Tagged: Music subscriptions

New issue of Music & Copyright with Russia country report

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

Pressure shifts to Pandora as SiriusXM agrees pre-1972 deal
US satellite radio service SiriusXM has agreed on a settlement with the three major record companies and ABKCO Music & Records over the use of music fixed in copyright before February 15, 1972 (pre-1972 sound recordings). The settlement followed a California district court ruling in October that the broadcaster should pay royalties on the disputed recordings. The issue of royalties payable on the pre-1972 works has already seen a number of legal cases heard in several district courts in the US. Two members of the 1960s band the Turtles, Howard Kaylan and Mark Volman, who later became known as Flo & Eddie, have led the charge against the non-payment of royalties by SiriusXM and online radio service Pandora. Although SiriusXM is still battling against Kaylan and Volman despite legal defeats in New York and California, the broadcaster has decided to settle with the record companies rather than appeal the California court’s interpretation of the state’s copyright law, which means that the online radio service Pandora is now under the pre-1972 sound recordings spotlight.

SGAE membership approves accounts for 2013 and 2014
Spanish authors’ society SGAE has published its annual accounts for 2013 and 2014 after approval from its membership at the June annual general meeting. SGAE has experienced a turbulent last few years with arrests of senior executives for misappropriation of funds followed by antitrust investigations over high tariffs for live performance and broadcast fees. The collection society still has a long way to go to repair the damage caused, but SGAE said in June that total revenue grew last year compared with 2013 despite the difficult trading conditions which affected some of the main income sources. Digital collections registered good growth and mechanicals benefitted from the big rise in sales of CD albums.

Music TV still plays the world’s global juke box
Music TV has come a long way since the early days of MTV, with music videos having made the leap from being pure promotional collateral to premium content able to pay its own way. YouTube and Vevo have essentially replaced broadcast music television in the living room with on-demand tracks across multiple devices. But while large players dominate the space, there is still room for innovation, especially on the live music side of the business where brands are also eyeing the opportunity.

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 profile. For more than a decade, the two major music industry sectors, recorded and live, experienced very different fortunes in Russia. Recorded music sales suffered under the weight of piracy and the live sector went from strength to strength. However, in the last couple of years, the situation has turned on its head with recorded music on the up and live music suffering a decline. Rising digital sales have boosted record company earnings and there is real hope that the country may be just about to start delivering on its potential. In contrast, Russia’s live sector has been hit by a devaluation in the ruble and souring relations with the West over Ukraine that have forced the country’s economy into a deep and subsequently damaging recession.

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Music & Copyright is published by Ovum.

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.

EC green-lights GEMA, PRS, and STIM pan-European online music licensing hub
The European Commission has given its approval to a joint online music-licensing venture between the three European collection societies GEMA, PRS for Music, and STIM. In January, the EC began an-depth investigation to determine if the venture was in line with European Union regulations on mergers. The investigation was launched after a preliminary investigation suggested that the combination of music repertoires currently controlled by the three collection societies could result in higher prices and worsened commercial conditions for digital service providers in the European Economic Area. In a joint statement, GEMA, PRS for Music, and STIM said the new hub will transform pan-European music licensing by enabling ease of access for digital music services to music rights as well as provide faster and more accurate payments of royalties to writers and their music publishers.

Both BUMA and STEMRA report collection growth in 2014
Dutch authors’ societies BUMA and STEMRA have reported a third consecutive year of growth in joint collections after three consecutive annual falls. Combined income for the two collection societies increased 5.3% last year, with gains reported in both performance and mechanical rights. Strong growth in streaming in the Netherlands resulted in an almost doubling of digital collections for BUMA. However, streaming remains a tiny source of revenue for authors and publishers in the country.

US Copyright Office opens up the debate on the future of orphan works
The US Copyright Office (USCO) has begun a new review of how best to deal with orphan works and mass digitization under the country’s copyright law. Earlier this year, the USCO asked for comments from stakeholders and held a number of public roundtables in Washington D.C. The culmination of viewpoints, as well as an analysis of issues impacting orphan works and mass digitization efforts along with a series of recommendations, has been published in a new report. The USCO has requested written comments on its recommendations be submitted by early August.

After the indie and Swift storm, Apple Music is all set to deliver the music streaming tipping point
Apple’s foray into music streaming has been a long time coming but Apple Music is set to hit the ground running. However, those who expected cool Apple to innovate in the streaming space need to “think different” as the company has designed a service which is pretty much a grab bag of features already out in the market. While that may be a disappointment for some, it is not necessarily a bad move. All Apple needs to do is provide a good, dependable music streaming service akin to Spotify’s and its marketing clout and the huge global penetration rate of its consumer electronics devices should ensure that becomes market leader. However, Apple Music is not about to wipe out the competition and the service’s launch will serve to lift most streamers’ boats.

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 profile. The French music industry experienced a contracted 2014 with recorded music sales and royalty collections both suffering a decline after a positive 2013. Despite the rise in music subscription and streaming revenue, continued falls in CD album and music download sales dragged down overall recorded music trade income. French authors’ society SACEM also suffered a reversal of fortune with the ongoing decrease in mechanicals overshadowing digital and broadcasting gains. France’s live music industry is highly competitive with national and international promoters battling for big name representation. High fees charged by leading artists make it difficult for promoters to return a profit and the increased concentration on bigger shows and festivals is causing a real headache for the country’s smaller events.

If you want to know more about Music & Copyright then follow the below links.

Music & Copyright is published by Ovum.

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.

BMI wins the latest royalty battle in the ongoing rate dispute with Pandora
A New York rate court has decided that US online radio service Pandora must pay BMI, the performing rights organization (PRO), 2.5% of revenue for the use of authors’ and music publishers’ content. In making its decision, the US District Court for the Southern District of New York decided that the rate proposed by BMI was reasonable, despite being at the low end of what BMI had hoped for. However, the rate is still higher that the 1.85% rate Pandora pays to ASCAP. That rate was affirmed by the US Second Circuit Court of Appeals in April after ASCAP had appealed a 2014 rate court decision. Previously, Pandora had paid BMI 1.75% of revenue and so, with the online radio service expected to generate around $1bn in revenue this year, the increased royalty payment to BMI could be as high as $75m. Pandora, which ended March with 79.2 million users, has said it will appeal the New York rate court decision.

Public performance gains return Czech authors’ society OSA to growth in 2014
Czech authors’ society OSA has reported a return to growth in royalty collections in 2014 after a slight dip in 2013. Despite a fall in broadcasting income and earnings from abroad, record collections from both public performance and digital boosted the authors’ society’s revenue to a new high. A good year for OSA also included a fall in costs and a subsequent decrease in costs as a share of collections, as well as a rise in distributions to its members.

Growth for all the major music groups in 1Q15
With UMG the last of the three major music companies to publish financial details for the first three months of 2015, a comparison of their respective performances reveals all of the companies posted year-on-year growth. Previous year-on-year comparisons of the three companies’ recorded music and music publishing sectors have been distorted by company acquisitions and sell-offs, and exchange rate fluctuations. However, with most dealings completed more than a year ago, the only major influencing factor in first quarter comparisons was exchange rates. Factoring in fluctuating current rates suggests that all three majors have got off to a good start in 2015. There are, however, still nagging doubts as to whether 2015 will be the year that the recorded music sector as a whole posts positive gains, and whether music publishing can register another year of growth.

On the Radar: BackBeat Solutions
A new “on the radar” section in Music & Copyright begins with a look at BackBeat Solutions, a company that provides pre-packaged deal management, royalties accounting, multi-platform publishing, and content services. It has a client portfolio in Europe and the US comprising tier-two music labels and music publishers. Founder Chris Chambers’ long association with the music licensing area has helped it secure projects for BMG Chrysalis, Fintage House, and Imagem Music Publishing.

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 profile. Optimism about a return to longer-term recorded music growth in the UK was quickly extinguished with the publication of last year’s trade results. Three straight years of decline ended in 2013 with a rise in trade revenue. However, recorded music sales slipped back again in 2014 with the rising income from streaming services unable to match the drop in downloads and CD album sales. The UK may well register growth again this year though as streaming increases in popularity. Royalty collections matched the recorded music decline last year with PRS for Music registering its first rights contraction since 2010. A rise in broadcast, digital, and public performance collections could not fully offset the fall in overseas income and mechanicals. The live sector remains strong, although research suggests small venues are under considerable pressure, both financially and regulatory.

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Music & Copyright is published by Ovum.

Music subscription services face a difficult balancing act between price and value

Music is unquestionably important to most people’s lives, regardless of where they are in the world. Although not everyone spends money on recorded music or buys tickets to a gig or festival, a very high percentage of people listen to music on the radio at home or in their car. Restaurants, shops, and bars use music to create a particular ambience to encourage people to either relax or feel enlivened to improve their customers’ experience.

Music is essential and important
Just how important music is to consumers was one of the many questions included in a consumer survey conducted by Music & Copyright publisher Ovum in July. Over a three-week period, 15,000+ consumers across 15 countries were asked a number of questions about their media use. In terms of importance, music was considered essential by 42% of respondents, and important by a further 43%.

Although listening to music was less important than browsing the Internet and reading the news, it was considered more essential that interacting on social media and watching TV. Only 16% of respondents said listening to music was unimportant. Continue reading

Has streaming really brought the good times back to Sweden’s recorded-music sector?

Earlier this week Sweden’s local music trade association Grammofonleverantorernas Forening (GLF) proudly reported that total trade revenues from recorded-music sales increased 5.1% last year, to SEK991.2 million (US$152.2 million), from SEK943.6 million in 2012. The rate of growth was lower than the 13.8% year-on-year increase in 2012, but higher than the 0.5% upswing in 2011. Streaming was the big winner, with record company earnings from services such as Spotify and WiMP rising to SEK705.9 million, from SEK541.6 million in 2012. Based on the latest GLF figures, streaming accounted for slightly more than 71% of total trade revenues in 2013, up from 57.4% in 2012 and just 1.5% in 2008.

Sweden sales 2000-2013

In a statement, the GLF CEO Ludvig Werner said three straight years of growth had pushed trade revenues to their highest level since 2004. However, he cautioned that record company earnings are still just 60% of the peak year of 2000.

With all the headlines about Sweden’s streaming boom, it is easy to forget how big the Swedish recorded-music market once was and how far it has fallen. Moreover, there are plenty of questions over how high streaming sales can actually go, particularly given the slowdown in the growth rate of streaming earnings (30.3% in 2013, down from 55.4% in 2012).

In just six years, sales of CDs in Sweden have more than halved, yet there is little published evidence detailing whether those CD buyers have switched to digital or are simply buying less recorded-music. In the early years of digital, falling trade revenues were a clear indicator that consumers were either switching to unauthorized services, or abandoning the recorded-music industry altogether. Download sales have never really taken hold in Sweden and so the big unknown is whether music subscription services have attracted consumers that stopped buying recorded-music, or whether the services are simply causing a redistribution of trade revenues from CDs and downloads.

Rising earnings suggests the growth has come from more than simple cannibalization, but it would be easy to gloss over the possibility that fewer Swedes are spending money on recorded-music, and that those consumers that are spending, are spending more. If that is the case then there will be a limit on how big the streaming boom will take Sweden’s recorded-music sector. No one is expecting streaming sales to keep on rising, but if streaming can’t return record company earnings to 2000 levels, then what can?

Music & Copyright
If you like this blog then Music & Copyright might be just what you are looking for. It is a fortnightly research service covering global copyright and legal issues affecting the music industry. It is unrivalled in its coverage of this complex and fascinating area of the music industry. It is also why our extensive client list includes companies and organizations from all sectors of the music industry operating all around the world. But don’t take our word for it, please get in touch and we will send you the latest issue.

Music & Copyright is published by Informa Telecoms & Media.

Spotify accounts filed with UK Companies House show decrease in revenues for 2012

spotify_logo-copy1-1According to its latest filing with Companies House in the UK, where it is based, Spotify posted a decrease in revenues, from £96.5 million in 2011, to £92.6 million in 2012. Advertising revenue increased, from £8.1 million to £9.1 million, but sales of subscriptions were down, from £72.5 million to £64.8 million. Losses after tax for 2012 totaled £10.1 million, reversing a £21 million profit in 2011.
Spotify accounts 2012

It is worth noting that the new figures are for Spotify Ltd only – the Spotify Group accounts came out in July and showed the subscription service generated revenues of €434.7 million (US$584 million) last year, up 128.3% from €190.4 million in 2011. Those accounts were filed with the registry of companies in Luxembourg by its holding company, Spotify Technology. Also worth pointing out is that during the first 5 months of 2011, global premium revenue was recognized in Spotify Ltd. But from as from June 2011 the premium service was provided locally and so the revenue was recognized in the local sales subscriptions.

The rate of growth in the wider subscription sector makes the UK figures a little misleading, particularly given the number of markets Spotify is now available in. Although the company hasn’t updated its subscriber numbers since March (6 million paying users and 24 million active users), both those totals will have increased. By how much, we will all have to wait and see.

Music & Copyright
If you like this blog then Music & Copyright might be just what you are looking for. It is a fortnightly research service covering global copyright and legal issues affecting the music industry. It is unrivalled in its coverage of this complex and fascinating area of the music industry. It is also why our extensive client list includes companies and organizations from all sectors of the music industry operating all around the world. But don’t take our word for it, please get in touch and we will send you the latest issue.

Music & Copyright is published by Informa Telecoms & Media.

Why reports on the evolution of the music industry should focus on earnings and not on format wars

For anyone interested in the recorded-music industry and where it is headed, it is difficult to escape the many articles and reports speculating on how music will be served to consumers in the coming years. For those living in Norway or Sweden the answer is already very clear with music subscription services leading the charge to a growth in sales after countless years of decline. Such has been the rise in music subscriptions in the two countries, streaming now forms part of sales charts published each week. IFPI Norway added streaming to album charts from the beginning of November. Previously, the album chart had only included physical sales and downloads. Sweden added streaming to its national album chart in October. IFPI Norway said by including streaming figures the album and singles charts reflected “the total consumption of music in Norway.” Streaming has been included in the Norwegian singles chart since the spring of 2011.

Adding streaming usage to a sales chart is a natural progression in the collation of music sales and recognition of how accessing recorded-music has changed. Excluding streaming from sales charts, particularly in a country where the majority of trade revenues now come from subscription services, would make those charts incomplete, unrepresentative and irrelevant. Continue reading