ANNUAL REPORT on most significant events of 2014 radio year and core trends in streaming broadcast and music industry' development of 2015 Part 1 – RADIO STARS & RADIO HITS ООО “СОВРЕМЕННЫЕ МЕДИА ТЕХНОЛОГИИ”, 127018 РОССИЯ, МОСКВА, СТАРОПЕТРОВСКИЙ ПРОЕЗД, ДОМ 11, КОРП. 1, ОФИС 111, +7 (495) 645 78 55, +44 20 7193 7003, +1 (347) 274 88 41, +49 69 5780 1997, WWW.TOPHIT.RU CONTENTS Introduction.………………….…………………………………………………………………………………………………………………. 2 Radio stars and radio hits…………………………………………………………………………………………………………………. 4 Artists and songs – Top Hit Music Awards 2015 winners…….…………………………………………………….……… 6 Achievements of record labels in 2014…………………………………………………………………………………………….. 7 Top 10 of Companies with biggest number of spins on radio air……………………..……………………………….. 8 Top 10 Companies with biggest number of songs on radio air …………………………………………………………. 9 Top 10 Companies with biggest number of spins per each song………………………………………………………. 10 Top 10 Companies with biggest number of songs on TOP HIT 100 radio chart…………………………………. 11 Top 10 Companies with best song test results …………………………………………………………………………………. 12 Top 100 of most frequently rotated local and foreign songs on Moscow radio air 2014…………………… 13 Top 20 of hot rotation playlists, set music trends on Moscow radio air 2014.…………………………………… 15 2015: Top Hit 3.0 ……………………………………………………………………………………………………………………………… 19 About the author……………………………………………………………………………………………………………………………… 20 1 ООО “СОВРЕМЕННЫЕ МЕДИА ТЕХНОЛОГИИ” 125130 РОССИЯ МОСКВА СТАРОПЕТРОВСКИЙ ПРОЕЗД, 11, КОРП. 1, ОФИС 102 +7 495 645 7855 +44 20 7193 7003 +1 347 274 8841 +49 69 5780 1997 WWW.TOPHIT.RU Introduction Every day hundreds of millions of people listen to radio, driving their cars. Music, news, programs and advertising are delivered in single information flows to listeners. Today the radio air brodcast is gradually replaced by the Internet streaming, and the place of customary radiostations and TV sets is more often taken by desktops, tablet PCs and smartphones with various entertainment apps in them. Streaming is an explosive growth area. For the last year, according to certain expert estimates, the audience of streaming Internet services and apps increased by 50%. In 2015 its double and even higher growth is expected. Since 2006 Swedish SPOTIFY has raised the capital up to $0.5 billion, and today the quantity of its active users is 40 millions of people. American PANDORA’s capitalization is $5 billion, the number of subscribers is 200 millions with 80 millions active. But a true explosion will take place within the next 4-5 years, when hundreds of millions of new users, listeners and viewers will get into the new cars with onboard multimedia Internet systems. Who will entertain them and how will they do that? Who will monetize this audience and how will it be going? Today there are no ready answers to all these questions. But the only evident fact is that investments won’t be enough. Brand-new ideas will be needed at most. The economic and political crisis, came on Russia and the cross-border regions, causes dramatic changes in all the life spheres. It directly affects the media business as well as the entertainment industry. But any kind of crisis means changes, losses and new opportunities at the same time. Preparing the present report, we pursued several objectives: firstly, to analyze important data and facts, which defined the industry of the last year; secondly, to show the core trends and depict the future of media and record business. But the only main goal is to help tophit.ru partners – stations, TV- channels, record labels, producers, DJs, authors and artists – clearly realize what is actually going on and what they should do not to drop out but develop and move forward in the business successfully. Hence the very tophit.ru annual report consists of three parts. The first one, 2014: RADIO STARS AND RADIO HITS, embraces the brodcast statistics of the radiostations, tophit.ru partners in Russia, Moscow, Ukraine, Kiev and the CIS countries. We analyze the chart stories of tens of top local and foreign artists, compare the radio air ratios with the last year ones and bring to light the most successful on radio air record business players. Besides, we’ll show what part of the Moscow radio air was taken by artists and their the local and foreign repertoire. We’ll also demonstrate the annual TOP 20 Songs of Moscow brodcasters, which formed the Moscow and federal music radio air. The second part of the report is titled 2015: RADIO AND LABELS ARE IN ZONE OF RISK. Here we speak of some significant events, which took place in record business, media and the Internet; define the core trends and give certain recommendations, which will help our partners not drop out of the business under the crisis and cardinal market changes but keep on moving forward successfully. Within the last decades the ordinary radio managed to hold the millions of listeners by a surprisingly small volume of music content, having a strong promotion instrument. It resulted in loyalty of rightholders, low expenses for music content and high margins. But today on radio very few realize how to fit their huge media assets into the forthcoming Internet future, convert the radio audience into tens of millions of their devoted Internet users and, finally, start earning on the web. And if the situation doesn’t change anyhow, very soon we’ll witness a dramatic fall of capitalization of once-powerful radio empires … 2 ООО “СОВРЕМЕННЫЕ МЕДИА ТЕХНОЛОГИИ” 125130 РОССИЯ МОСКВА СТАРОПЕТРОВСКИЙ ПРОЕЗД, 11, КОРП. 1, ОФИС 102 +7 495 645 7855 +44 20 7193 7003 +1 347 274 8841 +49 69 5780 1997 WWW.TOPHIT.RU On the other hand, the major rightholders, whose main business is monetization of the collected Cyclopic music catalogues, are aware that the Internet-broadcasters have not such a huge audience as the radio do, but they may have budgets. Hence now the rightholders conduct a zero tolerance policy with the Internet media – “pay on the spot, and we’ll get promoted via radio rotation”. But. As soon as the mass audience shifts to the Internet, the streaming services will acquire new instruments of promotion and monetization, and as soon as there are more stories of successful promotion of beginning artists and their hits on the web, the majors will have to elaborate more loyal collaboration policy in attitude to the Internet streaming services… In the third part of tophit.ru annual report, titled 2015: NEW MEDIA AND NEW STARS, we’ll analyze the work results of the streaming services in 2014. We’ll also explain why the new media is a splendid opportunity for the beginning artists to reach out a huge audience. And we’ll also show how the mass support of new talented artists plays a crucial part in gripping the mass audience by the streaming services. The founders and managers of streaming services create multiple scripts and modern designs and develop new algorithms of content offers. But. They do not tap a 60-year-experience of music radio broadcast. They just don’t know anything about it. The new media has no effective mechanisms of song promotion. As a result, for them it leads to the rightholders’ distrust, considerable expenses for acquiring rights for huge music catalogues, an ill fame of “the cash cows”, on the point of view of music majors, and the necessity of constant refunding, shifts of pay-back terms and, finally, project closures… But all that are just growing pains… The years of 2013-2014 gave a start to the future, we are approaching very fast, and where the Internet services will meet the music demands of the mass audience as well as become the main instrument in promotion of new artists and their new hits. The general title of all the report parts is “Annual report on the most significant events of 2014 radio year and the core trends in development of the streaming broadcast and music industry in 2015”. And the replace of ‘the radio broadcast’ by ‘the streaming’ is also a tendency and a kind of a sign. However, all the trends will be touched in the next parts of the report, and right now… 3 ООО “СОВРЕМЕННЫЕ МЕДИА ТЕХНОЛОГИИ” 125130 РОССИЯ МОСКВА СТАРОПЕТРОВСКИЙ ПРОЕЗД, 11, КОРП. 1, ОФИС 102 +7 495 645 7855 +44 20 7193 7003 +1 347 274 8841 +49 69 5780 1997 WWW.TOPHIT.RU Radio Stars and Radio Hits On 5 January, 2015 tophit.ru published 16 annual radio charts, including 4 main: Yearly General Top Hit 200, Yearly Russian Top Hit 200, Yearly General Artist Top 100 and Yearly Russian Artist Top 100. Elka and Nyusha, a couple of leaders of tophit.ru radio charts since 2011, consolidated their status quo last year and shared the 1st and the 2nd places again with a standard million of spins each. Along with the girlsband Serebro they became the most frequently requested artists on the radio air. Grigory Leps, who left the ladies behind in the year of 2013, yielded to them this time and took the 3rd place with 756.000 spins. It’s noteworthy that Burito (aka Igor BurnysheV, a composer and ex-member of the band Band’Eros) helped Elka much in taking the lead. The song “Ty Znaesh”, the co-author and co-performer of which is Burito (with Elka in refrains), became a true megahit, having played a bit less than 600.000 times on the radio air of 2014. Whereas purely Elka’s composition, “Narisuy Mnye Nebo”, played just a little more than 300.000 times within the year, having taken the modest 19th place on Top 100 Russian Songs. Once again Alyona MikhailoVa and her company VelVet Music demonstrated a high quality of the music content released as well as rare marketing skills.