New issue of Music & Copyright with South Africa country report

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

Time for the music industry to wise up quickly on artificial intelligence
Artificial intelligence (AI) is beginning to impact the music industry. Several artists are using the fast-developing technology to support and speed up the creative process, with more likely to follow suit. However, the use of recorded-music catalogs to “train” AI models to generate new songs—all without licensing such tracks—throws up serious copyright issues. To date, these issues have barely been addressed, either by intellectual property (IP) owners, regulators, or lawmakers. This situation needs to change to support the creative use of AI and the rights of artists, songwriters, and record companies.

Class action lawsuit shines a light on UMG’s equity holding in Spotify
UMG is facing a class action lawsuit over claims that the music company failed to pay its artists a share of the equity it holds in Spotify, received as part of the initial licensing deal between the two. The lawsuit, which was filed at a New York district court by the two members of the hip-hop duo Black Sheep, accuses the music major of secretly agreeing to lower the royalty rates payable to artists in return for the equity stake. The members of Black Sheep claim UMG should be paying its artists 50% of net receipts from Spotify as per signed contracts. Moreover, the filing says UMG’s minority ownership of Spotify and lower royalty rates only came to light after Spotify had published documents relating to its IPO in 2018. The lawsuit claims that UMG has underpaid royalties to the tune of $750m.

YouTube wins partial summary judgment in Schneider copyright infringement case
The lawsuit filed at a California district court by jazz composer Maria Schneider against online video service YouTube and search giant Google is still in play despite YouTube/Google receiving partial summary judgments in some of the claims. The case centers on Schneider’s claim that smaller rights holders are denied access to the online video service’s Content ID system of copyright protection. Denying the use of Content ID means smaller rights holders are forced into trawling YouTube for unlicensed use of their content, and then sending individual takedown notices to the video service via a web form, email, or postal mail for each video their searches identify. After YouTube/Google was denied a motion to dismiss the complaint in August, a filing for summary judgment was lodged with the court. Following an October hearing, the court granted some of YouTube’s requests but decided that a number of outstanding issues warranted the case going before a jury.

South Africa country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed South Africa music industry report. South Africa is Africa’s biggest music market. Consumer spending on recorded-music and royalty collections is significantly higher in the country than in any other market in the region. Despite its geographic location, South Africa is more akin to a Western music market and has far more in common with countries in Europe and North America than it does with its neighbors. However, although this means South Africa has a more developed music market, per capita spending on recorded-music is still extremely low. Moreover, the same problems encountered in the developed world, in the shift from physical formats to digital and downloads to access, have been experienced in the country. However, even though the rise in high-speed internet access has exacerbated problems associated with the unauthorized distribution of music, higher digital sales, rising smartphone penetration, and the rollout of several international streaming services suggest the market has a bright future.

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Blog question result on the impact of price rises on music subscribers

In an effort to gauge music subscribers’ reaction to increased prices, visitors to the Music & Copyright blog (mostly from the UK) were asked what action they would take if they subscribed to a music service that had raised the monthly fee. The results are as follows. Almost three quarters of the total respondents said they would stay with their chosen service and pay the extra, while 15.5% said they were undecided. Perhaps most surprising was that 6.1% of respondents said they would stop subscribing to a music service altogether.
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New issue of Music & Copyright

A very Happy New Year to readers of this blog and followers of Music & Copyright.

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

Physical still matters to the merchandise business, but goods are turning meta
Music merchandising remains big business, both for leading artists and for up-and-coming musicians. The former are able to charge high prices for limited edition items such as clothing and accessories, while many emerging artists have really needed to shift merchandise so stay afloat as lockdown measures continue to shutter music venues. Right now, there’s lots of innovation around nonphysical products as vendors look to develop digital music-related merchandise. UMG is emerging as a serious player in this fast-moving space. The company may well have a leading role to play in entertainment in the developing metaverse if its move to launch a virtual band selling virtual merchandise is any kind of guide.

Taylor Swift requests California judge reconsider trial ruling in Shake It Off plagiarism case
Taylor Swift is attempting for a third time to have a lyrics plagiarism case brought against her in California dismissed. The authors and copyright owners of the 3LW track Playas Gon’ Play claimed in 2017 that the Swift track Shake It Off contained lyrical similarities to Playas Gon’ Play and sued for copyright infringement. Although a district court ruled that the disputed lyrics in the 3LW track were too short and not eligible for copyright protection, an appeal at the Ninth Circuit sent the case back to the district court for further deliberation. Swift’s legal team then filed another motion for summary judgment, but the court denied the request to have the legal action thrown out. The judge in the case said that a jury may find enough similarities to show copyright infringement had occurred. Now, a third filing has been submitted to the district court, this time asking for the judge to reconsider his decision to press on with a trial.

The rise of OTT video and the potential impact on broadcast collections
Over the top (OTT) streaming of audio and video is a delivery system that has quickly become the leading mechanism of distribution and consumption. In contrast to traditional broadcast means, OTT is, as its name suggests, a process that uses the open internet rather than a service provider’s own infrastructure. Multiple services, including those from pure-play providers, such as Netflix and Amazon, are now available across the world. Moreover, revenue from OTT services now exceeds pay TV 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 was as much about attracting subscribers that have so far not engaged with their full paid-for offering as it is about competing with the current pure-play services. However, with the competition for viewing intensifying, collective management organizations (CMOs) may well be feeling apprehensive about the impact of OTT video services on broadcast royalties, particularly given that the income source has, for many years, been their biggest revenue generator.

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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.

The telco music bundle and its place in the evolving recorded-music sector
The bundling of music streaming services with mobile subscription packages has been around almost as long as the music subscription itself. To begin with, the music bundle had a slow start, but now it is widely considered to have played a major part in boosting the take up of subscription services. The bundle itself has gone through changes with the early years’ hard bundle largely giving way to simple service promotions and zero rating offers. The different levels of market development around the world have resulted in varying approaches to bundle rollouts. Operators in developed markets, on the whole, offer the least friendly music bundles with many focusing their entertainment provision on audiovisual. However, the usefulness of the bundle should not by overlooked, particularly in less developed markets that are only slowly waking up to the benefits of streaming.

Audio subscription gains boost Japan to nine-month recorded-music revenue growth
New figures published by the Japanese recorded-music trade association, the RIAJ, show digital music sales grew at a faster rate in the first nine months of this year compared with the prior year period. All the four streaming revenue sources registered positive results in contrast to the buy-to-own formats, which all suffered a decline. Audio subscriptions’ dominance of digital sales has continued to grow, with the revenue stream now accounting for more than 70% of the digital total. Physical formats have also registered a relatively positive year so far. Although the production value is down slightly, the combined revenue total of physical production and digital trade sales in the first nine months of this year suggests that Japan could secure recorded-music growth for the first time since 2018. However, questions remain over the longer-term fortunes for the recorded-music sector given the continued dominance of physical formats.

Pricey data remains music streaming’s main obstacle to Sub-Saharan African growth
Spotify finally went pan African this year, rolling out its music streaming services across the majority of the continent. However, the company is late to the streaming party in Sub-Saharan Africa, and the region is able to boast several well-established local streamers that are currently growing apace. A focus on local music is a core part of building a decent-sized user base—Spotify has clearly picked up on that particular learning—and leading streamer Boomplay is doing a good job promoting Afrobeats. However, while Sub-Saharan Africa has a youthful population to sell music to and smartphone penetration remains on the up and up, that lifeblood of streaming—data—can be pretty expensive in a generally low-income region. That’s why streaming providers need to join forces with local mobile operators to slot their services into more-affordable bundles and to come with creative megabyte workarounds.

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. France ended last year as the seventh-biggest economy in the world and the third in Europe, behind Germany and the UK. Last year saw the French economy shrink 8%, 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 6.3%, and then 3.9% in 2022. 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 streaming gains more than offsetting a dip in sales of physical formats, performance rights collections, and synchronization revenue. Digital sales first overtook physical in 2018 and accounted for almost three quarters of last year’s digital/physical total. UMG maintained its distributor lead despite a slight dip in market share. SACEM suffered a fall in collections for the first time since 2014 with all performance-based revenue streams taking a hit from the COVID-19 pandemic.

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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.

CISAC reports record year for collections, but big fall expected in 2020
CISAC has published its latest annual report on global creators’ collections. A new record for combined revenue for creators of music, audiovisual works, visual arts, drama, and literature was set last year with collections topping the €10 billion ($11.9 billion) mark for the first time. However, the main focus of the review was on the impact of COVID-19 and how the global pandemic is likely to affect this year’s results. Royalties from concerts, venues, and public performances are expected to fall by as much as 80%, with revenue from broadcasting set to shrink as much as 20%. CISAC noted that the impact of the virus is expected to remain long into 2021 and beyond. Across all repertoires, collections in 2021 will remain below the level of those in 2019, with users continuing to face payment difficulties and bankruptcies. SACEM remained the leading collective management organization (CMO) in revenue terms, with PRS for Music the latest CMO to register more than $1 billion in revenue.

California court denies Pandora anti-SLAPP motion to dismiss Flo & Eddie pre-1972 recordings claim
A California district court has denied for a second time an anti-SLAPP motion lodged by Pandora in the ongoing case brought by the artists Flo & Eddie. The music service had hoped to get the case struck off by the court after the California Supreme Court had dismissed two questions referred by the Ninth Circuit appeal court because of the timing of the enactment of the Music Modernization Act (MMA). Pandora had appealed the district court’s first dismissal of its anti-SLAPP motion and while the questions were pending, the MMA came into being. Subsequently, the Supreme Court vacated the first anti-SLAPP order, and remanded the action back to the district court to consider Pandora’s renewed anti-SLAPP motion. However, the district court again denied the anti-SLAPP motion.

Investor interest in music publishing is turning catalogs into assets
Songs no longer go for a song. Financial vehicles have taken a strong interest in music publishing catalogs, so much so that music rights have become much sought after and, some would say, very expensive assets. How expensive depends on a number of different factors, such as the ability to deliver consistent returns from synchronization deals, mechanical royalties and performance rights. However, despite the price tag, asset management firms are finding it easy to raise money to invest in these catalogs, especially as publishing rights can provide sizable revenue streams at a time of ongoing low interest rates. Valuations have gone up and are set to rise further. This is certainly a seller’s market.

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. France ended last year as the seventh biggest economy in the world and the third in Europe, behind Germany and the UK. Of Europe’s big three, France experienced the highest GDP growth rate last year, at 1.5%. However, according to the IMF’s June update to its April-published biannual World Economic Outlook report, the impact of the COVID-19 pandemic on the economy will see GDP in France shrink 12.5%, the fastest rate of decline of the three. For recorded-music sales, France lags the UK and Germany. Trade sales in the country have risen for four consecutive years and may rise for a fifth if the performance in the first half of the year is repeated for the second six months and streaming gains continue to offset declines in buy-to-own formats. Digital sales overtook physical in 2018 and accounted for slightly less than two thirds of last year’s total. UMG maintained its sizable distributor lead despite a slight fall in market share. SACEM registered a fifth consecutive annual growth in collections with income topping the previous year’s record. Collections for this year are set to fall sharply due to the impact of the COVID-19 pandemic.

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New issue of Music & Copyright with Spain country report

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

Midyear assessment of recorded-music and music publishing sector fortunes

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 lowest rate for five years. Although sales of physical formats have taken a hit from the COVID-19 pandemic, gains from streaming should just offset lower sales of buy-to-own formats. In contrast, the publishing sector will see a fall in revenue this year with rising digital income unable to fully counter declines in most other revenue sources. The positive news for publishers is that estimates for the sector published earlier this year by Music & Copyright have been improved slightly.

Digital dominates record year for MCSC collections and distributions

Royalty collections in China have increased for the 11th consecutive year. In September the Chinese authors’ society MCSC published its business report for 2019, confirming that total collections had topped the previous year’s record and exceeded CNY400 million ($58.7 million) for the first time. New records were also set for distributions and the membership total for the society. Digital is easily the biggest revenue source for MCSC with the recent licensing deal signed with Tencent Music Entertainment (TME) continuing to boost the collection total. Also registering a positive year was TV and radio with receipts benefitting from the signing of a memorandum of cooperation with the two broadcast sector’s copyright committees. Background music income was boosted by new agreements with a number of music users.

Short-term gloom turns to longer-term boom in latest PwC music industry forecasts

Professional services company PricewaterhouseCoopers (PwC) has published its annual assessment and forecasts for the recorded-music and live music industry sectors. In contrast to last year’s numbers which made for healthy reading for those involved in both music industry sectors, the latest forecasts have been greatly influenced by the global COVID-19 pandemic. Live music, which has previously proved to be a steady sector, is set to take a big hit with ticket sales and revenue from sponsorship falling by more than half this year. Although spending on recorded-music is still expected to rise, the growth rate for this year has been revised down from the previous set of forecasts. PwC is, however, confident that the live sector will bounce back in 2021 with revenue forecast to exceed pre-COVID-19 levels in 2022. North America is the largest music region and its share of total music revenue is set to edge up for most of the forecast period. Europe, Middle East and Africa (EMEA), and Asia Pacific are set to lose share to the leader and Latin America.

Spain country report

In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Spain music industry report. Spain is one of Europe’s mid-tier music markets. The country’s recorded-music sector has been one of the region’s worst hit by digital piracy since the turn of the century. Although piracy levels are still high, spending on recorded-music has recovered somewhat. Last year saw sales rise sharply with spending on both physical and digital formats and services increasing. This year has been a different story with the physical sector suffering from efforts to stop the spread of the COVID-19 virus. Spending on recorded-music was still up year-on-year in the first half, but economic problems and a high unemployment rate are concerning for longer-term growth. UMG maintained its position as the biggest music company, while the authors society SGAE is making progress in reforming the way it operates. Spain’s live sector enjoyed its best year in terms of turnover with festival popularity at an all-time high. However, COVID-19 has all but wiped out live sales for 2020.

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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.

Eddy Grant hits Donald Trump with copyright infringement claim over misuse of Electric Avenue
US president Donald Trump has upset a number of musicians by using their music as part of his reelection campaign without their permission. More than 50 big name artists sent an open letter to both the Republican and Democrat parties asking that they stop using their recordings for political purposes. However, the misuse has continued. Neil Young, a longtime critic of the president’s use of his work filed legal action in August at a New York federal court to try and prevent any more performances of his tracks at campaign rallies. Also in August, Eddy Grant filed a claim at the same court following the use of his biggest hit Electric Avenue in a video poking fun at the Democrat nominee Joe Biden. In a court filing, Grant, who is the owner of the master rights in the track, said the Trump team had not applied for a license to use any of his music and no permission to include the track in the video was granted.

Tough few years ahead for BUMA/STEMRA as record decline set to follow new high for collections
Dutch authors’ societies BUMA and STEMRA are expecting a difficult few years for rights collections with the COVID-19 crisis tearing a hole in the budget set at the beginning of this year. Restrictions placed on consumer movements and the shuttering of the live sector will see combined collections for the societies fall this year, perhaps to the lowest level for 10 years. Distributions are also expected to take a hit. The depressing assessment follows a record year for collections and distributions. Receipts for BUMA topped the previous year’s high and despite mechanicals shrinking around the world, STEMRA registered a flat year with rising digital and private copying receipts almost offsetting declines in broadcast and phono income.

How China will determine the shape of Africa’s music streaming sector
While Africa lags behind in the take-up of music-steaming services, there are signs that Africans do have appetite for such products. The continent has spawned a number of digital music startups, with entrepreneurial Nigeria now something of a powerhouse in the space. Boomplay, which has more than 70 million users and is growing its base apace, is leading the charge and can count on the support of leading Chinese technology companies. It’s not alone. Chinese giants Tencent and Huawei are also rolling out music streaming services in the region and, together with Boomplay backer NetEase, will ensure that Sub-Saharan streaming will have something of a Chinese flavor, at least in the back rooms. Clearly, low incomes and high levels of piracy are barriers to growth, but Africa’s new players would do well to learn from the Spotify play book if they want to make headway in paid-for music.

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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.

Tencent makes its assets sing in the global music business
China’s Tencent Holdings is building an impressive portfolio of entertainment assets, including stakes in recorded-music companies, in its home market, in Asia, and in Western markets. The technology giant certainly has global ambitions, and music sits at the heart of its entertainment empire. Interestingly, Tencent, which is on one long acquisitions spree right now, has been successful in monetizing music content in China—no mean feat—and is seeking to squeeze even more value out of the segment by combining it with its significant social media and gaming operations. Always quick to spot opportunities, Tencent has been using the dearth in live music performances due to COVID-19 to launch a live-streamed concert business. The group is well on track to becoming a major global music industry player.

Jay-Z and Beyoncé accused of copyright infringement over Black Effect intro vocal
Rapper Jay-Z, his performer wife Beyoncé, and company BJC Touring are being sued for copyright infringement, a violation of publicity rights, and unjust enrichment by a Jamaican choreographer who claims she was duped into providing a vocal that was used on the track Black Effect. The track was included on the Jay-Z/Beyoncé collaboration album Everything is Love, which was released in June 2018 and went on to achieve commercial success. The choreographer said in the court filing that she was required to sign an agreement to provide services to the defendants without having any legal counsel check over the agreement. Also, the use of the vocal was supposed to be limited to a promotional video but found its way on to the track without permission or credit.

Washington district court grants Amazon motion to dismiss copyright infringement claims
A district court in Washington has dismissed copyright infringement claims made by the heirs of three US authors against the online retail giant Amazon. The heirs had claimed that Amazon was part of an unlicensed process to make available numerous classic works by the authors. Although Amazon did not source the recordings, a separate company pulled together the tracks and through a distributor, made the albums available for sales through Amazon’s download store. Amazon filed a motion to dismiss the authors’ claims and the in June the court granted Amazon’s request. In a published opinion, the judge in the case decided that for a copyrighted work to be considered as distributed as defined by section 106 of the US Copyright Act, actual dissemination of the work must have taken place, rather than simply placing the work in a store for purchase.

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, retail sales of recorded-music in Brazil have risen for three years in a row. Streaming, and to a much lesser extent vinyl and synchronization, were the growth drivers with income from access services more than offsetting a collapse in sales of physical formats as well as a dip in performance rights. Umbrella rights organization ECAD reported a return to growth for collections and distributions following a decline in 2018. Brazilian events promoter Time For Fun (T4F) registered a big fall in revenue from live music promotion in the first quarter of this year due the shutdown of the live performance sector.

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New issue of Music & Copyright with US country report

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

Now is the time to get wise with music discovery as devices get smarter
Voice-controlled speakers are increasingly becoming a popular way to consume music in the home, with streaming services coming to the fore on such systems. The larger technology companies have combined their streaming offerings with smart speaker offers. Also, streaming leader Spotify is regularly touted as a late entrant to the smart device sector. Consumers are also turning to other smart devices, in particular connected TVs, which also boast voice-control features. To date, the industry’s experiments with voice-driven equipment has revolved around promotion, and some have proved successful. However, players need to get to grips sooner rather than later with functionality based on oral commands and requests if they are to be relevant in music discovery in the age of Alexa.

Ariana Grande joins the long list of accused high-profile artist copyright infringers
The growing list of plagiarism accusations against high-profile artists saw another addition in January with the claim by US hip-hop artist and singer songwriter Josh Stone that Ariana Grande and her team of songwriters copied his track You Need It, I Got It for the Grande track 7 Rings. Proving plagiarism requires two key elements: To begin with, there must be substantial similarity between the two works in question. Also, it must be proved that an accused has either heard or is presumed to have heard the original work prior to the writing of the infringing track. Stone’s court filing presents evidence for both elements, with expert testimony from two musicologists as well as an account of meetings with a music producer who went on to contribute to the Grande track. Stone has requested damages and all profits attributable to the alleged infringement.

Physical decline signals overall contraction in Japanese recorded-music sales
New figures published by Japanese recorded-music trade association the RIAJ show that the total production value of physical formats was down last year compared with 2018. Both audio and video suffered a decline in production value and units. There were some bright spots in the figures, with the value and volume of domestic repertoire CD albums increasing year on year along with vinyl LPs. Furthermore, the number of domestic Blu-ray music videos produced was up along with the trade value. However, a difficult year for DVDs had a negative effect on the overall video figures and total physical production. Full-year figures for digital trade earnings are set for publication in February. However, based on digital revenue in the first nine months of the year, the world’s second-biggest recorded-music market looks set to register a market decline, albeit a small one.

US country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed US music industry report. The US is the biggest music market in the world. Last year, the country accounted for more than one-third of global recorded-music sales and close to 40% of spending on tickets to live music events. The US is home to the single biggest live music promoter, Live Nation Entertainment, as well as the two leading authors’ rights organizations, ASCAP and BMI, and the biggest performance rights organization, SoundExchange.

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Family plans and bundling are a big hit for music service subscribers

Ovum’s Digital Consumer Insights 2018 survey has provided some interesting answers to the question of how consumers subscribe to music streaming services. Certainly, the availability of multi-user plans as well as bundled offerings with mobile access have been a big success but, until recently, the precise popularity of the likes of family and student plans was largely unknown. The results of this Ovum survey clearly show that family plans are a hit with subscribers, so much so that they are keeping a lid on music streamers’ average revenue per user (ARPU). Also, despite bundle deals for music services through mobile operators becoming less generous, a sizable share of subscribers still gain access to music through their mobile operator.

Driving sales of recorded music in the last few years has largely been the responsibility of a small number of streaming services such as Apple Music, Deezer, and Spotify. These services have successfully convinced consumers that they do not need to own music but, for a fixed monthly fee, can access pretty much every track that has ever been released, or will be released, so long as they keep up the payments.
How users pay to stream music

Direct or as part of a bundle
Payment for a music subscription service takes a number of different forms. Consumers can either go direct to the service and pay monthly or make one single payment covering a year. That subscription can cover one person or a whole family (usually up to six people, including the account holder). Services also offer reduced-rate access for students. For a few years, users have also been able to take advantage of bundle deals with mobile operators that either roll in access to a music service for free with a mobile tariff or give a discount on the direct subscription price. The benefit for consumers is clear – lower-priced access to music. Mobile operators also benefit from increased “stickiness” of certain mobile tariffs, which boosts customer retention. However, as noted in the last couple of financial results presentations by Spotify, the rising popularity of discounted access plans has impacted on ARPU. No service has published precise details on how the total subscriber share is split by the different plans, but Ovum’s Digital Consumer Insights 2018 survey, conducted at the end of 2018, has shed considerable light on the uptake of the different plans.

Multi-user access accounts for a growing number of users
According to the survey, which took in the views of around 6,211 consumers spread across Australia, Brazil, China, Germany, the UK, and the US in December 2018, 60.7% of respondents said they took out a music subscription through a single package, while 34.7% said they accessed it via a family package, with the remaining 4.6% being students (see Figure 1). By country, the split offers some notable differences. For example, in the US, currently the biggest streaming market in the world, the family share was 43.4%, while in Brazil the student share was 9.9%. Given that a family subscription costs 1.5 times a direct subscription but provides access for the account holder and five other users, the survey findings suggest that the impact on ARPU could be significant, particularly if uptake of family packages rises faster than single-user subscriptions.

Figure 1: Share of music streaming subscription users by package, December 2018

Source: Ovum

Ovum’s Digital Consumer Insights 2018 survey also revealed details of access via bundled plans. Overall, 66.7% of subscribers held a direct subscription, with 22.2% of subscribers accessing a service via some form of mobile bundle, and 11.1% through a fixed-line service deal (see Figure 2). As with package access, there were differences by country. The UK had the highest share of direct subscriptions (76.3%), with China being the lowest (57%).

Figure 2: Share of music streaming subscribers by access, December 2018

Source: Ovum

Although bundled offerings with mobile and fixed operators have shifted over the last few years from being included for free with an access plan to simple billing arrangements, there are still plenty of bundled offers that give discounts on music subscriptions or extended free trial periods. Moreover, when respondents were asked about the addition or removal of a service bundle in the past 12 months, 24% said they added online music streaming compared to just 6% saying they removed music service access. So, at the moment at least, music bundling is still important for a significant number of consumers.

Despite music streaming’s advances, it is worth noting that music access is still a relatively new way of listening to music, so slight reductions in ARPU through discounted plans and bundled access are not a problem at the moment. However, the issue of costs to services is something worth keeping an eye on. Eventually, services may be forced into looking at raising prices, and the obvious first target is the underpriced family plan. As Ovum’s Digital Consumer Insights 2018 survey has shown, the multi-user plans have proved popular, and a modest price rise is unlikely to result in mass subscription cancellations.

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