ISSUE 376 | 14 OCTOBER 2015
Contents 06 Beyond Music – thereport Twitter’s growing pains 07 Pinboard: Stats, deals, startups and more 09 Country profile: Chile
Writing wrongs
Music publishing’s biggest challenges laid bare 2
ISSUE 376 14.10.15 COVER FEATURE Music publishing’s biggest challenges Writing wrongs laid bare Recorded music and live tend to dominate the discussions around the music industry – one on the horns of navigating the transition from physical to digital and the other having enjoyed a long period of growth as online has yet to significantly disrupt its business. Within this, publishing can sometimes feel like an overlooked part of the equation. With that in mind, we spoke to those both in and around music publishing about what is helping them accelerate into the fast lane as well as what is grinding their gears. From metadata as both a payment and a discovery channel to wider licensing and regulatory issues, the coming year will be a bumpy one.
iscovery through both metadata and LYRICS: FROM MAYHEM TO subtitles – or legal lyric translations – for 11 lyrics; streamlined royalty reporting THE ULTIMATE METADATA years,” he says. “Through that process and and payments; and the moving “With lyrics, it used to be a Wild West through working with LyricFind on licensing target of revenue displacement. scenario,” says Will Mills, chief revenue officer international indie publishers for legal lyrics DBased on detailed conversations music:)ally at LyricFind, on the early websites offering for the past five, I’ve had the opportunity has had with key companies in and around (often user-generated) lyrics. These lyrical and the challenges to experience the music publishing, these are the three biggest transcriptions were almost always unlicensed stasis and also the positive changes in the themes gripping the sector in 2015 and the and also they were very often wrong. publishing and performing rights businesses things it needs to sort out before 2016. With over 400 publishers signed up globally. It’s been extremely interesting and There is a sense of progress being made and deals in place with around 100 clients there is news somewhere almost every day. but also a gnawing realisation that what – including Amazon, Deezer, Shazam, Some of it’s even good news.” a stopgap until the full promo video is shot were once open goals are now shrinking and SoundHound and MetroLyrics – LyricFind A decade ago, lyrics online really and edited together) while music services like the publishing sector as a whole needs to do is not only moving to tidy up this space but amounted to a sprawling mass of Deezer and Spotify are offering synchronised something – fast – before they close forever. also to create new revenue and marketing transcription sites, often replicating each lyrics on their players to not only enhance Here we work through the topics opportunities for publishers. other’s woefully transliterated song lyrics. the user experience but also to increase the dominating the publishing debate and explain Robert Singerman, global business They were often unlicensed so there was little amount of time a user plays music. what – if anything – is being done to capitalise development at DotMusic, has been active quality control. Since then, sites like Genius “Static lyrics feel like an older technology,” on them as well as pinpoint the areas that within the lyrics space for over a decade (formerly Rap Genius) have come along to says Mills of the changing demands that
report require urgent attention before what was and is highly enthused about what the not only re-run lyrics but also dissect them. services now have of lyric services. Beyond once brimming with potential sours into a publishing industry can and should do On top of this, lyrics videos are often the first serving as a way to boost listener dwell time, missed opportunity. here. “I’ve been working on giving music way a new pop single is released (often as he says they also have a growing commercial the 3
ISSUE 376 services, labels, publishers, PROs – look bad 14.10.15 COVER FEATURE at the precise point when they really should be doing a lot more to improve how they are function. “Synchronised lyrics are really viewed as acting here. important for ad-supported services as they increase the session time of the user and their engagement,” he says. “That has a material impact on ad CPMs.” He gives the example of this at work in tracks that mention brands, consumer products and even places. With these key words identifiable and taggable within a song, specific ads can be targeted at the listeners “@Spotify thanks for the £100 for this of the track. In basic terms, if a song mentions quarter just gone, one more month and I clubbing in Ibiza, ads for flights, hotels and might be able to afford your premium service,” clubs on the island can be sold around the Synchronised lyrics are really important for she tweeted on 22nd September, piling on the listeners to the song. “All of that is powerful sarcasm. “Lucky me!” for big data plays,” says Mills. “We like to think ad-supported services as they increase the session Picked up on by numerous media outlets of lyrics at the ultimate metadata.” time of the user and their engagement. That has a and held up as yet another example of artists To stress the importance of having material impact on ad CPMs” getting a raw deal from streaming services, clean lyrics, Mills also argues that they this was a PR disaster that could have easily are increasingly important in search and Will Mills, LyricFind been avoided, says the anonymous publisher. discovery terms. “We [LyricFind] serve many “The infrastructure that artists and billions of lyric impressions every year just input the metadata, publishers sometimes agreed that if you get played you should get publishers rely on is the reason that people through our API,” he says. “I would say [lyrics use this to their advantage by saying that, if paid. In reality, it’s just not working.” like Spotify are getting bad press,” they say. are] the biggest music discovery channel out something is not matched, they must own What is the best and quickest way to “Take La Roux’s tweets about this. She was there digitally.” it – or they must own some of it. I wouldn’t fix this? “It’s difficult to put your finger on looking at Spotify where she has millions of want to be an indie songwriter or publisher the solution,” they say. “If you think about plays and that will be worth more than £100 THE MESS OF METADATA AND today. [Their share will be claimed by the collection societies, they are membership [after splits]. If you are getting paid 18 months MICRO-TRANSACTIONS bigger publishers until it is sorted out.] That is organisations and they only run with after a stream and streams are a growing a problem.” their members’ money. The members are object, it is really difficult to say you have While Mills talks about lyrics as “the ultimate One publisher, speaking off the record, continually pushing for lower overheads millions of plays but only got £100. The way it metadata” and a way to get better and more says that incomplete and basic song – which means you have fewer people currently is, you’ll not be able to find it in the targeted ad results, the broader issue of metadata is causing a huge logjam in internally to sort things out. You are also ecosystem.” having clean and detailed metadata is still a payment systems, with the smallest players running on systems that Antony Bebawi, huge problem for the digital music industry and writers suffering the most. are 25 years old.” European EVP of digital as a whole and the publishing business in “Instead of suing people for unpaid They give the recent & society relations particular. royalties and working out after the fact how example of La Roux at Sony/ATV Music “Data is a huge issue,” says Gregor Pryor, you pay it out, we should be really pushing tweeting about her Publishing, takes partner at legal firm Reed Smith, adding all of the big DSPs to provide us with data so streaming payments exception at the point that incorrect data can be open to abuse. that from day one everyone can be paid,” they as a consequence of about slow payments,
report “The problem in the supply chain is that the say. “There is a massive amount of injustice this royalty processing suggesting this has publishers are not as involved as they could at the moment in terms of how people are tardiness that makes been improving be. If a file gets delivered by the label that has paid and who is paid. With digital, it should be everyone in the chain – markedly in recent the 4
ISSUE 376 The problem is the lack of good metadata on digital course, hugely important), Chris Garrett, 14.10.15 COVER FEATURE services – and this is probably one of our biggest co-founder and product director at licensing company Beatroot, feels that the industry has challenges” – Antony Bebawi, Sony/ATV Music years. “We have managed to squash the also unwittingly handed the keys of discovery lag period because, in the beginning, it was over to music services. ridiculous,” he says. “The amount of data missing is clean At a cost of “The industry is like a bowl of spaghetti coming in and hitting society systems was data.” £8m, the collapse – it’s a total mess,” he says. “There is no real unprecedented from their point of view. But Kobalt is being of the GRD coherence or simplicity to it and how the that lag has come down.” pointed to as a (Global Repertoire well-established publishers do business. That He does, however, accept that robust company that Database) in is particularly frustrating.” metadata is still the industry’s Achilles’ heel. could, ultimately, July 2014 is held He continues, “The whole metadata “The problem is the lack of good metadata force the hand by many in this thing is really interesting. The rightsholders’ on digital services – and this is probably one of everyone else sector to be the inability to get it together has ended up of our biggest challenges,” he says. “Our here to both music industry’s with the streaming platforms building their perspective is that there is a value chain speed up their greatest own own data sets instead. For example, Spotify and everyone in the value chain needs to payments and goal in recent bought The Echo Nest because it couldn’t get take some responsibility for their role within make the whole years. “There were a decent set of tags from the record labels. that value chain – and not just accumulate system more just too many They ended up building their own data set problems that they just end up bumping transparent. different kinds around that and they are not in control of into the lap of whoever it is at the end of the “Kobalt has at of stakeholders what they recommend. The record labels value chain. Our perspective is that there least gone out there and tried to be different,” involved,” is Singerman’s summation of why [and publishers] have no influence over that needs to be a way of incentivising labels, says Pryor. “I think it’s a really positive thing.” the GRD hit the wall. “There were too many whatsoever.” aggregators and digital services to capture Another publisher, speaking off the record, internal battles within each participant’s This is an interesting take on what else much more information about compositions says of Kobalt, “That is what everyone will structure and board. When you have so is being ceded in the wider failure to get when material is effectively ingested into aspire towards.” many participants involved, it is difficult to metadata up to speed for the modern age. the services rather than leaving it for the Pryor adds, “Much of that will depend on pull it together. On the recording and master While the micro-payments side of things will, rightsholders to match an increasingly large if Kobalt attracts more and more songwriting negotiating and licensing side, Merlin has eventually, get resolved, it may take copyright number of uses with inadequate information.” talent. If they grow their artist repertoire – and done a great job for the indie labels.” owners much longer to redress this increasing It is this flaw in the current metadata they have already got some incredible artists He does, however, point to a new platform imbalance over the power of discovery, set up that is derailing the speed of micro- – the more that happens, the more everyone (and one that he works with) as possibly especially as streaming will continue to grow transactions. Some are growing impatient else is going to have to take notice. Why has it helping to right many of these wrongs. to become the main way of consuming music. that this is being talked about as a problem happened? They have invested in technology “Heaven 11 is basically what the publishers but feel that nothing is being done – or and they are much more songwriter-friendly. and the PROs were trying to do with the FROM REGULATION certainly things are not being done fast They are just generally innovating.” GRD – integrating all the related master TO ZERO LICENSING enough. They point instead to other Against all this (and despite 12 years in the information and the release information from industries that have responded to these market), even the biggest digital music service DSPs,” he says. “It is a global, multi-territorial On a macro level, a number of major things challenges and long ago proved proof of in the world is, due to weak metadata, still map of rights – from contract registration, are rumbling in both Europe and the US concept. unable to smoothly process all transactions content management and royalty accounting that could have a profound effect on the “If the mobile phone industry can run here. “I have heard that even iTunes still – with toolsets for metadata ingestion, publishing business in general and the PROs on billions of micro-transactions every day, has about 25% of monies generated held in marketing, conflict resolution and so on. It’s in particular. why can’t we get a way where acts are not escrow because of conflicts and claims over an amazing platform that could really change “The Department Of Justice is currently
report paid in two years’ time?” they say. “They improper information and metadata,” claims things.” reviewing the consent decrees that govern should be able to get paid within 30 days Singerman. “I’d imagine the numbers are even While much of the focus around metadata ASCAP and BMI,” explains Bebawi. “This is of a transaction. The thing that is massively higher for other DSPs.” has been about payments (and this is, of neither a good news nor a bad news story the 5 “These days, if you want a licence from a label, you can get global rights one time. Bang – you’re
ISSUE 376 done. For publishing, it is so fragmented and so difficult that, from a pure labour intensity point 14.10.15 COVER FEATURE of view, it is incredibly hard” – Gregor Pryor, Reed Smith
yet because we don’t know what the result of the focus really must going be the company that is actually selling the review is going to be. We are hopeful that be on doing the same and distributing the music.” the result of the review is going to be greater to metadata. Not The Kobalt model was referred to again flexibility for rightsholders to decide which only will it streamline and again by people we spoke to as what the rights to put into ASCAP and BMI. That would payment processes, it publishing industry as a whole needs to aspire put the US on a similar track to where Europe can also give copyright towards. Last week the company signed up is. That is what we are hoping for. But it is owners a greater Deadmau5 and as it secures more and more difficult to know when it will land.” hand in discovery and marquee names, its power will grow as will the Singerman, however, feels that recommendation on pressure on other publishing organisations to consolidation is the real issue here for digital music services. think and behave much more like it. everyone. “Perhaps a Merlin licensing and Rich real-time data will Beyond that, the rumblings in the PRS/ lobbying for the indie publishers can’t work also help organisations SoundCloud legal case could have huge as the national publishing organisations better understand and implications for everyone here, especially with and the PROs have the majors onboard prepare for revenue regard to safe harbour exemptions. as [that means] there are balancing, direct displacement; as one As Bebawi puts it, “PRS is testing the negotiating, market share and leveraging source starts to dry up boundaries of safe harbour under the current issues,” he says. “But for the independents, (mechanicals from CDs legislation and the EC is also saying that it is Merlin has that opt-in representation and says. “Bang – you’re done. For publishing, it and downloads), new ones come on track potentially interested in opening up a debate joint lobbying clout as well as being a single is so fragmented and so difficult that, from and they need to be in the best possible about whether safe harbour needs to be licensing party for a huge number of different a pure labour intensity point of view, it is position to maximise the opportunities here. recast, redefined and reviewed. That could be constituents.” incredibly hard.” That does not, however, mean that big news if it happens.” He adds, “I think that part of the problem is He adds that “the pernicious thing about licensing rates get hiked up as the sole way He adds, “The system, as it is today, is best the competition among the PRO institutions publishing” is that while a label can, if it wants, to offset losses elsewhere. One source, described as ‘notice and takedown’. The onus creating consolidation – as some might pull its music from a service it is relatively speaking on condition of anonymity, said is on the rightsholder to police everything. It not necessarily want solutions to these easy for services to comply; but, because this is starting to happen and warned it is difficult to know, actually, who has got the problems. Because if and/or when things several publishers might have a share of the could have hugely negative repercussions burden of having to deal with it. There have are harmonised, then they might feel that same composition, it is a more convoluted for new services trying to enter the market. been conflicting decisions coming out of their roles, power, positions and even their takedown process for the service. “There have been dramatic price increases in different courts about whose liability it is to organisations could diminish or even go away, “There is some discussion in the US licensing deals,” they said. “What’s happening monitor what is happening on platforms like as licensing and accounting becomes simpler, about this zero licensing idea where you is that publishers are doubling their prices in YouTube and SoundCloud. I don’t think there or more accurate; [as that happens] conflicts can’t be prohibited from using a song where percentage terms.” is a really clear interpretation of the current over black boxes, escrow accounts and a publisher just owns a share,” he says. “It is They added, “The age-old argument legislation anyway.” upfront equity deals decrease.” very controversial. It couldn’t really happen has always been that the labels and the Those close to the developments here Pryor argues that publishers are, after in Europe. You could see why it’s a problem. publishers should have parity in price. argue that it is unlikely we will see anything years of feeling they are playing second If a publisher says so, in a way that makes Publishers are forever trying to claw back concrete happen here until next year at fiddle to the labels, really exerting their them more powerful than a label because that gap as they see it being inequitable. least. But, as an issue, it is ticking away in the muscles here and this, because they are more they have a share but you can’t identify That causes a challenge if you are a digital background and getting louder by the day. disaggregated than labels, can make it tricky their content.” music company because there is only so It is still too early to call but everyone here
report for new digital services to get deals in place. While the lyrics side of things has been much margin and it is already wafer thin. If is – depending on what side of the debate – “These days, if you want a licence from a cleaned up and, in doing so, created new one of the rightsholders starts to ask for more steeling themselves for the very best or the label, you can get global rights one time,” he licensing and advertising opportunities, money in percentage terms, the only victim is very worst outcome. :) the 6
ISSUE 376 14.10.15 BEYOND MUSIC While 316m active users are not to be sniffed at, it’s no Facebook, with Twitter struggling to throw off accusations that it appeals to a tech-savvy, liberal-leaning Twitter’s growing pains elite rather than a truly mass-market audience” Twitter’s new CEO has work to do in growing the platform’s user base
he good news for Twitter employees this month is that they finally have a new CEO, and he’s a familiar figure – co-founder Jack Dorsey. After aT three-month stint as acting CEO when previous boss Dick Costolo stepped down, Dorsey now has the job permanently. The bad news for up to 336 Twitter employees this month is that they won’t be working for him. The social network has announced plans to lay off up to 8% of its workforce. “Some tough but necessary decisions that enable Twitter to move with greater focus and reinvest in our growth,” is how Dorsey explained it. Wall Street approved, sending Twitter’s share price rising after the announcement of the layoffs. But Dorsey’s main challenge is less about cutting costs and more about plotting his company’s path into the mainstream, reigniting the user growth that has slowed down over the past year: there belief that he could be defeated in the UK as Project Lightning under his predecessor. a lucrative mobile advertising model: were 284m users in Q3 2014; 288m in Q4 general election earlier this year: “Let me Pitched as “the best of Twitter in an Twitter’s revenues in the last four quarters 2014; 302m in Q1 2015; and 316m in Q2 2015. put it as simply as I can, Britain and Twitter instant”, it’s a new section of Twitter’s app have been (in order) $361.3m, $479.1m, While 316m active users are not to be – they are not the same thing.” collecting tweets and media around specific $435.9m and $502.4m. Its net losses, sniffed at, it’s no Facebook (just under 1.5bn Twitter would like to change that globally “moments” – breaking news stories, cultural meanwhile, have been $175.5m, $125.4m, active users at the end of June 2015), with and it’s been working on the challenge for memes, big sporting and music events and $162.4m and $136.7m over the same period. Twitter struggling to throw off accusations some time – a process that began under so on. Figuring out how to attract and retain a that it appeals to a tech-savvy, liberal- Costolo’s leadership. It involved making Moments is a big bet for Twitter as it wide, mainstream audience – and then turn leaning elite rather than a truly mass-market the “onboarding” process better for brand tries to become the kind of service that’s that into the kind of advertising business audience. new users, including helping them find interesting, useful and entertaining to a that can bring Twitter out of the red – is a
report Or, as British Prime Minister David interesting accounts to follow. much broader swathe of the population. big challenge. If Dorsey succeeds, he’ll have Cameron witheringly put it in a recent Dorsey’s first task as CEO was to launch This, in turn, will boost the company’s proved himself as among the most adept of speech noting the Twitterati’s (misguided) a feature called Moments, which was known hopes of following Facebook’s path towards Silicon Valley heads. :) the 7
ISSUE 376 14.10.15 TOOLS Pinboard » Deals Tweets
PANDORA/TICKETFLY HP LOUNGE #TPP Universal Music Group has licensed @KimDotcom its music, including The leaked exclusive content, to final #TPP text Hewlett Packard’s Pandora has bought ticketing company Ticketfly in confirms all of our new HP Lounge ad-free online radio service that is fears. a deal estimated at $450m (split between cash and bundled in free for a year for anyone buying a new stock). This follows Pandora’s acquisition of analytics HP computer. Thereafter it costs £3.20 a year. company Next Big Sound in May. @brokep The #TPP chapter on TICKX/MoS CROWDMIX immaterial Ministry Of Sound has Social music startup Crowdmix rights is not for the people but invested in TickX, a has raised $20m in funding ahead for corporations. We can’t startup offering price of its Q1 2016 public launch. It is accept it! comparison for events. aiming to raise a further $20-30m It has received £175k in before the end of the year. It has investment so far, with @RobertBLevine also appointed former Universal I’m curious MoS being the lead Music Group digital head Rob Wells as its global chief whether TPP investor. commercial officer and CEO. bans local-data- storage rule that could undercut PAROLA LIVE NATION AUSTRALIA EU privacy laws, as rumored. If so, that’s a big deal.
Live Nation Australia has signed a partnership Collaborative remix and music discovery app deal with Telstra to offer the telco’s customers Parola has raised $2m in seed funding. The round 48-hour priority access to tickets, exclusive was led by Capital International, Innodo and Miki Follow Music Ally
report content, merchandise and VIP experiences on Twitter... Tunis (SVP at The Orchard). among other perks. twitter.com/musically the 8
ISSUE 376 Stats TOOLS » 14.10.15 Market share of album and TEA Pinboard US DIGITAL MUSIC (track-equivalent album) sales 250bn (January– September 2015) NEW SERVICE ELECTRIC JUKEBOX 118.1bn Indies Music streams (Jan–Sept 2014) 13.2% 232bn Music streams (Jan–Sept 2015) 1bn 118.1bn 756.3m (Note: indies distributed by majors Universal Track sales (Jan–Sept 2015) Warner are folded into 39.2% 19.4% the corresponding 10.9% major’s share.) Decline from Jan–Sept 2014 100m 118.1bn 77.3m Digital album sales (Jan–Sept 2015) Sony 0.3% 27.3%
Decline from Jan–Sept 2014 Source: Nielsen SoundScan (October 2015)
SPOTIFY – DISCOVER WEEKLY What is it? US SOCIAL MEDIA ADOPTION 2005 Source: Pew Research Centre (October 2015) AKA What Rob Lewis Did Next, with the Omnifone 2010 founder resurfacing with a brand new digital music 90% 1bn 2015 startup. It’s a hardware and software play: people 78% buy a stick-shaped device that plugs in to their 68% Tracks played during Discover Weekly’s 65% television’s HDMI port, which then streams playlists 62% first 10 weeks from a promised catalogue of “millions” of songs. 50% Celebrities are on board as curators, too – from 46% 71% Robbie Williams and Sheryl Crow to Stephen Fry. 42% Discover Weekly users who save at least one Electric Jukebox will sell the device for £179/$229, song to ther own playlists with a year’s worth of music included. After that point, a one-year pass will cost £60/$60. With 12% 7% 8% an advisory board of industry veterans, Electric 6% 60% Jukebox certainly isn’t entering this space with its eyes closed. And while its status as a rival to Sonos Discover Weekly users who stream 5+ All adults Young adults Men Women
report seems like the pitch, we wonder whether Google’s using social (aged 18-29) using social using social recommended tracks £30 Chromecast and Chromecast Audio devices will media using social media media media Source: Spotify (October 2015) be the stiffest competition. the 9
ISSUE 376 14.10.15 MARKET PROFILE Chile
continue to grow in Chile. “[The growth of download sales] has been mainly because CHILE Chile is one of the countries in the world where the technological companies test all the new devices – especially the telephone STATS companies,” he says. “Therefore, our f penetration in smartphones is higher than Population 17.4m other countries and, as a consequence, this trend will follow in the future.”
d Numbers from eMarketer bear this out. GDP per capita US$23,000 Chile is estimated to have smartphone user h penetration of 55.5%, the highest in Latin America, ahead of Colombia in second with Internet users 11.2m 50.4%. This is expected to grow to 66.3% c in 2018. The same is true of internet use: Broadband households 2.4m eMarketer says that Chile has the highest internet user penetration in Latin America
i at 70.5%, compared to the regional average Mobile subscriptions 23.7m of 54.1%. Active smartphones 9.1m Chile also leads both North and South America in social media penetration Active tablets 1.4m according to Statista, with 61% of internet Sources: IFPI/CIA World Factbook users in Chile considered monthly active social media users in June 2014. That’s versus 56% in the US, Argentina and When Music Ally last examined the digital music industry in Chile, Canada. back in July 2012, the talk was of a “new dawn” for digital music 2014 was also significant for sales after the launch of iTunes in 2011... the digital music business in Chile as it saw streaming income pass downloads for the first time. This was nd so it proved: after falling but they were quickly back on track. In largely thanks to significant growth in dramatically in 2011, digital music 2014, income from sales of digital tracks in revenue from ad-supported services, sales in Chile were on the up again Chile climbed from $1.61m to $2.24m, while which climbed from $1.04m in 2013 to the following year, helping the income from digital albums increased from $4.19m in 2014, making up almost half Aoverall recorded music market to record $0.81m in 2013 to $1.05m last year. Overall, of all digital income in Chile last year. a 33% growth in income in 2012. “iTunes recorded music income grew 13.6% in 2014 The obvious factor behind this was has been very important in Chile,” says to $23.2m, making Chile the fifth biggest the launch of Spotify in December
report Francisco Nieto, MD of IFPI Chile. music market in Latin America and the 36th 2013. As in many other countries, Download sales may have slipped in largest music market in the world. Spotify was not the first streaming 2013, albeit by relatively small amounts, Nieto believes that downloads can service on the market – Deezer the ISSUE 358
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ISSUE 376 14.10.15 MARKET PROFILE Chile continued...
* Even though iTunes has been live in the country Other since 2011, 2014 was the first full year that 4.19 Ad-supported IFPI reported digital track sales. streams 0.8 Subscription Digital streams 16.3 tracks 1.04 0.86 Mobile personalisation CD/other 0.62 0.71 0.83 physical 1.21 Other downloads 1.09 1.05 Full album downloads 0.97 0.81 2.16 Single track downloads 2.43 2.24 32.0 3.3 3.9 1.75 1.61 2.5 1.8 1.4 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Chile: recorded music sales volume (millions of units) Source: IFPI Chile: digital sales by format (US$ millions, trade value) Source: IFPI
Could Chile have a problem in could prove a worthy investment for foreign converting free users of streaming services acts and digital music services. to subscriptions? Nieto says no: he argues Chile’s GDP per capita of $23,000 is the that subscription income is low because highest in Latin America, while the Chilean Chile is one of the countries in “the most important of streaming services music business has the second highest the world where the arrived during last year – no other reason per capita revenue in the region, behind technological companies test all and everybody is expecting an important Argentina. What’s more, in contrast with, the new devices – especially the increase in the future.” In fact, Nieto is say, Argentina, the Chilean economy is generally positive about the future of remarkably stable, leading Latin American telephone companies” the digital music industry in Chile. “Do I nations in competitiveness, globalisation, launched in Chile in 2012 and Rdio followed Francisco Nieto, IFPI Chile feel positive? Yes, due to the high rate of economic freedom and low perception in 2013 – but it is the one that has had the penetration mainly in smartphones with 4G of corruption, according to the UN most impact, according to Nieto. Guvera, supported services shot up in 2014, and 3G,” he says. Development Programme. Tidal, Google Play, Apple Music and Claro subscription services festered, with income Chile, of course, is a relatively small Physical music, it is true, still dominates Música – a Latin American digital music of just $0.83m, barely up from $0.71m in country, with a population of just 17.4m. In recorded music income in Chile, bringing in service offering streaming and downloads 2013. More worryingly, perhaps, there Latin America, it is considered a second- $9.2m in 2014 compared to digital music’s that is backed by the region’s largest telco, are currently no partnerships between tier music market alongside Argentina and $8.8m. But with internet penetration in
report America Movil – also operate in Chile. major streaming services and telcos in Colombia, its business dwarfed by Brazil Chile expected to grow to 73.5% in 2018, The fly in the ointment here is Chile – traditionally seen as an on-ramp to and Mexico. Get past this, however, and it seems only a matter of time before this subscription. While revenue from ad- customers paying for subscription services. there are a number of reasons why Chile situation is reversed. :) the 11 Music Ally is a music business information and strategy company. We focus on the change taking place in the Music Ally is an ISSUE 376 industry and provide information and insight into every aspect of the business, consumer research analysing 14.10.15 example of perceptive the changing behaviour and trends in the industry, consultancy services to companies ranging from blue journalism at its chip retailers and telecoms companies to start-ups; and training around methods to digitally market your best, with unrivalled artists and maximise the effectiveness of digital campaigns. We also work with a number of high profile music Andrew Fisher, events around the world, from Bogota to Berlin and Brighton, bringing the industry together to have a good CEO, Shazam coverage of the commonsense debate and get some consensus on how to move forward. Entertainment digital music sector”
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