Category: Music industry

New issue of Music & Copyright

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

EU negotiators agree on new rules for cross-border online content service use
European Union (EU) negotiators have agreed on a series of new rules allowing citizens of member states to maintain access to online content services when they travel out of their home country around the EU. Services covered by the new cross-border rules include films, sports events, e-books, video games, and music. The agreement marks the first related to the modernization of EU copyright rules as proposed by the European Commission as part of its Digital Single Market strategy announced in May 2015. The next step will see the agreement formally confirmed by the Council of the EU and the European Parliament. Once adopted, the new rules will become applicable in all member states by beginning of 2018.

Sixteen countries singled out by the IIPA in latest copyright enforcement report
The International Intellectual Property Alliance (IIPA) has released its annual report detailing the impact that piracy and limitations on market access are having on US copyright holders in the worst-offending countries around the world. Eight countries were placed on the priority watch list with a further eight countries placed on the watch list. In line with last year’s change on previous annual reports, the latest IIPA release focuses on markets where the organization believes that active engagement by the US government could generate positive results for creators and the industries that support them. The IIPA said that in several key foreign markets, meeting the challenges identified in its report would create US jobs, promote exports, and contribute substantially to healthy economic growth in the US and overseas.

Major labels file copyright lawsuit against mixtape service Spinrilla
Mixtape site Spinrilla and its founder are being sued by the major record companies for alleged copyright infringement of their works. The labels filed a lawsuit in an Atlanta district court claiming that Spinrilla has profited from widespread copyright infringement for at least three years. The site and accompanying mobile apps allow users to freely stream and download content as well as make playlists and share music. The labels are claiming Spinrilla has committed direct and secondary copyright infringement and are claiming the maximum statutory damages or actual damages, including Spinrilla’s profits from its infringement.

Spain’s recorded-music sector sees third consecutive year of growth
After a long period of year-on-year contractions in trade earnings from recorded-music sales, Spanish trade body Promusicae has reported a third successive year of growth. Although combined revenue from physical and digital formats and on-demand access services only edged up last year, and although the growth rate was lower than the previous two years, the sector’s performance was notable for a number of reasons. Digital income overtook earnings from physical formats for the first time, and access services generated more than half of the overall recorded-music revenue total. The vinyl revival continued, and earnings from mobile personalization rose sharply. Despite the continued good news, it is sobering to remember that total trade revenue is still a quarter of the size it was at the turn of the century.

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Music & Copyright is published by Ovum.

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.

Music industry and consumer support for higher-quality audio streams grows
The idea of making high-resolution (hi-res) or high-definition (HD) music appealing to more than just audiophiles is a step closer following the announcement by a number of recorded-music industry stakeholders at the Consumer Electronics Show (CES) in Las Vegas that they are to boost their output of high-quality music. Music subscription service Tidal has also enhanced its commitment to high-quality streaming with improvements to the quality of its high-fidelity tier. A number of research reports suggested last year that increased sound quality was growing in importance for consumers who have become accustomed to music streaming. However, with the two biggest digital music service providers in the world, Spotify and Apple, yet to make any significant high-quality music moves, there remain serious questions over the likely success of the renewed push for the delivery of better-quality sound.

Lower collections for IPRS as Delhi court introduces interim rights-licensing process
India’s authors’ society, IPRS, has reported a drop in collections for the financial year ending March 2016. With the exception of the minor income source TV broadcasting, all revenue streams suffered a fall. IPRS commented that unfavorable court rulings and litigation were the main reasons for the income reduction. IPRS has also been instructed by a Delhi court not to issue any new licenses for the next three months. The interim order, which also affects licenses issued by the performance rights organizations (PROs) Phonographic Performance Ltd (PPL) and Novex Communications, was made on the grounds that the PROs are unregistered and so are operating in contravention of India’s copyright act.

Live music set to register another record year for ticket sales
Assessing the performance of the live-music sector from one year to the next at anything beyond a national level is speculative at best. Unlike its recorded-music counterpart, which is well organized under the auspices of the IFPI, the live industry has no all-encompassing trade association. Moreover, despite the emergence in recent years 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. However, some guidance can be gained 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 2016. Although the individual performances of each company differed, the combined earnings for the featured promoters showed positive overall growth. Moreover, share price gains over the last 12 months for four of the six companies pointed to ongoing city approval for the live entertainment sector.

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, the country is home to the largest live music sector in the world and the biggest live music promoter, Live Nation Entertainment. The US also has two of the biggest authors’ rights organizations, ASCAP and BMI, and has quickly become the world leader in performance rights collections for record companies and performers, despite the fact the country’s collection agency, SoundExchange, collects royalties only from digital music services.

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Music & Copyright is published by Ovum.

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.