New issue of Music & Copyright with Russia country report

The final issue of Music & Copyright for 2019 is now available for subscribers to download. Here are some of the highlights.

Comparing the performances of the major music groups in 2019
Rising consumer spending on recorded music, coupled with the continued steady growth in music publishing income, is set to boost revenue for the three major music groups this year. Sony will see the biggest overall rise, but this is largely down to the acquisition of EMI Music Publishing at the end of last year. However, UMG and WMG are both set to experience double-digit percentage gains. UMG will maintain its lead in recorded music, although WMG’s revenue for the year will rise at a faster rate than the leader. Sony’s combined music publishing companies will dominate publishing revenue. Warner/Chappell is the only one of the three major publishers likely to suffer an income decline for the year. Digital overtook performance as the biggest revenue source for publishers last year, and that position has been enhanced in 2019.

IPRS celebrates 50th anniversary with record collections and distributions
India’s authors’ society, IPRS, has reported its biggest ever annual increase in rights collections. The results were extremely timely given that the authors’ society is celebrating its 50th year in business. A number of factors contributed to the jump in receipts. TV revenue was boosted by new licensing deals with several of India’s broadcast networks, and a good year for public performance saw total domestic performing rights double in the year. A readmittance to global rights organization CISAC meant IPRS could receive payments from CISAC-member societies. Furthermore, a new licensing deal with YouTube greatly boosted streaming collections. Revenue from synchronization was also up sharply. The positive performance meant distributable revenue and payments to members in the financial year exceeded the previous record levels.

The live sector is aiming to make the touring world a whole lot greener
The global touring circuit could be about to take a hit if more artists back off from going on the road. Environmental sustainability has become a concern among a number of leading artists, while festivals and music venues are doing more to reduce their carbon footprints. However, developing a strategy to deliver greener live music performances is a complex and trying business and is best done in partnership with those with strong environmental expertise. Artists can also do more to promote a greener world by tapping into their creativity and getting on board with a multitude of environmental projects.

Russia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Russia music industry report. Russia is a recorded-music market that is starting to display the potential that music companies have all known existed but have been unable to coax out because of the widespread presence of unlicensed physical and digital formats. The country is the biggest in Eastern Europe and the world’s largest in terms of land mass, spanning 11 time zones. It ended last year with a population of 146.8 million. At 17.1 million square kilometers, Russia’s surface area covers around one-eighth of the world’s inhabited land area. However, despite its size, Russia’s main music industry sectors have long underperformed, and per capita spending on recorded music is painfully low. The transition from physical to digital opened a new front for unlicensed services to flourish, but the move from ownership to access is boosting legitimate sales, and prospects for longer-term growth are very positive. Royalty collections are rising steadily, and most music users in Russia hold a correct license. But copyright infringement cases against unlicensed users remain high. Russia’s live-music segment has continued its recovery, with growth bolstered by steady economic growth and a more stable ruble.

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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 Netherlands country report

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

China set to enter the top five as recorded music sales are forecast to continue rising
Ovum has updated its forecasts for retail sales of recorded music. In line with last year’s main conclusion, the recorded-music sector is firmly a growth market, and Ovum expects sales to rise in each of the years up to and including 2024. By the end of the forecast period, retail sales will have increased for 10 consecutive years and have topped the record high set in the late 1990s. Virtually all developed markets are benefiting from rising consumer interest in subscriptions and streaming, and, perhaps most importantly for the sector, many of the much-vaunted and piracy-dominated emerging markets are starting to show their worth. Subscriptions are the biggest recorded-music category and are set to account for two-thirds of total revenue in 2024. Ovum is still expecting the growth rate for recorded-music sales to slow over the next five years as the music subscription sector in most developed markets reaches maturity. But overall spending on subscriptions has been revised upward, and the rate of decline for physical sales has been eased.

USPTO begins consultation about rights protection for artificial intelligence innovation
The US Patent and Trademark Office (USPTO) has started a process to determine whether a piece of music that has been produced by artificial intelligence (AI) with limited involvement of a person qualifies as a work of authorship as defined by US copyright law. The USPTO has published a series of questions on AI and rights ownership for public comment at a time when the technology is starting to make waves in the music industry. The use of AI in creating music remains a niche concept, with recordings still labeled as experimental. But as the technology backing AI becomes more sophisticated and the use of AI widens, questions about rights ownership are becoming more pressing, particularly given that AI is able to create works with minimal input from human inventors.

Localized content has been key to streamer Joox’s success
Chinese streamer Joox Music has carved out a strong position for itself in Southeast Asia, becoming the leading provider of streamed audio in a number of markets in the region. The company has leaned heavily on its marketing savvy to build national businesses and has aligned itself closely with K-pop, a hugely popular genre among Southeast Asia’s younger demographic. Joox’s emphasis on customizing its content to suit local tastes has also paid off, making it the go-to provider for audiences. The company is in a good position to profit from forecast music streaming in Southeast Asia and may well expand in the region. However, given its presence in South Africa and links to a regional partner, sub-Saharan Africa might offer better prospects.

Netherlands country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Netherlands music industry report. After more than a decade of falling trade revenue from recorded-music sales, the Netherlands is experiencing a sustained period of growth. As in most developed markets in Europe, record company earnings in the Netherlands were hit by the effects of online piracy as a result of the shift from physical formats to digital. However, for the last four years, trade revenue has been on the rise, and further growth is expected for this year and beyond. Dutch authors’ societies BUMA and STEMRA registered a seventh consecutive year of growth in joint collections, after three straight annual falls. Combined income for the two collection societies edged up last year, with gains for BUMA offsetting the decline for STEMRA. A rise in domestic and international collections for producers’ and performers’ society SENA boosted total receipts for the second year in a row. The live industry experienced a positive 2018, with increases in both the number of visitors to events and revenue from ticket sales.

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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.

Big gains for SoundExchange and PPL boost producers’ and performers’ rights to new level
Performance-rights distributions to record companies (producers) and performers registered another record-breaking year in 2018, with total payments topping the $3bn milestone for the first time. Producers’ and performers’ rights have become an important source of income in recent years given the long decline 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 is a key earnings generator, with growth in distributions last year matching the rate of increase in combined physical/digital trade sales. Measured at both reported and constant exchange rates, global performance rights distributions were up year on year. The US enhanced its position as the biggest country for performance rights, while Europe remains the biggest region.

Claims involving Taylor Swift, Katy Perry, and Juice WRLD made October a busy month for plagiarism watchers
Copyright infringement claims against high-profile artists and performers are part and parcel of today’s recorded-music industry. Not only are millions of dollars at stake should a claim be successful, but the reputations of artists renowned for their songwriting can also take a hit. Proving one artist or songwriter has copied another’s work 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 be presumed to have heard the original work prior to the writing of the infringing track. October proved to be a busy month for plagiarism cases, with some of the world’s biggest artists involved in claims made against them, their writing teams, and their record companies and publishers.

Streamers’ HD offerings hinge on getting audiences to care about higher-quality music services
“Immersive music” is now a thing. Dolby Laboratories and Sony Corp. have moved into the quality music space with new formats for audiences. Both say that their respective services deliver more engaging experiences, and both are leaning on the latest Echo smart speaker from Amazon to stake claims in the living room. However, high-definition (HD) music-streaming products, with their higher price points, have yet to take off after years in the marketplace. Using a smart speaker to cut through could prove a savvy move when mobile networks can’t yet be relied upon to provide good service. But what is key to the success of HD music is persuading prospective subscribers that, first, they need such services, and second, that they ought to be paying more for them.

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 midtier 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, but the transition from ownership to access has not all been smooth sailing. Last year saw a modest increase in retail sales, with higher spending on digital formats and services just offsetting a decline in sales of physical formats. This year has so far been a different story, with total sales benefiting from both digital and physical growth. The steady improvement in Spain’s economic fortunes have had a positive effect on the country’s different music industry sectors. However, the unemployment rate remains high, particularly among younger consumers, who are traditionally the biggest music consumers. The troubles for local authors’ society SGAE are continuing, even though the society registered higher collections and distributions. Spain’s live sector enjoyed its best ever year in terms of turnover, with festival popularity at an all-time high.

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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.

Global royalty collections see positive year, with growth at reported and constant currency rates
The world’s 20 biggest collective management organizations (CMOs) registered an increase in collections last year at both reported and constant currency exchange rates. The listing, which includes just those CMOs that have published collection results, shows that five of the 20 registered a fall in collections compared with 2016. As always, currency fluctuations affected some CMOs more than others, and overall, the growth rate last year of the combined 20 was higher at reported rates than constant. SACEM remained the leader in terms of total revenue, but BMI and ASCAP took the second and third spots, with a decline in GEMA collections relegating the German society to fourth. The performance of BMI and ASCAP meant the US is the clear leader in terms of collections at country level. Europe is the top region, accounting for close to 60% of the combined top-20 collection total.

Africa faces challenges on its way to becoming a recorded-music contributor
Africa might well be home to a sizable share of the world’s population, but in terms of recorded-music returns, the region is massively underperforming. Aside from South Africa, which has established music distribution and rights administration infrastructure, most countries in Africa have been decimated by high levels of piracy and infighting among collection societies. Ever the optimists, the three major record companies have all made recent moves to reverse the African status quo. The growth of access services in the rest of the world and their positive effects on unlicensed music consumption have given hope to those who believe Africa is an untapped treasure trove. Plenty of local activity and a rapid transformation of digital communications suggest that the time could well be right to move into the region. Few are holding their breath for a turnaround in the short-to-medium term, but longer-term prospects are certainly improving.

Streaming’s winners need to adapt if they want to keep on thriving
Spotify and Netflix are two highly successful children of the streaming revolution and have built market-leading positions with their attractive services. But times are set to become a little tougher for both of them. While the audio- and video-streaming markets will continue to grow, the sectors are becoming more challenging. Spotify’s IPO went smoothly enough, but its public listing means its inability to make a profit is under constant scrutiny, and its streaming business may not be able to deliver on that front; pressure is on the company’s non-core activities to do the job. Netflix faces a new era of tough competition from powerful adversaries and is sure to lose market share; from here on in, it’s all about the content.

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 is the seventh-biggest economy in the world and the third-biggest in Europe, behind Germany and the UK. For recorded-music sales, France is the smallest of the three European countries. However, trade sales have risen for three consecutive years and look likely to rise again this year, with subscription service gains more than offsetting declines in sales of physical formats and music downloads. Digital sales overtook physical and accounted for more than half the combined digital physical total for the first time. UMG enhanced its position last year as the biggest music distributor, with an increase in market share. Authors’ society SACEM registered a fourth consecutive annual growth in collections, with income topping the previous year’s record thanks to a big jump in digital receipts.

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New issue of Music & Copyright with South Korea country report

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

Rollout of 5G networks offers a whole new dimension of music collaboration and connection
With the distribution of recorded music now an access-dominated business, the means by which music fans engage in listening has come sharply into focus. No longer do consumers have to visit a record store to purchase recorded music – almost every track ever released is available at the touch of a button. However, the uptake of access services is slowing in developed markets, and so forward planners are looking to new experiences to keep the growth momentum going. 5G offers music companies just that opportunity. Commercial rollouts of 5G networks are under way, although consumer uptake will take a while to gather pace. But already experiments and trials have shown how the music industry may be able to harness and monetize this new high-speed distribution network.

Digital gains boosts SACEM collections to new record
French collection society SACEM has reported a fourth consecutive annual growth in collections, with income topping the previous year’s record. Domestic and foreign receipts were up year on year, while revenue from mandates edged down. The differing fortunes of general rights and broadcasting saw the former overtake the latter to become the biggest collection source for SACEM. Background music income was boosted by higher average user fees and a rise in the customer base. Broadcasting income was hit by a drop in advertising sales. Digital registered the highest growth rate of the main collection sectors, with revenue more than doubling. New contracts provided the biggest boost to the digital total, although greater consumer interest in streaming added to the total. A higher growth in collections than costs meant the authors’ society’s net operating cost as a share of collections edged down.

Regulation is just the ticket for the live music sector
Regulators and lawmakers are starting to turn their attention to long-standing abuses in the ticketing business, with the lack of transparency over fees and hugely inflated resale prices in their sights. New rules and legislation have already been introduced or are in the pipeline in a number of countries, but all participants in the live music sector have the duty to do more to better protect consumers. Current alliances aimed at tackling bad actors and bad practices need to be strengthened. And there is certainly a role for technological solutions that will make it that much more difficult for scalpers to ply their trade.

South Korea country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed South Korea music industry report. South Korea’s recorded-music industry is arguably the most advanced in the world. Since the turn of the century, the sector has been through a massive transformation, from being almost overrun by piracy to becoming a multifaceted market where both physical and digital formats and services flourish. Surprisingly for a developed market, CD album sales are still healthy despite the rise of digital access. Although spending on digital music accounted for the majority of music sales last year (see Figure 1), a third consecutive year of growth in spending on physical formats has narrowed the gap. Locally produced music is popular worldwide, with the K-pop genre benefiting from the so-called Korean Wave, which began in the late 1990s and continues to boost the popularity of South Korean popular culture through online services and social media. Local music groups dominate recorded-music distribution, with the major labels accounting for a low market share.

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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.

US leading global recorded-music sales to fifth consecutive year of growth
With all the world’s major recorded-music markets and several 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 register a higher rate of growth this year than in 2018. All the trade associations that have published figures or provided guidance have shown continued gains from music subscription services, and this earnings growth in all but one of the countries has more than offset declines in revenue from other formats. The ongoing dominance of the world’s biggest markets, particularly the US, is continuing, but the rate of growth in the less developed and so-called emerging markets is set to be higher than the global leaders.

Advocate general at European Court of Justice finds no resale right for e-books
Maciej Szpunar, advocate general at the European Court of Justice (CJEU), has provided an opinion in a case involving the resale of secondhand e-books. Often in cases involving disputes over specific points of law, an advocate general is asked to publish their opinion, which can act as guidance to the court when a specific case is heard. The case in question this time centered on the business model of a Dutch e-book reseller. Although the matter has been ruled on twice by district and appeal courts in Amsterdam, a court in The Hague asked the CJEU to answer a number of questions before making a ruling. In his published opinion, Szpunar decided that there should be no market for the resale of e-books because of the potential damage caused to rights holders. Although the advocate general’s opinion related specifically to e-books, his arguments against resale could easily be applied to recorded music.

Artists thwarted by streaming look to merchandizing to make music pay
The low level of royalty payments in the music-streaming business has long been a bone of contention among rights holders, and artists have often come out and highlighted just how few dollars most of them get from the billions of annual plays across the likes of Spotify, Apple Music, and Amazon Music. Some companies, most notably Deezer, are investigating different payment systems that better reward smaller artists. In the meantime, however, musicians looking to make a living from their music need to come up with other ways to support themselves. That is why an increasing number are looking to the selling of a range of music merchandize to put money in their coffers. Furthermore, the potential of merchandizing is not just attracting artists: each of the three major record companies is looking to increase its merchandizing play.

Italy country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Italy music industry report. Italy’s recorded-music sector has experienced an erratic few years, largely due to the lingering dominance of physical formats. However, digital trade sales overtook physical formats last year, and the sharp rise in subscription sales more than offset falls in CD album sales and vinyl. The pattern of sales has continued this year, and Italy looks to be heading for a period of growing stability. UMG is the clear leader in market share terms, ahead of second-placed SME, with the former increasing its distributor share at the expense of the latter. Royalty collections have been positive, with only minor changes over the last three years. Total income for authors’ society SIAE edged up last year, but music collections were down slightly. Italy’s live music sector has undergone a number of strategic changes of late, most notably with the launch of Ticketmaster Italia. Earlier this year, the ticketing service partnered with local independent festival promoter Home Entertainment as part of the service’s Italian expansion. Regulators in the country have increased their attention on the secondary ticketing sector, but promoters are still bemoaning efforts to control the practice.

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