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.

Despite legal successes, stream ripping remains a significant threat to the recorded-music industry
Music streaming has quickly become the dominant revenue source for recorded-music companies. Moreover, recorded music is now a growth industry and is likely to remain so for the medium term at least. However, the process of stream ripping, where websites enable users to rip streams from audio and video services and convert them to permanent downloads poses a major threat to the growth of legal music services by undermining the services’ paid tiers that offer offline listening to subscribers. The most ripped copies are from YouTube, and music trade associations have claimed that inaction by the online video service to limit the damage of stream ripping exacerbates the value gap and increases the disparity between how much music consumption video streaming platforms enable and the relatively small amount sites like YouTube pay back to the industry. Some advocates of the free internet have claimed that stream ripping has legal uses and so qualifies as non-infringing fair use. However, the results of recent legal action suggest otherwise. There is, though, some debate over the extent of the damage caused by the existence of stream ripping and whether the illegal process is affecting the growth of the legal streaming sector.

Midyear sales results suggest no change to Italy’s erratic recorded-music sector
New figures provided to Music & Copyright by the Italian music trade association FIMI show that the erratic sales pattern of recorded-music sales in the last few years is set to continue. Total recorded-music revenue increased in the first six months of this year, with streaming and vinyl the main positives. Growth in trade earnings from streaming ground to a halt in 2017, so higher income this year will have come as something of a relief to local record companies. However, the rate of growth in the second quarter was notably lower than in the first. Vinyl was the only buy-to-own format to register increased sales in the six months, but there are clear signs that the revival of the format may well be running out of steam. The CD album is still a popular format for Italian consumers. Although streaming overtook CDs to become the biggest revenue source, the format still accounts for more than 30% of the total trade sales.

Classical music services bring quality to the stream
Recent moves from a number of music companies have suggested that the classical music genre could soon start appealing to music streamers and listeners who have remained loyal to music format ownership. Although a wealth of classical music is available on all of the international music-streaming services, classical music listeners have largely been put off making the switch from ownership to access because of concerns about sound quality. However, there are several services that are catering to classical listener preferences by offering higher-quality streams that in some cases can exceed that of the CD for depth and accuracy. These offers come at a price, with services often charging double the standard monthly rate of the likes of Spotify and Apple Music. But, if the services can find a way to convince the core classical audience that they offer more than the big-name services, the prospects of turning classical music streaming into a viable business are promising.

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. Of the leading recorded-music markets, Japan is certainly the most erratic, with some sizable differences in annual performance. Looking back over the last five years or so, total trade revenue from recorded-music sales has been inconsistent, with one or two years of growth followed by a couple of years of decline. However, although record company income from physical formats continues to be unpredictable, the digital sector has become more stable. Moreover, after a lengthy reliance on downloads, the subscription sector is now generating more revenue for the local industry than any other digital income stream.

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New issue of Music & Copyright

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

California appeal court reverses CBS summary judgment in pre-1972 remastering case
The US Court of Appeals for the Ninth Circuit has reversed a California district court’s ruling that the remastering of a sound recording effectively created a new version of that recording. The case was brought by a number of US record companies against the radio broadcaster CBS because the broadcaster had claimed that it was only broadcasting digitized versions of pre-1972 sound recordings, which it claimed were covered by federal copyright law. Pre-1972 recordings are covered by US state law and so are subject to different copyright protection. For a number of reasons, the appeal court decided that the creation of an authorized digital remastering of pre-1972 analog sound recordings that qualify as copyrightable derivative works does not bring the remastered sound recordings exclusively under the ambit of federal law. The case will now be sent back to the district court for new hearings.

SIAE reports growth for music rights, but fall in overall collections
Italian authors’ society SIAE has reported a fall in total collections after three straight years of growth. According to the authors’ society’s latest business report, total income, including rights collections, private copying remuneration, and revenue from other intermediation services, was down after three straight years of growth. However, the total was still the third-highest for SIAE. Of the four main rights sources, music was the only one to register growth. Cinema and literary works/visual arts both suffered a sharp fall in collections. Music rights were boosted by growth in general performance and live income, while broadcast collections were almost unchanged year on year. Digital music collections were up for the fifth consecutive year, but as a share of total income, the collection source remains very low.

ZAiKS celebrates centenary year with record collections
Polish authors’ society ZAiKS has reported a second successive annual increase in total collections. Celebrating its centenary year, the authors’ society said collections in 2017 topped the previous year’s record. In contrast, distributions edged down and there were marginal rises in both the administration rate and costs. Broadcasting is the biggest income source for ZAiKS ahead of public performance. Both revenue streams registered growth last year, but a sharp rise in cinema collections saw public performance increase its share of the overall collection total. Rising sales of digital music in Poland boosted digital collections, but a fall in sales of physical formats meant phonomechanicals suffered a decline. Foreign receipts increased year on year, but ZAiKS noted that overseas payments were low due to the lack of popularity of Polish music abroad.

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New issue of Music & Copyright with Brazil country report

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

Streaming the big positive for UMG and SME in latest financial results
French media company Vivendi and electronics giant Sony Corp. have reported financial details for their respective music subsidiaries, UMG and SME. Although revenue gains at reported rates for UMG in the first half of this year were affected due to the strength of the euro against the dollar, at constant rates UMG’s performance was positive. Recorded-music income benefited from the continued growth in streaming and subscriptions and more than offset the drop in revenue from physical formats. Publishing saw growth in the six-month period, while income from merchandising suffered a year-on-year decline. Sony also reported positive streaming results for SME in the first quarter of its 2018 financial year, although it was music publishing that registered the biggest sector rise for the company. Sony upped its revenue and operating income forecast for the current financial year for SME. However, the company is still forecasting a fall in both for the full year.

Record collections for UACRR despite ongoing collection society accreditation chaos
Ukrainian authors’ society UACRR has reported a big rise in royalty collections and distributions to its author and publisher members. Revenue from theaters, the society’s biggest income source, grew for the third consecutive year, but the biggest boost to overall growth came from live collections and TV receipts. Live collections benefited from tours from international artists, including Sting and Depeche Mode, while TV receipts benefited from the signing of a broadcast licensing agreement with the broadcast group 1+1 Media. The positive results from UACRR came despite little change to the country’s disorderly collective administrative system. The administration process was thrown into chaos in 2013 when a court order invalidated the accreditation system. Currently, there are 18 competing societies, many of which provide licenses for music use below market rates.

HDS ZAMP reports new record for collections and distributions
Croatian authors’ society HDS ZAMP has reported another record-breaking year for royalty collections and distributions, with both domestic and international receipts registering growth. A modest rise in costs meant the total cost-to-revenue ratio was down for the seventh consecutive year. With the exception of the events sector, all of the main public performance sectors saw higher collections. General licensing was the biggest source of revenue, ahead of TV. There was no repeat of the 2016 rise in phonomechanicals due to lower sales of physical formats in Croatia. However, higher private copying income meant the total for mechanicals was almost unchanged. Digital receipts remain low despite the rise in consumer uptake of music-streaming services.

Brazil country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Brazil music industry report. Following two consecutive years of contraction, trade earnings from recorded music in Brazil grew sharply in 2017. Higher trade sales of digital formats and a rise in performance rights easily offset a more than halving of revenue from sales of physical formats. Umbrella rights organizations reported a second straight year of growth after a first fall for more than 10 years. Brazilian events promoter Time For Fun (T4F) reported a fall in revenue for its 2017 fiscal year. However, a higher occupancy rate per show in live music boosted revenue for the first quarter of this year.

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New issue of Music & Copyright with France country report

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

It’s time for the music industry to tackle the gender imbalance
Gender equality is a hot topic at the moment. There’s pressure in the music industry to increase female participation in the performance, management, and technical sides of the business, with women severely underrepresented across the board. There are a growing number of initiatives – mostly from the public sector – to tackle the gender imbalance, but many music companies simply aren’t yet doing enough to promote women, leaving themselves open to criticism. There are signs that the situation is improving. Live Nation rolled out an initiative earlier this year to support early-stage female-led live music companies, and Smirnoff has attempted to increase the number of female artists headlining at its sponsored festivals.

AKM sees collection growth, but Austro Mechana records annual decline
Austrian authors’ society AKM is on an unbroken streak of collection growth that dates back more than 10 years. The collection society has reported an increase in all of its main domestic income sources. Moreover, overseas revenue was also up year on year. Although digital registered the highest growth rate for AKM, the revenue stream is still a minor revenue source for Austrian rights holders. AKM subsidiary Austro Mechana (AUME) also experienced a rise in digital income, on the back of rising consumer use of streaming services. However, retroactive private copying collection in the previous year had an impact on last year’s overall performance by AUME.

Audio and video streaming gains boost US and Canada music consumption
The recorded-music sectors in US and Canada are continuing to feel the benefit of rising consumer use of streaming services. Consumption figures for the first six months of this year for both countries show streaming gains have more than offset declines in the sales of physical and digital formats. Although sales of vinyl LPs were up year on year, the results for the six-month period confirm the ascendancy of streaming. Not only have access services put both markets firmly on a stable footing, the shift from ownership to access has had varying degrees of impact on the sales of the different genres. R&B/hip-hop has benefited most, and after overtaking rock last year to become the most popular genre in the US, R&B/hip-hop widened the gap further on the previous leader.

France country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed France music industry report. Recorded-music sales in France look to have turned the corner after several almost unbroken years of decline. Earlier this year, the local trade association SNEP reported a second straight year of growth for trade earnings. The rise marked only the third time in the last 10 years that trade sales have registered an uptick. Royalty receipts have been relatively stable. French authors’ society SACEM reported a third consecutive year of collection growth in 2017 after a slight year-on-year decline in 2014.

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New issue of Music & Copyright with Germany country report

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

Instagram video gives music new social traction
In June, Facebook-owned Instagram upped its content game with the launch of its first long-form video service, IGTV. This new platform could be an opportunity for music creators. Artists have long used Instagram to document their lives and get closer to their fans. IGTV should enable them to boost fan engagement. Furthermore, long-form video gives Instagram a way to take on YouTube and in the music space. Artist should produce long-form video to post to IGTV as soon as possible to pick up views, as the platform is likely to become populated with a high level of content. Leading brands such as Nike, Gucci, and Netflix are already active in the new space.

Four years of record collections for Czech authors’ society OSA
Czech authors’ society OSA has reported a fourth consecutive year of growth for royalty collections. Moreover, the setting of a new record saw OSA maintain its position as a billion-koruna society. All the main sectors saw an increase last year, with digital income registering the highest growth rate. However, despite the jump in collections, digital remains a small source of income for Czech authors and publishers. Public performance held on to its position as the biggest collection source for OSA, having taken the top spot from broadcasting in 2016. A higher increase in costs than collections meant costs as a share of the total collected increased slightly. Total distributions to local authors were down last year, but payments to Czech publishers and overseas societies were up.

JASRAC reports slight dip in royalty collections and distributions
Japanese authors’ society JASRAC has reported a slight fall in royalty collections for the 12 months to end-March 2018, after a flat previous financial year. The big two domestic collection sources of general performance and broadcasting both registered growth. Background music was the only performance revenue source to suffer a year-on-year decline. Overall performance income increased, along with digital collections, but the ongoing decline in mechanical royalties caused by the steady fall in sales of physical soundcarriers more than offset the gains elsewhere. In line with the fall in collections, distributions to its members were down in the latest financial year, with broadcasting the biggest single source of earnings for Japanese authors, ahead of general licensing.

Germany country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Germany music industry report. The steady rise in retail sales of recorded music in Germany ground to a halt last year after four straight years of growth. However, although Germany missed out on five straight years of rising sales, the prospects of a return to growth are positive because of the increasing consumer interest in music access services. One slight worry is the big fall last year in spending on physical formats. Although revenue from access services easily accounts for the biggest share of digital music income, CD albums remain the most popular format for German consumers, and should spending on CDs fall away at any speed then the market could suffer for another year or two. Authors’ society GEMA went one better than the recorded-music sector, recording five straight years of revenue growth with total collections last year topping €1bn ($1.2bn) for the second year running. Germany’s live music sector continues to deliver stable results. However, there have been some notable shifts within the market, largely following the entry of Live Nation at the beginning of 2016.

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New issue of Music & Copyright with Italy country report

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

Funding vehicles offer opportunities to music companies
Although music industry revenue continues to increase on the back of rising streaming sales, the financial benefits aren’t spread evenly among record labels or artists, nor do they help those ailing segments of the live music sector. That’s why governments around the world support music businesses and musicians through funding programs. However, state funding is often in short supply, with music often in competition for finance with other creative endeavors. This means there are opportunities for private enterprises to step up to the plate to ensure a pipeline of talent and content necessary for commercial exploitation.

SiriusXM settles legal disputes with SoundExchange
SiriusXM and SoundExchange have settled their litigation surrounding outstanding claims from the beginning of 2007 to the end of 2017, in exchange for a lump sum payment of $150m. Both sides confirmed the settlement with SoundExchange, stating that the funds paid will be distributed to the rights owners and artists whose sound recordings were used during the settlement period. The agreement brings to an end almost five years of legal dispute centering on SoundExchange’s allegations that SiriusXM made incorrect deductions and exemptions when calculating its royalty payments. SiriusXM was also accused of failing to pay the correct fees due for a number of late payments within the same period. SoundExchange said the satellite radio service did not include in its gross revenue any performances of pre-1972 recordings, so reducing the gross revenue figure the royalty payments were based on.

ICMP accuses SGAE of operating a television broadcast distribution scam
Troubled Spanish authors’ society SGAE has been on the receiving end of fresh criticism from global music publishers’ association ICMP over an alleged inappropriate and unbalanced television broadcast distribution scam. Last year, SGAE’s offices were raided by local police that were investigating claims made by some of the authors’ society’s members who claimed that SGAE was complicit in the scam. ICMP complained that although SGAE was reprimanded by a WIPO arbitration panel, the international publishing community, and the international community of collective management organizations, the society has continued to manipulate television revenue. SGAE has denied ICMP’s accusations. Although the authors’ society acknowledged that some of its members had engaged in fraudulent conduct, SGAE said it was not party to its members’ wrongdoings.

Italy country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Italy music industry report. Italy’s recorded-music sector has experienced an erratic few years. Despite the ongoing digital transition, overall performance has been most affected by sales of physical formats. A surprising jump in CD album sales a few years ago added almost as much revenue as streaming. The last couple of years, however, has seen physical sales fall and digital gains struggle to offset the decline. Moreover, the streaming boom came to an abrupt halt last year. UMG is the clear leader in market share terms, ahead of second-placed SME. Royalty collections have been positive with three years of growth following two years of decline. Italy’s live music sector has undergone a number of strategic changes of late, most notably with the launch of Ticketmaster Italia. Italian regulators have increased their attention on the secondary ticketing sector. Moreover, the government has introduced new regulations aimed at tackling the use of automated purchasing.

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New issue of Music & Copyright with UK country report

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

Amid rife piracy, RBTs are helping prop up MEA’s legal music sector
If it were not for ring-back tones (RBTs), music revenue would be in decline in many parts of Africa and the Middle East (MEA). Other digital music services – namely, sites and apps offering downloads and streaming on an a-la-carte or all-you-can-eat basis – are making negligible revenue in much of the region. On their own, digital services do little to compensate for plummeting physical sales. Beyond recorded music, concert ticket sales and sponsorships (i.e., live music) help to shore up revenue – but, other than in a small handful of countries, not at sufficient scale or pace to make a huge difference. Digital services are hobbled by a long list of barriers, yet numerous homegrown services have sprouted up in many parts of the region, and are exploring different ways of scratching out a living. RBTs are immune to digital piracy and get around the region’s low penetration of online payments by being added to users’ mobile bills. However, most of the revenue they generate is pocketed by mobile telecoms operators, and they cannot be relied on as a cash cow forever.

Digital takes the domestic lead for Swedish authors and publishers
Swedish authors’ society STIM has reported record financials for 2017, with total collections exceeding SEK2bn ($227.7m) for the first time. Distributions to its members also topped the previous year’s high. Online and new media service collections were again the standout revenue source, with the growth rate the highest of all STIM’s main revenue sources. Moreover, online now accounts for almost 40% of total domestic collections. Income from overseas remains the biggest revenue source for Swedish authors and publishers, with last year’s growth more than reversing the previous year’s decline. Royalties from festivals and live music concerts increased for the second consecutive year. STIM said the growth was largely down to big-name artists playing more arena dates and an increase in ticket prices.

Opinions divided over the US ACCESS to Recordings Act
US Senator Ron Wyden has thrown something of a curveball at the moves by legislators to speed up the passage of a new copyright law that would put an end to the discrepancy between pre- and post-1972 sound recordings in the US. Currently, pre-1972 sound recordings are governed by state laws and receive different protection than post-1972 recordings, which are under federal copyright protection. The unanimous passing of the Music Modernization Act through the House of Representatives and its subsequent introduction in the Senate gave rights holders hope that the issue of pre-1972 recordings would soon be at an end. However, the introduction of Senator Wyden’s new bill is likely to put the brakes on rights-holder celebrations. Unsurprisingly, opinions over Wyden’s bill have been divided, with some accusing the senator of putting legacy artists’ retirement security at risk.

UK country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed UK music industry report. The UK’s recorded-music industry is going through a positive period. Three straight years of decline ended in 2013 with a rise in trade earnings. Although revenue has slipped back in the two subsequent years, the country has registered two consecutive years of growth. Going one better, the retail value of recorded-music sales has risen for three straight years with subscription sales and streaming growth more than offsetting lower spending on physical formats and downloads. UMG is the clear leader in market share terms, with SME in second place. Royalty collections in the UK are on the rise with both PRS for Music and PPL continuing to register record receipts. Live music continues to be the most robust leisure sector in the UK, and tours and festival appearances still the most secure way for artists to generate revenue. However, concerns over the ongoing decline in the number of grassroots music venues has prompted the government to launch an inquiry into the live music business, with a specific focus on small music venues.

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