The annual survey by Ovum publication Music & Copyright of the recorded music and music publishing sectors has revealed that recorded-music leader UMG lost market share in 2014, mainly as a result of the sale of the Parlophone Label Group (PLG) to WMG in 2013, which formed part of EMI Recorded Music acquisition requirements. UMG’s loss was WMG’s gain and the smallest of the three majors narrowed the gap on second-placed SME. Sony/ATV held its lead in music publishing, but the collective share of the independent publishing sector was the highest overall.
Majors cede a little recorded-music market share to the independents
Following two years of consolidation in the recorded-music and music-publishing sectors after the breakup of EMI Music Group and the subsequent sales of EMI’s record and publishing divisions, restructuring and company selloffs have had an impact on the market share figures for the major music groups in 2014.
UMG acquired EMI Recorded Music and a Sony-led consortium of companies bought EMI Music Publishing in 2012. National and regulatory approval required a number of company sales, which were completed with the sale of the PLG in July 2013. The timing of the sale meant year-on-year market-share comparisons for UMG and WMG this year and in 2013 were affected. Moreover, at the time of the PLG acquisition by WMG, the major said it would sell some of the PLG assets, or their equivalent value of owned assets, to independent companies. Strong interest by the independent sector has delayed the asset sales with more than 140 companies reported to have bid for around 11,000 artist catalogs. Should the selloffs be completed this year, WMG’s 2015 market share may well be negatively affected.
UMG is the recorded-music leader despite a market share dip
According to Music & Copyright’s annual survey of the music industry, UMG had a 34.1% share of the combined physical and digital recorded music trade revenue last year, down from 36.7% in 2013. For physical revenue only, UMG’s share stood at 32.3%, while its digital share was 36.1%. SME was the second-largest music company, with a virtually unchanged combined physical/digital market share of 22.5%.
The smallest of the three majors, WMG, was the only company to experience an increase in both physical and digital shares: Its share of revenue from physical recorded music sales was 15.7% in 2014, up from 14.8% in 2013, while the share gain was slightly lower for digital, rising to 17.7%, from 17.1%. WMG’s combined physical/digital share grew, to 16.7%, from 15.8%.
The independent record companies’ share of combined physical/digital revenue also rose last year, to 26.7%, from 25.1% in 2013. The sector increased its share of both physical and digital revenue. However, the independents’ share of physical formats is still higher than its digital share.
A healthy year for music publishing
Music & Copyright has calculated that global music publishing revenue grew 2.5% in 2014, to $4.05bn, from $3.95bn in 2013. Despite a virtually unchanged market share in 2014 of 29.5%, Sony/ATV, the joint venture between Sony and the Michael Jackson Estate, remained the global publishing leader. Although Sony/ATV and EMI MP are still separate companies, with EMI MP repertoire administered by Sony/ATV, Music & Copyright has combined the companies’ shares. EMI MP is the larger of the two companies in terms of tracks owned and administered, with a publishing catalog of around 2 million tracks, compared with 1.6 million for Sony/ATV.
UMPG is the second-largest music publisher. The company’s market share edged up slightly last year, to 23.0%, from 22.6% in 2013. Warner Chappell was the only major music publisher to suffer a fall in share in 2014.
Independent companies hold the lead
Independent music publishers have long dominated music publishing and compete well with the majors for major artists’ attention. Last year, the independent music publishing sector experienced a small increase in share: Music & Copyright estimates that independent companies accounted for 35.0% of global publishing revenue, compared with 34.8% in 2013.
BMG Rights Management is the biggest of the independent music publishers and has gained share consistently through a mixture of company acquisitions and administration deals. Music & Copyright estimates that BMG’s share of global music publishing revenue was 5.4% in 2014, up from 5.1% in 2013.
Kobalt has also made gains in the last few years, although increased revenue for the company has come from organic growth rather than through company acquisition. Music & Copyright estimates that Kobalt’s share of global publishing revenue increased to 3.9% last year, from 3.5% in 2013.
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Informa Telecoms & Media today announced the publication of the second edition of its highly successful report Demystifying Pan-European digital-music rights. The report neatly illustrates what repertoire is controlled by what collection society or licensing hub in 30 of Europe’s most vibrant recorded-music markets. Continue reading
Last year the European Commission introduced new proposals for a directive on the collective management of copyright and multiterritory licensing of music. The proposals, which target collection-society transparency and the efficient working of digital-distribution businesses in Europe, are working their way through a series of committees. After that, they must be agreed upon by the European Parliament and European Council of Ministers.
What the directive will not do is interfere with the way music publishers administer their rights. All of the major publishers and a number of independents have withdrawn the rights to certain repertoire for licensing on a multiterritorial basis. Some see these moves as a step towards the creation of a new form of fragmentation, one based on repertoire, rather than national borders. Publishers have long claimed that withdrawing certain repertoire rights streamlines the licensing process. However, music ownership can involve multiple publishers and therefore digital services that want to provide an all-encompassing offering still need to sign more licensing deals than the number of countries they operate in. Continue reading
In the past 20 years or so, all sectors of the music industry have been through massive change. Format transitions, company consolidation and greater scrutiny of copyright and licensing have changed the industry beyond all recognition. But have the changes made for industry improvements, and more important, have the main players learned from their mistakes? The recent discovery of the first issues of Music & Copyright has allowed for a unique look at just how much certain things have changed, and how much they haven’t.
The newsletter’s 20-year anniversary came and went in September, but thanks to a long-standing subscriber, copies of the first 24 issues published have been found and make for interesting reading. Despite containing names that have either long since left the music industry or been swallowed up as part of industry consolidation, the headlines for a number of news stories resonate closely with happenings today. Continue reading
As the issue of multiterritory licensing comes under the spotlight in Europe, differences in rates charged and rights splits will become more evident. Will an EU directive that breaks down national borders be followed by a bigger push for deeper collection-society harmonization across the region?
With publication of the European Commission’s new multiterritory licensing proposals, Brussels’ efforts to harmonize the EU’s digital-music landscape are looking to build on legislation harmonizing authors’ and publishers’ rights that are managed by collection societies. Continue reading
The number of digital-music services in Europe is growing every year and consumers across the continent are being presented with an array of different ways to listen to music. Digital-music delivery and consumption has undergone a rapid transition. However, such has been the speed of the sector’s evolution, new business models specializing in digital-music delivery across Europe have forced those organizations charged with issuing licenses to rethink the way they operate.
Music publishers and collection-societies in Europe have taken to the task in different ways (see below table for major music publisher initiative details). But, in contrast to a few years ago, when digital-music services were required to negotiate countless licensing deals, agreements between music publishers and collection-societies have reduced the necessity for endless rounds of licensing negotiations. Continue reading
In a country profile of Germany a few weeks ago, we reported that some members of the German authors’ society GEMA members had raised concerns at the unfairness of GEMA’s voting system at its annual conference. To recap, GEMA oper-ates three levels of membership: associated, extraordinary and ordinary (the highest level). These levels define voting rights at its annual conference. In 2009, there were 54,605 associated members, 6,406 extraordinary members and 3,343 ordinary members. Associated and extraordinary members have no voting rights at the annual conference. But in pre-meeting sessions, these two groups can nominate up to 34 representatives to participate in, and have voting rights during, the annual meeting. A proposal to raise the number of delegates from the associated and extraordinary membership from 34 to 42 was made at last month’s annual conference, but a decision on the proposal was been postponed until next year’s annual meeting.
After the concert promoter Monika Bestle filed a 106,000-signature petition last year, a hearing in May at the German Bundestag concluded that GEMA’s internal voting process was not well balanced. But is GEMA any less democratic than the other collection societies in Europe? Moreover, could members of other collection societies who are not eligible to vote at their annual general meetings cite the unrest at GEMA as reason for change in their national collection society?
PRS for Music in the UK and SACEM in France are two of Europe’s largest collection societies. PRS divides its membership into three tiers: full, associate and provisional. Of the total membership of 63,129, full members, which numbered 4,172 at the beginning of this year, have multiple voting rights; associate members (17,175) have a single vote; and provisional members (41,782) do not vote. The qualifying criteria for admission to each category of membership are based on a member’s earnings in the previous year. If earnings meet the threshold, which is defined as a set percentage of the total amount distributed to PRS members the year before that, the member is promoted to the next category of membership. Full members have a standard 10 votes. They qualify for an additional 10 votes if they have been a member for at least 20 years and during that time have received an aggregate number of distributions from PRS that is at least 10 times the annual qualifying figure for admission to full membership for the previous year or they have been a member for at least two years and during that time have received an aggregate number of distributions from PRS that is at least 20 times the annual qualifying figure for admission to full membership for the previous year.
Like PRS, SACEM has three membership levels for authors, composers and publishers: adherents (members), societaires professionnels (professional members) and societaires definitifs (full members). At the beginning of the year, the total membership of 132,000 was divided among 127,629 adherents, 2,277 societaires professionnels and 2,094 societaires definitifs. At SACEM’s annual general meeting, all members participate in the approval of the society’s accounts and elect the members of the board of directors, which is made up of six authors and two author-directors, six composers and six publishers. All members have a single vote, while societaires professionnels and societaires definitifs each receive 15 additional votes. The board of directors appoints members as societaires professionnels and societaires definitifs.
BUMA and STEMRA in the Netherlands operate as a single company, despite consisting of two separate bodies: Vereniging BUMA (the BUMA Association) and Stichting STEMRA (the STEMRA Foundation). Each has its own members and affiliates and its own board of directors. BUMA’s board consists of 12 members: six composers, three authors and three publishers. Candidates are recommended by the societies of composers, authors and publish¬ers, but members are elected by composers, authors and publishers collectively. STEMRA’s board consists of 12 members: seven composers or authors, four publishers and one member recommended by BUMA. The composer/author members are elected by writer/composer members of BUMA/STEMRA, and publisher members are elected by publisher members only. Voting is on a weighted basis, based on the publisher’s turnover, and any publisher gets a maximum of 10 votes. Once music authors and publishers transfer the commercial exploitation of their music copyright to BUMA/STEMRA, they become members (BUMA) or affiliates (STEMRA) and are eligible to vote. BUMA/STEMRA ended 2009 with about 16,000 members and affiliates.
Italian authors’ society SIAE has author and publisher members from a variety of arts, including the music, literary, drama, opera, visual and audiovisual sectors. It does not categorize members in tiers. Although rights holders can be contractually represented by SIAE, only members are allowed to participate in SIAE’s governing bodies. SIAE’s General Assembly (GA) consists of 64 members, which are elected by all members every four years. The GA, which meets twice a year, nominates the other governing bodies (president, board of directors, section committees, board of auditors, internal audit) every four years. From a total 81,839 “musical” members, 79,154 are authors and 2,485 are publishers.
SGAE of Spain ended 2009 with 96,955 author and publisher members. Its author mem¬bership is divided into the professional categories of music (72,748 members), grand rights (theater, drama, musicals, etc.) (7,371) and audiovisual (8,031). Voting rights are divided between temporary rights and permanent rights, with the number of votes weighted, based on royalty income. For temporary rights, the weighting of votes is dependent on royalty income received in the previous financial year, and for permanent rights the votes are weighted based on royalty income received in the previous five years.
In the latest issue of the newsletter we continue the analysis by looking at SUISA of Switzerland, SABAM of Belgium, AKM of Austria and STIM of Sweden. We also compare European collection societies with those operating in North America and Asia. The conclusion to all this? It would seem that although most collection societies restrict the voting at annual meetings to the most senior or exclusive members, virtually all of them continue to operate with full member support. For the time being at least. As always, comments are gratefully accepted.