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CONTENTS

4 25 Introduction Moving to a global release day in 2015 Plácido Domingo, chairman, IFPI Frances Moore, chief executive, IFPI 27 Country case studies 6 Brazil: a top performing market Market overview China: moving towards paid services An evolving portfolio business : streams grow, CDs resilient Regional picture 32 10 and the wider economy Most popular artists and global bestsellers of 2014 The broader effect of investment in artists IFPI Global Recording Artist of the Year 2014 Music helps drive Top selling global & singles of 2014 Music and economic growth How streaming is changing the charts Tomorrow’s world

14 34 Key recording industry trends in 2014 Labels working with artists: four case studies Subscription drives portfolio : using data intelligently New global services, more reach Lucas Lucco: artist and digital native Smartphones and partnerships drive growth : innovative promotion Getting subscription to the mass market Wakin Chau: interactive digital promotion Streaming revenue models Streaming services compete on curation 38 Payment options diversify Tackling digital piracy decline Consumer attitudes towards piracy Video streaming surges Website blocking Search engines 20 Advertising and payment providers New IFPI data shows artist payments Piracy and apps as of revenues are up IFPI’s content protection work

22 41 Fixing the ‘value gap’ in digital music Digital music services worldwide

Cover photo by Sarah Barlow + Stephen Schofield Robin Schulz photo by Geturshot.com Wakin Chau photo courtesy of Rock Group photo by RJ Shaughnessy Lucas Lucco photo by Guto Costa photo by Ben Watts photo by Cass Bird

This report includes new findings from a consumer study carried out by IPSOS in January 2015 across 13 of the world’s leading music markets (, Brazil, Canada, , Germany, Great Britain, Italy, , Mexico, South Korea, , , ), www.ifpi.org commissioned by IFPI. @ifpi_org Designed by design to communicate © IFPI 2015 All data, copy and images are subject to copyright and may not be reproduced, transmitted or made available without permission from IFPI.

3 INTRODUCTION

PlÁcido domingo chairman, ifpi

Respect for copyright, growth for artists

Welcome to edition of IFPI’s annual Digital Yet this can only happen if copyright is respected Music Report. It sets out how the has by all those involved in the digital marketplace that is adapted in the digital age and the challenges and oppor- increasingly where music is distributed. Just because tunities it faces . something is now distributed online, rather than There is that technology is improving through stores, does not mean that it is no longer access to culture, connecting artists with amazing au- valuable. diences. As someone who is passionate about ensuring We need a world where copyright is respected access to culture, I welcome this digital revolution. and music is valued – where artists, and record producers are fairly compensated when their music is played. Where investment in new artists can “We need a world where copyright increase once again, bringing greater choice to music fans everywhere.­ This is a future for music that I is respected and music is valued.” believe is worth fighting for. And it is one that is achiev- able if our politicians show leadership and vision when it Yet the rights of creators must be fairly pro- comes to the world’s cultural industries. tected and rewarded in the digital world. When I travel the world and meet policymakers, I urge them to pro- mote and protect copyright, not to weaken it. I explain that if they do not respect the role of copyright, and ensure their laws protect it online, then they will see in- vestment in culture threatened. I passionately believe that artists should be fairly remunerated for their work. I want to see young tal- ented performers from all backgrounds enjoy the same sort of opportunities I had in my early life to develop my career.

4 Frances Moore

Photo by Graham Flack Photo by Chief Executive, IFPI

Charting a path to sustainable growth

The recorded music business has always led the Another issue is the so-called ‘value gap’. This way for creative industries in the digital world. That is a fundamental flaw in our industry’s landscape leadership continues today as the music industry’s which sees digital platforms such as Daily Motion digital revolution continues through new phases, and YouTube taking advantage of exemptions from driven by the consumer’s for access to, rather copyright laws that simply should not apply to them. than ownership of, music. Laws that were designed to exempt passive hosting As this edition of IFPI’s Digital Music Report companies from liability in the early days of the in- shows, the state of the recording industry is in many ternet – so-called ‘safe harbours’ – should never be ways cause for great optimism. Consumers are bet- allowed to exempt active digital music services from ter served than ever before – and the consumer having to fairly negotiate licences with rights hold- research shows it. They have instant access, at any ers. There should be clarification of the application time and in any place, to a vast record collection of of ‘safe harbours’ to make it explicit that services more than 43 million tracks. Licensed music services, that distribute and monetise music should not ben- numbering more than 400 globally, are competing efit from them. fiercely for consumers by offering ever improving choice and curation of music. Digital services have gone global, enabling the recording industry to reach “Music companies are charting a path to sustainable markets that it could not monetise through physical retailing. Global digitisation has brought licensed year-on-year growth. That path was never going to services to some 200 countries. Not everything has changed, however. Our be straight, but we are making great strides along industry’s core business remains investing in art- ists. And, despite many years of declining industry it, embracing new models, licensing, investing and revenues, record companies continue to be the pri- mary investors in new talent: over the last five years improving consumer choice.” more than US$20 billion globally has been invested in artists. By meeting the needs of the consumer, by Music companies are charting a path to sus- embracing change and by being resilient investors tainable year-on-year growth. That path was never in music, record companies are putting our business going to be straight, but we are making great strides back on the road to recovery. Digital music revenues along it, embracing new models, licensing, invest- grew 6.9 per cent globally in 2014. They were pow- ing and improving consumer choice. The next step ered by continued strong growth in subscription is to achieve sustained growth and a fair reward for revenues, up 39.0 per cent. rights holders. This is the most important issue for So is it ‘mission accomplished’ for the inter- our sector in 2015. national recording industry? The answer is no – far from it! The headline statistics of 2014 speak for themselves, with overall revenues still largely flat, down by 0.4 per cent. This reflects stabilisation – but not yet year-on-year sustainable growth. Over the last four years the number of paying subscrib- ers globally has increased by more than five-fold to 41 million users. There is potential to attract many tens of millions more and for digital services to gain greater scale, whether via bundling partnerships with ISPs or more varied payment models tailored to specific consumer groups. The industry has already created a vast customer base for licensed services, but more needs to be done.

5 Market verview

US$6.85 bn T The industry’s digital revenues in 2014

Share of Industry Revenues 2014 46% 46% Digital Physical 8% Performance Rights and Synch

Global digital revenues 2009–14 (US$ billion)

6.9 6.4 6.0 5.3 4.7 4.4

2009 2010 2011 2012 2013 2014

John Legend Source: IFPI photo by Matthew Williams

6 However, the growth of subscription and fell. Japan saw digital growth for the first YouTube alone has more than one streaming was not quite able to compen- time in five years, with a sharp rise in sub- billion users and music related content sate the two other key elements of the in- scription revenues helping digital revenues makes up a very large proportion of its use. dustry’s current transition: a global decline rise by 4.9 per cent. Overall, the Japanese Consumer research published for this report in both physical format sales (-8.1%) and market saw a decline of 5.5 per cent in 2014, by Ipsos, conducted across 13 of the world’s sales (-8.0%). As a consequence, considerably less sharp than the 16.7 per- leading music markets in 2015, shows that overall recorded music revenues in 2014 fell cent fall in 2013. Germany painted a more 57 per cent of users have accessed slightly by 0.4 per cent to US$14.97 billion. positive picture, with growth in revenues music or music videos on internet video of 1.9 per cent. Physical sales remain more sites such as YouTube in the last six months, robust than elsewhere and subscription ser- compared to 38 per cent for music stream- “The music industry is vices are seeing strong advances. The top-10 ing sites such as and 26 per cent for market with the overall growth download services like iTunes. The research managing the transitions was South Korea (+19.2%). finds more than a quarter of internet users (27%) listen to music on YouTube without from physical to digital, watching the video. PC to mobile and download An evolving “Music is one of the most to streaming at the same portfolio business Music continues to be a portfolio business, potent forces shaping time. In that context, I think with revenues generated from a diverse range of channels including music subscrip- culture, the industry is performing tion services, CDs, vinyl LPs, downloads and performance rights licensing. and technology. We are remarkably well and with Within this portfolio, the key drivers of change in 2014 were the rise of stream- committed to forging new a paid subscription model, ing and the decline of physical and down- load revenues. Combined ad-supported business models, delivering we are building a business and subscription streaming revenues now account for 32 per cent of global digital maximum value for artists that is here to stay.” revenues, up from 25 per cent in 2013. This sector is fast catching up on downloads as and building a bright future Edgar Berger, chairman & CEO, the industry’s main digital revenue source: in international, Music no fewer than 37 markets (including South for our industry.” Entertainment Korea, Sweden and Mexico) streaming rev- enues have overtaken download income. Stu Bergen, president, international, Behind the global figures, a markedly mixed Revenues from streaming sub-divide Warner Recorded Music picture is apparent among the world’s major into subscription services and ad-sup- music markets. The US saw overall revenues ported streaming. The latter revenues are increase by 2.1 per cent in 2014, as increasing seeing accelerating growth globally – up by digital income offset the fall in physical for- 38.6 per cent in 2014, a significantly higher mat sales. Subscription rose sharply, while growth rate than the 16.6 per cent increase both download and physical format sales in 2013.

Global digital revenues by sector (2014) 3% 39.0% Mobile 9% subscription growth Michael Bublé personalisation Ad-supported photo courtesy of WMG streams income 12% 52% Other permanent 41m Downloads 23% people using Subscription subscription services streams income

7 Downloads still account for the Performance rights revenue – in- bulk of global digital revenues (52%), but come from the use of recorded music by declined by 8.0 per cent in 2014. Single broadcasters and public venues – increased track downloads declined by 10.9 per cent by 8.3 per cent and now accounts for 6 per in 2014, while digital albums also saw rev- cent of total industry revenues or US$948 enues down 4.2 per cent. Download sales million, including some one-off revenues declined in virtually all established mar- as a result of litigation cases (see note on kets, but continue to grow in some emerg- methodology). ing markets. The global decline was driven Synchronisation revenues – income by a variety of factors, including the sharp from the use of music in advertising, film, growth of Android smartphones and tab- games and television programmes – in- lets orientated to streaming services creased by 8.4 per cent in 2014 with big rather than downloads. This has combined gains in markets such as France (+46.6%), with a certain amount of substitution as Germany (+30.4%) and Japan (+33.5%). consumers move from download to stream- ing services. Note: IFPI has amended the methodology and scope of its Global music industry revenues coverage of performance rights revenues globally and in the US for 2014. from physical formats accounted for less Globally, performance rights revenues now refer to than half of total industry revenues (46%). distributions made to record companies (including non-recurring distributions) in the same year they reach record company Nonetheless there is a marked format di- accounts. Previously, IFPI reported performance revenues, versity between different countries, with a excluding non-recurring distributions, one year in arrears. In the US IFPI has for the first time reported SoundExchange robust physical market share still recorded distributions under ‘Other Digital’ and included artists share in the in countries such as (65%), France reported revenue. The change aligns IFPI’s worldwide reporting with the RIAA reporting practice for the US. It reflects the fact (57%), Germany (70%), Japan (78%), Poland that a significant proportion of SoundExchange revenues comes (71%) and (62%). Vinyl remains from personalised streaming services (such as Pandora) that are Downloads still account elsewhere reported directly by the companies inclusive of artists a niche product, accounting for 2 per cent share. In the light of this change, US performance rights now have of global revenues, but the format contin- a nil value. for the bulk of global Historical performance rights revenues have now been ues to revive with sales increasing 54.7 per restated to reflect these changes and to provide equivalent year- cent in 2014. on-year comparisons. digital revenues (52%).

Permanent downloads and subscription streams Permanent downloads as a % of total digital revenues 2014 Subscription streams income

92 91 88

82 83

75 70

55

24

14 12 11 12 8 5 5

Sweden South Korea USA Germany Australia Canada

Source: IFPI

8 Asia saw revenues fall by 3.6 per Regional picture cent. There was strong growth in South “The strength of the industry Korea (+19.2%) and some smaller markets Music markets are moving at different such as China (+5.6%), (+16.3%), today is seen in the wide- speeds with diverse trends in different and Singapore (+4.7%). Japan saw digital countries. In North America, the US mar- revenues increase by 4.9 per cent, driven by ranging portfolio of diverse ket increased in value by 2.1 per cent. Digital strong subscription revenues, but the mar- revenues topped US$3.5 billion in 2014 and ket declined by 5.5 per cent overall. businesses operating in the now account for nearly three-quarters of continues to underperform, with a market the recorded music market (71%). Revenues decline of 10.1 per cent. market. The consumer is now collected by SoundExchange, the music saw a market decline of 0.2 licensing company, from personalised per cent, but the picture across its vari- being offered an incredible streaming services such as Pandora are now ous countries was highly diverse. The larg- reported as digital revenues rather than est market Germany saw growth of 1.9 array of music experiences performance rights income (see note on per cent, helped by streaming gains and a page 8). The company reported the royalty slower-than-average fall in physical sales. and artists have more payments it made increased in value by 31.0 Other large markets, including France per cent in 2014 to US$773.4 million. Overall (-3.4%) and the UK (-2.8%) saw declines. opportunities to reach the subscription income increased by 33.5 per There was growth in Spain (+15.2%) and a cent and advertising-supported streaming number of smaller European markets in- widest possible audience.” income was up 21.4 per cent. There was a cluding Czech Republic (+4.6%), 7.2 per cent drop in the value of downloads, (+2.0%), Hungary (+7.8%), Iceland (+0.7%), Francis Keeling, Global Head of Digital which account for 55 per cent of the digital Ireland (+8.5%) and Slovakia (+13.5%). Business, market. In Canada, the overall market fell by 11.3 per cent, with physical (-20.8%) and digital (-3.9%) posting declines. Latin America continued to grow strongly in 2014, with overall recorded music revenues up 7.3 per cent as sharply rising digital income offset a decline in physical format sales. Latin America has been the fastest-growing region for music GLOBAL DIGITAL SALES sales for the last four years and now makes up 4 per cent of the world market com- pared to 3 per cent in 2013. Digital growth in the region over the last year at 32.1 per cent, compared to a global average of 6.9 per cent. +39.0% +38.6% Subscription streaming Ad-supported streaming

Bruno Mars photo by Kai Z. Feng -8.0% -17.9% Permanent downloads Mobile personalisation +6.9% Total digital

9 M st p p lar artists & gl bal bestsellers f 2014 IFPI

Sam Smith photo courtesy of Universal Music

Ed Sheeran photo by Ben Watts

10 TOP 10 GLOBAL RECORDING ARTISTS OF 2014

Rank Artist Rank Artist

1 TAYLOR SWIFT 6

2 ONE DIRECTION 7

3 ED SHEERAN 8 SAM SMITH

4 9 KATY PERRY

5 AC/DC 10 BEYONCÉ

Source: IFPI. The compilation of the IFPI top artist chart has been independently verified through certain agreed procedures by BDO LLP. BDO LLP has verified that IFPI has compiled the chart correctly in line with the outlined procedures. The certain agreed upon procedures carried out by BDO did not constitute an audit review.

Soundtracks and albums comprising of songs from Various Artists have been excluded on instruction from IFPI.

1989 also sold well worldwide, be- Taylor Swift with the IFPI Global IFPI Global coming a top five hit in Germany, Japan and Recording Artist of the Year award. the UK, the next largest recorded music Photo by Dave Hogan, GettyImages Recording Artist markets. The ’s lead single, , was a top five hit in more than 20 coun- of the Year 2014 tries, including Canada and Japan, and its accompanying video was viewed more than Taylor Swift was named the IFPI Global 350 million times on YouTube. Recording Artist of 2014, receiving the One Direction took second place on annual award honouring the most popu- the chart. The UK/Irish band, who topped lar recording artist across music down- the inaugural IFPI Global Recording Artist loads, streaming and physical format sales Chart last year, released their fourth stu- worldwide. dio album FOUR in November 2014. Like The Global Recording Artist Chart its predecessors, this album also topped takes into account the full catalogue of the Billboard 200 chart, which means One each artist. It includes albums, music , Direction is the first group to have all their singles, free and paid-for audio streams first four studio albums debut at the top of and streams of official music videos on the US charts. FOUR, which contained the platforms such as YouTube and . The hit singles Steal My Girl and Night Changes, chart reflects “track and album equivalents” also topped the charts internationally in which incorporate each of the formats and markets from to the UK. channels. These are arrived at using conver- Third place spot on the Global sion rates between track downloads and Recording Artist rundown was claimed streams, reflecting estimated average lev- by singer- Ed Sheeran, who re- els of consumption of streams relative to leased his second studio album x in June downloads. 2014. This topped the chart in 12 coun- Taylor Swift released her fifth studio tries and reached the top five in a further album, 1989, in October 2014. It sold more 11 markets. Spotify revealed that x, which than 1.2 million copies in its first week of featured the hit singles Sing, Don’t, Thinking release in the US alone, the highest debut Out Loud and Bloodstream, was its most sales week since ’s The Eminem streamed album in the world in 2014. Show in 2002. One Direction and Katy Perry were the only two acts that featured across both the 2013 and the 2014 Global Chart.

11 Top selling global albums of 2014 Global Top Digital Singles of 2014

Rank Album & Artist Total sales (m) Rank Title & Artist Total sales (m)

1 10.0 1 Happy 13.9 Various Artists 2 1989 6.0 2 Dark Horse 13.2 Taylor Swift Katy Perry feat. Juicy 3 x 4.4 3 All of Me 12.3 Ed Sheeran 4 Ghost Stories 3.7 4 11.0 Coldplay 5 3.5 5 Let It Go 10.9 Sam Smith Idina Menzel 6 FOUR 3.2 6 Timber 9.6 One Direction feat. Ke$ha 7 Rock or Bust 2.7 7 Fancy 9.1 AC/DC feat. Charli XCX 8 Guardians of the Galaxy: 2.5 8 9.0 Awesome Mix Vol. 1 feat. Iggy Azalea Various Artists 9 Rude 8.6 9 The Endless River 2.5 MAGIC! Pink Floyd 10 Bailando 8.0 10 2.0 feat. Sean Paul, Descemer Bruno,

Source: IFPI. Physical and digital albums included. Streams excluded. Source: IFPI. Units include single-track downloads and track-equivalent streams.

IFPI’s 2014 global singles chart was topped by Pharrell Williams’ Top selling global albums Happy. The song appeared on the Despicable Me 2 album and was also the lead single on G I R , Williams’ second & singles of 2014 studio album. It was first released in November 2013 and went on to top the charts in more than 20 countries, including Canada, the The top selling album of 2014 was the motion picture soundtrack UK and US. It was the best-selling song of the year in the US, the Frozen which sold 10 million copies and topped the charts world- world’s largest market. It was partially promoted through a social wide. The album was released in November 2013 and went on media campaign centred around the 24hoursofhappy.com website, to top the Billboard album chart for 16 non-consecutive weeks. which featured the world’s first 24-hour . It claimed the most weeks at number one in the US for a motion The second single was Katy Perry’s Dark Horse. The song picture soundtrack since Titanic in 1998. It also topped the charts was first released in September 2013, as a promotional single from internationally in countries from Argentina to Japan. her fourth studio album Prism. It was then released as the third of- Second in chart was 1989 by Taylor Swift which ficial single from the album in December 2013. The track, which also sold six million copies worldwide and topped the charts in more featured rapper , was part of a competition run by Pepsi in than 10 countries. 1989 was Swift’s fifth studio album and was re- which fans could vote on about whether they it or leased in October 2014. It debuted at number one on the Billboard Walking on Air to be the first promotional single from Prism. It went 200 in the US achieving the highest sales of an album in its first on to chart at number one in the US, Canada and the , week of release since Eminem’s in 2002. The while reaching the top 10 in almost 20 countries worldwide. album also debuted at number one in other markets, such as The third best-selling single was John Legend’s All of Me. Canada and the UK, and charted in the top 10 in leading markets It was taken from the American singer-songwriter’s fourth studio such as Brazil, France, Germany and Japan. album In The Future. It was his first number one in the US and The third best-selling album of 2014 was Ed Sheeran’s x. also topped the charts more than half a dozen other countries. It was the British singer-songwriter’s second studio album and For the second year the singles chart includes streaming – topped the charts in a dozen countries worldwide. either through on-demand subscriptions (paid and ad-supported) or video streams of official music video content. The streams are measured by track equivalents, which involves aggregating multiple streams to represent one download single track.

12 Pharrell Williams photo by Mimi Valdes

divided by the average audio ad-supported How streaming and premium streaming revenue per track. 16 countries have integrated This model, which is reviewed frequently is changing the to ensure it is up to date, is followed by audio streaming into their the Nordics, Australia, Ireland, Italy, New charts Zealand, Spain and the UK. singles charts and another The effect of incorporating stream- Record companies and chart compilers are ing has been to slow the pace of track six countries use streaming increasingly adapting charts to reliably re- moves on charts because the consumption flect the popularity of an artist’s music in is measured over time, rather than through data to formulate their the streaming world. It has also become one-off purchases. more common to use streaming data to cal- Ariana Grande made history in July albums charts culate Gold and Platinum awards certifica- last year when her song Problem became tions around the world. the first UK single to reach number one At of publication 16 coun- thanks to a combination of both streams tries – Australia, Austria, Denmark, Finland, and sales. In its first week, streaming con- Germany, Ireland, Italy, Netherlands, New tributed, on average, more than 20 per Zealand, Norway, Poland, Spain, Sweden, cent of its chart position within the Top 40. , UK and USA – have integrated That is the equivalent of one in every five audio streaming into their singles charts and “sales” coming from streaming; a significant another six countries – Denmark, Finland, proportion. Norway, Sweden, the UK and the US – use streaming data to formulate their albums charts. Most of these changes took place in 2014 and early 2015. Many countries include on-demand audio streams in their charts from services such as Spotify, and Xbox and most, for the time being, exclude video streams 1 in 5 from services such as YouTube and Vevo. The proportion of UK ‘sales’ of This is to ensure consistency between the Problem coming from streaming content included in different countries, and to avoid comparisons being skewed by user- generated content. A major exception to this is Billboard in the US, which includes YouTube video streams, as well as , in its Hot100 Chart. The most common methodology for converting streams to downloads is the model pioneered by Sweden and other Nordic countries. The calculation to arrive at the conversion rate is made by taking the average download revenue per track

Ariana Grande photo by Tom Munro

13 Key rec rding ind stry trends in 2014 M

Miley Cyrus photo by Tyrone Lebon

% Using free or paid music “Streaming is becoming a very streaming services/download services in the past six months important portion of revenue for

Subscription the industry, but we have always 65 Downloads looked at things from a consumer point of view. It is not in our 46 42 interest, or the consumer’s, to 41

36 37 34 move away from any one format. 31

25 If people want to buy physically,

32 download or stream, that is great.

10 9 We are just responding to consumer demand.”

Sweden France Italy USA GB Germany Dennis Kooker, president, global digital Source: Ipsos business & US sales, Entertainment

14 for the majority of digital revenue in 10 ter- Subscription drives ritories (Croatia, Denmark, Finland, Hong “As we move to a more Kong, Iceland, Netherlands, Norway, South the music portfolio Korea, Sweden and Taiwan). mobile ecosystem, there is Key rec rding Streaming services cite a cocktail of The defining positive characteristic of the factors that are driving take-up. Thorsten a natural transition towards global music market in early 2015 is the Schliesche, senior vice president and gen- continued surge in consumer uptake of eral manager Europe, says: “Our services that provide ind stry trends streaming services. Much of this is driven fastest growing countries included France by young consumers with little or no expe- and Germany. There are several factors subscription access rather rience of owning music and, therefore, less coming together. Better technology infra- geared to traditional ownership models. structure, higher smartphone penetration, than à la carte ownership. The industry remains a multi-format cheaper prices for devices, more storage in 2014 business focused on the varied tastes of the space to store tracks for offline users and That changes people’s consumer. Research across 13 countries by improved car integration. Streaming can Ipsos in 2015 shows a diversity of demand now be with all day in the car, in your listening , they are across multiple formats. According to the home, in the gym. That was really true for data, more than a third of respondents have the first time in 2014, it’s why we had a mas- more likely to experiment purchased CDs or vinyl (37%) in the last six sive tipping point.” months, while 26 per cent have paid for Martin Mills, founder and chairman and discover new music. downloads. It also shows a marked variance of , believes streaming is key between the popularity of streaming and to the future of the music business for both We need to ensure that our downloads in different countries. majors and independents. “There has been a Subscription is the recorded music substantial towards streaming. We find music is on the services industry’s fastest growing revenue stream, our ‘sales’ revenue streams – downloading, increasing by 39.0 per cent in 2014, includ- physical and streaming – now split into three that consumers are ing the subscription and ‘freemium’ tiers of roughly equal parts. Income from streaming services such as Deezer and Spotify. Over is very significant and covers an enormously embracing and that we and the five year period to 2014, subscription broad range of repertoire, including a lot revenues have grown more than six-fold to that was previously not earning much at all. I our artists are paid fairly.” US$1.6 billion. The model now accounts for see this as a positive development.” 23 per cent of digital revenues. Streaming services have also, along Rob Wiesenthal, cOo/Corporate, The number of paying subscribers with copyright enforcement strategies, worldwide increased by 46.4 per cent in helped migrate consumers to licensed ser- 2014 and now stands at an estimated 41 mil- vices by offering a convenient alternative lion, five times their level of just eight million to piracy. in 2010. Subscription services now account

Streaming growth year on year (2009–14) Subscription streams income Ad-supported streams income M US$

1,800 +39%

1,600

1,400 +55% 1,200

1,000 +63% +39% 800

+40% +45% +17% 600 +33% 400

+60% 200 1%

2009 2010 2011 2012 2013 2014

Source: IFPI

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Visit us at TIDAL.COM The increase in mobile offerings has New global had a positive effect. Latest statistics show that more than half of Spotify’s users are services, more now streaming music on mobile devices, with 42 per cent of activity taking place reach on smartphones and 10 per cent on tab- lets (Source: strategyeyedigitalmedia.com After several years of rapid expansion, the January 2015). streaming market has now entered a new phase of growth. There remains intense competition between services internation- “Income from streaming is ally, but with a few bigger players entering new markets or consolidating their position very significant and covers in existing ones. The most anticipated and watched new players in subscription in early an enormously broad range 2015 are those backed by the biggest global players. of repertoire.” YouTube launched in beta mode its photo by Neil Krug subscription service, Music Key, in November Martin Mills, Founder & chairman, 2014 in Finland, Ireland, Italy, Portugal, Spain, beggars group the UK and US. The service offers ad-free lis- Smartphones tening, the ability to play music offline and in the background of a user’s phone even when and partnerships A second driver has been the in- locked. The service costs US$10 per month creased marketing of such services in some and includes an account with ’s Play drive growth countries by leading telcos that offer them Music All Access service. bundled with user tariffs. Bundling deals are Apple entered the streaming market Two key factors have helped drive the a key strategy to provide streaming services with a US$3billion acquisition of Beats and growth of streaming and subscription – the to the mass market and are expected to in- is widely expected to launch a new stream- spread of smartphones and bundling part- crease as consumers prefer integration of ing service in mid-2015. Apple is expected nerships. Global smartphone penetration their payments for music into their broad- to bundle into its iOS operating was projected to have increased by 25.1 per band and phone subscription, and even system this year and roll out its new service cent in 2014 according to research from cable bills. globally to millions of iPhone users. The key eMarketer.com, hitting 1.76 billion users or Napster partnered worldwide with selling point of the subscription service is 24.5 per cent of the global population. The Telefonica leading to bundled offerings the exceptional reach of Apple’s existing researchers predict this number will hit 2.73 with subsidiaries such as Vivo in Brazil consumer base, with access to some 800 billion users or around 40 per cent of the and Movistar in the rest of Latin America. million credit card accounts. global population by 2018, indicating there Deezer struck deals with TIM in Brazil, These major international services is still further room for growth. Vodacom in South Africa, Smart Telecom are seen as influential players in the evo- One of the key events of 2014 was in the and Tigo in Ghana and lution of streaming and reaching a global Spotify’s launch of a mobile free tier where Tanzania. Such partnerships now span the audience. John Rees, vice president, digital users can shuffle play or create , globe, from Deezer-Tigo in Colombia and strategy & business development, Warner while Deezer launched Flow, a personalised Deezer-DTAC in , through Napster- Music International, says: “The challenge is and unlimited ad-supported smart radio for Terra/Vivo in Brazil to Spotify-Sprint in the to reach the mass market and that requires free on mobile, while other music apps such US. Deals are also being struck in emerging significant investment in marketing and pro- as Pandora and are widely available markets, which have scarcely been mon- motion of subscription services.” across operating systems and driving an in- etised by the industry. One such deal is the Other major international services tegrated experience. partnership between Telenor and WiMP in continue to move into key markets. Pakistan. launched Prime Music in the US, Deezer launched in the US, TIDAL launched in sev- “The challenge is to reach eral markets, Spotify launched in Canada, Music Qubed’s MTV Trax launched in the the mass market and UK, while and entered India. that requires significant investment in marketing and promotion of subscription services.”

John Rees, vice president, digital strategy & business development, Warner Music International

17

for artists. Glen Barros, president and CEO Getting Streaming of Concord Music Group believes the bal- ance between free and premium tiers of subscription to revenue models some services may change in future. “As streaming will clearly play a dominant role the mass market A key objective and ongoing challenge in in the future of our business, it needs to the digital music market is meeting con- be embraced. We now need to respect the Within the music streaming sector, there is sumer demand while generating fair and value of music and direct our efforts toward substantial untapped potential for growth sufficient revenues for artists and labels. building an environment where creators are within the paid-for category. The Ipsos The streaming revenue model currently fairly compensated.” 2015 research shows that 35 per cent of breaks down into two key segments: paid- Streaming services themselves take respondents across the 13 selected mar- for subscriptions providing a higher value different views of the need for a ‘freemium’ kets have accessed streaming offering, including full access on mobile model. Ethan Rudin of Rhapsody says that services in the last six months, compared to devices and absence of adverts; and adver- free tier services undermine the value of 16 per cent using paid-for music streaming tising-supported streams, providing limited music. “We don’t offer a free tier, we believe subscription services. While consumer use functionality and adverts. people should be educated to pay for music. of free and paid-for services varies mark- Major and independent record com- Rights holders need to look to the long- edly between countries, there are show- panies have licensed their repertoire to the term and not let people give away their case markets proving that consumers will advertising-supported tiers of streaming music for too little in return.” Hans-Holger pay in large numbers for premium music services, viewing them as an important way Albrecht, Deezer’s chief executive officer, subscription. of persuading users to upgrade to premium says: “Freemium needs to be attractive Ipsos found South Korea (42%) and subscription accounts on services such as enough for users to get a good experience Sweden (40%) are leading the countries Deezer and Spotify. of the added value of the streaming service with the highest pay-to-stream incidences. Although, this ‘funnel’ of free-to- and remain differentiated enough to drive In Germany 16 per cent of respondents used consumer music is important, there are conversion. As long as it drives conversion, paid for services; 15 per cent both in the also publicly-voiced concerns that free to we will remain strong supporters of the US and Great Britain; and just 6 per cent in consumer advertising-supported models freemium model.” Japan. are not generating a fair share of revenues growing markets Mark Piibe, executive vice president, global Consumer use of music streaming business development and digital strategy, services within the past six months Sony Music Entertainment, says: “We need across the 13 selected markets to get subscription streaming to an inflec- tion point at which it becomes mass-mar- ket in major territories, rather than merely being a niche product. Once we see sub- scription services in countries like the US, UK and Germany reach the level of popu- lation penetration that we saw in Sweden in the first couple of years after Spotify launched there, then the market will really have begun to surge.” 35% 16% There are several ways to move sub- Free paid-for scription streaming further into the mass market. They include increasing bundling partnerships and integrating more music subscriptions into phone billing; better con- sumer education to improve awareness of the value of the paid subscription service; more varied payment options to supplant the basic payment model of free versus pre- Source: Ipsos mium; and addressing the underlying prob- lem of the ‘value gap’ (see page 22).

“As streaming will clearly play a dominant role in the future of our business, it needs to be embraced.”

Glen Barros, president & CEO, Concord music group

19 New IFPI data shows Streaming artists payments as share services compete of revenues are up on curation

Streaming services present a new payment model for artists based on con- In the early years of streaming services, un- sumption of music over a continuous period and invoicing accumulated multiple limited repertoire was the universal selling per-stream payments. Successful artists will be assured of a steady income over point. Now the focus has shifted as these time, and as streaming services grow their consumer base, the overall revenues services compete to offer better curation increase. Glen Barros, president and CEO of Concord Music in the US, says and recommendations to consumers. more clarity is needed in explaining the revenue benefits of streaming. “I believe Curation has become more sophis- that one of our problems is that we’re trying to evaluate a new business model ticated and tailored to different consumer through an old world mentality. Rather than worry about how many streams it groups. Hans-Holger Albrecht, Deezer’s takes to earn a dollar, we should be focused on converting music buyers into chief executive officer notes that surfacing music subscribers. If we could get even half of the people that buy music every songs and editor recommendations that year to pay for a subscription, it’s simple math to see that it will be a healthy are tailored to the listener’s taste is key to business.” customer retention. He says: “When people The rise of streaming services has also prompted wider discussion move beyond search to experience the full around the issue of artists’ royalty payments in the digital environment. In order benefit of tailored curation, they are hooked to better inform this discussion, IFPI conducted research in 2014 to obtain an to the service.” accurate picture of how royalty payments have changed as the market has shifted from physical sales to digital channels. Industry data compiled by IFPI Intelligent from the three major companies, covering local sales for locally signed artists recommendation in 18 major markets outside Japan and the US in the five year period to 2014 Other streaming services have invested in shows that while sales revenue fell 17 per cent, total artist payments – in the more intelligent music recommendation. form of royalties and unrecouped advances – declined much less in real terms In March 2014, Spotify founder and CEO (down 6 per cent) and increased significantly as a share of sales revenue, by Daniel Ek described his company’s acquisi- 13 per cent. Over the five year period, the data shows that total payments by tion of music data group as record companies to local artists totalled more than US$1.5 billion across the 18 a bid to build the “best music intelligence markets. platform on the planet” mixing human skill Significantly, the market with the most positive trend in artist remunera- with social curation and algorithms. Beats tion has been Sweden, where paid streaming predominates, accounting for 68 Music has attempted to differentiate itself per cent of total industry revenues. In Sweden, payments to artists over the five from competitors by hiring music experts year period rose 111 per cent against a 47 per cent increase of corresponding and offering the in compil- sales revenue. Furthermore, the IFPI data shows that in the majority of markets ing and curating its playlists. Google’s pur- where subscription services account for more than 30 per cent of revenues, chase of , which promises to deliver artists have benefited from the growing sales and are receiving more money human curated playlists based on a mix of and a larger share of the revenues. taste, mood and data. Apple also acquired Overall the results of the IFPI data collection process suggests that, Semetric at the start of this year. Founded across a substantial sample of markets, remuneration to local artists as a share in 2008, one of its best known brands is of sales revenues has seen a significantly more positive evolution than the trend Musicmetric, providing record companies in overall sales income. It also suggests that, in particular, paid streaming ser- and other media companies with analysis vices have had a positive impact on overall payments to artists. and data on music downloads, streaming and social media. Record companies have also heav- invested in this area with Sony Music purchasing Filtr, Universal Music launch- ARTIST PAYMENTS 2009–2014 ing Digster.fm and Warner Music buying Playlists.net which aggregates and recom- mends playlists created on Spotify. Beth Appleton, senior vice president, global mar- keting, at Warner Music International says: “At record companies, we are increasingly curators and editors, we don’t just simply +13% -17% manage the recording process. It is our job to make sure fans hear our artists’ amazing Artists’ share of Record company music and to help them know what they are sales revenue sales revenue listening to.”

20 Payment options Downloads Video streaming diversify decline surges

For consumers, pricing options are already Download sales remain the principal source Video streaming continues to grow in popu- becoming more diversified as streaming of digital revenue for record companies, larity worldwide. Advertising-supported services widen the parameters of the basic but their value fell by 8.0 per cent in 2014, revenues, which are largely from video free versus premium model and offer new an acceleration on the 2.0 per cent drop in streaming services, increased by 38.6 packages. For example, Deezer Elite and 2013. The global decline is being primar- per cent in 2014. Growth was particularly TIDAL offer users access to high quality ily driven by the maturing of downloads in strong in Latin America (+96.9%), but more audio streams for €19.99 with a range of developed economies, with double digit measured in the mature markets of North promotional offers for subscribers com- declines in most major markets. Download America (+23.2%). mitting to a year’s subscription. Other play- sales continue to grow in some ers are starting to offer family plans, with emerging markets, particularly Spotify enabling a family of four to enjoy in Asia. “At record companies, we are its full premium service, including separate A combination of factors recommendations and playlists, for US$25, underlies the decline in down- increasingly curators and editors, instead of four individual charges of US$10. load sales in most developed Some digital services believe there markets. These include the we don’t just simply manage the is a market for a lower cost product that changing structure of the tech- does not offer access to the full repertoire nology market, competition from recording process. It is our job to of more than 40 million licensed tracks. other entertainment products Music Qubed’s MTV Trax in the UK charges and a by some consum- make sure fans hear our artists’ £1 a week and offers music fans up to 100 ers to streaming services. The tracks on eight curated playlists. In emerg- largest download store iTunes amazing music and to help them ing markets, digital services are experiment- is not available on the Android ing with pricing to reach the mass market. In platform, which is increasingly know what they are listening to.” Brazil, Napster has signed a deal with tele- dominant in the smartphone and com company Vivo that sees it offer prepaid tablet market. When consum- Beth Appleton, senior vice president, global customers, who represent 70 per cent of ers are drawn to Android and marketing, Warner Music International the market, its service for three reais (US$1) Amazon products they the a week. iTunes ecosystem. Another factor is the competition offered from other entertainment prod- “The main services all ucts within the iTunes store with consumer photo courtesy Universal Music spending spread across a greater range of offer more than 30 million products including apps, films, games and TV shows. Executives report recent tracks and have a similar card spending in the store has shifted to- wards apps. quality and approach. The rise in streaming is also clearly having an impact on consumer demand The value comes in what for music downloads. Unlike the industry’s previous format shifts, including moves to is being placed over the cassettes, CDs and downloads, the transi- tion from downloads to streaming is faster top. It’s all about curation, because fans do not need to buy new hardware. recommendation and There is evidence that streaming is not the only factor in this decline, however. influence.” In Canada, download sales in 2014 declined by 7.7 per cent, broadly in line with the US Francis Keeling, global head of (-7.2%) despite the absence of streaming digital business, universal music services until late 2014 with the arrival of Spotify. Internationally, Google Play has en- joyed robust growth in download sales, - gesting that the decline in downloads is not happening across all stores.

21 FIXING THE ‘VAL E GAP’ IN IGITAL M SIC

A successful digital music industry that invests in and rewards artists T needs a fair digital marketplace

43million tracks licensed worldwide US$6.9bn value of digital music business 400+ digital music services worldwide

22 The value gap: Creating a Addressing a distortion in fair licensing the value gap the market environment – next

At the heart of the ‘value gap’ is a market The key to addressing the ‘value gap’ is To turn the digital transformation of the distortion caused in which digi- to create a fair licensing environment. music industry into sustainable long-term tal services circumvent the normal rules of Currently, this does not exist. This is be- growth, the ‘value gap’ must be addressed. music licensing. This allows them to gen- cause certain content platforms (that is A successful music industry that invests in erate a substantial share of global music services such as YouTube and ) music and rewards artists needs a balanced consumption in a way that diminishes the claim that they are merely neutral hosting digital marketplace in which to negotiate revenues that should rightfully be returned services entitled to benefit from exemp- terms for the use of its music. to creators and rights owners. tions to copyright law (akin to internet Policymakers have a clear role to play service providers), rather than digital dis- in this area, in creating a level playing field tribution services akin to Deezer or Spotify, between online operators and the crea- The music industry has which do not benefit from such exemptions. tive sectors. They need to make sure that This significantly distorts rights owners’ ne- the law is clarified and applied correctly. made the changes needed gotiations with the content platforms. Specifically, it needs to be made clear that any liability exemptions can only apply to to continue leading the Exemptions genuinely neutral and passive online service The liability exemptions – known as “safe providers, and not to services that play an creative industries in the harbours” – were introduced with the ob- active role in distributing, promoting and jective of protecting genuinely passive and monetising content. digital world. neutral online service providers from li- The ‘value gap’ needs to be ad- ability. They cannot apply to services that dressed in order to reflect the true behav- An illustration of this can be seen in play an active role in distributing, promot- iour of individual digital platforms, allow fair comparing the share of revenue derived by ing and monetising content. On this basis, competition between services and generate rights owners from services such as Spotify for a content platform such as DailyMotion a fair return to music right holders. and Deezer and those derived from certain or YouTube to claim the status of a neutral content platforms like YouTube and Daily hosting service is not justified, undermines Motion. IFPI estimates music subscription the negotiating position of right holders and services have 41 million paying global sub- creates unfair competition between indi- The key to addressing scribers, plus more than 100 million active vidual services. users in their ‘freemium’ tiers. This sector To be defined as a neutral content the ‘value gap’ is to generated revenues to record companies host allows a service to effectively refuse to of more than US$1.6 billion in 2014. By con- negotiate for a licence. Instead of becoming create a fair licensing trast, YouTube alone claims more than one fully licensed itself, the service can claim it billion monthly unique users and is thought needs a licence only on behalf of its cus- environment. to be the world’s most popular access route tomers, or alternatively remove unlicensed to music. Yet total global revenues to re- content only when a right holder issues it cord companies generated by exclusively with a takedown notice. That procedure free-to-consumer advertising-supported is, in most cases, not sufficiently effective services (predominantly video online plat- to seriously disrupt the unlicensed making forms) amounted to just US$641 million in available of music. Right holders are, in ef- 2014, less than half the total amount paid fect, left with a choice of two bad options: by subscription services to the industry. agree to the terms and derive some rev- This is the essential discrepancy that is de- enue from the content; or commence costly fined by ‘value gap’. and protracted legal proceedings against all of these services. This situation has created a funda- mental distortion in the negotiating re- lationship between the right holder and certain digital platforms. This, in turn, is creating unfair competition for rival digital music services trying to build and expand subscription offerings.

23 music - - karaoke music videos - ambiance - business

We are the world-leading 2,000 curated channels provider of multiplatform and playlists music products and services! 113 countries

114M subscribers

TV

Web Mobile Stingray.com M VING TO GL BAL RELEASE DAY IN 2015

F photo by David Black David photo by “New music should hit the high street when people hit the high street.”

Paul McGowan, CEO, Hilco capital

43% FRIDAY & SATURDAY Consumers’ preference for new music release days 25% PREFERRED FOR NEW RELEASES

12%

6% 5% 5% 4% Friday Sunday Monday Tuesday Saturday Thursday Wednesday

Source: TNS Ncompass. Participants across seven countries: Brazil, France, Italy, , Spain, Sweden and USA.

25 WE’VE HAD AN AMAZING YEAR!

NOW MORE THAN 2.5 MILLION FANS STREAMING WITH RHAPSODY & NAPSTER

LISTEN TO 34 MILLION TRACKS ANYWHERE, ANYTIME IN 32 COUNTRIES

THANKS FROM ALL OF US WE’VE Brazil HAD AN A TOP PERFORMING MARKET

AMAZING Brazil continues to be one of the top performing global markets for recorded music. The industry works with “Subscription services are a wide range of revenue streams including physical sales, mobile personalisation products, subscription investing in producing playlists services, video streaming and download sales. The mar- YEAR! ket increased in value overall by 2.0 per cent in 2014 of local repertoire as they to US$246 million, with digital growth of 30.4 per cent more than offsetting the continuing decline in physical move from addressing early format sales (-15.5%). This meant that Brazil was the ninth largest market for recorded music worldwide. adopters to the mass market. Subscription services revenue rose 22.1 per cent. In January 2015, research from Opinion Box on behalf We think there is still a lot of of the Committee of Digital Music Development esti- mated some 28.2 per cent of Brazilians were accessing potential for expansion over music on such services. Partnerships with telcos are a key strategy to get subscription services to a mass audi- the next few years.” ence. Deezer and Napster, two of the large international services, have signed deals with leading telcos TIM and Alexandre Schiavo, president, Sony Music Vivo. Rdio has partnered with Entertainment Brazil

Lucas Lucco Grupo Bandeirantes. Napster’s partnership will see pre- photo by Guto Costa paid customers, who represent 70 per cent of the mar- sales, but the services are improving their range and ket, pay three reais (US$1) a week for Napster’s service. curation of local repertoire. Universal Music Group has partnered with Bradesco, Download sales increased by 11.7 per cent in a leading bank, to launch Bradesco Music, a streaming 2014, but only account for 28 per cent of the digital service that will cost 4.90 reais (US$1.55) and offers market. Download sales have never reached their full access to half a million tracks and 50,000 video potential in Brazil because the main player in the mar- clips from . ket, iTunes, has only been available in US currency, and with no gift card option available. Repertoire Mobile personalisation products have remained Marcelo Soares, president of independent record strong in Brazil, unlike in many other markets, increas- company Som Livre, says that streaming services ing by 11.8 per cent in 2014 and accounting for 19 per are growing strongly, delivering his label more reve- cent of the digital market. The price point of ringback nue than downloads in 2014. “Subscription is helping tones at around three reais per month remains particu- drive the whole market up. All of the big players are larly attractive to lower income consumers and they are here and are marketing their services. Before stream- available through operating services so are not affected ing the only options for digital consumption for most by the shift from feature phones to smartphones. Video people were YouTube or pirate services.” streaming is popular, with ad-supported services grow- Alfonso Perez Soto, senior vice president, busi- ing their revenues by 77.7 per cent in 2014. Around a ness development emerging markets & Latam, Warner third of music consumption on YouTube takes place on Music Group, adds: “Since the launch of Deezer, Napster mobile devices and the platform is looking to improve NOW MORE THAN 2.5 MILLION FANS and Spotify in Brazil we’ve seen an impressive level of its monetisation of mobile consumption. uptake in subscription. This has helped to boost Brands are also looking to cash in on the success STREAMING WITH RHAPSODY & NAPSTER streaming revenue and is important growth for of Brazilian repertoire. Alejandro Duque, vice presi- the market. For that to continue, I think we will dent business development and digital, Universal Music see a mix of bundled deals and standalone sub- Group, says: “There are lots of innovative models, with LISTEN TO 34 MILLION TRACKS ANYWHERE, scription offerings over the next few years.” brands interested in the streaming market and work- ANYTIME IN 32 COUNTRIES The repertoire played on subscription ser- ing with record companies to develop playlisting strat- vices has tended to skew towards international egies to help them reach young, affluent early adopter repertoire, a reverse of the trend seen in physical consumers.”

27 THANKS FROM ALL OF US 28 China MOVING TOWARDS PAID SERVICES

Jay Chou photo courtesy of JVR Music

China remains a music market of enormous untapped Stu Bergen, president of International Warner potential, with an online user base of 650 million peo- Recorded Music says: “Our partnership with is ple and a growing number of licensed digital services. aimed at harnessing the incredible demand for music However, an undeveloped culture of paying for music in one of the world’s most rapidly changing territories. and a history of piracy makes progress slow. The market Together we can help create a sustainable legitimate increased in value by 5.6 per cent in 2014, helped by an music ecosystem that encourages artistry and entre- increase in streaming revenues. The hope is for further prenurial investment.” growth in the years ahead as labels and services roll out These players have continued to operate a num- initiatives to establish a paid model for music. ber of paid music services, but these have been held The cause for optimism dates back to 2011, when back by the ubiquity of free licensed alternatives. The the major recording companies, through subsidiary most popular paid-for tier, charging RMB10 (US$1.60) One-Stop-China, licensed the music service operated by per month, is Green Diamond, owned by Tencent, with Baidu, the country’s largest on- an estimated three million subscribers. However, overall line search engine. Before this subscriber numbers remain low due largely to a combi- “Just the simple fact that the only significant source of li- nation of free licensed offerings and . censed digital income for rights Ed Peto of the China-based music industry con- there is a paid model in holders was ringtones, with the sultancy Outdustry Group says: “Just the simple fact digital market dominated by un- that there is a paid model in China now is an incredibly China now is an incredibly licensed players. Andrew Chan, positive development, but it was always going to need SVP, digital & strategic planning, time to develop. The difficulty at the moment is that positive development, Universal Music China, says: consumers can still get everything they want for free.” “The Baidu deal was the mile- There is optimism also around China’s progress but it was always going stone that changed the whole towards joining the 147 other countries that currently ecosystem. Since then the have full performance rights. A proposal in its final draft to need time to develop. government has said that it is of the amendment of the law by the National Copyright stepping up its commitment to Administration of China (NCAC) remains under con- The difficulty at the protecting sideration by the Legislative Affairs Office of the State rights and that the development Council and it is hoped it will be enacted in 2016. moment is that consumers of the music industry is a major A glimpse of the potential offered can be seen in China’s priority.” karaoke market, with performers and producers cur- can still get everything rently earning an estimated 140 RMB (US$20 million), market growth from the 10 per cent or so of karaoke bars that are cur- they want for free.” In 2014, after a period of intense rently licensed. activity by several services to try International record companies have gained a Ed Peto, Outdustry Group and introduce paid offerings, firm foothold in China and are looking to step up their there was major consolidation ownership and investment in local music. This was il- in China’s digital music market. lustrated in 2014 by Warner Music’s purchase of Gold Three major internet companies, Alibaba, CMC and Typhoon, one of the best known and largest independ- Tencent, have made several acquisitions to dominate ent record labels for the Greater China Region. There digital music distribution. Alibaba operates the Xiami is no reliable data available on the breakdown between and TTPod internet portals, and CMC acquired the local and international repertoire in China. Informal in- Kuwo and Kugou music services. These major internet dustry estimates suggest Chinese-language music ac- companies have also started to move to secure licens- counts for around 80 per cent of the market and K-Pop ing deals with major recording companies. Sony and and J-Pop for 10 per cent, with the remaining 10 per Warner and a number of leading Taiwanese independ- cent going to international repertoire. ent labels signed an agreement with Tencent in 2014.

29 FOR A DIRECTORY OF LICENSED DIGITAL MUSIC SERVICES WORLDWIDE VISIT WWW.PRO-MUSIC.ORG

The Pro-Music site offers: • -stop guide to getting music online with a comprehensive global list of digital music services • Links to 400 legal music services in over 150 countries – listed by country and model • Educational resources – copyright FAQs; a guide for parents and teachers; resources for schools; information about the global music industry

Pro-Music is supported by: Germany STREAMS GROW, CDS RESILIENT

Germany is the third largest recorded music market in The physical retail infrastructure in Germany is the world. It combines an enduring and robust physi- robust, with Media Markt, Saturn and Muller operating cal sector with a fast-growing and intensely competi- around 700 outlets between them. The average tive streaming market. Overall, the market increased in a music buyer is 46, higher than in most other countries, value by 1.9 per cent in 2014 to US$1.40 billion. which is reflected in the popularity of traditional reper- Physical format sales account for 70 per cent of toire such as Schlager, Alpine Volksmusic and Classical, the market and their value dropped by just 1.5 per cent which account for 16 per cent of the market and are in 2014, significantly below the 8.1 per cent global fall in predominantly sold in physical formats. German singer physical sales. Holger Christoph, vice president, digital topped the 2014 singles chart with her sales, Universal Music Germany, believes that physical track and held on to the top sales and streaming can co-exist in Germany. spot in the 2014 German albums chart with her release “The physical market, including an increasing , which was also the top seller in 2013. vinyl share, remains important not only for collectors, Germany has seen a comparatively slow transi- for fans who want to have something to put on their tion to digital. Digital revenues accounted for 22 per shelves, it is also a popular format for domestic reper- cent of the market in 2014, growing strongly by 12.2 toire and with older consumers who enjoy buying and per cent, which is markedly above the global digital in- listening to full albums. At the same time, we’re seeing crease of 6.9 per cent. This was largely achieved thanks streaming growing strongly with younger consumers, to an 86.8 per cent increase in subscription income and who tend to listen to more international track driven a 43.0 per cent increase in revenue from ad-supported repertoire, while à la carte downloads remain popular streams helping to offset a 3.7 per cent decline in down- across the board.” load sales. The surging subscription market is driven by intense competition with 14 players currently oper- ating in the streaming space. The biggest players in- clude Spotify, which has a partnership with Deutsche Telekom; Napster, which runs through O2 and E-Plus; 46 and Deezer, which has a partnership with Vodafone. Partnerships with telcos are a key driver of the The average age of a growth of streaming. They also mean telcos do not German music buyer have to build a music service from scratch. Prior to link- ing with Spotify in 2012, Deutsche Telekom ran its own download store Musicload. Peter Kerckhoff, vice presi- dent, content, Deutsche Telekom, says the telco partner benefits from the subscription partnership with Spotify because a streaming service package can “give greater consumer value, increase loyalty, improve customer sat- isfaction, help the brand’s image and make us stand out from our competition.” Stefan Goebel, SVP International, Sony Music Entertainment, says: “Partnerships with telcos are help- Schlager, Alpine ing the streaming services reach sizeable audiences Volksmusic and Classical without spending lots of money themselves on market- account for 16 per cent ing. We think it’s important to have a healthy market of the market with lots of players and are supporting them all in their efforts to gain customers.”

Helene Fischer photo by Sandra Ludewig

31 M SIC AND THE WIDER ECON MY

1.17 R million people across the EU work in the music industry

9 out of10 of the most watched YouTube videos are music related

Study highlights how music generates jobs in Europe

In December 2014, consultancy EY produced a report Creating Growth – Measuring Cultural and Creative Markets in the EU – which highlighted the role the music industry plays in generating jobs in Europe. The re- port revealed that 1.17 million people across the EU worked in the wider music industry, with 44,660 em- ployed in sound recording and music publishing and 650,000 earning a living as musicians and songwrit- ers. The report also highlighted that the wider music industry generated €25.3 billion in economic activity.

32 Music helps drive Music and Tomorrow’s social media economic growth World

Use of social media platforms is partly The role of music in driving tourism – Record companies work with a range of driven by music, with users regularly swap- a global market valued at over US$3 tril- business partners to harness the latest ping recommendations about bands or lion – is increasingly recognised by gov- technology developments to bring music posting videos. Twitter says that 50 per cent ernments and boards. A study to consumers. They also look ahead to of its users follow at least one musician. by UK Music/VisitBritain, Wish You see how innovations can shape the mar- Clear evidence of social media’s reliance Were Here, published in 2013 estimated keting promotion and distribution of on music and musicians comes in Twitter’s that music tourism generated £2.2bn music. most followed people chart, topped by Katy (US$3.6bn) for the UK economy from Rob Wiesenthal, COO/Corporate, Perry with more than 63 million followers. a total of 6.5 million music tourists in 2012. Warner Music Group, says nurturing Another six artists – , Taylor In the US, Austin has successfully digital innovations is a crucial element Swift, , Britney Spears, Justin branded itself the Live Music Capital of of record companies’ strategies. “We’re Timberlake and – are placed within the World, partly on the back of its annual spending a lot of time growing a digi- the site’s top ten. The platform had a mar- (SXSW) music and film tal nursery of relationships with music ket capitalisation of almost US$30 billion in festival. The Texan capital earns US$1.6 bil- start-ups, which are potentially influen- February 2014. lion in annual revenues from music tourists tial and leading music services.We must Music similarly dominates other so- and other visitors. proactively nurture these services rather cial media channels: nine of the top ten Other cities around the world than just passively wait for them to most watched videos of all time on YouTube are following this trend. A 2012 report, emerge and approach us.” are music related. The most watched video Accelerating Toronto’s Music Industry In 2014, Warner partnered with is Psy’s Gangnam Style with more than two Growth, was commissioned to leverage Interlude Music, a company that cre- billion views to date. On , David best practices learned from Austin. One of ates interactive video content, partnered Guetta has nearly 60 million likes on his its key recommendations was to link the with Shazam to gain access to its con- page. Music also drives substantial revenues Canadian city’s music industry with tour- tent and became a founding partner of from branding partnerships through which ism marketing, a move it suggested would short video windowing platform Vessel. artists promote brands from consumer increase earnings from music from the cur- One growing area of technol- goods, drinks and clothes. rent CDN$700 million to CDN$5 billion. ogy development is immersive vir- tual reality technology. A leader in this field is Oculus VR, which was acquired by Facebook in 2014 for US$2 billion. Universal Music has worked with Oculus and handset manu- facturer to produce virtual reality experiences involv- £2.2bn ing its artists. In one such experience, users of the Oculus Rift headset can virtually enter a fairground themed around The The value of music Who, go into different rooms, meet the band, hear their music tourism in the UK being played and see various iconic images relating to the band. 63m Deborah Hyacinth, vice president, international digi- people follow Katy tal marketing, Universal Music Group, says: “Immersive virtual Perry on Twitter reality is as least as transformative for video as when MTV or YouTube launched, potentially even more so. While the plat- forms for watching video have changed, the format itself has remained basically the same for decades. But now virtual real- ity allows us to take video in completely new directions, with

Katy Perry levels of visual interaction and participation that until recently photo by Cass Bird only existed in science fiction. It’s very exciting to be at the be- ginnings of something that will be so powerful for artists and fans.” Another area record companies are looking at is wear- able technology. As people start to use items such as smart watches, companies and their partners are experimenting with audio recognition and working out how they can service devices with less memory than phones that are often used for other specific purposes such as health and fitness.

33 “We issued the track Bad as a pre-release for the album primarily for his core fans, and thanks to streaming services we were able to get millions of streams with something that is not a traditional radio-friendly hit.”

photo courtesy of Warner Music DAVID GUETTA: USING DATA INTELLIGENTLY David Guetta has been recording and DJing “We looked at data coming in from “When David is active we tend to for more than 20 years and remains one of Germany ahead of Christmas 2014 which promote four or five tracks a year in Europe the most popular dance artists in the world. suggested that if we invested in additional and Australia, whereas in the US we’ll prob- He has achieved massive success on music marketing in the country, which had tradi- ably go for fewer, maybe two or three, be- streaming platforms and built a significant tionally been slower for David than some cause it can take five to nine months to global fan base. other territories, we could really make a work a track to become a top 40 radio hit,” Bart Cools, executive vice president, mark. So we did and his album Listen be- explains Cools. global A&R and marketing, dance music, came a top five Christmas hit,” says Cools. Guetta’s next single release (at time Warner Recorded Music, says: “David is a The growth of streaming platforms of publication), which will be promoted phenomenal artist, we are working at the has had a big impact in the way that cam- in Europe and the US, is Hey Mama, fea- moment on what is set to be his nineteenth paigns for dance artists are run. Cools adds: turing and Afrojack. “It makes consecutive hit. He is very hands-on in de- “We issued the track Bad as a pre-release sense globally because we can market it ciding which tracks he wants to promote for the album primarily for his core fans, and to David and Nicki’s fans worldwide,” Cools and works closely with us on his promo- thanks to streaming services we were able says. “Some markets are cautious, such as tional campaigns.” to get millions of streams with something Germany where mainstream radio might be The process of deciding when and that is not a traditional radio-friendly hit.” hesitant to play it, but you have to plan on a where to mount campaigns is becoming Guetta is currently seeing his tracks global basis.” more scientific as increasing amounts of streamed more than 20 million times a data are available to record companies. week, with the cumulative total increasing Cools says that the record company moni- each time he has a new hit. Because of the tors data from streaming services and different pace it takes to generate a hit in Shazam to see where tracks are having an different territories, Guetta’s record com- impact and are worth marketing further. pany runs parallel campaigns in Europe and America.

34 LUCAS LUCCO: ARTIST AND DIGITAL NATIVE

photo by Guto Costa

In December 2013, the label launched “Lucas was a bright young talent, with a strong view the single Mozão with a full push across broadcast, digital and social media, which of how he wanted to present himself and his music. attracted more than 55 million views. The album Tá Diferente followed in March 2014 He came to prominence through online videos and with Colombian superstar featuring on Lucco’s debut music DVD, re- he continues to be highly engaged with this medium, corded in 2014 in his hometown of Patrocinio. Follow-up singles in 2014 in- writing all the storylines for his videos himself.” cluded Vidas in June, in honour of father’s day; Destino in September and Vai Vendo in Alexandre Schiavo, president, sony music entertainment brazil December. Lucas Lucco has performed ex- Lucas Lucco is a singer-songwriter from In 2011 he uploaded a song called tremely strongly in the digital space. Mozão Brazil who has enjoyed enormous success Amor Bipolar to YouTube. Then he posted was the most watched video from Brazil on over the last couple of years. A true digital two other songs, Princesinha and Pra Te YouTube in 2014. It was also the best-selling native, Lucco was discovered when he posted Fazer Lembrar, on YouTube in 2013 attracting ringback tone in Brazil in 2014. The label his own performance videos on YouTube more than 50 million views between them. also partners with Lucco on his live perfor- where they caught the eye of the A&R team The videos caught the interest of mances and he currently performs around at Sony Music Entertainment Brazil. He has Alexandre Schiavo, president of Sony Music 20 shows a month around the country. gone on to become the label’s artist with the Entertainment Brazil, who called his man- most accumulated views on YouTube. ager and signed him in the second half of Lucco is from the small Brazilian 2013. Schiavo says: “Lucas was a bright town of Patrocinio. He learnt to sing and young talent, with a strong view of how he play the guitar from an early age and wrote wanted to present himself and his music. He his first song, 50 per cent, aged just 11. He came to prominence through online videos went on to work as a sales assistant and a and he continues to be highly engaged with model, while continuing to write music and this medium, writing all the storylines for play with a band called Skypiras. his videos himself.”

35 SAM SMITH: INNOVATIVE PROMOTION British singer-songwriter Sam Smith has Raphael and Charrington worked in In tandem with digital music service swept the international music over the studio with Smith on his debut album Google Play and broadcaster Channel 4 the the last two years, picking up four Grammy In the Lonely Hour, which was completed in ad aired in May 2014 and featured Smith Awards in 2015, including best new artist and December 2013 with the label taking lead performing his second single Stay With Me record of the year, and two BRIT Awards. single to radio. At the live from the Camden Roundhouse. president Nick same time Smith was awarded the BRITS The partnership between the record Raphael and Jo Charrington (EVP of A&R 2014 Critics’ Choice award, an honour that label and Google Play was repeated with a Capitol Records) offered the singer/song- had previously been won by , Emeli major campaign to support the release of writer a record deal on the spot after Sandé and Tom Odell. ’s seventh studio album III. Stay watching him perform in 2012. Raphael In a move to introduce Smith to a With Me went on to sell more than two says: “We’d decided there was no intrinsic wider audience, the label marketing team, million copies and the album In the Lonely rush, we’d let Sam find his feet musically Murray Rose and Tom Paul, devised a novel Hour has sold more than one million copies. and in time produce a classic album.” promotional concept – the UK’s first live TV Andrew Kronfeld, president of global Producer asked Smith advert. marketing, Universal Music Group, says: to lay vocals over one of his tracks and the Brian Rose, managing director, com- “The current campaign will go to the end of result was La La La. “The track came out on mercial division, Universal Music UK & Ireland, 2015 as well. Sam is an artist who has magic Sam’s 21st birthday and became an enor- said: “We were aware of the heat building moments in markets, when he performs live mous hit,” adds Raphael. That was followed around Sam Smith. We wanted to work with and does TV shows. The songs are great by the Nirvana EP that was licensed for re- business partners to think of new and innova- and the success so far is just the tip of the lease through independent label PMR. tive ways to amplify the campaign.” iceberg, we’ll see plenty more in 2015.”

photo courtesy of Universal Music

“We were aware of the heat building around Sam Smith. We wanted to work with business partners to think of new and innovative ways to amplify the campaign.”

brian rose, managing director, commercial division: universal music, uk and ireland

36 photo courtesy of Rock Group WAKIN CHAU: INTERACTIVE DIGITAL PROMOTION Wakin Chau is a singer-songwriter based Danny Tuan, head of Rock Records’ Tuan says the growth of international in Taiwan whose music is popular across affairs says the label has in- digital platforms makes it easier to pro- the region. He has been signed to leading vested heavily in expanding its digital pres- mote artists across the region. “Consumers Taiwanese indie label Rock Records for more ence over the last few years. Its YouTube across Asia can engage with our artists than 20 years enjoying a string of successful channel is one of the most successful in instantly on platforms such as Facebook, albums and hit singles, as well as undertak- Taiwan, one of only three with more than a YouTube, iTunes, Spotify, and KKBOX. ing several international tours. million subscribers. While YouTube has be- There’s no time lag any more as new music In the autumn of 2014 he performed come a more important channel for labels in goes out across the region on these plat- his What Do We Sing Today? concert in Taiwan, Tuan says that the primary market forms at the same time.” Taipei, which was partly shaped by fans re- for music videos in the territory remains the Rock Records continues to work with sponding to a Facebook and Spotify digital karaoke audience. Wakin Chau promoting his current album, promotional campaign that created a set list Using international social networks Jiang Hu, a collaboration with Taiwanese of songs from his 40-plus albums. such as Facebook is now standard for the writer Chang Ta Chun, in Taiwan and across The campaign was extremely suc- artists that Rock Records work with across the region. The label plans to carry on con- cessful at engaging Facebook users, with the region, with performers also signed up necting Chau with existing and new fans huge numbers entering the competition to to WeChat, Sina Weibo, and Xiami to con- through both digital and traditional media shape Chau’s performance. Fans who sug- nect with fans in mainland China. China is over the years ahead as they continue their gested tracks chosen for the concert’s set an important market for the label, with re- long-term relationship. list won various prizes including exclusive cent licensing deals opening up new oppor- signed merchandise. This online campaign tunities to promote Rock Records’ artists was backed by more promotional work through licensed channels. with Rock Records’ one million subscriber YouTube channel.

37 TACKLING IGITAL PIRACY

20% of fixed-line internet users P worldwide regularly access services offering copyright infringing music 4 billion music downloads via alone

38 Website blocking ISPs in 19 countries Search engines

Action by ISPs to block users’ access to have been ordered to Search engines are a significant driver of copyright infringing websites has become traffic to unlicensed websites, and play a an increasingly accepted way of effectively block access to more major role in influencing the decisions of in- helping to tackle digital piracy. ISPs in 19 ternet users about where and how to obtain countries have been ordered to block ac- than 480 copyright content. cess to more than 480 copyright infringing A study entitled Do Search Engines websites. infringing websites. Influence Media Piracy? published in 2014 In March 2014, the Court of Justice by Carnegie Mellon University in the US re- of the ruled that the block- vealed that 94 per cent of internet users ing of copyright infringing sites is compat- Website blocking has proved ef- presented with search results that mostly ible with EU law, including the EU Charter fective where applied. While blocking an linked to licensed services purchased a of Fundamental Rights, as copyright itself individual site does not have a significant film, while only 57 per cent did so when is a fundamental right requiring protection. impact on overall traffic to unlicensed ser- presented with results that mostly linked Courts and authorities in 11 EU countries vices, once a number of leading sites are to infringing services. The researchers con- have ordered ISPs to block users’ access to blocked then there is a major impact. Since cluded: “our results suggest that reducing infringing websites. Outside the EU, web- and numerous other sites the prominence of pirated links can be a vi- site blocking of copyright infringing sites have been blocked in the UK there has able policy option in the fight against intel- has been authorised in countries including been a 45 per cent decline (from 20.4m in lectual property theft”. Argentina, India, Indonesia, Malaysia, Mexico, April 2012 to 11.2m in April 2014) in visitors In October 2014, Google announced South Korea and Turkey. In December from the UK to all BitTorrent sites, whether that it would be taking action to demote 2014, Singapore effected an amendment blocked by ISPs or not. In Italy, where courts sites for which Google received a large to its Copyright Act to enable rights hold- have ordered the blocking of 24 BitTorrent number of valid take down notices from ers to obtain website blocking orders, and sites, there has been a decline of 25.6 per rights holders. The changes made in 2014 in March 2015 the Australian government cent in the number of overall BitTorrent initially had a positive effect on pirate sites introduced draft legislation that would en- downloads in the country in the two years that were subject to a high number of no- able rights holders to seek website blocking from January 2013. tices to Google, forcing them down the injunctions. The recording industry continues to search rankings. However, licensed sites call for website blocking legislation where did not benefit much from the change, with it does not already exist. In countries where other pirate sites replacing those that were 53 per cent of those there is already a legal basis for blocking, previously ranked highly. IFPI believes more procedures can be slow and burdensome. therefore should be done to ensure that surveyed believe that For example, within the EU, blocking The consumers are directed to licensed services Pirate Bay has meant taking multiple legal and not to pirate sites. licensed services should actions in different member states and rights holders are calling for injunctions to appear above pirate sites have cross-border effect. in search engine results.

visits from the UK to all BitTorrent sites

20.4m -45% 11.2m April 2012 April 2014

pirate bay blocked May / June 2012

39 considering additional legislation to require Advertising “If there is a way to pre-emptive action by advertisers and pay- ment providers. He concluded: “If there is a and payment advertise on sites hosting way to advertise on sites hosting illegal ac- tivity, or take money via a payment provider, providers illegal activity . . . then the without legal implications, then the system, and law, needs to be updated.” Many pirate websites are funded by adver- system, and law, needs to In July 2014, the European Com­ tisers from well-known brands. Despite ini- mission announced that its EU action plan tiatives either underway or being discussed be updated.” on the enforcement of intellectual prop- in a number of countries including the US, erty rights would include consultation with UK, Spain, France and others, the advertis- Mike Weatherley, intellectual property all stakeholders on applying due diligence ing industry is yet to take effective action. adviser to the UK prime minister throughout supply chains as a means to pre- Research for the Digital Citizens Alliance, vent commercial scale IP infringements, and published in February 2014, and conducted songwriters, artists and labels whose music facilitation of Memoranda of Understanding by MediaLink, for example, found that 596 is involved receive nothing. to reduce the profits of commercial scale infringing sites generated US$227 million a The availability of reputable pay- IP infringements in the online environment, year in advertising revenue, with adverts ap- ment facilities on pirate sites also remains involving advertising service providers and pearing from blue chip firms. a damaging problem. A report from the payment services. Major brands are continuing to adver- Digital Citizens Alliance and NetNames, tise on pirate sites. In the month leading up published in September 2014, revealed that to publication of this report, IFPI 30 unlicensed download and streaming cy- Piracy and apps egregious pirate sites including Atrilli.net, berlockers are making almost US$100 mil- Albumjams.com, 4Shared.com, Sharebeast. lion annually in revenues while facilitating As consumption of content via mobile de- com and SUMOTorrent.sx featuring advertis- the distribution of unlicensed content. The vices grows, consumption of pirated prod- ing for AirAsia, Barclays Bank, British Airways, cost to the cyberlockers for using payment uct can be expected to follow. Research eBay, Expedia, Lloyds Banking Group, processors estimated at over $130,000 per published last year by NPD in the US sug- Microsoft, PayPal, Royal Bank of Canada, month. US Senator Patrick Leahy, chairman gests that 27 million people used mobile Royal Caribbean, Samsung, Santander, of the Senate Judiciary Committee, wrote apps to get at least one unlicensed song. Telefónica UK Limited, Unilever, Vodafone to MasterCard and Visa calling on them to Mobile applications can act as piracy ena- and Western Union Holding Inc. review the complaints against the cyber- blers, facilitating user access to infringing were viewed from various countries includ- lockers and ensure that payment services content through downloading, streaming, ing Australia, Canada, Brazil, offered to those sites, or any others dedi- stream ripping, and search. Apps are most and the United States – in each case appear- cated to infringing activity, cease, saying often downloaded from the biggest app ing next to copyright infringing music or that no amount of money derived from un- stores, operated by Google and Apple. download pages. Driven by the demand for lawful activity should make its way onto the Following requests by rights holders, both music, this advertising generates exposure card companies’ balance sheets. companies have taken some steps to re- for the brand, and revenues for the pirate In June 2014, Mike Weatherley, intel- move apps that facilitate piracy, but many site and the advertising industry companies lectual property adviser to the UK prime such apps remain available or reappear, and involved in placing the advertising, yet the minister, issued a report recommending more effective action is needed.

IFPI’s content protection work

The digital piracy landscape has fragmented over the last few years, Taylor Swift’s 1989 album is an example of a title where the team resulting in IFPI’s Anti-Piracy Unit (APU) pursuing a more broad had to act quickly to remove infringing links from online social range of content protection activity than ever. The team’s workload networks. has also expanded over the years from prioritising the top releases To enable the removal of infringing content, the APU runs a at any time to working on a broader list of new releases, as high volume notice and takedown programme. This approach re- well as the rest of IFPI members’ catalogues. duces internet traffic, and therefore revenues, for infringing sites, A major priority for the APU is the protection of pre-release as well as creating “dead” links that make it more difficult to access content. The team prepares a dedicated content protection plan infringing content. IFPI constantly works to drive down the per link for each release focused on the varying distribution channels for cost of notice and takedown. In 2014, IFPI and its national groups unlicensed content. Access to much infringing pop repertoire, for identified in excess of 40 million infringing files for removal. example, is facilitated through the distribution of infringing links on IFPI and its national groups have worked on a major search social networks. Illegal links to much infringing rock repertoire, by engine delisting programme, which saw almost 80 million links re- contrast, are found on dedicated internet forums. moved from Google’s search engine results. It also investigates unli- The team responds rapidly to the appearance of infringing censed sites that distribute copyright infringing music. In November links on social media, such as Twitter because a single link to in- 2014, the operators of one such site, Dancing Jesus, were jailed in fringing repertoire can be retweeted more than 27,000 times on the UK for their role in running the service which made available Twitter in just 30 minutes. The team works quickly to remove the 250,000 copyright infringing files, including pre-release titles, and link included in the original tweet before it is distributed so widely. attracted 70 million visits.

40 *400 – although services are listed in every country they appear, they are only counted once in the overall figure e.g. iTunes is DIGITAL MUSIC counted once in the figure of 400, etc. SERVICES WORLDWIDE

The featured list of licensed music services on the Pro-Music information resource (www.pro-music.org) at the time of the report’s publication and it is the most compre- hensive directory of the world’s legal digital music services. The list numbers over 400* licensed services in over 150 territories.

Afghanistan Deezer Albania Deezer Algeria Deezer, YouTube Andorra Spotify Angola Deezer, The Kleek Anguilla Deezer, iTunes Antigua & Barbuda Deezer, iTunes Argentina CIENRADIOS, AClaro Música, Daily Motion, Deezer, Faro Latino, iTunes, Larala, Movistar, MTV, MUZU, Napster, Personal, Rdio, Spotify, Xbox Music, YouTube Armenia Deezer, iTunes Australia , Bandit. fm, , Deezer, Getmusic.com.au, Google Play, Guvera, iHeart Radio, iTunes, JB Hi Fi NOW, Milk, MixRadio, MOG, Optus, Pandora, Rdio, Spotify, The InSong, VEVO, VidZone, Virgin, Vodafone, Xbox Music, YouTube Austria 7digital, AmazonMP3, Ampya, Artistxite, Classical.com, Deezer, DG Webshop, eMusic, Finetunes, Google Play, iTunes, JUKE, Ladezone, Mediamarkt, MixRadio, MUZU, MyCokeMusic, MySpace, MyVideo, Napster, Naxos, Planet3, Preiser, , Rdio, Schlager.tv, , SMS.at, Soulseduction, Spotify, Telering, TIDAL, T-Mobile, VidZone, Weltbild, Xbox Music, YouTube, Zed Azerbaijan Deezer, iTunes

Bahamas iTunes Bahrain Deezer, iTunes, YouTube Bangladesh Deezer Barbados Deezer, iTunes Belarus Deezer, Google Play, iTunes, 7digital, Beatport, , Deezer, BDJTUNES, Downloadmusic, eMusic, , Google Play, iTunes, Juke, Junodownload, Legal Download, Muziekweb, MUZU, Napster, Qobuz, Rdio, Simfy, Spotify, TIDAL, Traxsource, VidZone, Xbox Music, YouTube Belize iTunes Benin Deezer Bermuda iTunes Bhutan Deezer Bolivia Spotify, Batanga, Deezer, Google Play, iTunes, Rdio, Viva Bosnia-Herzegovina Deezer, Google Play, YouTube Botswana Deezer, iTunes Brazil Claro Música, Deezer, Google Play, GVT Music, iMusica, iTunes, Kboing, Mercado da Musica powered by iMusica, MixRadio, Mundo Oi, MUZU, Rdio, Spotify, Terra Musica Powered by Napster, TIM , UOL Megastore, VEVO, Vivo Musica by Napster, Xbox Music, YouTube British Virgin Islands Deezer, iTunes, Spotify Brunei Deezer, iTunes Bulgaria Deezer, eMusic, Google Play, iTunes, Muzikata, Spotify, Telenor, Vivacom, YouTube Burkina Faso Deezer, iTunes Burundi Deezer

Cambodia Deezer, iTunes Cameroon Deezer Canada 7digital, Archambault, ArtistXite, Bell Mobility, CBC Music, , Daily Motion, Deezer, eMusic, Google Play, HMV Digital, CiTunes, Mediazoic, MixRadio, Motime, MTV, Naxos, Qello, Rdio, Rithm, Slacker, Songza, Spotify, Stingray Music, TIDAL, VEVO, Xbox Music, YouTube, Zik Cape Verde Deezer, iTunes Cayman Islands Deezer, iTunes, Spotify Central African Republic Deezer Chad Deezer Chile Spotify, Batanga, Claro Música, Deezer, Entel-Napster, Google Play, iTunes, MIMIX, Movistar, Portaldisc, Rdio, YouTube China China Mobile, China Telecom, IQIYI, Tencent Chinese Taipei Emome, Far Eastone, Hami+ Music, HiNet Funplay, iNDIEVOX, iTunes, KKBOX, MTV, muziU, myMusic, Omusic, Spotify, T STAR, Taiwan Mobile, YouTube Colombia Spotify, Batanga, Claro Música, Codiscos, Deezer, Google Play, iTunes, MUZU, Napster, Prodiscos - Entertainment Store, Rdio, Tigo, YouTube Comoros Deezer Costa Rica Spotify, Batanga, Claro Música, Deezer, Digicel, Google Play, iTunes, Movistar, Rdio, Xbox Music Croatia Cedeterija, Dallas Music Shop, Deezer, Google Play, Rdio, YouTube Cyprus Spotify, Deezer, eMusic, Google Play, iTunes, Rdio, TIDAL Czech Republic Spotify, Alza Media, Bontonline, Clickmusic, Deezer, eMusic, Google Play, iTunes, Koule, Mixér.cz, MusicJet, O2, Rdio, Supraphonline, TIDAL, T-Music, Vodafone, Youradio, YouTube

Democratic Republic of Congo Deezer Denmark BibZoom.dk, Deezer, eMusic, Google Play, iTunes, MUZU, Napster, Rdio, Shop2download, Spotify, SubCell, TDC Play, Telmore Musik, TIDAL, DVidZone, Xbox Music, Yousee Play (JUKE), YouTube Djibouti Deezer Dominica Deezer, iTunes Dominican Republic Spotify, Claro Música, Google Play, iTunes, Rdio, Xbox Music

East Timor Deezer Ecuador Spotify, Batanga, Claro Música, Deezer, Google Play, iTunes, Rdio Egypt Alamelphan, Anghamy, Deezer, iTunes, Mazzika Box, Yala Music, YouTube El Salvador Spotify, EClaro Música, Deezer, Digicel, Google Play, iTunes, Rdio, Tigo, Xbox Music Equatorial Guinea Deezer Eritrea Deezer Estonia Deezer, eMusic, Google Play, iTunes, muusika24.ee, Rdio, Spotify, TIDAL, YouTube Ethiopia Deezer

Fiji Deezer, iTunes Finland 7digital, City Market CM Store, Deezer, Digianttila, eMusic, Google Play, iTunes, MixRadio, Musa24.fi, MUZU, Napster, NRJ Kauppa Mobile, Rdio, Spotify, TIDAL, VidZone, FXbox Music, YouTube France 121 MusicStore, 7digital, Altermusique, AmazonMP3, Beatport, cd1d, Daily Motion, Deezer, Echopolite, eMusic, Ezic, FNAC Jukebox, Google Play, iTunes, , en ligne, MixRadio, musicMe, Musicovery, MySurround, Napster, Qobuz, , Rdio, SFR Music, Spotify, Starzik, TIDAL, Urban Music, VEVO, VidZone, Xbox Music, YouTube, Zaoza

Gabon Deezer Gambia Deezer, iTunes Georgia Deezer Germany 7digital, AmazonMP3, Ampya, Artistxite, Beatport, boomkat, Classics Online, Clipfish, Col-legno, Deezer, digital-tunes, DJ Shop, GDJTUNES, elixic.de, eMusic, e-Plus unlimited, Eventim Music, Finetunes, Google Play, HD Tracks, Highresaudio, iTunes, Jamba, Juke, Junodownload, Linn Records, Make Music TV, Mediamarkt, Medionmusic, MixRadio, MTV, Musicload (Dixero), MUZU, MyVideo, Napster, Naxos , O2, Onkyo, Putpat, Qobuz, Rdio, Saturn , Schlager.tv, Simfy, Spotify, tape.tv, T-Mobile, Tonspion.de, trackitdown, traxsource, Vevo, VidZone, Vodafone, Weltbild, whatpeopleplay.com, Xbox Music, zwo3.net Ghana Deezer, iTunes, The Kleek, YouTube Greece Akazoo, Cosmote, Daily Motion, Deezer, eMusic, Google Play, HOL Music Club, iTunes, Junodownload, mpGreek, MTV, MySpace, Napster, Naxos, Rdio, Spotify, TIDAL, Wind, YouTube Grenada Deezer, iTunes Guatemala Spotify, Claro Música, Deezer, Digicel, Google Play, iTunes, Movistar, Rdio, Xbox Music Guinea Deezer, Guinea-Bissau Deezer, iTunes

Honduras Spotify, Batanga, Claro Música, Deezer, Digicel, Google Play, iTunes, Rdio, Tigo, Xbox MusicHong Kong 1010, 3Music, Classics Online, CMHK Soliton, Eolasia.com, Guvera, hifitrack, HiTunes, , KKBOX, , Musicholic, MusicOne, Naxos, Newsic Daily, OleGoK, Qlala, Rdio, SmarTone iN, Soliton, Spotify, YouTube Hungary Spotify, Dalok, Deezer, Google Play, Hungaroton, iTunes, Rdio, Songo, TIDAL, YouTube, Zene! 24/7

Iceland Bedroom Community, Deezer, Gogoyoko, Google Play, Rdio, Spotify, Tonlist.is India Artist Aloud, Biscoot, Gaana, Guvera, Hungama, In, IndiaONE, iTunes, Meridhun, MixRadio, My Band, IRaaga, Rdio, Saavn, Saregama, , TeluguOne, YouTube Indonesia Arena Musik, Deezer, Guvera, iTunes, Langit Musik, Melon , MixRadio, Musikkamu, Rdio, YouTube Iraq Deezer Ireland 7digital, ArtistXite, Bleep, Blinkbox, Deezer, eMusic, Golden Discs, Google Play, iTunes, MixRadio, MUZU, MySpace, Napster, Qobuz, Rdio, Spotify, TIDAL, VEVO, VidZone, Xbox Music, YouTube Israel Celcom Music, iTunes, Musix, Orange, Rdio, YouTube Italy 7digital, AmazonMP3, Azzurra Music, Beatport, Deezer, eMusic, Google Play, IBS, InnDigital, iTunes, Jamba, Juke, MixRadio, MP3.it, MUZU, Napster, Net Music Media World, Playme, Rdio, Spotify, TIDAL, TIMmusic, VEVO, VidZone, Xbox Music, YouTube Ivory Coast Deezer

Jamaica Deezer, REGGAEinc Japan AmazonMP3, Beatport, BeeTV, Best Hit J-Pop, clubDAM, , Farao, GyaO!, ICJ, iTunes, KKBOX, KONAMI, LISMO, , mu-mo, Music Airport, Music.jp, JMusing, MySound, NAXOS MUSIC LIBRARY, NOTTV, D Music, ME, Reco Choku, TSUTAYA MUSICO, Utapass, UULA, Xbox Music, YouTube Jordan Deezer, iTunes, YouTube

41 KKazakhstan Deezer, iTunes, Yandex Music Kenya Deezer, iTunes, Mdundo, The Kleek, YouTube Kiribati Deezer Kuwait Deezer, YouTube Kyrgyzstan Deezer, iTunes

Laos Deezer, iTunes Latvia Deezer, eMusic, Google Play, iTunes, Rdio, Spotify, TIDAL, YouTube Lebanon Deezer, iTunes, YouTube Lesotho Deezer Liberia Deezer Libya Deezer, YouTube LLiechtenstein Spotify, Google Play, Rdio Lithuania Deezer, eMusic, Google Play, iTunes, Rdio, Spotify, TIDAL, YouTube 7digital, Deezer, eMusic, Google Play, iTunes, Napster, Qobuz, Rdio, Spotify, TIDAL, VidZone

Macau iTunes, KKBOX Macedonia Deezer, Google Play, YouTube Madagascar Deezer Malawi Deezer Malaysia Akazoo, Deezer, DigiMusic, Guvera, Infogo, iTunes, KKBOX, Maxis Music MUnlimited, MixRadio, RAKU, Rdio, Spotify, The Cube, YouTube Maldives Deezer Mali Deezer Malta Deezer, eMusic, Google Play, iTunes, Spotify, TIDAL Marshall Islands Deezer Mauritiana Deezer Mauritius Deezer, iTunes Mexico Claro Música, Corona Music, Deezer, Flycell, Google Play, Guvera, Ideas Telcel, iTunes, Mientras Contesto de Iusacell, MixRadio, Mixup Digital, Movistar, MUZU, Napster, Nextel , Rdio, Spotify, Terra Live Music, Terra TV, VEVO, Xbox Music, YouTube Micronesia Deezer, iTunes Moldova Deezer, iTunes Monaco Spotify, Rdio Mongolia Deezer, iTunes Montenegro Deezer, YouTube Morocco Deezer, YouTube Mozambique Deezer, iTunes

Namibia Deezer, iTunes Nauru Deezer Nepal Deezer, iTunes Netherlands 7digital, Beatport, Countdownload, Deezer, Downloadmusic, eMusic, GlandigoMusic, Google Play, iTunes, Jamba, NJuke, Mega Media, MixRadio, MTV, Muziekweb, MUZU, Napster, Nederland FM, Qobuz, Radio 538, Rdio, Spotify, Talpadownloads, TIDAL, Trackitdown, TuneTribe, VEVO, VidZone, Wildhitz, Xbox Music, You Make Music, YouTube, zazell.nl New Zealand 7digital, Amplifier, Bandit.fm, Beatport, Deezer, Fishpond, Google Play, iHeart Radio, iTunes, MySpace, Pandora, Rdio, Spotify, The InSong, theaudience, VEVO, Vodafone, Xbox Music, YouTube Nicaragua Spotify, Batanga, Claro Música, Deezer, Digicel, Google Play, iTunes, Movistar, Napster, Rdio Niger Deezer, iTunes Nigeria Deezer, iTunes, The Kleek, YouTube Norway 7digital, CDON, Deezer, Google Play, iTunes, Jamba, MixRadio, Musicnodes, Musikk Online, Musikkverket & Playcom, Napster, Platekompaniet, Rdio, Spotify, VidZone, YouTube OOman Deezer, iTunes, YouTube

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UAE Deezer, iTunes, MixRadio, YouTube Uganda Deezer, iTunes, YouTube UK 7digital, Amazing Tunes, AmazonMP3, ArtistXite, Beatport, Bleep, Blinkbox, Boomkat, Classical Archives, Classics UOnline, Deezer, eMusic, Google Play, HD Tracks, Highresaudio, HMV Digital, Imodownload, iTunes, Jamster, , Junodownload, Linn Records, MixRadio, Mobile Chilli, MTV, MTV Trax, Musicovery, MUZU, MySpace, Napster, Naxos, Nectar Music Store, O2 Tracks, Onkyo, Orange, Presto Classical, Psonar, Pure Music, Qobuz, Rdio, Sainsburys, Spotify, Technics Tracks, The Classical Shop, TIDAL, trackitdown, Traxsource, TuneTribe, VEVO, Vidzone, Virgin, Xbox Music, Yahoo! Music, YouTube Ukraine Deezer, Google Play, iTunes, MUSIC CLUB, MUZon, Yandex Music, YouTube Uruguay Spotify, Antel Musica, Batanga, Butia, Claro Música, Deezer, Google Play, Napster, Rdio, TMUY USA 7digital, Acoustic Sounds, AmazonMP3, AOL Radio Plus, Arkiv Music, ArtistXite, Beatport, Beats Music, BOOMiO, CD Universe, ChristianBook.com, Classical Archives, Daily Motion, Deezer, Free All Music, Freegal Music, GhostTunes, Google Play, Guvera, Hastings, HD Tracks, Hoopla, , iOldies, iTunes, iTunes Radio, Listen, MetroPCS, MixRadio, MTV, , MusicGivz, Onkyo, Platinum League, Pono, Pro Studio Masters, Project Carmen, Pulselocker, Qello, Rdio, Rhapsody, Rokmobile, Shuv, Slacker, Spotify, Sprint, TheOverflow, TIDAL, T-Mobile, Verizon Wireless, Vessel, VEVO, VidZone, Virgin, Xbox Music, Yahoo! Music, YouTube, ZUUS Uzbekistan Deezer, iTunes VVanuatu Deezer Venezuela Batanga, Deezer, Digicel, Google Play, Ichamo, iTunes, Movistar, Rdio Vietnam Deezer, Guvera, iTunes, MixRadio, NCT, Vega, Viettel, YouTube YYemen Deezer, YouTube ZZambia Deezer Zimbabwe Deezer, iTunes

42 An answer to optimising streaming revenues? Good old downloads.

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