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.

CMA explains decision not to conduct market investigation into UK music streaming
The UK competition regulator, the Competition and Markets Authority (CMA), decided earlier this year not to conduct a full market investigation into the music industry and, in particular, music streaming. In January, the CMA published a market study notice, confirming that it was examining the supply of music to consumers and the provision of services connected with the supply of music to consumers, to assess whether both operated in the full interests of music users. As part of the market study, the CMA had a six-month deadline to decide whether to launch a more detailed investigation. Choosing not to do so, the CMA noted that the recorded-music sector was concentrated, with three major labels dominating, but concluded that issues negatively affecting artists in the UK were driven by factors that were unrelated to the high degree of concentration. Now, the authority has published a full report detailing its reasons for not conducting a more detailed study. The CMA said that after thorough consideration, it was unlikely that the problems cited by some industry stakeholders were competition created, and a competition intervention would be unlikely to improve the situation.

Live music returns with a new set of postpandemic problems
The two music industry sectors of live and recorded have operated with differing fortunes over the last 20 years or so. The decline of recorded-music sales for much of the previous decade contrasted with growth in live sales. The uptake of streaming returned the good times to record companies, and both recorded and live experienced a period of growth. However, while spending on recorded-music was largely unaffected by COVID-19, the pandemic put paid to almost all concerts and in-person music performances in most parts of the world for almost two years. While the live sector is now firmly back up and running, and the world’s biggest promoters are reporting positive financial results, the companies’ share price performances this year have been less than impressive, with world events and the cost-of-living crisis weighing heavily on investors’ minds.

Deutsche Grammophon set to go head-to-head with Apple Music on classical streaming
Deutsche Grammophon has made a major digital play with last month’s launch of an upgraded classical music audio and video service that boasts high-fidelity streaming capabilities. However, while the company has a strong brand able to attract the attention of the genre’s fastidious fans, it is going up against competition from a range of impressive startups. Also in the wings is Apple Music, which is in the throes of developing a dedicated classical music streaming platform built on its acquisition of leading classical audio streamer Primephonic. However, Apple Music has work to do in making the prospective Apple Music Classical a serious contender, not least in adding a live-streamed video offering to match those already in the marketplace.

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. Before the COVID-19 pandemic, the Australian music industry had experienced a prolonged period of growth. Recorded-music sales had registered consecutive annual increases, with growing numbers of consumers happy to stream music rather than own it. Authors’ rights collections were also on the up, and ticket sales for live music events were topping record levels. However, the COVID-19 pandemic touched all the country’s music sectors, some significantly more so than others. Recorded-music sales weathered the storm and have now registered growth for seven consecutive years. Collections for APRA AMCOS also maintained consistent annual increases, with the year to June setting a new record. However, live music suffered a major dip, as revenue and attendance fell sharply. Moreover, although concerns over COVID-19 are now lessening, economic and financial problems are slowing the sector’s recovery.

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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.

YouTube Music makes market share gains as more streaming services roll out price rises

The number of music subscriptions around the world is continuing to rise, with a steady stream of consumers happy to sign up to one of the many available streamers. In a short space of time, a handful of services have become dominant. Spotify has long been the leader, although subscriber gains from some of its competitors have reduced the Swedish service’s market share. YouTube Music has registered the highest growth rate of the leading streamers so far this year, with the service recently confirming a new subscriber milestone. Although the music streaming sector is continuing to grow at pace, some services have decided that now is the time to raise prices. Spotify has kept its pricing largely the same since it rolled out more than 10 years ago, but that is expected to change early next year. While the majority of subscribers have indicated that they will fork out the extra, a sizable number have questioned whether the higher price is worth paying.

Luna Aura files legal claim against 3LAU for a share of Ultraviolet multimillion-dollar NFT sale

Recording artist Luna Aura has filed a lawsuit at a New York district court against the electronic music DJ and producer 3LAU for the nonpayment of royalties. Aura contributed to a track included in an album released by 3LAU in 2018. However, several special edition vinyl copies of the album were sold as part of an NFT auction at the beginning of last year. The auction generated several million dollars in revenue, but Aura did not receive any royalties linked to the NFT sale. Although both sides signed an agreement covering rights payable from the original release of the track and album prior to their recording, there was no specific provision included in the agreement for any nontraditional sales. Aura was offered a licensing fee for the use of the track in the NFT project, but the payment offered was not considered satisfactory.

Twitter’s travails make rival social media a stronger music bet

Twitter 2.0 is a very difficult beast to get a handle on. The reign of Elon Musk has been short and has already been tumultuous. And the whim-based nature of the new owner means there are plenty of twists and turns to come. But while Twitter looks an unsafe and unstable platform to be active on right now, there is likely promise from a mooted creator program that could deliver for artists if it comes to fruition. However, for that to come about, relations between Twitter and record companies need to improve dramatically, given the latter’s issues around alleged copyright infringement on the platform. In any case, Twitter 2.0 isn’t really cutting-edge social media, and TikTok looks like a far more attractive ongoing music prospect.

France country report

In addition to the usual set of music industry statistics and news briefs, the latest issue of <em>Music & Copyright</em> includes a detailed France music industry report. France ended 2021 as the seventh-biggest economy in the world and the third in Europe, behind Germany and the UK. Last year saw the French economy grow 6.8% after suffering an 8% contraction in 2020, largely because of the impact of the COVID-19 pandemic. For this year, the IMF forecast in its October-published World Economic Outlook report that GDP would rise 2.5%, and then 0.7% in 2023. Similar to its economic position in Europe, France also lags the UK and Germany for recorded-music sales. However, last year saw trade sales grow for the fifth consecutive year with the positive results down to the sustained rise in streaming-generated revenue and the resilience of physical formats. Digital sales first overtook physical in 2018 and accounted for almost 70% of last year’s digital/physical total (see Table 1). UMG extended its distributor lead with SME and WMG losing share. Collections for SACEM returned to growth after suffering a dip in 2020. However, the effects of the pandemic are still impacting certain business areas.

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New issue of Music & Copyright with Canada country report

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

US songwriters edging closer to an end to the 15-year physical mechanical rates freeze
UMG, SME, and WMG along with the National Music Publishers Association (NMPA) and the Nashville Songwriters Association International (NSAI) have submitted a joint motion to the US Copyright Royalty Board (CRB) agreeing on the mechanical rates payable on the sale of physical recorded-music products, permanent downloads, ringtones, and music bundles (subpart B configurations) for the five years between 2023 and 2027. Earlier this year, the CRB judges had withdrawn their backing of a previous agreement between the music companies and rights holder groups following criticism that the freezing of current rates was unfair. The CRB judges called on industry stakeholders to either come together and forge a new agreement or face long, drawn-out, expensive litigation. Although the new motion will see rates increase 32%, plenty of other issues aside from the rate rise remain unresolved.

Annual revenue for SME tops the JPY1tn mark for the first time
Sony Corp. has reported a good end to the 2021 financial year for its music division SME. Recorded-music and music publishing sales were up year-on-year in 4Q21 with gains for the two segments more than offsetting a dip in revenue for visual media and platform. For the full year, improved recorded-music and publishing income boosted SME sales past the JPY1tn ($7.7bn) mark for the first time. Streaming drove the recorded-music total in the quarter and full year with higher sales more than offsetting declines in sales of physical formats and downloads. Streaming was also the publishing mainstay although “other” publishing revenue registered a much more positive year than in the prior 12 months. Income for the third division, visual media and platform, was down in the quarter and full year with the prior year periods boosted by the massive success of the anime movie Demon Slayer: Kimetsu no Yaiba–Mugen Train.

Deezer comes to market as it takes on music rivals with streaming allies
Deezer has been in the music streaming business a long time but is regarded as something of a second-tier provider in comparison with the likes of Spotify, Apple Music, and Amazon Music. The company is now set to get a stock exchange listing along with large sums of money to help it grow. It’s too late for Deezer to make it big across a broad swathe of markets, so it needs to cherry-pick and decide where there’s real opportunity to make a mark. To date, it has shown it can do this when it joins forces with a strong local partner, and there’s no reason to believe that this strategy can’t deliver going forward. Also, Deezer has already shown commitment to the fast-growing livestreaming sector and it’s here where the brand has the chance to cut through and perhaps become a major operator.

Canada country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Canada music industry report. Canada is one of the world’s bigger music markets. Although an ever-present in the top 10, the country has slipped a couple of places in recent years, with South Korea and China registering higher gains in trade sales. Last year, however, Canada maintained its position as the eighth-biggest recorded-music market, extending its lead slightly over ninth-placed Australia for the second year in a row. Recorded-music consumption levels were up in 2021, along with trade sales. Streaming registered healthy growth, along with sales of vinyl. Performance rights were down for the second year in a row as the sector continues to suffer the negative effects of the COVID-19 pandemic. For the third consecutive year, UMG and SME enhanced their market share lead over WMG and the independents. SOCAN is yet to publish full collection results for 2021. However, preliminary estimates by the authors’ society show revenue from licensed music set a new record, beating the previous high set in 2019. After suffering a major downturn, Canada’s live sector has started on the long road to recovery. Estimates suggest it will take several years for ticket sales to return to prepandemic levels.

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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.

Recorded-music trade growth set to eclipse modest rise in revenue for music publishers
With all the world’s major recorded-music markets and one or two other smaller ones having published midyear trade figures, Music & Copyright‘s annual assessment of the results suggests global recorded-music trade earnings from the sale of physical and digital recorded-music and income from music access services will rise at the fastest ever rate. The big bounce-back in sales of physical formats in some markets will provide a major boost to this year’s global total, along with the continued rise in streaming. Adding to the good news, revenue from performance rights and synchronization is expected to return to growth after a tough 2020. Income for music publishers will also register a positive year after the squeeze on the performance sector from the COVID-19 pandemic took the edge off last year’s growth.

Increase in global performance rights distributions, but fall expected for this year
Performance rights distributions to record companies (producers) and performers edged up last year, following on from a fall in 2019 that saw payments slip below the $3bn mark after reaching the milestone for the first time in 2018. Producers’ and performers’ rights have become an important source of income in recent years given the long period of demise of recorded-music trade revenue. The return to growth through increased consumer interest in streaming and subscriptions has somewhat overshadowed the importance of performance rights, but the revenue source remains a key earnings generator. While last year’s modest increase suggests that distributions defied the COVID-19 pandemic, total payments were partly based on receipts from prior year uses and so the impact on distributions to producers and performers has been delayed.

Financial big guns take aim at the catalogs business
The music industry has seen millions of dollars pour into the acquisition of song rights over the past couple of years, and rights management, which was until recently regarded as something of a backroom business, is making global headlines. Big financial players are now making sizable bets on music catalogs, which have now become firmly established as a new asset class, and valuations are on the up. Active asset management will be the key to future success, and owners will need to really sweat those newly acquired rights to achieve decent returns. Furthermore, while mainstream music will surely continue to make up the bulk of such portfolios, investors should look to pick up unexploited rights in new genres.

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. Prior to the pandemic, Italy’s recorded-music sector had experienced an erratic few years, largely due to the lingering dominance of physical formats. However, digital trade sales overtook physical formats in 2018 with a sharp rise in subscription sales more than offsetting falls in CD album sales and vinyl. The pattern of sales continued into 2019 but the toll on physical formats and performance rights in 2020 resulted in a flat year overall. So far this year, sales have bounced back strongly. UMG remains the clear leader in market share terms, ahead of SME and WMG. However, the largest of the three majors saw its distributor share fall last year with SME and WMG both making gains. Total income for the authors’ society SIAE suffered a sharp fall with collections from live performance and background music taking a tumble. Given that the live sector was effectively shuttered for nine months, total spending on concerts and festivals last year was down to the lowest level for more than 20 years.

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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.

Music streaming services go for growth, but the focus varies
Music streaming services are growing apace. Spotify remains the global market leader, although both Amazon Music Unlimited and YouTube Music have expanded quickly over the past few years, and Apple Music continues on its steady course. Interestingly, Spotify and Amazon Music Unlimited are going head-to-head on podcasting and spending millions in the process. YouTube Music is clearly bent on subscriber acquisition above all, while Apple Music’s focus remains on providing a premium service. As all providers seek more sign-ups, expect to see differentiation on pricing as market segmentation becomes increasingly important. Also, there’s opportunity for these companies—although likely not for Spotify—in the burgeoning livestreaming space, and both Amazon Music Unlimited and YouTube have clear advantage here.

Canadian rock band Nickelback hits back at Rockstar plagiarism claims
Canadian rock band Nickelback has hit back against accusations that the band’s multimillion-selling track Rockstar borrowed from an earlier work by lesser-known group Snowblind Revival. Last year, Kirk Johnston, guitarist and songwriter for Snowblind Revival, filed a lawsuit at a Texas district court against Nickelback and the band’s record company and music publisher, claiming Rockstar had plagiarized his track, Rock Star. Nickelback members and the companies filed a motion to dismiss the claim, but in August a judge submitted a report and recommendations to the court stating that there was enough evidence to continue with the case. Nickelback and the companies subsequently responded with a new filing, detailing objections to the recommendations, along with a request to dismiss Johnston’s plagiarism claims.

FIMI reports massive bounce back for Italian recorded-music trade sales
New figures published by the Italian recorded-music trade group FIMI for the first half of this year show recorded-music trade sales in the country registered the biggest year-on-year rise on record. While sales in the corresponding period of last year were negatively affected by access and distribution problems as a result of government measures to stem the spread of the COVID-19 virus, the latest results are nothing short of extraordinary. Although audio subscriptions increased at a faster rate in the last six months than in the prior year period, it was the performance of the different physical formats that was the standout result. Sales of vinyl almost trebled year-on-year, and even though income from CDs was up, vinyl became the biggest physical format revenue source for the first time in more than 30 years.

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New issue of Music & Copyright with Austria country report

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

Court rules no share of UMPG’s Bob Dylan acquisition proceeds should go to coauthor estate
A New York court has ruled that the estate of songwriter Jacques Levy is not entitled to a share of the proceeds from the acquisition of Bob Dylan’s catalog by music publishing major UMPG in December. Levy coauthored a number of tracks with Dylan that were featured on one of the music star’s earlier albums. Although Levy has received royalties for the sale of the tracks, the late author’s wife filed a lawsuit against Dylan and UMPG claiming that the agreement establishing Levy’s royalty rate also covered any sale of the works. However, the court decided otherwise, ruling that the agreement was clear that the contribution by Levy was made as an employee for hire and not a joint author.

Strong quarter and half year results for UMG ahead of September listing
UMG has registered a positive set of results for the second quarter and first half of its 2021 financial year. Subscriptions and streaming were again the stand out revenue stream with the growth rate in the three months the highest for the last seven quarters. Although now a minor source of income for the music company, sales of physical formats grew sharply, while licensing receipts also increased along with merchandize sales. North America remained the dominant source of recorded-music revenue, ahead of Europe and Asia, but it was the rest of the world region that scored the biggest income rise. Music publishing revenue was down in the quarter and half year at reported exchange rates but up at a constant rate measure. Vivendi’s live entertainment and ticketing unit Vivendi Village saw revenue double in the quarter with strong growth reported in the US.

Now is the time to take Twitch-style tipping to another level
Tipping has offered a lifeline to many artists during the COVID-19 pandemic, with live streaming video gaming service Twitch proving popular among musicians. Capability is now being enhanced on social media platforms such as YouTube and Facebook as the bigger technology companies see remuneration through tips as a way of ensuring creators stay loyal. However, the tipping ecosystem is beginning to look a little behind the times and is ripe for innovation, especially as the mechanism has demonstrated just how loyal audiences can be to artists. Tippers should be better rewarded for this loyalty, perhaps with exclusives, while musicians deserve a larger cut of the tipping proceeds than they currently get.

Austria country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Austria music industry report. Austria is one of Europe’s smaller music markets. Although well-developed, with a relatively high per-capita spending rate on music, the country could be described as one of Western Europe’s laggards when it comes to the transition from physical formats to digital. Like its bigger neighbor to the north, Germany, which plays host to a large sector of consumers that have long been wedded to the CD album, physical formats accounted for the biggest share of spending on recorded-music in Austria until 2018. However, digital has quickly increased in dominance with streaming the biggest revenue generator for local record companies. Authors’ rights collections in the country suffered a decline last year because of the impact of the COVID-19 virus. Also affected was performance rights revenue for producers and performers. Hardest hit by the virus was the live sector with ticket sales dropping sharply.

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New issue of Music & Copyright with Sweden country report

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

UK parliamentary committee details legislative reforms required to reset the music streaming sector
A UK parliamentary committee tasked with examining the workings of the music streaming sector has made a number of recommendations to rebalance streaming in favor of artists and performers. The Digital, Culture, Media, and Sport (DCMS) Committee said in its July-published Economics of music streaming report that the government should introduce a right to equitable digital music remuneration, a right to recapture the rights to works after a period of time, and the right to contract adjustment if artists’ works were successful beyond the remuneration they receive. The report also expressed concerns about the dominant position of the major music companies and called on the government to support the independent sector and take advice from the Competition and Markets Authority (CMA) as to whether competition in the recorded-music market was being distorted. Also under the Committee’s spotlight were user-generated content (UGC)-hosting services and their questionable licensing requirements.

Digital gains unable to offset COVID-related performance losses for SOCAN
Canadian collective management organization (CMO) SOCAN has published its collection results for 2020. The CMO had advised its members last year of the likely decline with live performance and general licensing expected to be down sharply. Those estimates were largely accurate. However, the overall dip was modest compared with the drop in revenue experienced by some other international CMOs. Higher receipts from digital services softened the losses from performance-based revenue streams. Unsurprisingly, concerts suffered the biggest decline, followed by cinema and general licensing. Online income overtook foreign collections to become the single biggest revenue source. Although distributions increased year-on-year, the full effect of the virus on member payments is expected to be felt in 2021.

Why Roblox’s virtual experiences are valuable to the music business
Fast-growing gaming company Roblox has drawn the attention of the music majors. The games platform has already hosted a number of virtual concerts and other music events, demonstrating that it is able to draw the crowds, sometimes in huge number. This kind of reach enables music companies and artists to develop the music tastes of millions of would-be fans, many of which, according to Roblox, are under the age of 16. So far, the events have made relatively modest use of the digital capabilities of gaming platforms, but expect Roblox and its new music company allies to work together to develop features that lean on innovative games technology to make artist avatar performances richer music-plus experiences. That will boost engagement, as well as the likelihood of selling a good deal of digital merchandize.

Sweden country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Sweden music industry report. As home to the world’s biggest on-demand audio subscription service Spotify, Sweden has become one of the world’s most progressive recorded-music markets. The country’s digital share of trade sales last year topped 93% (see Figure 1) as digital sales continued to grow and combined spending on physical formats slipped to yet another record low. However, in contrast to the buoyancy in recorded-music sales, rights collections and live music spending suffered declines from the impact of the COVID-19 pandemic. STIM’s results were shaped by the virus, although a retroactive payment boost to foreign revenue in 2019 exaggerated the size of the overall dip. Live sales were the worst hit music industry sector last year and 2021 is shaping up to be no better with a government roadmap to a return to normality ruling out all major festivals until September at the earliest.

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New issue of Music & Copyright with Australia country report

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

Subscription services face the challenge of maintaining user growth
Music company revenue from music subscriptions is set to rise this year, as take-up of the likes of Apple Music, Deezer, and Spotify shows little sign of abating. The number of users of subscription services is growing annually, with markets previously lost to piracy starting to come on board. It is, however, inevitable that revenue from subscriptions will slow and services will need to look at new ways to tempt current users to pay more, or to attract streaming holdouts to pay something. Mixed in with these considerations is the issue of price. The cost of an entry-level subscription has remained unchanged in the leading markets, meaning that in real terms, access is gradually getting cheaper. Leading service Spotify has signaled that it is willing to experiment with pricing in Northern European markets, but with music companies at the heart of pricing, a multimarket price increase must be getting nearer.

Congress tries again to force radio broadcasters in the US to pay to play
New legislation aimed at forcing AM/FM radio broadcasters in the US to pay performance royalties to producers and performers has been introduced in Congress. The Ask Musicians for Music (AM-FM) Act would line up terrestrial broadcasters alongside noninteractive online services that do pay a performance right. The US is unique in the industrialized world for not having a radio broadcast performance right for producers and performers. However, despite the anomaly, the US is the biggest country for performance rights, with distributions from collective management organization SoundExchange last year exceeding $950m. Previous efforts at legislating on the matter have failed, and the strength of the radio lobby, along with US politicians’ unwillingness to upset station owners, means the proponents of the latest attempt face an uphill battle.

Evolution of music piracy raises challenges for industry groups
Illicit file-sharing activity continues to trouble the recorded music sector, but stream-ripping has emerged as the leading means of obtaining copyright-infringing music content online. Record companies have little option but to seek legal remedy against perpetrators, to strong-arm third party enablers such as Google and ISPs, and to lobby government to regulate against pirates in efforts to ameliorate the problem. However, new and innovative pirating services will continue to appear and will require responses. It might well be time to take a look at core legislation that has served to protect online platforms from liability for the past two decades.

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 economy is suffering from a period of slow economic growth. Retail sales are depressed despite three interest rate cuts, which have reduced the rate to a record low of 0.75%. Moreover, GDP was up just 1.4% in the year to end-June, the slowest rate since the global financial crash 10 years ago. In contrast to the economic gloom, recorded-music sales are on the up, with rising consumer interest in subscriptions boosting trade sales to four straight years of growth. UMG enhanced its sizable market share lead last year at the expense of SME. The latest figures published by APRA AMCOS show royalty collections in Australia are continuing to rise, with digital the biggest collection source, generating more than public performance and TV broadcasting combined. Revenue from ticket sales to live events last year topped A$2bn ($1.6bn) for the first time.

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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 Indonesia country report

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

Just how big is recorded music streaming going to be?
In a fairly short space of time, music streaming has become the most important distribution means for the recorded music sector. Earlier this year the IFPI reported that streaming gains were behind the first substantial growth in global trade earnings for almost 20 years. Add to this the fact that all the major labels have confirmed in the last few weeks that streaming was the top recorded music revenue source in the first quarter of this year. We look at the latest developments in the music subscription sector and explains why streaming is now so important for the recorded music industry. It also predicts just how high the total number of paying subscribers could reach by 2020.

Subscription gains fail to offset physical format decline in Japan
The Japanese music trade association, the RIAJ, has reported physical and digital recorded music trade figures for the first three months of this year. Production levels of physical formats suffered a modest decline in the period compared with the same period of 2015. In contrast, total record company earnings from digital sales and services increased year on year in the quarter. However, the rate of growth in digital sales was not sufficient to fully offset the physical format declines. Although record companies in Japan will welcome the rise in digital revenue, physical formats still account for more than 80% of total trade earnings in the country. There is a real fear that any acceleration in the contraction rate of physical format sales could spell a tough few years for the Japanese recorded music sector.

Streaming and manufacturing initiatives set to bolster the vinyl renaissance
Vinyl remains in resurgence as consumers continue to show an appetite for the traditional analog format. But demand is stretching the industry to the limit and established vinyl pressers are struggling to keep pace, hamstrung by antiquated equipment, with record companies relying on old engineering from central Europe to feed the pipeline. There are, however, plenty of signs of innovation on the manufacturing side as fresh blood is drawn to the business. The age-old format might also be in line for an HD upgrade.

Indonesia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Indonesia music industry profile. Indonesia has the third-largest population in Asia after China and India. Like the two leaders, it has for many years been thought of as a music market that offers great potential. But as a marketplace for creative content, it has been badly hit by the widespread availability of pirate recordings, and unauthorized CD albums are on sale throughout the country for a fraction of the price of legitimate copies. More recently, digital piracy has grown in line with Internet access. Indonesia is no different from a number of other Asian territories where music piracy is widespread. However, unlike many countries in the region, Indonesia has made notable improvements on intellectual property rights protection. Mobile personalization is currently the biggest revenue generator for record companies in the country. But several of the international music subscription services have set up shop in Indonesia and there is real hope for the future of recorded music sales. Indonesia’s digital infrastructure is also developing well with smartphone penetration on the rise. Essentially, all of the requirements for further digital growth are firmly in place.

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Music & Copyright is published by Ovum.