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.

Lockdowns set to take their toll on the recorded-music and music publishing sectors
Like all other creative industries, the recorded-music and music publishing sectors are having to adjust to the impact on their businesses from the spread of COVID-19. Working conditions are unprecedented, and such is the fluidity of the situation, announced plans to support all those affected mark the start of what is certainly going to be a long road to recovery. There are some early indicators from a number of research and digital music services that show the initial impact on listening with some optimism that the initial fall in streams served may be short-term. However, the hit on many other music industry sectors will take time to filter through. Growth in music subscriptions over the last few years should allow the recorded-music sector to continue to grow, albeit at a much-reduced rate. But music publishing will take the biggest knock from the halting of live performance and the temporary closure of the retail and hospitality sectors.

Music livestreaming playing center stage as festivals and venues stay dark
Music livestreaming has long been touted as the next best thing to standing in front of a stage and enjoying a band’s latest song. However, while the technology is certainly up to the task of providing quality experiences, long-distance video performances have so far failed to gain real favor among audiences. But the global outbreak of COVID-19 has closed down the live sector and given livestreamed music the opportunity to shine. Right now, and certainly for a few months ahead, livestream operators can show a wider public just what they have been missing, while also enabling funds to be raised to combat the pandemic and allow independent artists to earn a living. However, providers need to ensure that the performances they offer are engaging enough to retain audiences in the COVID-19 aftermath, as well as giving artists the revenue they need to survive.

Madras High Court reaffirms movie producers’ music rights
A recent court ruling in India has illustrated the differences in the terms “author” and “owner” when dealing with musical works used in movies. A court in Madras heard a case brought by the music label the Indian Record Manufacturing Company (IRMC) against a composer of musical works for movies, who had claimed ownership of the copyrights to his compositions and had tried to assign them to a music company in Malaysia. While changes to Indian copyright law in 2012 provided greater certainty to authors of music used in movies regarding royalties and reuse, the Madras case showed that movie producers are still deemed copyright owners of movie music and so are able to assign those rights to other companies without the authors’ permission.

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. Despite its geographic location, South Africa more closely resembles 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 the country has a more developed music market, per capita spending on recorded-music is very 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 South Africa. But, 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 suggests the market has a bright future.

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New issue of Music & Copyright with Indonesia country report

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

Creativity survives as COVID-19 hits the music sector hard
The COVID-19 pandemic has slammed the music industry, with the live music and physical retail segments the hardest hit. Around the world, there has been a swathe of live performance cancelations and postponements, with many, many more to come. This is hitting large live entertainment providers like Live Nation, and is threatening the futures of independent venues, while also impacting the livelihoods of those working in the sector. With city shutdowns already in place or imminent, music retailers will really suffer in the short- to medium-term at best. Also, music streaming providers might not be as secure as they seem at first glance with the global economy set to crater. The best we can say to those hit by the COVID-19 is be creative, and above all, stick together.

California judge overturns Katy Perry plagiarism ruling but leaves door open to an appeal
US performer Katy Perry, her coauthors, and music companies behind the 2013-released hit single Dark Horse are not liable for damages following a ruling at the US District Court for the Central District of California. The court decided that the Perry single did not plagiarize the Marcus Gray-created track Joyful Noise. Perry and her coauthors, associated record companies, and publishers had been hit with a sizable damages ruling following a trial last July, but the latest decision means they are off the hook. The case centered on an eight-note ostinato – a short musical phrase or rhythmic pattern repeated in a musical composition. Gray had argued that the ostinato in his track had been used by Perry and her coauthors. Although the two eight-note sections sounded similar, the California court ultimately decided that the ostinato did not qualify for protection. Gray is, however, able to appeal the decision, so the case is not yet closed.

Four straight years of revenue growth for UK recorded-music sector
UK music trade association the BPI has published trade sales for last year, with streaming gains and increased sales of vinyl, along with higher revenue from performance rights and synchronization more than offsetting declines in CD album sales and downloads. In a repeat of 2018, the big success story last year was subscriptions, with revenue from the likes of Apple Music and Spotify registering another strong year. The BPI figures show that income from subscription services accounted for more than half of the trade total for the first time. Advertising revenue from audio on-demand services also grew last year, along with video streaming income and sales of vinyl albums. UK trade sales have now risen for four consecutive years and are the highest for 13 years, but remain below the post-millennium peak year of 2001.

Indonesia country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Indonesia music industry report. Indonesia is the fourth most populous country in the world, behind China, India, and the US: the country ended 2019 with 269.1 million inhabitants. Despite its large population, Indonesia has always underperformed as a recorded-music market with the legal sector struggling to gain a foothold because of high piracy rates. However, the success around the world of music streaming is starting to be felt in Indonesia with a mixture of services now available offering access to several million local and international recordings. The collection of royalties is undergoing change with the government and the different collective management organizations agreeing on one-stop-shop administration with a single agency given the authority to collect and distribute royalties from commercial music users. The live sector is facing a tough year with the spread of COVID-19. This year’s Java Jazz Festival went ahead at the end of February and beginning of March, but others are set to be cancelled or rescheduled.

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New issue of Music & Copyright with Canada country report

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

Brands partnering with music specialists to get closer to consumers
Brands have long relied on music to get closer to consumers and are always looking to refine their strategies to boost engagement. Many are now, wisely, joining forces with brand music specialists to fine-tune their offerings, and this music-for-business space is proving attractive enough to entice big hitter Apple Music to enter the fray. Launching new standalone record companies has been – and continues to be – a popular ploy, though such label output has tended to be rather limited, and brands appear to have little desire to participate beyond the short-to-medium term. Strategic alliances with music companies might be the way to take the concept beyond mere marketing tactics. Plus, there’s one major thing for brands to watch out for – make sure those content rights are sorted.

Charter claims music companies’ misregistered sound recordings in latest ISP copyright infringement case
Buoyed by the success of their copyright infringement legal action against the US ISP Cox Communications, a group of record companies have now turned their attention to Charter Communications. According to court filings, the companies have accused Charter of secondary copyright infringement based upon the ISPs subscribers’ infringing of close to 7,000 sound recordings. In an effort to invalidate a large share of the songs at issue, Charter has claimed that the music companies incorrectly registered a large number of the sound recordings at issue with the US Copyright Office as works for hire. Deliberately misstating to the Copyright Office who a work’s author is can invalidate the copyright registration, Charter has argued, and so could prevent the record companies from suing for any copyright infringement. Disputing Charter’s claim, the companies said in a court submission that no court has ever invalidated the registration of a copyrighted work because it was incorrectly designated as work for hire.

SAMRO reports steady year for collections but SABC cashflow problems hit distributions
Africa’s largest authors’ society, the South African Music Rights Organization (SAMRO), has reported a flat year for music royalties for the 12 months ending June. Difficult trading conditions affected SAMRO’s operations in the year, with a number of businesses forced to close due to economic pressures, while others defaulted. Although broadcasting collections were almost unchanged year on year, the authors’ society’s biggest income source was impacted by financial difficulties experienced by the public broadcaster the SABC. Missed payments by the broadcaster also resulted in lower royalty distributions to SAMRO members. Overseas collections increased in the financial year, although the size of the rise was exaggerated by exchange rate fluctuations and the timing of revenue receipts from foreign societies.

Canada country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Canada music industry report. Canada is one of the world’s bigger music markets. Although an ever-present in the top-10, the country has slipped a couple of places in recent years, with China and Australia registering higher gains in trade sales. We expect Canada to maintain its lead over Brazil when the IFPI publishes its global roundup later this month, but it will remain ninth, behind Australia. Recorded-music consumption levels were up last year, and the likelihood is trade sales will have grown also. Although streaming income is expected to register healthy growth, a slump in CD album sales as well as the continued decline in sales of single track and album downloads will have dented the overall market performance. UMG and SME enhanced their market-share lead over WMG, with the formers gaining share at the latter’s expense. Preliminary results from SOCAN show royalty collections were up for the eighth year in a row, with the level of royalties collected breaking the previous year’s record. Canada’s live sector is thought to have registered a positive year, with attendance at music events up year on year.

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New issue of Music & Copyright with China country report

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

On-demand music subscription sector hits new milestones despite slowdown in overall growth
The on-demand music subscription sector experienced a positive 2019, with several international and local services reporting solid operating details. Spotify ended the year in the driving seat, with subscription gains boosting the service’s market share. Apple Music also registered growth, but the service lost market share to both the leader and Amazon. The three major music groups are benefiting from the rise in access services, with all reporting favorable financial results driven largely by streaming. The rise of the paid subscription from a niche revenue source not so long ago is impressive, and the year-end record company results have illustrated the importance of access services to the companies’ bottom lines. Despite the inevitable slowdown in service take-up in Western countries, developing markets are starting to show that they are well placed to step in and soften any decline.

French recorded-music sales see fourth consecutive year of growth
French music trade association SNEP has reported a fourth straight year of growth for trade earnings from recorded-music sales. For the first time, revenue from audio streaming generated more than half of local record company income. In another first, sales of premium subscriptions overtook physical formats. Subscription sales recorded a very positive year, with the number of net new subscriptions rising sharply. However, it was advertising revenue from audio service that scored the highest growth of any income stream. With the exception of music video, all the buy-to-own formats suffered year-on-year declines. Trade earnings from CD album sales continued to fall, and the vinyl revival took a hit, although the number of units shipped to retail continued to rise along with sales of turntables.

Time for record companies to push the music and gaming space convergence
The gaming sector continues to grow apace, with esports events capable of attracting large in situ and online audiences. While a number of music industry players having recognized the potential of adding music – both recorded and live – to the gaming mix, many have yet to take even baby steps into the space. Esports arenas can clearly double up as music venues, and a number of such mixed-use facilities are either up and running or in the pipeline around the world. Expect to see more of these spots as well as – finally – an increasing number of music companies coming onboard as partners in gaming ventures. More experimentation is necessary to ensure that esports doesn’t remain an electronic music enclave.

China country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed China music industry report. China’s relatively buoyant economy is reflected in several sectors of the country’s music industry. Often described as an emerging market, retail sales in the country show the country is more than living up to its long-held potential. China’s digital infrastructure is highly developed and with smartphone penetration on the rise, all the requirements for digital growth are firmly in place. Royalty collections have grown consistently for the last nine or so years but given the size of the population and level of music use, rights holders’ earnings measured at a per capita rate are tiny.

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New issue of Music & Copyright with India country report

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

European live assets remain prized assets as acquisitions mount
There’s been a huge amount of consolidation in European live music promotions and ticketing over the past few years, and there’s little sign that this trend is going to slow in 2020. Germany’s CTS Eventim and Deutsche Entertainment AG (DEAG) have been behind a raft of acquisitions across the continent, and they both clearly have appetite for more purchases as they build out existing and new territories. Live Nation, as always, has been busy picking up live entertainment companies, and there’s no reason for it to apply the brakes. However, private equity firms see the sector as ripe for investments – and returns – and have already acquired significant assets. There could be a real battle for those independent festivals and ticketing outfits this year as all players look to further develop their portfolios.

Cox challenges the first ever billion-dollar damages award for copyright infringement
US ISP Cox Communications is challenging a $1bn damages award made against it by a Virginia federal court in December after a jury found the ISP guilty of copyright infringement. Plaintiffs were made up of 53 music companies that had identified more than 10,000 instances of infringement carried out by Cox customers. The ISP has claimed that the size of the damages award bore no relation to the offence it was accused of and has requested that the court either reduce the award or hold a new trial. Cox also claimed in its filing that the jury in the trial was urged by the music companies to punish the ISP and ramp up the damages because of its positive financial situation. Cox said the supposed transgressions described in the trial went far beyond the limited acts of infringement alleged.

Spotify reports accelerated user growth with year-end subscribers at the top end of expectations
Music streaming service Spotify has published its fourth quarter and full year results for 2019, detailing both the its financial position and its operating details. Total revenue for the three- and 12-month periods registered healthy growth with premium subscription and ad-supported service income rising at similar rates. However, although the company posted sizable gross profits, sharp rises in operating expenses resulted in operating, and net losses for both periods. Monthly active user (MAU) growth exceeded the previous quarter’s guidance, and premium subscriber numbers ended last year at the top end of the company’s expectations. Notable in the final quarter of last year was the addition of 11 million net new paying subscribers, the highest since the company was launched. Podcasts are proving to be a big hit for Spotify users, with increasing evidence that the content form is aiding user retention.

India country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed India music industry report. For many years, India has been tagged as an emerging market with great potential to become a major market of the future. The country’s population is edging towards 1.4 billion and although economic growth softened in 2019, forecasts suggest better things for 2020. Tapping into what is a market ripe for exploitation has always been high on the recorded-music industry’s list of priorities and in the last couple of years very positive retail sales figures suggest all the optimism for the future has been well placed. For many years, India’s biggest obstacle to recorded-music growth has been piracy, with rising internet penetration providing increased access to unauthorized music distribution sites and services. But developments in the last couple of years have suggested that streaming will be the way out of the piracy problem.

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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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New issue of Music & Copyright

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

Streaming hits new milestone as US recorded-music consumption rises again
US recorded-music consumption has registered a very positive year, with streaming again boosting consumption levels to record highs, according to Nielsen Music. Particularly notable in the results was that the number of streams served reached the 1 trillion milestone for the first time. Although the number of audio and video streams served increased year on year, it was video streams that registered the highest growth. Unsurprisingly, almost all buy-to-own formats suffered a decline in sales, apart from vinyl LPs, which benefited from two successful Record Store Day events. R&B/hip-hop was easily the most popular music genre in the US last year, ahead of rock and pop. However, the share of sales of most genres varied greatly by format and access method.

Subscription services putting the squeeze on unlicensed music access in Australia
A new report from the Australian government’s Department of Communications and the Arts has found that the level of online copyright infringement is falling. A report detailing infringement levels of the four entertainment categories of music, video games, movies, and TV programs painted a positive picture of entertainment piracy decline. For music, the share of respondents accessing only unlicensed content has halved in five years, with the share accessing only licensed content on the rise. The position for the other content types was also largely positive, with the share of respondents accessing only unlicensed movies and TV programs much lower than five years ago. Video games was the only category not to experience a fall in unlicensed-only share, but the proportion of gamers accessing licensed content only grew in 2019.

European Court confirms that supply of e-books represents a communication to the public
The European Court of Justice (CJEU) has published its ruling in a case involving the resale of secondhand e-books. Two Dutch book publisher associations first filed a claim against an e-book reseller in 2014. The associations claimed that the offering of secondhand e-books was an unauthorized communication of those books to the public as determined by the Copyright Directive. However, the reseller argued that its activities were covered by the distribution right, which was subject to a rule of exhaustion if the e-book was sold in the European Union by the rights holder or with their consent. Both a district and appeals court in Amsterdam ruled in favor of the reseller, forcing the associations to take the case to a court in The Hague. A number of questions were subsequently presented by the Hague court to the CJEU to determine if the supply of permanent e-book downloads was covered by the right of distribution to the public provided for by Article 4(1) of the Copyright Directive 2001/29, or the right of communication to the public provided for in Article 3(1) of the directive. The CJEU decided that the supply of e-books for download was covered by the communication right.

Asia’s growth potential prompts music company outreach
Recorded-music growth in Asia, especially in the huge Chinese market, is attracting the music industry’s leading players. In a relatively short space of time, a number of Asian countries have been transformed from piracy havens to the markets with the biggest growth potential. Record companies are establishing operations in the region, often together with local partners, to both distribute their existing roster of artists and to pick up Asian talent with a view to taking them to the West. And recent successes in the US for South Korean and Chinese acts have demonstrated that there is audience appetite. The trick will be to ensure that the region isn’t treated as a homogeneous entity, though the current signs are that record companies recognize this.

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