New issue of Music & Copyright with UK country report

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

Amid rife piracy, RBTs are helping prop up MEA’s legal music sector
If it were not for ring-back tones (RBTs), music revenue would be in decline in many parts of Africa and the Middle East (MEA). Other digital music services – namely, sites and apps offering downloads and streaming on an a-la-carte or all-you-can-eat basis – are making negligible revenue in much of the region. On their own, digital services do little to compensate for plummeting physical sales. Beyond recorded music, concert ticket sales and sponsorships (i.e., live music) help to shore up revenue – but, other than in a small handful of countries, not at sufficient scale or pace to make a huge difference. Digital services are hobbled by a long list of barriers, yet numerous homegrown services have sprouted up in many parts of the region, and are exploring different ways of scratching out a living. RBTs are immune to digital piracy and get around the region’s low penetration of online payments by being added to users’ mobile bills. However, most of the revenue they generate is pocketed by mobile telecoms operators, and they cannot be relied on as a cash cow forever.

Digital takes the domestic lead for Swedish authors and publishers
Swedish authors’ society STIM has reported record financials for 2017, with total collections exceeding SEK2bn ($227.7m) for the first time. Distributions to its members also topped the previous year’s high. Online and new media service collections were again the standout revenue source, with the growth rate the highest of all STIM’s main revenue sources. Moreover, online now accounts for almost 40% of total domestic collections. Income from overseas remains the biggest revenue source for Swedish authors and publishers, with last year’s growth more than reversing the previous year’s decline. Royalties from festivals and live music concerts increased for the second consecutive year. STIM said the growth was largely down to big-name artists playing more arena dates and an increase in ticket prices.

Opinions divided over the US ACCESS to Recordings Act
US Senator Ron Wyden has thrown something of a curveball at the moves by legislators to speed up the passage of a new copyright law that would put an end to the discrepancy between pre- and post-1972 sound recordings in the US. Currently, pre-1972 sound recordings are governed by state laws and receive different protection than post-1972 recordings, which are under federal copyright protection. The unanimous passing of the Music Modernization Act through the House of Representatives and its subsequent introduction in the Senate gave rights holders hope that the issue of pre-1972 recordings would soon be at an end. However, the introduction of Senator Wyden’s new bill is likely to put the brakes on rights-holder celebrations. Unsurprisingly, opinions over Wyden’s bill have been divided, with some accusing the senator of putting legacy artists’ retirement security at risk.

UK country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed UK music industry report. The UK’s recorded-music industry is going through a positive period. Three straight years of decline ended in 2013 with a rise in trade earnings. Although revenue has slipped back in the two subsequent years, the country has registered two consecutive years of growth. Going one better, the retail value of recorded-music sales has risen for three straight years with subscription sales and streaming growth more than offsetting lower spending on physical formats and downloads. UMG is the clear leader in market share terms, with SME in second place. Royalty collections in the UK are on the rise with both PRS for Music and PPL continuing to register record receipts. Live music continues to be the most robust leisure sector in the UK, and tours and festival appearances still the most secure way for artists to generate revenue. However, concerns over the ongoing decline in the number of grassroots music venues has prompted the government to launch an inquiry into the live music business, with a specific focus on small music venues.

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Streaming growth boosts R&B/hip-hop share of global recorded-music sales

New research published by Music & Copyright has revealed that retail sales of R&B/hip-hop jumped 24.1% in 2017, to $2.59bn, from $2.08bn in 2016. The genre’s share of total retail sales increased, to 11.9%, from 10.4%. Furthermore, R&B/hip-hop’s retail share has more than doubled in the last 10 years. Pop and rock remain the two most popular music genres. Consumer spending on pop music increased 3.9%, to $6.79bn, from $6.53bn, while spending on rock music grew 2.5%, to $5.25bn, from $5.12bn. In terms of revenue share, pop accounted for 31.1% of global music retail sales, with rock taking a 24.1% share.

Global, recorded-music retail sales by genre share, 2017

Source: Music & Copyright

“The simple explanation why R&B/hip-hop sales have risen so much in the last few years is that streaming use has grown sharply. The streaming audience is skewed toward a younger demographic, and R&B/hip-hop is more popular among younger consumers,” said Simon Dyson, editor of Music & Copyright and Practice Leader of Ovum’s Music team. “National trade associations that have published sales by genre and retail channel have shown that the streaming share for R&B/hip-hop can sometimes be more than double the genre’s share of more traditional format sales. With streaming forecast to continue rising for the next few years at least, the future for R&B/hip-hop has never looked so good.”

Note to editors
The classification of any artists’ music into a single genre is fairly arbitrary and can differ between record company, music retailer and national trade association. Categorizing music within a genre can often have multiple influencing factors such as musical technique, style, context, target audience and geographical origin. Moreover, many genres have sub-genres that can often overlap others. For the purposes of this research, Music & Copyright has limited itself to the most commonly used genre categories by most national trade associations when presenting a breakdown of sales by genre.

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New issue of Music & Copyright with Denmark country report

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

Streaming growth boosts R&B/hip-hop share of global recorded-music sales
The return to growth for the recorded-music industry has brought with it an interesting shift in sales patterns for the different musical genres. A number of national trade associations’ year-end summaries of music sales have shown that certain genres have received a sizable boost from the change in consumers’ consumption patterns, while others have suffered a decline. R&B/hip-hop in particular has benefited from the growth in streaming, with the genre’s share of global retail sales more than doubling in just five years. Music & Copyright has analyzed global genre sales to see just how the return to recorded-music good times has affected sales of the most popular music genres.

Music streamers extend their bundle options to maintain subscription growth
Music streamers are finding that bundling their offerings with other products can help them recruit paying customers. A good part of that activity has revolved around tie-ups with video-streaming services. More recently, the likes of Spotify, iHeartRadio, and Tidal have been pushing into new areas such as movies and books to generate interest in their subscription-based streaming offers. Expect more bundling activity from music streamers in sectors such as gaming, in-car entertainment, and audio equipment, although promotions may need to be bolder to really pay off.

TONO reports record year for collections and distributions
Norwegian authors’ society TONO has reported a record year for both collections and distributions. After a disappointing 2016 that failed to repeat the record-breaking year of 2015, total receipts in 2017 were boosted by growth in all the main collection sources. Digital registered the highest year-on-year increase, but there were notable rises in collections from broadcast retransmission, live concerts, cinema, and overseas. TONO noted that Norwegian music picked up considerable momentum abroad last year. Receipts from background music and casual music use also grew. Previously, the authors’ society had said the competition for customers in the background music segment had increased in recent years with providers of non-licensed music becoming more active. However, the level of competition lessened in 2017 and a new copyright act is set to clarify whether users of non-licensed services should be paying royalties.

Denmark country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Denmark music industry report. Denmark is one of a small number of countries in Northern Europe that can be described as global leaders in the transition from music ownership to access. Although the country has a population of just 5.7 million and ranks in the lower part of the world’s top 20 music markets, the share of recorded-music sales from access services rivals most others. Streaming accounted for 85% of trade earnings from sales of physical and digital formats and services last year, and this share is expected to rise further as sales of physical formats and downloads fall away. UMG is the market share leader in Denmark, ahead of SME and WMG, enhancing its lead with a modest share rise. Royalty earnings collected by authors’ society KODA were boosted by retroactive TV collections that pushed the collection total above the DKK1bn mark for the first time. Performance rights society Gramex also reported a record year, and indications suggest Denmark’s live sector performed well in 2017.

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UMG and WMG make recorded-music market share gains, Sony outperforms in publishing

Music & Copyright’s annual survey of the recorded-music and music publishing sectors has revealed the changes in global market share for the three major music groups and the independent sector. Recorded-music leader UMG maintained the top spot with an increase in both its physical and digital market shares. Second-placed SME suffered a dip in its recorded-music share, while smaller major WMG continued its upward trend and registered a share increase. A repeat of 2016 saw independent record companies collectively account for the biggest share. Sony remained the leader in terms of corporate music publishing control after registering the best year in the company’s history. UMPG suffered a slight fall in share, while Warner/Chappell and the collective share of the independent publishing sector were unchanged.

UMG extends recorded-music lead
UMG had a 29.7% share of combined physical and digital recorded-music trade revenue last year, up from 29% in 2016. For just digital revenue, UMG’s share stood at 32%, while its physical share was 25.4%.

Record companies, physical- and digital-revenue market shares, 2016 and 2017
Source: Music & Copyright

SME was the second-largest music company, although its combined physical/digital market share slipped last year, to 21.9%, from 22.9% in 2016. SME registered a year-on-year fall in both physical and digital market shares. The company’s share of all recorded-music trade revenue, which includes licensing and other revenue as well as income from physical and digital music sales, was also down, to 22.3%, from 23.2%.

Record companies, total recorded-music-revenue market shares, 2017
Source: Music & Copyright

The smallest of the majors, WMG, experienced a mixed year in digital and physical shares. The company’s digital share increased, to 18.1%, from 17.6%, while its physical share edged down, to 12.8%, from 13.1%. WMG’s combined physical/digital share grew, to 16.2%, from 15.8%, and its total revenue share was up, to 15.8%, from 15.4%.

UMG was the single biggest record company, but independent record companies’ combined physical/digital revenue share was higher than the leader last year, at 32.2%. The independent company sector increased its share of both physical and digital revenue, but there remained a sizable difference between its physical and digital shares.

It is worth pointing out at this stage that following last year’s review of our music publishing share methodology, we have made similar changes to the way we determine recorded-music shares. Our calculations are now based on a much more comprehensive assessment of the recorded-music sector and allow for greater accuracy in the standings of the three majors and the independent companies. The change has meant we have restated the previously published 2016 figures.

Positive year for music publishing
In line the way in which Music & Copyright determines global recorded-music market shares, music publishing market shares are also based on revenue received by each company. Music & Copyright has calculated that global music publishing revenue grew 11.2% last year, to $4.92bn, from $4.42bn in 2016. Sony increased its leading position following the best year in the company’s history. Earnings were boosted by a record growth in streaming. Moreover, the company published the IFPI’s top three artists of last year, Ed Sheeran, Drake and Taylor Swift. Sony accounted for 27.3% of global publishing revenue, up from 27% in 2016.

Music-publishing companies, revenue market shares, 2016 and 2017
Source: Music & Copyright

UMPG was the second-largest music publisher last year. Music & Copyright estimates the company’s share edged down, to 19.5%, from 19.8% in 2016. Third placed Warner/Chappell’s share was unchanged at 12%. Also unchanged last year was the indie share. Independent music publishers have long dominated music publishing and continue to compete well with the majors for major artists’ attention. Music & Copyright estimates that independent companies accounted for 41.2% of publishing revenue in 2017.

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New issue of Music & Copyright with Finland country report

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

UMG and WMG make recorded-music market-share gains; Sony outperforms in publishing
Music & Copyright’s annual survey of the recorded-music and music-publishing sectors has revealed the changes in global market share for the three major music groups and the independent sector. Recorded-music leader UMG maintained the top spot, with an increase in both physical and digital market shares. Second-placed SME suffered a dip in its recorded-music share, while smaller major WMG continued its upward trend and registered a share increase. A repeat of 2016 saw independent record companies collectively account for the biggest share. Sony remained the leader in terms of corporate music publishing control, after registering the best year in the company’s history. UMPG suffered a slight fall in share, while Warner/Chappell and the collective share of the independent publishing sector were unchanged.

Return to growth for Dutch neighboring rights society SENA
SENA, the Dutch collection society representing performers and producers (record companies), has reported a rise in total licensing income for 2017. Domestic receipts increased for the third consecutive year and more than offset a second annual dip in international collections. Total domestic invoiced licensing revenue registered growth, but overseas invoiced revenue fell. In contrast, distributions in the Netherlands last year were down, while payments abroad were up. General licensing was the biggest collection source for SENA members, ahead of broadcasting. SENA noted in its annual report that the first full year of operation of its joint venture service center created with the authors’ society BUMA has brought the expected efficiency benefits. SENA also said that greater cooperation with BUMA on other joint initiatives is a possibility.

Regulation is just the ticket for live music events
Regulators around the world are starting to crack down on event ticket abuses. The key targets in many markets are the sharp practices of secondary ticketing operators, which have been the cause of much consumer complaint for some time. But also in regulatory sights is the widespread lack of price transparency and the use of automated bots to sweep up tickets for resale. And while the live music sector is welcoming of such regulation, there’s also an opportunity for private companies to deploy technological solutions to further help live music fans.

Finland country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Finland music industry report. Finland is outside of the global top 20 for revenue from recorded music. But, despite its small size, the country is a market leader in the digital transition from ownership to access. Subscription services already account for more than two-thirds of recorded-music trade earnings in the country and this share is expected to rise further as the reliance on physical formats continues to drop and sales of downloads disappear. The streaming boom means digital trade sales now generate close to 90% of the total market. UMG enhanced its leading position last year with a modest rise in market share while SME took second place from WMG. Royalty earnings collected by authors’ society TEOSTO were down slightly year on year. However, continued growth in digital collections meant the revenue stream increased its share of total royalty receipts to 13.7%. Indications suggest Finland’s live sector registered a good year. Despite lower ticket sales to festivals, attendance at events increased year on year.

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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.

IFPI reports big rise in recorded-music trade sales
Global recorded-music trade earnings increased 8.1% last year, to $17.3bn, from $16.0bn in 2016, according to figures published by the IFPI. The rise marked the third consecutive year of growth since the IFPI began tracking the market in 1997. Revenue from digital formats and services increased 19.1%, to $9.4bn, from $7.9bn, while trade earnings from physical formats generated revenue of $5.2bn, down 5.4%, from $5.5bn. The rate of decline in physical format income was tempered by the ongoing revival of the vinyl format. Performance rights generated $2.4bn of revenue last year, up from $2.3bn in 2016, while synchronization earnings stood at $0.3bn.

Live streaming has a new champion in the making
Audiences have taken to watching live streams of performances at leading festivals and concert venues, with the likes of Ultra Music Festival, Coachella, and Live Nation among those embracing the format. To date, live-streaming efforts have been fairly piecemeal, and no single technology provider has emerged to own the space and push it forward. But this might be about to change, as ambitious provider LiveXLive continues to sign partnership deals with leading promoters. However, simple live streaming may not be enough to win over music fans in the long term; further innovation is needed to make it a highly engaging medium.

Three straight years of collection growth for SACEM
French collection society SACEM has reported a third successive year of growth in collections, with income and distributions both topping previous record levels. Domestic revenue and income from mandates all registered a year-on-year rise in 2017. Collections from broadcasting edged down, and mechanical receipts continued the downward trend, but royalty earnings from all the other main income sources registered growth. Moreover, in a repeat of both 2015 and 2016, private copying and online were the biggest gainers. In addition to the good year for collections, SACEM-member authors’ rights distributions also registered growth. The authors’ society noted that it restated its 2016 figures to reflect contractual changes with the mechanical rights society SDRM, which came into effect last year as part of a push to improve transparency in reporting.

Wolfgang’s Vault operators guilty of copyright infringement over streaming of iconic live recordings
A New York court has sided with some of the world’s biggest music publishers in a long running copyright infringement case involving the unlicensed download and streaming of a number of live performances by some of the world’s biggest artists. The service, Wolfgang’s Vault, has been buying up live audiovisual performances for several years and making them available on different websites. Although the service owners claimed to hold the correct mechanical licenses to distribute the recordings, the court decided otherwise and ruled that the service was guilty of copyright infringement. However, the court did not grant the publishers an injunction to shutter the websites. A future trial will determine if the copyright infringements were willful and set damages accordingly.

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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.

SoundCloud must put faith in its creators to survive and thrive
Germany-based SoundCloud has been involved in music streaming longer than sector leader Spotify, but to date it has been unable to turn an evident appetite for its “social” music services into a sustainable commercial operation. The company was forced into a major reorganization last year, losing a good chunk of staffers in the process. However, it also picked up a fresh cash injection and an experienced management team, which might be able to squeeze more value out of SoundCloud’s most valuable resource: its artists.

Australian Senate committee backs incremental approach to safe-harbor expansion
In December, the Australian Senate referred the newly introduced Copyright Amendment (Service Providers) Bill 2017 to a committee for inquiry, with a view to reporting back with a recommendation in March. In short, the bill deals with the extension of the safe-harbor scheme to a broader range of service providers. As part of the inquiry process, the committee requested submissions from interested parties and then held a public hearing. The resulting report reviewed the bill and outlined the principal issues raised, along with the committee’s findings and a recommendation. Although the committee said the Senate should pass the bill, it said it agreed with the government’s decision to make an incremental expansion of the safe harbor scheme, so that it can continue to consult on how best to reform the scheme to apply to other online service providers.

Miley Cyrus the latest artist on the end of a lyrics plagiarism claim
Miley Cyrus has become the latest high-profile artist to be targeted by a copyright infringement claim. In March, Jamaican singer-songwriter Michael May accused the US performer, her songwriting and production team, and her record company and publisher of plagiarizing a short original lyric phrase that he created for his recording We Run Things. Although the phrase was altered slightly in the Cyrus track We Can’t Stop, May’s copyright infringement claim goes beyond simple copying, with accusations that Cyrus used cultural elements drawn from his track as a basis for her transformation as an artist and performer. May is reportedly claiming upwards of $300m in damages as well as an injunction preventing any further sales and performance of the Cyrus track.

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 live performance as well as royalty collections are significantly higher in the country than in any other market in the region. Despite its geographic location, South Africa more closely resembles a Western music market and has far more in common with many countries in Europe and North America than it does with its neighbors. Although this means per-capita spending on music is high compared with other African countries, 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. Music piracy rates are extremely high and despite government promises to amend copyright laws and increase intellectual property rights protection, the piracy problem persists. But, although 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 may well have a bright future.

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