Autumn Of The A&R Man

The International Federation of Phonographic Industry (IFPI) this week released its biannual Investing in Music report and the numbers raised quite a few eyebrows. According to the report, record labels worldwide invested U.S. $4.5 billion last year in A&R ($2.8 billion) and marketing, ($1.7 billion), representing 27 percent of their total revenue, more than the pharmaceutical, aerospace, or technology industry spends on R&D in percentage terms.

His_Master's_VoiceThat represents an increase of 12 percent and 6 percent, respectively, over 2013.

Particularly eye-opening was the report’s claim that it costs a label anywhere from $500,00 to $2 million to “break” a new artist in a major market like the U.S. or U.K., factoring in the “upfront” costs of artist advances, recording, music video production, tour support, and marketing and promotion.

The report is clearly meant to bolster the case for the continued relevance of traditional record companies amid the simmering industry debate over whether artists still need a label deal, given the availability of cheap, DIY recording technology and the myriad independent distributors, aggregators, marketers and other service providers offering to help artists bring their music to market. Read More »

For Music Biz, First-Half Results Are A Glass Half Full

The Recording Industry Association of America this week reported that U.S. music sales through the first half of 2012 were up 8.1 percent over the first half of 2015, to $3.4 billion, the industry’s strongest rate of growth in more than a decade.

iphone-artist-spotifyThe surge was due almost entirely to a whopping 112 percent increase in revenue from paid streaming services such as Spotify, Apple Music, and Tidal which more than offset a 17 percent decline in digital downloads (including albums, single tracks, and kiosks), and a 16 percent decline in sales of physical formats (CDs and vinyl).

Revenue from free interactive streaming, such as Spotify’s ad-supported tier, YouTube and Vevo, grew 24 percent but remained a tiny slice (5.9 percent) of the overall revenue pie. Revenue from non-interactive streaming services, primarily Pandora, was up 4 percent.

“Streaming in all its forms accounted for almost half of all recorded music revenues in the first half of 2016,” RIAA CEO Carey Sherman wrote in a post on Medium. “This represents a remarkable transformation and reinvention by a business that was principally physical products just six years ago.” Read More »

Bridging The Streaming Music ‘Value Gap’

The global music business offered up two cheers this week for the first signs of life in the recorded music business in nearly a decade. According to International Federation of the Phonographic Industry’s (IFPI) latest global sales report, total recorded music revenue grew 3.2 percent in 2015, to $15.0 billion, the biggest jump since 1998 and the only growth since 2012, when sales ticked up 0.3 percent.

The overall growth IFPI_YouTubecomparisoncame entirely from digital sources, particularly streaming revenue, which jumped 45 percent over 2014, to $2.9 billion, or 19 percent of total revenues. Physical sales continued their decade-long slide, falling another 4.5 percent, buoyed somewhat by the continued renaissance of vinyl.

The strong streaming numbers were not evenly distributed, however. Subscription streaming revenue accounted for $2 billion of the $2.9 billion total, as the total number of paying subscribers reached 68 million, while industry revenue from ad-supported streaming amounted to a mere $634 million, despite more than 900 million listeners worldwide.

The report referred to the mismatch between consumption and revenue to artists and labels as a “market-distorting value gap,” that must be closed, echoing comments last month by RIAA CEO Cary Sherman. Read More »

Turning Contracts Into Code: Why SoundExchange’s ISRC ‘Lookup’ Tool Matters

SoundExchange, the digital performance royalty collection agency, along with the international record industry association IFPI, this week unveiled its long-awaited portal that allows users to look up the IRSC number for nearly 20 million unique music recordings, along with associated metadata.

The lookup tool has been in the works for years and its launch represents an important milestone in the music industry’s often fitful effort to bring its scattered record-keeping up to date with the myriad ways music is used and consumed today. The database can be searched by track title, artist Music-Dials-Guitar-Case-Moneyname, release (i.e. album) title, version, recording date and file type. Metadata can be downloaded and incorporated with playback applications by digital music services.

The International Standard Recording Code (ISRC) system was established as an ISO standard for assigning unique identifiers to individual sound recordings in 1989 and is overseen by IFPI, the international federation of national recording industry trade associations. Compliance with the system was for many years spotty, as record companies continued to rely on their own in-house systems for identifying and cataloging recordings. Since 2006, however, the use of ISRCs has grown more consistent and widespread, thanks in large measure to Apple’s insistence that labels provide ISRC numbers for every track sold through the iTunes Music Store. More recently, streaming services such as Spotify and Pandora have embraced ISRC to track song-plays for royalty purposes. Read More »

Voices Raised Over Librarian of Congress Nominee

The Librarian of Congress is not generally considered a controversial post within the government. There have only been 13 of them in the Library’s 216-year history, which tells you something about the urgency with which Congress has historically regarded the appointment.

The job is largely administrative, charged with overseeing the libraries vast collection and providing research assistance to Congress. But it also

Dr. Carla Hayden

Dr. Carla Hayden

has some policy-making authority, exercised most prominently in recent decades through its oversight of the U.S. Copyright Office, which is a division of the Library.

Under Section 1201 of the Digital Millennium Copyright Act the Copyright Office must conduct a triennial rulemaking proceeding to determine whether certain types of copyrighted works protected by access control technologies (“technical protection measures”), should be exempted from the DMCA’s ban on circumventing such measures in certain circumstances.

The process has, among other things, led to recognition of a right to unlock a cell phone so it can be used on another network and to circumvent DRM on DVDs for certain teaching purposes, and the right to circumvent DRM on ebooks to allow them to be used with screen readers to assist the visually impaired. Read More »

Slippery SOPA

Copyright Critics of the failed Stop Online Piracy Act and the Protect IP Act (SOPA/PIPA) have been having some fun with some internal RIAA and IFPI materials regarding the music industry’s anti-piracy efforts that leaked to TorrentFreak last week. Part of the cache includes a PowerPoint presentation delivered by RIAA deputy general counsel Victoria Sheckler to IFPI members back in April (pdf).

The critics are taking particular delight in Sheckler’s acknowledgment that the laws were “not likely to have been effective tool[s] for music.” Here’s the PPT slide summarizing the SOPA/PIPA debate:

While perhaps a bit embarrassing for the RIAA, I don’t find the revelation terribly surprising. The bills weren’t really crafted with music in mind; most of the online piracy the music industry is concerned about occurs over peer-to-peer networks, which were not the targets of the bills.

Rather, the bills were crafted by the MPAA, as a tool against movie piracy. Though P2P networks are responsible for a certain amount of movie piracy, more of it these days involves digital locker services, mostly based outside the U.S., like Megaupload, which were the main targets of SOPA and PIPA. As data contained elsewhere in Sheckler’s presentation show, digital lockers make up only about 6 percent of what the music companies regard as piracy, compared to 23 percent Read More »