in terms of royalties collected. It also has a buoyant live sector.

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Music & Copyright is published by Ovum.