Billboard Weighs in on MIDIA Research: Music Rev Still Dropping

Glenn Peoples for Billboard reports (here) on new research coming from MIDIA: “Global Music Forecasts 2014 to 2019: The Shift to the Consumption Era”.

Unfortunately the revenue of the music business will continue to sink into 2019 throughout the world market. The revenues from digital sources (downloads, streaming, ad-supported models, etc) will continue to increase its share but the overall revenue pie will shrink. This is primarily due to the lower profitability of the newer digital products. The report predicts a further shift in the music business as distributors, labels and artists retool to adapt.

From a royalty processing standpoint, this research shows that the accounting for these complex, low-revenue, high-transaction volume products will continue to be a challenge to content companies. New markets will open as well, further forcing the globalization of content management.

“As the report notes, streaming services have achieved the highest penetration in countries that had little success with downloads. Take Sweden, a country frequently hailed for its adoption of subscription services. Downloads never accounted for more than 8% of Swedish recorded music revenues. In contrast, the download peaked at 43% of U.S. revenues. Other factors will play a part in how markets evolve: piracy, per-capita music spend and GDP, and the adoption of mobile devices and other technologies.”

Music Ally Debate on Transparency

In preparation for a the Music Ally Debate: “I Can See Clearly Now” – Transparency In The Digital Age, Phil Bird, CounterPoint’s Head of Global Sales writes an opinion published on the CounterPoint Site, here.

“In the modern era, corporations speak constantly about the need for transparency. This is often at the behest of consumers who demand corporations behave in a socially responsible manner. Furthermore, by having a transparent view of their supply chain, corporations can gain greater efficiency.” — Phil Bird, CounterPoint

The June 17, 2014 debate was sponsored by Counterpoint and took place at the MusicAlly office in London, the panel included:

  • Debbie Stones, PRS for Music
  • Brian Message, ATC Management
  • Phil Bird, Counterpoint
  • Adrian Pope, PIAS
  • Mark Williamson, Spotify
  • Mike Skeet, SkeetKaye

Large amount of time was spent discussing the streaming services, Spotify in particular. Artists do not know the parameters of the deals the labels have with streaming services, due in part to the practice of using non-disclosure agreements (NDAs) to keep information about the deal away from outside parties. The royalty calculations from these deals are inherently complex and impossible to extrapolate clear rates from the final payments to the distributed labels or artists.

“We don’t tell the world or our members what precise licensees pay…” Debbie Stones said, referring to other areas of PRS’ business. “We haven’t been able to do that on online, partly because the services are so varied, trying to assess anything on a fixed-point value is difficult. But one of the things is this NDA culture… PRS can’t disclose all of those terms to its members directly. What it can do is where it’s paying out to its members, try and make the statements as transparent as possible.”

Read coverage of the debate: Music Ally “Transparency In Digital Music: There is a lot of Work to be Done” & Music Ally “LiveBlog: Digital Music Transparency with Brian Message, Greg Prior, Mike Skeet

Primer on Terrestrial Radio’s Performance Royalty History by Future of Music

Although the composers and songwriters receive public performance royalties from broadcast (terrestrial) radio, most often through collection societies like ASCAP & BMI, they are exempt from paying the performers. So, with an often used example of the song “I Will Always Love You” performed by Whitney Houston, a broadcast radio station plays the song, Dolly Parton gets paid for writing it but Whitney Houston’s performance goes uncompensated.

A great primer on this subject here on the Future of Music website, here.

“At least 75 nations, including most European Union member states, do have a performance right. This means that foreign broadcasters pay royalties to songwriters/composers and performers. But since there is no reciprocal right in the US, foreign performance rights societies cannot distribute these royalties to American performers.” – Future of Music