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 results confirm the recorded-music sector is heading for a fourth straight year of growth
With all the world’s major recorded-music markets and several 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 register a similar rate of growth this year as in 2017. 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 is set to continue, but, as has been the case in the last few years, the rate of growth in the less developed and so-called emerging markets will be higher than that of the global leaders.

Tencent Music Entertainment’s SEC filing lifts the lid on the Chinese company’s inner workings
Chinese music giant Tencent Music Entertainment (TME) has filed the necessary documentation with the US Securities and Exchange Commission (SEC), confirming its move to go public. The company will list under the symbol TME in what is expected to be the biggest IPO by a Chinese company in the US. As is the case with all listings, documents filed with the SEC lift the lid on financial and operating metrics not previously available. In contrast to Western services, which have seen revenue rise but losses deepen, TME’s music platforms are profitable, despite the low share of users paying a regular subscription. The filing also offers a look at some of the service offerings and initiatives not provided by Western services. This research note picks out some of the more interesting insights surrounding the financial standing of the service, its popularity, and what the details tell us about the Chinese music-streaming sector.

The future of selling recorded music and the next phase of streaming service development
With music streaming and subscriptions now the main revenue generator for recorded-music companies, and sales of buy-to-own formats in terminal decline, the term “music retail” is quickly becoming obsolete. Consumers in increasing numbers are not buying recorded music; they are paying to access it. Trips to the record store are a thing of the past for all but a small number of vinyl connoisseurs. Moreover, there is nothing to hold anymore, apart from the credit card used to pay for the subscription, or the hardware used to stream the music. In short, the first phase of music streaming is effectively over and the second phase, where streaming companies go beyond simple service provision, is well underway. Each company has its own plans for competing with its rivals and attracting new subscribers who are yet to take the streaming plunge. New artist initiatives, service acquisitions, expanded rollouts, and wider music bundles are already shaping the access-service landscape, but this kind of activity will only intensify over the next couple of years, as services look to enhance their position in what has become a rapidly evolving sector.

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, but the transition from ownership to access has not all been smooth sailing, and this year has seen the gains from higher spending on music subscriptions offset by the continued fall in download and CD album sales. Per-capita spending on recorded music is low and lags a long way behind Europe’s leading markets. The steady improvement in Spain’s economic fortunes will have a positive effect on the country’s different music industry sectors. However, the unemployment rate remains high, particularly among younger people, who are traditionally the biggest music consumers. UMG remained the biggest recorded-music company last year, while troubled authors’ society SGAE reported higher collections and distributions. Spain’s live music industry experienced a positive 2017, with sales boosted by the reduction in the VAT rate in June last year.

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New issue of Music & Copyright with Norway country report

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

Multicontent bundles and new social partnerships set to drive digital music’s evolution
Developments in the digital music sector inevitably touch on developments in other sectors where music players have found welcome bedfellows and beneficiaries. Although the leading music subscription services are continuing to attract new subscribers as they expand their reach around the world, in markets that have seen a drop in take-up, services have been forced to become more inventive to maintain the growth momentum. Furthermore, providing opportunities for consumers beyond a simple subscription will not only keep the music business on an expansive track, but also draw in users who have so far failed to be tempted by the simple single subscription. Ovum has picked out three key trends that prove that services and potential service partners need to look beyond straightforward service provision to benefit from a resurgent recorded-music sector. Each of the trends looks at how music streaming and the provision of music subscription services are likely to evolve over the next 12 months. However, we also detail how non-music-service players are increasingly becoming important to maintaining growth and, in some cases, providing whole new revenue streams.

Recorded-music sales in Australia see a positive first six months
Midyear trade sales figures published by Australian music trade association ARIA suggest the country is heading for a fourth consecutive year of growth. Big rises in audio and video streaming revenue more than offset declines in sales of CD albums and music downloads. Music subscriptions accounted for more than half of the total trade income in the six-month period for the first time, with streaming as a whole generating over two-thirds of the total trade revenue. The vinyl revival is still in full swing with sales of the format accounting for more than one quarter of the physical total. ARIA was upbeat about the results and the prospects for further growth, but the pattern of sales in the country over the last few years is similar to the Northern European streaming leaders, all of which are now heading for market stagnation.

Digital collections stall, but MCSC reports a new record for royalty receipts
Royalty collections in China increased last year for the ninth consecutive year. In September, local authors’ society MCSC published its business report for 2017, confirming that total collections had topped the previous record, set in 2016, and exceeded CNY200m ($29.2m) for the first time. Furthermore, the year-on-year growth rate was more than twice the rate in 2016, and collections have almost doubled in just five years. Digital was the biggest revenue source for Chinese authors, ahead of background music and TV. While MCSC welcomed the positive results, the authors’ society commented that the copyright environment in the country was slow to improve and that although progress has been made with regards to the licensing of background music, significant difficulties remain in many areas of royalty collection.

Norway country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Norway music industry report. Norway is part of a Northern European quartet of countries that have proved to be global leaders in the transition from music ownership to access. Despite having a population of just 5.3 million and ranking at the lower end of the global top 20 recorded-music markets, Norway’s share of recorded-music sales from access services rivals most others. Streaming accounted for 84.9% of trade revenue from combined sales of physical and digital formats and services last year and this share is expected to rise further as take up of subscription services continues to grow. UMG maintained its slim lead over second-placed SME for market share last year, with both companies suffering a slight share decline. Royalty earnings collected by authors’ society TONO hit record levels with growth boosted by a jump in digital receipts.

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New issue of Music & Copyright

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

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

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

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

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New issue of Music & Copyright with Brazil country report

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

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

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

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

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

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New issue of Music & Copyright with France country report

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

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

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

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

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

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New issue of Music & Copyright with Germany country report

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

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

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

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

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

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New issue of Music & Copyright with Italy country report

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

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

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

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

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

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