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.

SPECIAL FOCUS: NMPA turns up the heat on Spotify in the US with letter to the FTC
The US National Music Publishers’ Association (NMPA) has written to the US Federal Trade Commission (FTC), calling on the agency to review Spotify’s recent practice of reclassifying its Premium service offerings as bundles. The service made the change earlier this year so it could pay lower mechanical royalty rates. Spotify has claimed that because its plans contain music and audiobooks, it should pay a reduced royalty rate as permitted under US compulsory blanket licensing rules on bundling. The Mechanical Licensing Collective (The MLC) has already filed a legal action against Spotify for making the unilateral royalty switch. However, the NMPA has turned up the heat on the streaming service with its FTC complaint, with more action set to follow if Spotify does not switch back to its non-bundle royalty rates. (View in full)

NEWS FEATURE: Digital takes the lead for TONO in record year for Norwegian collections and distributions
Norwegian authors’ society TONO has reported a third consecutive annual rise in collections and a second straight year of growth for distributions. Digital hit a new record high and became the single biggest income stream for local authors and publishers. The previous leader, broadcasting, registered a modest rise, although TONO said the result was in line with expectations given the competition to radio and linear TV from audio and video streaming. After returning to prepandemic levels in 2022, both concert and background music receipts registered growth last year. However, despite two years of higher collections for cinema, the income source is yet to beat the pre-COVID-19 high. Overseas revenue was up year-on-year, with GEMA providing the biggest share of international payments. (View in full)

SECTOR ANALYSIS: Megabucks for rights acquisitions are doing little good for the music ecosystem
Music catalogs continue to attract buyers prepared to pay many millions of dollars for tracks from leading artists and authors. The latest name in the mix is Queen, with reports suggesting the sale of the band’s catalog could fetch upward of $1bn. Increasingly, the headline deals are being driven by deep-pocketed financial institutions who see recorded-music as providing the opportunity to deliver significant monetary gains. However, these profits are destined to leave the recorded-music sector with nonmusic companies reaping the rewards. What is needed are innovative ways of leveraging the value of rights to help develop music’s creative and entrepreneurial talent. (View in full)

COUNTRY REPORT: The UK
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 is the world’s third-largest recorded-music market. Earlier this year, the IFPI said the country maintained its global ranking, with a trade sales growth rate exceeding that of fourth-placed Germany and the leading markets of the US and China. In common with most other developed markets around the world that suffered from the impact of the COVID-19 global pandemic, certain parts of the UK music industry were badly affected. Live music was the hardest hit, with the sector forced into an 18-month hiatus. Performance-based rights collections also took a tumble. However, both sectors have recovered. The live industry is overflowing with artists wanting to perform, and rights collections are breaking records. Last year, recorded-music sales benefited from higher subscription sales along with an increase in spending on vinyl and CDs. Performance rights collections also registered a new record high. UMG extended its distribution lead over second-placed SME for the second consecutive year. Spending on tickets to live music events returned to prepandemic levels, but many smaller grassroots venues have been forced to close due to tough operating conditions. (View in full)

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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.

Gains for digital and physical boost US recorded-music sales to a seventh year of growth
US trade group the RIAA has reported another year of rising trade and retail sales of recorded-music. Streaming was again the main growth provider, with $900m extra from the five different streaming categories. Such has been the rise in all things access, streaming revenue alone last year was more than $1bn higher than the entire US recorded-music market in 2020. There was, however, a notable decrease in the growth rates for the different streaming subsectors. For example, paid subscriptions and subscriber revenue both rose at single-digit percentage points. Also, performance rights distributions by SoundExchange were down year-on-year. Physical sales were boosted by the continued renaissance of vinyl, with the increase in sales of the age-old format more than offsetting a sharp decline in spending on CDs. Unit sales of vinyl exceeded CDs for the first time since 1987.

Slowdown in subscription and vinyl sales as BPI reports UK recorded-music results
UK music trade association the BPI has reported a positive 12 months for recorded-music trade sales. However, the overall growth rate was down sharply on the prior year. Perhaps most concerning is the slowdown in revenue from music subscriptions, with the year-on-year rise in the low single-digit percentage points. Audio advertising registered healthy growth, and income from video streaming was also up. The resurgence of vinyl continued, with revenue from the format overtaking CDs for the first time in 35 years. But the low growth rate compared with 2021 suggests the renaissance of the age-old format may be coming to an end. Both performance rights and synchronization continued to bounce back after a tough 2020 caused by the COVID-19 pandemic.

K-pop’s growing popularity spawns a clash of the genre giants
The ongoing success of K-pop, both in its home South Korean market and overseas, sparked a spot of corporate warfare among the sector’s leading protagonists. SM Entertainment (SMEnt) became the takeover target of both major South Korean tech group Kakao and rival K-pop outfit HYBE. The latter now looks to have withdrawn from the fray—both companies’ efforts have been complicated by familial rivalry, bids, and counterbids, along with a court injunction—leaving Kakao the task of persuading SMEnt investors to support its latest bid. Should it succeed, SMEnt is set to emulate HYBE and push K-pop further onto the international stage.

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 report. Indonesia is the fourth most populous country in the world, behind China, India, and the US: the country ended 2022 with 279.1 million inhabitants. Despite its large population, Indonesia has always massively underperformed as a recorded-music market, with the legal sector long struggling to gain a foothold because of persistently high piracy rates. However, music streaming’s success around the world is influencing Indonesia, with a mixture of services now available offering access to several million local and international recordings. The collection of royalties has also changed. In 2019, the government and the different collective management organizations agreed on a one-stop-shop administration, with a single agency given the authority to collect and distribute royalties from commercial music users. The live sector has suffered a couple of bad years because of the COVID-19 pandemic and the measures introduced to control the spread of the virus. Following a sharp fall in ticket sales in 2020, some live performances resumed at the end of 2021, but it was last year that saw a fuller return for the sector, with ticket sales returning to prepandemic levels.

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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.

US CRB affirms Phonorecords III rates but offers streaming services total cost and bundling gains
The long-running dispute between US rights holders and digital music streaming services over mechanical rates payable for the five years between 2018 and 2022 (Phonorecords III) is almost over. At the beginning of 2018, the Copyright Royalty Board (CRB) increased the overall percentage of revenue paid to songwriters by streaming services over the five years by 43.8% from 10.5% for the 2012–17 period (Phonorecords II). The rate was set to rise annually and would only reach 15.1% in 2022. However, Spotify, Amazon, Google, and Pandora appealed the ruling, and the rate increase was put on hold. Now, the CRB has confirmed that the rates will apply. Although the decision is a win for authors and publishers, the CRB decided not to change the total content cost (TCC) and bundle definitions and reverted back to the Phonorecords II levels.

Despite ongoing COVID-19 impact, broadcast and digital gains boost SGAE collections
Spanish authors’ society SGAE has published its annual accounts for 2021 after receiving approval from its membership at the June annual general meeting. Total collections were up for the first time since 2018. Although SGAE noted in its report that the COVID-19 pandemic continued to impact its results, most performance-based revenue streams returned to growth after suffering sharp falls in 2020. Broadcasting registered the biggest rise of all the main collection sources, with backdated receipts boosting the total. Digital income was up year-on-year, and there were notable gains for on-demand audio and video streaming. Distributions to SGAE members were flat, with domestic payments edging up and monies sent overseas falling. SGAE signed four new representation agreements in 2021. The Spanish society now manages the repertoire of 173 collective management organizations in around 180 countries.

Brands push deeper into music, and now metaverse marketing beckons
Suddenly, leading brands seem to be in the business of releasing albums, with Pokémon and Mastercard making great play of their new recorded-music offerings as part of wider marketing campaigns. Pokémon looks to have cut through with its drop—it’s too soon to assess Mastercard’s album performance—and that may well spur the release of further branded musical offerings. Also, there’s more music industry appetite to work with brands to further monetize content. UMG’s partnerships unit has just launched the UMusic Media Network, offering music for brands to work with, following a similar service rollout from indie distributor UnitedMasters that has already attracted big-hitter Diageo. And while music-brand alliances have long been many and varied, the metaverse is as yet unchartered territory for such partnerships. IHeartMedia clearly believes that’s the case, while WMG really ought to leverage its early-mover position in the virtual world and bring brands onboard.

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 is the world’s third-largest recorded-music market. Earlier this year, the IFPI said the country maintained its global ranking despite a strong performance by fourth-placed Germany. In common with many other developed markets around the world that suffered from the impact of the COVID-19 global pandemic, certain sectors of the UK music industry were badly affected. Live music is only now beginning to recover after an 18-month hiatus, while performance-based rights collections took a hit but are now bouncing back. Recorded-music sales held up well, with higher revenue from streaming and vinyl offsetting performance rights and synchronization declines. Last year saw recorded-music trade sales benefit from rising sales of all formats apart from downloads. Furthermore, performance rights and synchronization returned to growth. Digital now generates close to 70% of recorded-music trade sales. UMG maintained its distribution lead over second-placed SME.

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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.

Beach Boy David Marks the latest artist to call foul on international streaming royalty deductions.
US singer songwriter Lenny Williams has been denied class action certification in a case brought against WMG over the alleged underpayment of royalties earned from the streaming of his works overseas (outside of the US). Williams had wanted the case to be heard as a class action, but the Ninth Circuit affirmed an earlier California district court decision that class members’ contracts were potentially too dissimilar to be dealt with altogether. Also, many class members’ advances were likely to be still unrecouped and so the question of unfair deductions was largely irrelevant. Now, ex Beach Boy guitarist David Marks has filed a similar class action claim, this time against UMG at the same California district court, accusing the music company of also underpaying on international streaming royalties. The filing said UMG had withheld international streaming revenue, breached contractual obligations, and acted in a deceptive and fraudulent manner.

JASRAC reports record year for distributions but collections suffer the COVID-19 effect
Japanese authors’ society JASRAC has reported a mixed year for collections and distributions, with the former down for the first time in three years and the latter topping the prior year’s record. The impact of the COVID-19 virus and the subsequent restrictions on various industry sectors and consumer movements meant all performance-based receipts were down. Broadcasting was the least affected, but the total in the 12-months to end-March was buoyed by backdated payments. Mechanical collections suffered a downturn from lower sales of CDs. Games mechanicals and revenue from broadcast commercials also fell sharply. In contrast, digital collections were up with sizable increases in collections from music subscriptions and video streaming services.

EU/UNESCO report shines a light on the Zimbabwean music industry
A new report from the National Arts Council of Zimbabwe has provided some interesting insights into the workings of the Zimbabwean music industry. Apart from South Africa, accurate data for sales of recorded-music and rights collections in most African countries is in short supply. Although the report does not contain these elusive figures, it does provide details of consumption and an assessment of which digital music services are the most popular. The report also explains how the difficulties associated with selling music means most artists earn most of their revenue through live performance. Unsurprisingly, rights collections in Zimbabwe are low with many music users, particularly broadcasters either failing to engage with the local collection society or just refusing to pay royalties for the music used. The report does though suggest that the Zimbabwean music sector has the potential to grow, provided a sufficiently enabling environment is in place.

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. Like all other developed markets around the world that have suffered from the impact of the COVOD-19 global pandemic, certain sectors of the UK music industry have been badly affected. Live music has been on a hiatus since March last year and although the country is making rapid progress with its vaccine rollout, the prospects for the rest of this year are not good. Rights collections have also taken a knock with PRS for Music reporting its worst 12 months in terms of year-on-year performance. Three of the four main revenue streams suffered a decline with public performance the hardest hit. In contrast, recorded-music sales held up well with higher revenue from streaming and vinyl keeping the total above the £1bn ($1.4bn) mark. Unsurprisingly, performance rights and synchronization took a hit with measures to control the spread of the virus resulting in the closure of nightclubs and many retail stores, as well as film production and screenings suffering a negative impact. UMG maintained its distribution lead last year over second-placed SME. Both companies experienced a slight rise in market share.

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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.

How podcasts are carving out a space in the music business
Leading music companies are pushing their way into podcasts as a means of expanding their core audio entertainment bases beyond music performance. UMG is currently focusing on music-related content, for example, while SME is looking for opportunities beyond the music business. Thanks to an aggressive—and ongoing—acquisition strategy, Spotify has emerged as a major player and is now in a position to significantly develop both new business models and the format itself. Expect to see some more experimentation in and around podcasts, with Spotify the mover and shaker behind much of the action.

US Copyright Office report on safe harbors recommends a rebalance is required
The US Copyright Office has published a report looking at the impact and effectiveness of the safe harbor provisions contained in section 512 of the Digital Millennium Copyright Act (DMCA). The study is the first conducted by the government on the effectiveness of the notice-and-takedown system since its enactment more than 20 years ago. Guiding its analysis, the office said it followed a number of principals and subsequently concluded that the operation of the section 512 safe harbor system has become unbalanced. The report highlights areas where current implementation of section 512 is out of sync with Congress’ original intent, including eligibility qualifications for the service provider safe harbors, repeat infringer policies and knowledge requirement standards. The report is not advocating big changes to section 512 but has instead identified certain areas where Congress could fine-tune section 512 to achieve a better balance between the rights and responsibilities of online service providers and rights holders in the creative industries.

JASRAC reports new highs for collections and distributions
Japanese authors’ society JASRAC has reported a second straight year of growth for collections and distributions with receipts and payments in the 12 months to end-March 2020 hitting new records. Broadcasting collections, JASRAC’s biggest income source returned to growth after a fall in the prior 12-month period. General performance income was also up, along with receipts from cable and satellite as well as background music. A new milestone for digital saw collections top mechanicals for the first time. Digital income was boosted by the uptake of music and video subscription services. CD and video mechanicals were hit by falling sales of hard formats, while games mechanicals registered another positive year on the back of rising games sales. In line with the rise in collections, distributions to its members hit a new record in the latest financial year, with broadcasting the biggest single source of earnings for Japanese authors, ahead of digital and mechanicals.

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. Up to the end of last year, the UK’s music industry had experienced a positive few years with all of the major sectors on the up. After several years of decline, recorded-music trade revenue has risen for five years in a row with rising subscription sales and streaming growth, along with rising performance rights and synchronization income more than offsetting the steady decline in spending on physical formats and downloads. Last year the UK maintained third spot in the IFPI’s global ranking, ahead of Germany with trade sales surpassing £1bn ($1.2bn) for the first time for more than 10 years. UMG extended its market share lead over second placed SME with the former gaining share and the latter suffering a small. Royalty collections in the UK are on the rise with both PRS for Music and PPL continuing to register record receipts.

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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.

SGAE committed to reform after CISAC suspends the society’s membership
Troubled Spanish authors’ society SGAE has been suspended from CISAC over concerns about the society’s operations, discriminatory treatment of rights holders, and unfair practices relating to the distribution of royalties. A report from CISAC containing recommendations for changes to the society’s governance rules, statutes, and royalty distribution practices was presented to SGAE over a year ago. A lack of progress on the confederation’s requirements resulted in the opening of a sanction procedure. Although CISAC said it has been working with SGAE for a number of months, a lack of progress on change has led to the authors’ society’s expulsion. SGAE has been embroiled in a scandal involving an alleged inappropriate and unbalanced television broadcast distribution scam. SGAE’s offices were raided by local police investigating claims made by some of the authors’ society’s members, who stated that SGAE was complicit in the scam. Despite the expulsion, SGAE says it is confident that it will be readmitted to CISAC after required changes are endorsed at the society’s June general assembly.

Sweden as a model for developed countries’ music subscriber potential
When music industry analysts comment about the potential future size of the music streaming and subscription sector, they often look to developing markets such as China and India, both of which have been re-energized after years of stagnation under the cloud of piracy. Certainly, the world’s two most populous countries have a central role to play in continuing the rise in recorded-music sales, along with several of their smaller neighbors. But many developed markets are still a long way from reaching their potential, and so for the next five years at least, these markets will remain the backbone of global growth. The paucity of official subscriber details means approximations and forecasts are the only way to plot the future of recorded-music sales. There are, however, one or two countries where granular evidence can back more precise estimations. Moreover, given the advanced position of some markets, the recorded-music sector has a model on which to base its future potential.

Podcasts are starting to look like a good bet for music companies
Record companies and music streaming operators are seeing value in the podcast and are investing in the content and production sides of the business. While both see podcasting as a way of increasing engagement with audiences, there’s also an opportunity for music streamers to increase their revenue outside their core music-listening businesses. Success lies both in making podcast discovery an easier operation than it is right now and in developing strategies to grab a decent share of the growing podcast advertising market – as far as the latter is concerned, those with data expertise at the heart of their activities ought to do best.

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 music industry is experiencing a positive period at the moment. After several years of decline, recorded-music trade sales have now increased for three years in a row. Going one better, the retail value of recorded-music sales has risen for four consecutive years. Trade and retail sales have benefited from rising subscription sales, and streaming growth has more than offset a drop in spending on physical formats and downloads. Last year the UK retook third place from Germany in the global trade revenue ranking (see Figure 1). UMG extended its market share lead over second-placed SME, with the former gaining share and the latter suffering a decline. 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 UK’s most robust leisure sector, with tours and festival appearances still a secure way for artists to generate revenue.

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New issue of Music & Copyright

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

Competing music sales monitors report good year for US music consumption
US recorded-music consumption registered a very positive 2018, according to consumer research organizations Nielsen and BuzzAngle. Both have reported an increase in the growth rate of recorded-music consumption, with on-demand audio streaming the main driver. Nielsen has so far only released top-line consumption details, while BuzzAngle has published a full report detailing sales and consumption across the different music formats and access platforms. Streaming has attracted all the headlines, but both research companies have also highlighted the continued revival in sales on vinyl albums. Nielsen analysis on sales by genre will follow with the release of its full report, but BuzzAngle has confirmed that hip-hop/rap is the most popular music genre in the US, although the share of sales of the genre varies greatly by format and access method.

Jury set to get it on in Ed Sheeran plagiarism case
Artist and songwriter Ed Sheeran’s attempt to have a copyright infringement claim dismissed has been denied by a New York district court judge. The claim was made by the heirs of Edward B. Townsend, who cowrote the track Let’s Get It On with soul legend Marvin Gaye in 1973. The heirs have claimed that Sheeran copied elements of the Gaye track for the million-selling 2014-penned song Thinking Out Loud, the third single to be released from the album Multiply. Sheeran filed for summary judgement on the grounds that the two songs were not the same and that any similar elements between the songs were not protected by copyright. The filing also questioned whether the daughter of Townsend was legally entitled to make a copyright claim.

Webcast and streaming gains boost IPRS collections
Indian authors’ society IPRS has reported a big rise in collections for the financial year ending March 2018. The increase was the first since 2014 and was largely the result of higher public performance collections and income from webcasting and streaming. Although the collection society only publishes limited revenue details, it did say that receipts from local online radio service Mix Radio and YouTube boosted the overall collection total. Ongoing and lengthy legal action against FM radio broadcasters has so far failed to reverse previous legal rulings that the broadcasters do not have to pay royalties to IPRS for the use of its members’ content. IPRS has also taken legal action to force mobile operators to pay royalties for the use of its members’ music in value-added services such as ringtones and ring-back tones.

UK music consumption and retail sales continue to rise
UK music trade group the BPI and retailers’ association ERA have reported respective growth in music consumption and retail sales. Strong gains in music streaming boosted UK consumption levels and retail sales of recorded music last year. According to the BPI figures, which were supplied by the Official Charts Company (OCC), streaming consumption topped the previous year’s record level, while the revival in vinyl LP sales continued, albeit at a slower rate than in previous years. Data from ERA, also supplied by the OCC, showed that retail sales of music subscriptions were particularly positive. Neither the BPI nor ERA figures included any music video details, and so the overall year-on-year growth rate of streaming and digital in consumption and revenue terms will most likely be higher than reported by the two organizations.

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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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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.

Plotting the rise of paid audio subscriptions and the end of smooth lines and growth curves
Earlier this year, global trade body the IFPI reported that audio subscriptions were on course to become the biggest source of revenue for music companies. Digital as a whole overtook physical in 2014, and streaming became the biggest revenue generator in 2016. However, although the CD album was still the single revenue source when streaming is broken out into its three constituent parts, paid audio subscriptions is set to take the lead this year. The rise of the paid subscription from niche revenue source just a few years ago can only be described as rapid, and recent record-company results have illustrated the importance of access services to the companies’ bottom lines. As part of our annual look at the latest developments in the music subscription sector, we explain why streaming is now so important for the recorded-music industry and why the rise of access services is the beginning of the end for the well-established trend of straight-line growth and decline.

ECJ issues ruling on internet sharing platforms’ role in copyright infringement
The European Court of Justice (ECJ) has issued a preliminary ruling in a case referred by the Supreme Court of the Netherlands on the legality of websites and services offering the indexation of metadata relating to protected works, which enable internet users to locate copy-protected works and share them online. The ECJ said that making available and managing an online platform for sharing copyright-protected works may constitute an infringement of copyright. Even if the copyright-protected works are placed online by the users of the online sharing platform, the ECJ confirmed that the operators of that platform play an essential role in making those works available. The case was first brought by Dutch antipiracy organization Stichting Brein against internet service providers (ISPs) Ziggo and XS4ALL to force them to block the domain names and IP addresses of torrent tracker site The Pirate Bay.

Sharp rise in private copying collections boosts ARTISJUS results
Hungarian authors’ society ARTISJUS has reported a return to growth in royalty collections following a fall in 2015. A boost from retroactive private copying collections in 2014 was the main cause for the year-on-year decline the following year. However, sharp organic growth in private copying income last year, along with positive results from public performance and cable retransmission, took ARTISJUS’s total revenue close to the 2014 record. Digital collections were particularly positive, although they still accounted for a minor source of income for Hungarian authors. ARTISJUS noted in its business report that the focus of digital exploitation has shifted from downloading to streaming, resulting in much heavier administration in the course of the collection and distribution of royalties. Local VOD services generated around three-quarters of digital royalties, with international music services accounting for the remainder.

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 experiencing something of a growth spurt at the moment. Three straight years of decline ended in 2013 with a rise in trade earnings from recorded music. Although revenue slipped back in 2014, the country has subsequently registered two consecutive years of growth. The retail value of recorded-music sales has also risen year on year with subscription sales and streaming growth more than offsetting lower spending on singles and albums. Royalty collections in the UK are also showing positive signs, with both PRS for Music and PPL registering annual growth. Live music continues to be the most robust leisure sector in the UK with tours and festival appearances still the most secure way for artists to generate revenue. However, despite the relatively buoyant stadium and arena sector, the ongoing decline in the number of smaller music venues is a cause for concern.

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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.

Google’s latest antipiracy report sparks criticism from music industry
Google has published the latest version of its How Google Fights Piracy report, detailing its recent antipiracy activities. In addition to updating some of the facts and figures presented in the 2014 edition, the latest report explains how Google’s products and services have created opportunities for creators around the world and how the company has targeted those that have misused its services to commit copyright infringement. The report lists creators that have used the Google-owned service YouTube to boost their careers as well as develop new revenue streams and business opportunities. Reaction to the report from music industry bodies was swift. Both the IFPI and the BPI commented that Google has the resources and expertise to do much more than it currently does to limit the amount of recorded music accessed without permission on its platforms.

SGAE reports second year of modest growth in royalty collections
Spanish authors’ society SGAE has published its annual accounts for 2015 after approval from its membership at the June annual general meeting. SGAE has experienced an unsettled last few years with arrests of senior executives for misappropriation of funds followed by antitrust investigations over high tariffs for live performance and broadcast fees and several changes in its president. In terms of collections, the authors’ society has reported a second consecutive year of modest revenue growth after three years of decline. Ongoing economic difficulties have affected some of the main income sources. However, a big jump in private copying collections and growth in live music and general licensing collections fully offset revenue declines elsewhere.

The music industry must be more proactive about interactivity
New digital tech developments and ever more powerful computer processing are making consuming music a less passive experience. In various parts of the music industry, players are experimenting with interactive features that build a degree of customization into audio and audiovisual content. Although some of the creations are proving hugely popular, interactivity still feels like a nascent segment, and many players seem reluctant to go beyond the basics. They risk missing a great opportunity to develop more immersive experiences that really engage with audiences, especially millennials keen to stamp their mark on music-based content.

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 profile. The UK recorded music industry is in something of a lull at the moment. Three straight years of decline ended in 2013 with a rise in trade revenue. However recorded music sales dipped in 2014, with rising income from streaming unable to match the drop in downloads and CD album sales. Last year saw the continued shift from ownership to access, but overall trade earnings were down for the second consecutive year. In contrast to trade earnings, the retail value of recorded music sales grew year-on-year with a rising number of subscriptions fully offsetting consumer spend on singles and albums. Royalty collections in the UK were more positive: Both PRS for Music and PPL registered annual growth. Live music continues to be the most robust leisure sector in the UK with tours and festival appearances still the most secure way for artists to generate revenue. Despite the overall increase in ticket sales, smaller venues in the country continue to close because of rising rents, urban development, and noise regulation.

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