ARIA SUBMISSION TO THE PARLIAMENTARY INQUIRY INTO THE MUSIC INDUSTRY

October 2018

1. EXECUTIVE SUMMARY

Today the Australian recording industry is a digital growth industry. After a long period of challenge and disruption, the music business has evolved to embrace the growing online and global marketplace.

There remain significant challenges for the industry to overcome in order for Australian artists, labels and the local industry to thrive in this global marketplace – and ARIA welcomes the Committee’s inquiry to investigate the way the Australian music industry can continue to grow sustainably.

Our local performers and songwriters play an important role in reflecting and recording our cultural identity – telling our stories from our own unique perspective – and increasingly are taking these songs to the world.

ARIA suggests the industry and Government works towards an ambitious goal of Australian music gaining a 5% market share of the global music market by 2030.

In the following submission ARIA has set out suggestions which are drawn from discussions with our members and from local and international experience to help in this ambition, under the following key themes:

• Creators’ Rights; • Investment; • Export; • Local Content; • Music Cities and Live Music; and • Music Education

The suggestions are put forward to begin a dialogue with the Committee and we look forward to working towards a final report from the Committee which contains tangible, achievable recommendations which can achieve bi-partisan support.

2. INTRODUCTION

2.1 Australian Recording Industry Association (ARIA)

ARIA is the peak trade body for the recorded music industry in . ARIA is a not for profit, national industry association that proactively represents the interests of its members.

ARIA has more than 100 members ranging from small "boutique" labels typically run by 1-5 people, to medium sized businesses and very large companies with international affiliates.

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ARIA is active in many key areas of the music industry, for example:

• acting as an advocate for the industry, both domestically and internationally;

• supporting Australian music, and creating opportunities to help it be heard in Australia and around the world;

• playing an active role in advancing the protection of creators’ rights and making submissions to government on copyright reform, regulation and other issues where it has the information and expertise to do so;

• collecting statistical information from members and retailers and compiling numerous ARIA Charts with data provided by retailers and data suppliers across Australia;

• providing, in certain cases, a reproduction licensing function for various copyright users on a non-exclusive basis; and

• staging the prestigious annual ARIA Awards which recognises the achievements of Australian recording artists. ARIA works closely with the NSW Government agency Destination NSW on the annual ARIA Awards. The ARIA Awards are the pinnacle of success for Australian artists and generate significant national and international media attention for our local artists. It works to position and NSW as the music capital of the Asia-Pacific region. With the success of ARIA WEEK – a series of showcase gigs, events and industry conferences – the ARIA Awards has attracted thousands of visitors to Sydney from intrastate, interstate and international destinations. The financial and marketing support of Destination NSW is an essential component of the success of the ARIA Awards in achieving these outcomes.

ARIA’s primary objective is to advance the interests of the Australian recording industry. The role of ARIA is not to monitor, supervise or intervene in the pricing or other commercial decisions of its members.

2.2 Where We Have Been

Today the Australian music industry is a digital growth industry. However, over the past 20 years, the Australian music industry has faced enormous challenges and disruptions which has caused the industry to evolve at an unparalleled rate. From nearly an entirely physical product market, the music industry is now predominantly digital, in the form of downloads or streaming. This transition was in response to the explosion of online music piracy and large reduction of value of the entire music industry. The explosion of online piracy was made possible by the rapid uptake of new technologies.

A sharp rise in unauthorised file-sharing in the early 2000s signalled the start of the digital disruption which saw the global recorded music industry lose over a third of its value in just a few years. With improved availability and speed of the Internet, 2 | P a g e

music consumers could access all recorded music, for free, whenever they wanted. This was exacerbated by the not fit-for-purpose notice and takedown scheme, which created an unmanageable ‘whack-a-mole’ scenario. Copyright owners would, and continue to, send millions of takedown notices of unauthorised use of their copyrighted material, with the same material easily reposted on the same platform moments later.

Responding to these disruptions, the Australian music industry adopted innovative business models, distribution channels and licensing options. Since the launch of iTunes in 2005, the Australian music industry has been at the forefront of the “digital revolution”. Global music services continue to enter and operate in the Australian market due to the receptiveness of Australian consumers and industry to new technologies and services.

Since 2003, the Pro-Music website (www.pro-music.org ) has operated as a global guide to finding and accessing licensed digital music. From this website, music consumers can find an array of legal music providers available in their country. In 2016, the Australian music industry collaborated with other creative content industries to create the Digital Content Guide ( www.digitalcontentguide.com.au ). An Australian-only site, visitors can find digital services and platforms where they can legally acquire, watch and listen to their favourite creative content.

Demand for recorded music has helped drive demand for new digital services and hardware. Music videos fuelled the growth of audio-visual services like YouTube. Leading artists have developed huge numbers of Twitter and Instagram followers, driving audiences to those services.

2.3 Where We Are Now

In 2018, the Australian recorded music industry continued its resurgence. This has been supported by the industry’s embrace of innovative platforms to deliver music into the hands of consumers, and copyright laws which respect and protect the rights of creators.

Last year, recorded music revenue grew 10.5% in value, the third consecutive year of growth. The 10.5% increase to a total of $391 million represents the largest annual growth since 1996. This revenue resurgence has been largely fuelled by consumers’ uptake of paid streaming services, which from 2014 has risen from $23 million in revenue to $213 million. 1

This growth story has continued in 2018 with ARIA’s half year figures showing an increase in revenue of 6.1%. Streaming platforms are the dominant format, accounting for over two-thirds of revenue – a remarkable statistic given these streaming services only entered the market six years ago. See Appendix A for further information.

1 ARIA statistics 2017 3 | P a g e

Whilst recent sustained industry growth is welcome, it should be noted that current recording revenue results are still some 30% below those achieved for the 2003 calendar year, being the last year prior to the impact of digital disruption taking effect.

The Australian music industry’s economic contribution to the wider community continues to be significant. In a PWC study for the Australian Copyright Council, it was found in 2016 that the Australian music industry contributed $10.554 billion to the Australian economy and employed 92,370 people. 2 The demonstrable demand for music by Australian consumers is reflected in the size of the Australian recorded music market, which is the eighth largest in the world. 3

Consumers are listening to music in unprecedented numbers and can access it in more ways than ever before. They can continue to buy music in physical CD or vinyl forms or digital downloads from online services, as well as access millions of recordings through paid subscription streaming services or ad-supported platforms. Globally, there are 360 licensed digital services, distributing over 40 million songs to music consumers. 4 The adoption of these services means that Australian music lovers are able to access nearly all of recorded music whenever and wherever they want at a modest cost.

While the outlook for 2018 and beyond is positive, the Australian music industry continues to face challenges. Music piracy continues to restrain the growth and sustainability of the industry.

The International Federation of Phonographic Industry ( IFPI ) estimates that 40% of internet users continue to access unlicensed music content. 5 This is despite the wide availability of music through numerous legal avenues and price points, including free on ad supported services.

While peer-to-peer file sharing continues to eat away at the industry, the popularity of streaming has led to stream-ripping making up a larger percentage of unauthorised copyright infringement. The ‘Value-Gap’ (the difference between the value extracted by liability-protected online services from the use of copyright content, and the remuneration they pay to right holders) threatens the sustainable growth of digital content markets and seriously disadvantages creators as they attempt to negotiate fair payment for their creative works.

2 The Economic Contribution of Australia’s Copyright Industries 2002 – 2016 , prepared by PwC and published in September 2017, page 13, 23. 3 IFPI Global Music Report 2018 4 IFPI Global Music Report 2018 5 IFPI website 4 | P a g e

2.4 Australian Music and the World

Music is part of our nation’s cultural fabric and helps to define and reflect our unique character. For decades Australian artists have given a soundtrack to our lives and exported these sounds globally, taking our stories and perspective to the world.

Australian performing and recording artists have demonstrated their world standing in recent years, with local artists such as , , , Flight Facilities, , , , Troye Sivan, , Keith Urban, Five Seconds of Summer and all enjoying international sales, critical acclaim and chart success. Such export success not only benefits the Australian economy, but helps to position Australia on the world stage. Perhaps even more importantly, local performers and songwriters play an important role in reflecting and recording our cultural identity – telling our stories from our own unique perspective.

In a recent survey conducted on behalf of Screen Australia, 79% of Australians agreed that local stories are vital for contributing to our sense of Australian national identity.

The local music industry enables a broad ecosystem to flourish in both the cities and the regions – in the form of tours, festivals, live music venues, and local businesses. The local radio stations use music to build and maintain audiences. Local papers generate revenue from local venue advertising and music festivals bring thousands of people into regional areas – for example, BluesFest (Byron Bay) and the Deni Ute Muster (Deniliquin), the Gympie Music Muster (Gympie), the Country Music Festival (Tamworth), (Byron Bay), Wide Open Space (Central Australia) and the One Night Stand events around Australia.

Moreover, the arts (including music), contribute to the wellbeing and happiness of the nation, leading to improved productivity.

The music of Australian labels and artists now competes in a global marketplace, which creates both opportunities and threats. Within this competitive environment it is even more vital that Australia has the right policy settings and long term plans to support and encourage the creation and consumption of local music.

The landscape is currently dominated by international online services , Google (particularly via YouTube) and Spotify. Amazon is a recent entrant to the market.

There are minimal barriers preventing local music being made available on these services, which typically have libraries of tens of millions of songs. The challenge is having local music discovered within each of these extensive services, via organic search or the curated playlists.

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2.5 The Future

The music industry is resilient and innovative. However, like any industry it looks to the Government to put in place infrastructure which will support it and assist it to flourish and grow. ARIA believes the Committee should recommend the establishment of long term policies, strategies and funded programs to support a sustainable and vibrant local music industry.

Long term collaboration and investment designed to foster and incubate talent and businesses are required to ensure the music industry continues to contribute to the local economy, and promote Australia’s culture by telling our stories both here and around the world.

The latest Goldman Sachs report into music estimated the global recorded music market would hit $US 41 billion by 2030 (over $A 50 billion).6 Adding publishing and live touring revenue to this figure, and there is a potential for $100 billion global music industry within a decade.

ARIA suggests the industry and Government works towards an ambitious goal of Australian music gaining a 5% market share of the global music market by 2030, generating a $5 billion export market. To put that in perspective Australian wine exports are currently $2.5 billion.

ARIA has set out below suggested themes for support which are drawn from discussions with our members and from local and international experience to help in this ambition. These suggestions are put forward to begin a dialogue with the Committee and we look forward to working towards a final report from the Committee which contains tangible, achievable recommendations which have bi- partisan support.

3. KEY THEMES

3.1 Creators’ Rights

A necessary condition for the ongoing success of the Australian music industry is a strong commitment to maintain and support the principles which underpin copyright and creators’ rights. Copyright is the foundation upon which long term investment in the industry and artists’ careers are possible.

Copyright and intellectual property rights are the bedrock of the recorded music industry – it is the means by which artists and labels can get paid for their creative work.

6 https://www.billboard.com/articles/business/7949040/music-industry-will-hit-41-billion-by-2030-according-to-new-goldman-sachs

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It is essential that the Committee reaffirm the importance of copyright to the music ecosystem both locally and internationally.

It is suggested that the Committee recommend that any changes to Copyright Law be made only if there are sound evidence-based public policy grounds, and structured in accordance with Australia’s international obligations.

Additionally, the Committee should recommend Australia continue to actively participate in international treaties designed to promote and protect Intellectual Property (IP) Rights and that Australia continues to advocate for strong IP chapters in all bi-lateral and multi- lateral trade agreements.

A further area of copyright that requires urgent reform is the issue of the 1% statutory cap on license fees paid by commercial radio stations to Australian artists and record labels for the use of sound recordings.

The cap, which has been in place for almost fifty years, is an international anomaly. It grossly undervalues the sound recording rights used by the Australian radio industry. As a result Australian recording artists and record companies are effectively subsidising the highly profitable commercial radio sector.

ARIA supports the detailed submission of PPCA on this issue.

3.2 Investment

ARIA’s record label members invest millions of dollars annually to support, develop and market recording artists.

The cost of doing so continues to increase, particularly given the growing global marketplace.

The IFPI Report Investing in Music found that record labels invest 27% of their revenues into artist discovery and development ie. the R&D of the music business.7

The Committee should look at funded programs which support artists and record labels to showcase new and emerging genres and talent; as well as support for incubating new talent and businesses locally and in the international context.

There are various international examples of such schemes, and in particular ones in which there is ‘’matched” funding from Government.

7 IFPI Report ‘’Investing in Music’’ http://www.ifpi.org/investing-in-music.php 7 | P a g e

Two examples from Canada include:

The Ontario Music Fund (OMF), strengthening and stimulating growth in Ontario’s contemporary music sector. The OMF has contributed to the creation of over 1,800 full-time equivalent positions for Ontario’s music companies and supporting this growing sector. The Fund is designed to drive activity and investment and to support Ontario’s music companies and organisations in expanding their economic and cultural footprints within Canada and around the world.

In 2018, the OMF invested over $14 million of matched-funding to provide more than 200 new grants to 198 music companies and organizations that help produce, distribute, present and promote Ontario-based music, and to help them compete internationally.

FACTOR is a private, non-profit organisation dedicated to providing assistance toward the growth and development of the Canadian music industry. The goal of FACTOR is to support the production of sound recordings by Canadian musicians and to help Canadian music companies make recordings available to a wider audience both domestically and internationally.

FACTOR is funded through licence fees on commercial radio (annual % of revenue plus a proportion of value of radio mergers/acquisitions) and Canadian Government’s Canada Music Fund funding. FACTOR funds several programs including Artist Development, Live Performance, Production of Sound Recordings. In 2016/2017, FACTOR provided a total of $18,613,432 in funding to a total of 2,886 projects across all of programs, including the creation of 717 new sound recordings and 415 successful international tours and showcase appearances.

3.3 Export

The emergence of global streaming platforms have “flattened” the music world, and made it easier for our artists to have their music heard around the world.

Export dollars for ARIA members have increased 28% over the past two years to almost $20 million.

Yet in order to avail themselves of global opportunities, artists still need to physically be in market to promote, market and tour – with all the associated travel and living costs that go along with such an exercise. Labels and managers need to invest significant sums to be able to harness these international opportunities for their artists.

This is an area where Federal Government support could significantly enhance the industry’s ability to grow its export market.

Countries such as the Canada, Sweden and the UK have invested in the export of their local music industry to great success.

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Australia should set itself an ambition to become a net exporter of music – like Sweden and the UK – and Australian artists to generate 5% of global sales by 2030.

The Government should adopt policies to support this ambitious goal and partner with the industry to achieve this outcome

Sounds Australia is an existing body that could be used as the basis for a revamped joint industry-led body (APRA AMCOS, ARIA, PPCA and managers) to spearhead a world-class music export organisation fit for purpose for the global streaming age.

Moreover, the recently announced DFAT Review into Australia’s soft power diplomacy underlines that music and the broader creative industries represent a growing opportunity for Australia to project a positive image to its neighbours and the world

3.4 Local Content

Australian labels and artists now compete in a global marketplace for their music, which creates both opportunities and threats. Within this competitive environment it is even more vital that Australia has the right policy settings to support and encourage the creation and consumption of Australian music.

(a) Commercial Radio

The existing local content quotas for commercial radio contained in Code 5 of the Commercial Radio Codes of Practice (Code) are an important part of this mix. Specifically, the Australian Music Code requires commercial radio stations to play a certain proportion of Australian music, of which a proportion must be less than 12 months old, based on the predominant format of the service.

The Australian Music Code is vital to the continuing health of the Australian music industry. Commercial radio remains a very powerful, easily accessible and successful medium for Australians to listen to music.

Under the Code, the Australian Communications and Media Authority ( ACMA ) has ultimate responsibility in respect of complaints where satisfactory resolutions have not been achieved between the parties, and remains the body best able to ensure compliance with the Australian Music Code. It is important that ACMA is able to take relevant and effective action should there be continuing non-compliance brought to its attention from either industry or its own oversight.

One particular aspect of the Australian Music Code that will require further oversight relates to the categorisation of a radio station within the formats prescribed in the Australian Music Code. Currently, each radio station is able to self-determine whether it falls within a particular format ranging from Mainstream Rock, Oldies, through to talk formats. However, the formats as prescribed in the Australian Music 9 | P a g e

Code are not presently defined, and have not been updated for over a decade. This means that radio stations are given significant latitude to self categorise their station’s format. Ostensibly, it seems reasonable that the radio station would be best placed to make the determination. However, if a radio station self categorises as having a “Hits and Memories” format it will be subject to a 15% quota but if it chooses the format of “Nostalgia” then 5% would apply. It is ARIA’s view that the format categories should be reviewed and streamlined to minimise the arbitrary nature of the station’s election, and to provide more definitional clarity about the criteria for each format.

(b) Streaming Services

There are no local content quotas that currently apply to music streaming services – whether they are operated by the commercial radio stations (other than simulcasts of their existing broadcast licences) or stand-alone providers (eg. Apple Music, Spotify).

ARIA recognises the difficulty of applying local content quotas to global services. This is further complicated for interactive or ‘on-demand’ streaming services (such as Apple Music, Spotify) where the listener is in control of the content they consume by selecting tracks to listen to on an on-demand basis. These types of services differ from traditional radio (and simulcasts) where the listeners have no influence over the tracks that are played.

In these circumstances, it is ARIA’s view that streaming services should work with the industry to ensure Australian consumers have access to local content. This could include:

• having local employees dedicated to curating Australian content;

• creating locally produced and curated playlists;

• ensuring that Australian content is appropriately represented on its locally curated playlists; and

• highlighting Australian artists in its promotional material internally to its users and externally via its marketing channels.

We believe that fostering such cooperation would benefit all parties, the digital services, the music industry and most of all Australian music fans, who would have easier access to new and exciting Australian music.

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(c) International comparisons

A most relevant market for comparison is Canada. Canada is the sixth largest recorded music market in the world 8 and is a predominantly English-speaking country whose population and music market size is similar to Australia. We note the rising success of the Canadian music industry both domestically and internationally. Many of the biggest acts over the past few years have come from Canada – including Justin Bieber, Drake, The Weeknd, and Alessia Cara.

Canada has commercial radio content quotas that are both a higher proportion and required to be fulfilled in a more limited prime time window than Australia.9

In Canada, all stations (English and French language) must ensure that at least 35% of the music they broadcast each week is Canadian content (compared to 25% in Australia.)

Canadian commercial radio stations also have to ensure that at least 35% of the music broadcast between 6am and 6pm, Monday to Friday, is Canadian content (compared to 6am to 12am in Australia).

Moreover, there are far fewer categories and no self-selection by individual radio stations.

3.5 Music Cities and Live Music

A thriving and vibrant local music scene is incredibly important to the development of recording artists, and critical to the success of our local record labels. ARIA draws the Committee’s attention to work of IFPI – representative of the global recording industry - on the development of music cities. Their report The Mastering of a Music City outlines the steps that can help local authorities, businesses, community groups and the creative sector capitalise on the potential of music to build, grow and strengthen their cities.

It cites examples from 22 cities from all continents to explain what a music city is, why it is beneficial, and – critically – the most effective strategies and policies that can be implemented to nurture active music hubs. The Mastering of a Music City has identified recommendations in seven strategic areas that are an effective means to grow and strengthen a city’s music economy:

• Music and musician-friendly policies, from licensing and liquor laws to parking and planning regulations to affordable housing and artist entrepreneur training;

8 IFPI Global Music Report 2017, page 80. 9 Canadian content requirements for music on Canadian radio available at: http://www.crtc.gc.ca/eng/cancon/r_cdn.htm 11 | P a g e

• The creation of Music Offices to help musicians and music businesses navigate the broad range of government policies and regulations that impact music;

• The formulation of Music Advisory Boards to engage the broader music community in a collaborative way and to facilitate dialogue with city governments around the Live Music / Night-Time Economy and major events;

• Engaging the broader music community to ensure the people most affected by music policies are involved and informed;

• A focus on audience development, ensuring that there is an engaged and passionate audience for local musicians as well as international touring artists, now and into the future;

• Music tourism or the development of a Music City brand to leverage a thriving live music scene, rich music history, or large music festivals in order to reap the significant benefits associated with music.

The importance of a thriving music scene should not be confined to our metropolitan capital cities. Ensuring that there are strong regional music cities has a two-fold positive effect. It provides community building and positive entertainment options for young people in the region, as well as expanding the opportunities for regional touring for Australian artists. Any broad music strategy should include encouragement for regional music development and touring.

3.6 Music Education

In its 2018 submission to the South Australian Government’s Music Education Strategy, Music Australia made the following observations:

“Many studies show a strong correlation between music education and academic achievement. Children who receive music lessons show improved language-based reasoning and the ability to plan, organise and complete tasks, as well as improved academic achievement.

Students who undertake meaningful music education have marked increases in self- confidence, attention span, language skills, emotional resilience and empathy when compared to those who have not .”

ARIA is committed to drawing attention to music education (or lack thereof) in Australian schools. Last year ARIA initiated the Music Teacher of the Year program to celebrate music teachers around Australia during the ARIA Awards, and bring attention to the fact that 3 out of 4 Australian schools don’t have a music program. This Award was incredibly well received, with hundreds of applications from around

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Australia galvanising community recognition of the incredible work done by music teachers around the country.

There is a role for Government to help promote music education in schools and tertiary intuitions including business and music skills development initiatives.

ARIA supports existing music education programs such as APRA AMCOS Songmakers Program and other initiatives run by The Song Room, ACMF, Music Australia.

In addition, ARIA recognises the need for improved vocational and skills development for the changing nature of the music sector. For example, access to continuing education to support emerging artist managers, festival organisers and label owners – in particular around financial literacy, digital distribution and export opportunities.

4. ARCHITECTURE

4.1 Industry Body

The coordination of policy and the implementation of strategies to support the industry will require sustained effort and collaboration between Government (State and Federal) and industry.

ARIA believes that can be most efficiently achieved through the creation of an umbrella agency made up of cross-industry organisations representing artists, labels, managers, publishers, and songwriters (eg. APRA AMCOS, ARIA, PPCA and AAM), and Government representatives who are tasked with the development of sustainable funded initiatives.

One model which the Committee may consider is the current Music Moves Europe initiative. 10

This initiative aims to help the music sector flourish, to adapt to new challenges and to reap the benefits of digitization. Through MME the Commission wants to build on and strengthen further the sector's strong assets: creativity, diversity and competitiveness.

10 https://ec.europa.eu/programmes/creative-europe/actions/music-moves-europe_en

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Its specific objectives are to:

• promote creativity and innovation;

• safeguard and expand the diversity of European music;

• help the sector adapt to and benefit from digitization.

The Commission will also strengthen the dialogue with the sector so as to explore further the developing needs and identify possible fields of EU action (policy action and targeted funding for music post-2020) with a clear added value.

Were the Committee to adopt this recommendation, the umbrella agency could be tasked with ensuring the coordination of the above policy areas, in particular:

• Policies designed to promote local content on digital and traditional broadcast platforms;

• Funded programs which support artists and record labels to showcase new and emerging genres and talent;

• Support for incubating new talent and businesses locally and in the international context;

• Music education in schools and tertiary intuitions including business and music skills development initiatives;

• Coordinate with State Governments to support the promotion and development of Music Cities.

4.2 Predictability

In order to provide stability and certainty for the growth of the music industry, it is very important that the sector receives predictable and dedicated funding. This is imperative to sustain initiatives funded through the Australia Council and Department, and joint industry partnerships with ARIA, PPCA and APRA AMCOS such Sounds Australia.

New funding to foster new programs will be central to the long-term success of any collaboration between Government and industry.

These should include grants, tax credits and other tax and funding incentives developed in consultation with the industry.

However, of equal importance is a strong commitment to maintain and support the principles which underpin copyright and creators’ rights.

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5. CONCLUSION

The local and global music market is expanding at the same time as Australian music is capturing a growing audience here and overseas.

With targeted policies there is no reason why the Australian music market cannot reach the ambition of becoming a net exporter of music and capture a 5% share of the global revenue pie.

The local music industry is resilient and self-reliant. It has often succeeded in spite of little Government support. However, if it is to capture the maximum opportunities afforded to our local artists and labels in this digital global era, targeted assistance from the Government is required.

With the right architecture, combined with a predictable, stable copyright framework and funding, Australian music will continue to be enjoyed by generations of music fans throughout this country and around the world.

ARIA looks forward to continuing this discussion with the Committee and welcomes any further questions or requests for information.

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Appendix A

2018 ARIA Yearly Statistics January - June 2017 vs January - June 2018

January - June 2018 January - June 2017 Percentage Change Configuration Dollar Value Dollar Value Dollar Value Singles 68,745 253,570 -72.89% Vinyl Albums 9,083,039 7,389,862 22.91% CD Albums 22,979,827 32,888,197 -30.13% Music Video/DVD 1,049,065 1,684,312 -37.72% Other * 11,792 6,395 84.39% Total Physical 33,192,468 42,222,336 -21.39% Digital Track 14,516,744 21,291,799 -31.82% Digital Album 13,428,641 20,989,779 -36.02% Ad Supported Streaming Models 12,686,941 9,621,665 31.86% Video Streaming 14,615,972 10,357,509 41.11% Subscription Services Income 104,997,595 77,720,247 35.10% Digital Other * 2,210,793 2,295,412 -3.69% Total Digital 162,456,686 142,276,411 14.18% Grand Totals 195,649,154 184,498,747 6.04%

ARIA Total Market Value 2016 - 2018 (In Percentages)

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Appendix A

Digital vs Physical Sales

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