Wednesday, May 23, 2018

Sony forecasts slowdown in industry’s global recorded music growth in 2018 | Music Business Worldwide

According to the IFPI, the global recorded music market grew by 8.1% in 2017, with $17.3bn in trade revenues making their way back to artists and labels.

Should the industry grow by that percentage figure again in 2018, those annual trade revenues will leap up to nearly $19bn.

But don’t bank on that happening.

According to Sony Music, the global industry will see a more modest revenue increase this year, largely thanks to heavy declines in downloads and physical music sales.

The headline figure amongst Sony’s projections is that industry digital download sales are going to fall by a whopping 35% in calendar 2018.

This figure is based on what Sony Music expects will happen across the world outside Japan. (Japan is covered by a separate internal division at Sony – Sony Music Entertainment Japan.)

Last year, according to IFPI figures cited by Sony, the ex-Japan global music industry grew 10.5% to $14.5bn.

Within that, streaming revenues leapt up 44% to $6.5bn, while download and physical declined; ‘other digital’, including downloads, was down 16% in 2017, while physical music sales fell 5%.

However, according to Sony’s new projections – released to investors earlier this week and published by MBW below – these declines are going to get more severe this calendar year.

This, predicts Sony, will result in ex-Japan industry growth of 4.1% in 2018, up to $15.1bn.

In addition to the 35% projected decline in downloads, Sony expects industry physical revenues to fall 19% in 2018, down to $2.6bn.

Audio streaming, meanwhile, will grow 29% in 2018, says the major – helping drive overall streaming revenues to take 54% of the total market at $8.2bn.

“We have forecast an accelerated decline in both the download and physical business,” Sony Music COO Kevin Kelleher told investors on Tuesday (May 22) in Tokyo about the projections. “That accelerated decline is currently what we’re seeing in the monthly year-over-year trends.

“For example, in the US marketplace through April the download business in down mid-20%s; [Sony] is forecasting over 30% fiscal year [decline in downloads]. As that base gets smaller, a decline is going to have a greater percentage impact. As more people migrate to the streaming platforms, they’re moving away from the ownership model to an access model.”

“We have forecast an accelerated decline in both the download and physical business. That accelerated decline is currently what we’re seeing in the monthly year-over-year trends.”

Kevin Kelleher, Sony Music

He added: “On the physical side, we’re seeing the same type of trends – through April in the US marketplace it’s down in the mid-20%s. We’re projecting a 19% [global ex-Japan] market decline. Hopefully it’s not going to be worse than that.

“When you look around the world, France Germany, the physical market is still a substantial portion of that market. The offset will be the growth in streaming. The 4.1% reflects that optimism.”

There was yet more optimism from Kelleher on China, which became a Top 10 market in the global recorded music business last year.

He told investors: “We think in five years China could be a Top 5 market. Tencent, which is a major player in that marketplace, has 700m+ people using their music service every month, with 25m paying subscribers. They’ve got great ambitions, as have some other companies.”Music Business Worldwide


Court Approves $43.4M Spotify Artists Compensation Fund Settling Class Action Lawsuit | hypebot

Spotify New $The court has approved the settlement of combined class action lawsuits originally brought against Spotify for copyright infringement by musicians David Lowery and Melissa Ferrick. The settlement guarantees an artist  compensation of $43.4million plus future royalties. The full settlement totals $112.55 million, including legal fees.

The ruling came despite objections of major music publisher Wixen and several songwriters and publishers who argued that the settlement was too small. 

"The court heard a lot of testimony and did the best it could under the circumstances," attorney and artist advocate Christian Castle tells Hypebot. "It’s still far and away the most money anyone has gotten so far from Spotify’s gross and willful infringement of song copyrights.  Next time maybe they’ll pay more attention to the little guy."

Wixen and other objectors are exempted from the settlement, as are National Music Publishers Association members and others who agreed to a separate NMPA settlement with Spotify.

If, as expected, the Music Modernization Act currently before Congress becomes law, only those who filed suit prior to January 1st, 2018 will be allowed to take action against Spotify and other music streamers. Wixen Music Publishing preemptively filed seeking $1.6 billion in statutory damages prior to the deadline.

Gavel-clipart-gavel_bwIt's Not Over Yet

"Another group of songwriters in that 'takings; category would be those whose works were infringed by Spotify only after June 29, 2017 as those infringements would not be covered by the class settlement as I read it.," says Castle.  "Because of the reachback safe harbor, copyright owners whose works were infringed only after June 29, 2017 would potentially have their rights taken by the Congress if their infringement claim was still within the three-year statute of limitations on January 1.  They may still not understand the pretzel logic that the MMA is about to lop off their rights if it passes."

"These situations tee up either a solid set of facts to bring a Constitutional challenge to MMA if anyone wants to take the risk of suing, or a good demonstration of the 'in terrorem' effects of the reachback," concludes Castle.

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The Orchard Ventures To Nashville For The 2018 Music Biz Conference | The Daily Rind

Music Biz wrapped on May 17th after four days of panels, meetings and some good ol’ fashion Nashville fun. Since our last visit The Orchard announced the expansion of our Nashville team with Jess Phelps as our new General Manager. It was a very exciting week to connect and celebrate with our partners, especially in the Music... Read more »

The post The Orchard Ventures To Nashville For The 2018 Music Biz Conference appeared first on The Daily Rind.


Beginner’s Guide To Launching Social Media Ads | hypebot

1If you're trying to market an upcoming release or tour via social media, and your carefully crafted posts seem to be going unnoticed, don't give up hope! Here we look at how you can make paid social media ads work for you and your band.


Guest post by Dana Tom of Eventbrite

Are your social media posts falling into the abyss?

There’s no guarantee that your witty posts are reaching your own followers — much less new people on social media. The News Feed is a crowded place. On top of that, most social networks actively de-emphasize organic brand posts in favor of user-generated content.

To stand out and expand your reach, it’s worth investing money in paid social media advertising. Here are three simple steps to get started.

1. Identify your target audience

Unlike a TV spot during the Super Bowl, social media is extremely precise. In fact, you can measure exactly how much traffic each impression drives and pay only when people land on your listing (called “pay per click”).

Narrow who you target — by interests, age, gender, and behavior — based on your attendee profile. After one week of testing different social networks and targets, redirect your budget to the ads driving the highest results to ensure no dollar is wasted.

As you learn more about your core attendees, identify the people on Facebook and Twitter who share similar profiles or behaviors and pay to target them (called “lookalike targeting”). This is one effective way to reach like-minded people most likely to attend your event and expand the number of people in your targeted segment.

If you use Eventbrite, our integrations with Boostable and ToneDen — tools for automated Facebook, Instagram, and Twitter advertising — make it easy to promote your event and target the people most likely to attend.

 2. Experiment with your content

During your first few weeks of running paid ads, experiment with different forms of content (including images and videos) on each social network, and take note of what works where. You might find that your Facebook followers crave more substance than what your 140-word character limit on Twitter allows.

Replicate the posts with the highest engagement, and you’ll start to see the results.

Don’t know what content to test? Check out The Anatomy of an Ideal Event Ad.

3. Use real-time analytics to prioritize your social marketing

2Now, it’s time to get scientific about social, especially if you decide to invest in advertising. Every organizer dreams of driving more ticket sales at a lower cost. And you can! With the right data, you can quantify your impact on each social network to ensure every dollar is being spent wisely.

Between social media and your ticketing platform’s analytics, you can track exactly who is seeing, engaging, and buying. Determine where your ticket buyers are coming from (FacebookTwitter, or Instagram) by applying unique tracking pixels to your event listing. Then double down on the social networks driving the most sales.

For an even more holistic look at your online promotion, use Google Universal Analytics to track the full path people take to reach your ticketing page.

 Advance your paid ads knowledge

After you’ve learned what you need to run an ad on social media, it’s time to up your expertise before spending more. Read How to Master Facebook Advertising and Sell More for all you need to know to optimize your spend on the most common advertising platform for events.

Dana Tom is a Product Marketing Manager, who strives to write about Eventbrite’s coolest products using as few em dashes as possible. She firmly believes two things in life: Spam is a national treasure and Star Wars’ Han Solo shot first.

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Rob Stringer talks Spotify, YouTube, The Orchard and Sony’s ‘aggressive investment’ in data tools | Music Business Worldwide

Sony Music CEO Rob Stringer this week gave a lengthy address to investors in Japan – telling them that his company “would like there to be as many competitive [streaming] platforms in the marketplace as possible”.

Speaking in Tokyo on Tuesday (May 22) – just hours after Sony confirmed its acquisition of a majority stake in EMI Music Publishing – Stringer covered a range of topics including Sony Music’s financial optimism, the promise of emerging markets and the performance of distribution company The Orchard since Sony fully acquired it in 2015.

He also addressed investor concerns over Spotify potentially growing its market share to a dominant global level – in addition to the much-discussed prospect of streaming platforms becoming ‘labels’ in the future by signing artists directly.

“Currently Sony Music is the No.2 global music company with 25.1% market share in the markets where we operate outside of Japan,” said Stringer, referring to Sony’s performance in its last fiscal year (FY 2017) – the 12 months to end of March 2018.

“We are clearly encouraged by the overall performance of the market; the global streaming market outside of Japan was up 44% year-over-year [for the industry in calendar 2017]. This drove an overall market growth of approximately 10.5% [outside Japan, to $14.5bn].

“This marks the third year in a row of meaningful market growth after more than a decade of decline.”

Speaking alongside Sony Music COO Kevin Kelleher, Stringer focused exclusively on Sony Music’s global performance outside Japan – a market which is the corporate responsibility of another Sony division not run by the British exec, Sony Music Entertainment Japan (SMEJ).

“In the last fiscal year, we renewed our deals with existing partners [such as] Spotify, Apple, Amazon, YouTube and Tencent – and created a new partnership with Facebook,” said Stringer.

“These partners will be integral to our industry’s continued growth and we’ve aligned our interests with them to further drive paid subscription adoption.

“As we develop this growth together, it is vital that we maintain a balanced and mutually respectful relationship with our music distribution partners. We also support new entrants into the marketplace at the global, regional and local levels to drive this paid subscriber growth.”

At one point, Stringer faced a challenging question from an analyst: what if Spotify increased its global market share in streaming to 70%-plus? Would that be a risk to Sony’s business and its ability to negotiate with such a digital partner?

“That would be a risk, which is why we actively encourage lots of platforms,” acknowledged Stringer. “We have to make sure we work with everybody in a way which encourages a competitive landscape.

“For instance, YouTube has just launched a subscription music service… We did new deals with Spotify, Apple and YouTube only last year. We’re crossing each bridge as we come to it but at the moment we feel we have a diverse landscape.”

Kevin Kelleher noted that, in calendar 2017, the largest industry revenue growth came in Latin-Iberia markets and Asia Pacific (ex-Japan) – up 17.3% and 22.9% respectively.

Said Stringer: “We are fully focused on developing viable subscription businesses in emerging markets such as China and India, where previously only very limited physical or digital download business existed.”

“Over the long term, once markets are established, [our] focus will turn to increasing revenue per user by enhancing the product and plan offerings.”

He added: “Over the long term, once markets are established, [our] focus will turn to increasing revenue per user by enhancing the product and plan offerings.

“This includes greater differentiation between free and paid tiers as well as up-sell opportunities driven by new product and content configurations, expanding the use of voice [control] at home and in the car, as well as launching pre-paid subscriptions in markets such as Latin America and India.”

Stringer then turned his attention specifically to The Orchard, announcing that Sony had nearly doubled the distribution/services company’s EBITDA since spending $200m to fully acquire it three years ago.

Said Stringer. “Understanding that independent labels and artists were poised to gain market share, we acquired 100% of The Orchard three years ago to service a segment of the market that was looking for [partnership] outside of a traditional major music company.

“Understanding that independent labels and artists were poised to gain market share, we acquired 100% of The Orchard three years ago.”

“[The Orchard’s] capabilities in creative marketing, distribution and analytics make us the leading choice globally for independent labels and artists. As part of this strategy, we acquired Finetunes and Phonofile, two leading Europe-based music distribution companies, to strengthen our position in Germany and the Nordic territories.”

Stringer later added: “We bought The Orchard to help with market share – and everywhere The Orchard is now being built up it’s helping with market share.”

Stringer also tackled the importance of data to Sony’s modern day business – and was unapologetic about the amount of money being invested in tools to give his company an edge.

“As a global company, we have aggressively invested in data and analytical tools to interpret the billions of commercial and marketing data points we receive from partners and services around the world on a daily basis,” he said.

“While our capabilities are global in scale, our execution is hyper-targeted by market.”

“While our capabilities are global in scale, our execution is hyper-targeted by market. With our proprietary tools, we are able to discover artists earlier and drive sales and marketing efficiency, monitor customer behaviour and guide creative decisions.

“In addition, we have built artist-facing dashboards and royalty portals that make us more attractive to our artist community.

“However complex our digital strategy, at our core will always be creativity and musical instinct. Our key competencies of identifying and developing artists, and supporting their vision, must be what differentiates us from our competitors. We are looking to reinforce this strength by maximising back office efficiencies and shifting more of our workforce into creative, artist-facing functions.”

Stringer added that Sony’s current content strategy is “focused on genres that are growing with the new market such as hip-hop, Latin rhythmic pop, and electronic/dance music”, while he said that the company is currently “increasing our release flow to drive market share”.

The exec pointed out that his Sony Music team is keen to widen its business further into ancillary areas of recorded music.

“We must expand the number of creative and business services we provide to our artists including artist management, branding, touring and merchandise, in order to increase revenue flow and build stronger and more transparent relationships with the artists,” he said.

“In the search for this transparency, we are evolving our contractual relationships with artists ensuring that deal structures are balanced, flexible and futuristic to adjust to the changing business landscape.”

Stringer then faced some tough questions from investors and analysts.

He was asked why, despite his optimism, Sony’s worldwide corporate music division (including Japan) – across publishing, records and other non-music areas such as ‘Visual Media & Platform’ – is currently projecting a decline in annual operating income for FY2018.

Stringer pointed out that Sony Music Entertainment Japan was held separately from his Sony Music Entertainment division – indicating that this was an essential clarification.

Here’s one reason why: Sony’s ‘music’ division in Japan has benefitted from a huge bump from ‘Visual Media & Platform’ revenues in recent years thanks to the runaway success of a mobile video game, Fate Grand/Order. Sales of the game are likely to decline in the coming years. VM&P turned over the equivalent of $2.2bn in calendar 2017.

Unfavourable currency movements have also been factored in to Sony’s 2018 forecast.

Said Stringer: “We [SME, ex-Japan] are very optimistic about our numbers for the next three years, and we’ve been going up each year for the past three years.”

Stringer noted that Sony Music’s investment in data tools was bound to affect the firm’s annual operating income – but he said the idea of cutting this investment at the current juncture would be short-sighted.

“I think it would be detrimental to our business if we didn’t diversify our investment opportunities over the next three years,” said Stringer.

“If we stand still and just collect the money now in three years time we’ll be in a very different place.”

“With our revenue increasing over the past three years we’ve had more opportunity to be positive about the future of our business. If we stand still and just collect the money now in three years time we’ll be in a very different place.”

He added: “All of our competitors, including the digital platforms, are investing in the music business. We are looking at any business opportunity that is complementary to our future strategy.”

Stringer was also asked about the possibility of streaming platforms ‘signing’ artists to exclusive distribution deals – moves from which, it was suggested, the likes of Apple and Amazon wouldn’t need to generate a profit.

Is that a potential future threat to the major labels?

“Any time that artists are encouraged to be on one platform is a risk to our business,” said Stringer. “Obviously the moves that have been made by subscription platforms so far [for artist exclusives] are related to getting paid subscribers on their platforms. So far, we’ve been able to mitigate those circumstances.

“We happen to believe that one platform isn’t a global solution for an artist as of today. We think there needs to be multiple platforms [to work with] for an artist to be successful on a global level.

“We encourage them to use multiple platforms to get their music across to the consumer. At the moment, we feel encouraged that artists understand [that].”

Analysts were forbidden from asking Stringer and Kevin Kelleher about the purchase of a 60% stake in EMI Music Publishing, but a few tried anyway.

Stringer offered a polite “no comment”, before adding “we’re very happy that Sony Corporation invests in music content, and it happened this morning”.Music Business Worldwide


Distributor Ditto poaches Tunecore’s Chris Mooney to run US operation | Music Business Worldwide

Fast-growing UK-born distributor and services company Ditto Music has hired Chris Mooney as its Head of US Operations.

Mooney has worked for rival Tunecore for the past eight years, most recently as Senior Director of Entertainment Relations.

His role at Ditto will see Mooney based in New York.

The exec told MBW: “I am proud to join the Ditto Music Team as Head of US Operations. After eight years of managing artist and partner relations at TuneCore, it is exciting to have the opportunity to be part of the growth of this amazing company that Matt and Lee Parsons created.

Ditto Music CEO Lee Parsons said: “Chris brings over a decade of experience and relationships within the US market to Ditto and we are hugely excited to have him on the team.”Music Business Worldwide


Phone Store Employee Sued For Promoting ‘Pirate’ App Showbox | TorrentFreak

In recent years, a group of select companies have pressured hundreds of thousands of alleged pirates to pay significant settlement fees, or face legal repercussions.

Traditionally, the companies go after BitTorrent users, as they are easy to track down by their IP-addresses. In Hawaii, however, a newly filed case adds a twist to this scheme.

The studios ME2 Productions and Headhunter, who own the rights to the movies ‘Mechanic: Resurrection‘ and ‘A Family Man‘ respectively, are suing an employee of a phone store who allegedly promoted and installed the ‘pirate’ application Showbox on a customer’s device.

Showbox is a popular movie and TV-show streaming application that’s particularly popular among mobile Android users. The app is capable of streaming torrents and works on a wide variety of devices.

While it can be used to stream legitimate content, many people use it to stream copyrighted works. In fact, the application itself displays this infringing use on its homepage, showing off pirated movies.

In a complaint filed at the US District Court of Hawaii, the studios accuse local resident Taylor Wolf of promoting Showbox and its infringing uses.

According to the studios, Wolf works at the Verizon-branded phone store Victra, where she helped customers set up and install phones, tablets and other devices. In doing so, the employee allegedly recommended the Showbox application.

“The Defendant promoted the software application Show Box to said members of the general public, including Kazzandra Pokini,” the complaint reads, adding that Wolf installed the Showbox app on the customer’s tablet, so she could watch pirated content.

From the complaint

The movie studios note that the defendant told the customer in question that her tablet could be used to watch free movies. The employee allegedly installed the Showbox app on the device in the store and showed the customer how to use it.

“Defendant knew that the Show Box app would cause Kazzandra Pokini to make copies of copyrighted content in violation of copyright laws of the United States,” the complaint adds.

The lawsuit is unique in the sense that the studios are going after someone who’s not directly accused of sharing their films. In the traditional lawsuits, they go after the people who share their work.

The complaint doesn’t mention why they chose this tactic. One option is that they initially went after the customer, who then pointed ME2 and Headhunter toward the phone store employee.

Neither studio is new to the piracy lawsuit game. ME2 is connected to Millennium Films and Headhunter is an affiliate of Voltage Pictures, one of the pioneers of so-called copyright trolling cases in the US.

As in most other cases, the copyright holders demand a preliminary injunction to stop Wolf from engaging in any infringing activities, as well as statutory damages, which theoretically can go up to $150,000 per pirated film, but are usually settled for a fraction of that.

A copy of the complaint filed against Taylor Wolf at the US District Court of Hawaii is available here (pdf).

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