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Tag archive: Digital Music Report (3)

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Napster’s subscription service launches in Canada

Napster, the digital music service featuring more than 35 million licensed songs, has officially launched in Canada. The service launched yesterday, offering on-demand access to the service’s catalogue for $9.99 per month. The service is available in both French and English, and is available on a wide array of devices, including iOS, Android, Windows Phone, Web, Sonos, Chromecast, and several auto manufacturers.

While many will recognize the Napster name from the turn-of-the-millennium P2P service that became synonymous with music piracy, the brand is now owned by Rhapsody and operates as a fully licensed subscription service.

Napster features curated playlists as well as personalization algorithms, and offers tailored music recommendations through the service’s Music Inbox feature. The service offers offline playback feature to allow subscribers to download music to their phone to save on data fees or to listen in areas without a connection.

“With a deep catalogue of local artists, hand-curated playlists, and the first music experience for kids, Napster is customized specifically for Canadian music fans,” said Ethan Rudin, Napster’s chief financial officer, in a release. “It was important to us that we enter Canada with a personalized music experience that has a complete catalogue of local, national and international artists.”

The service also offers Napster KIDS, a streaming music experience specifically designed for children. The KIDS feature allows children to safely explore age-appropriate songs and playlists designed for a younger audience.

As part of their launch, Napster is offering an introductory subscription for Canadians, priced at $1 for the first three months. For more information, see the announcement on Napster’s blog.

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Digital Music Report 2015 released by IFPI

Today, the IFPI released the Digital Music Report 2015, which provides an extensive overview of the global digital music sector, including international market figures, market trends, and worldwide bestsellers information. The report notes that globally, digital music revenues matched physical format sales for the first time in 2014. Digital revenues rose 6.9% to US $6.9 Billion, representing 46% of all global music sales and underlying the industry’s transition over recent years. Overall global revenues fell slightly (0.4%) in 2014, to US $14.97 Billion.

Digital-Music-Report-2015The IFPI says the Digital Music Report shows an industry in continued transition, with consumers embracing music streaming and subscription models. Subscription revenues rose sharply in 2014, growing by 39%, which offset an 8% decline in digital download sales to grow overall digital revenues to US$6.85 billion. The number of paying users of subscription services increased by 46.4%, to an estimated 41 million people worldwide. Subscription services are now a major part of the industry’s portfolio of businesses, making up 23% of the digital market and generating US$1.6 Billion in trade revenues.

“The recorded music business has always led the way for creative industries in the digital world,” said Frances Moore, chief executive of IFPI. “That leadership continues today as the music industry’s digital revolution continues through new phases, driven by the consumer’s desire for access to, rather than ownership of, music. It is a reflection of how much we have adapted that digital revenues today are, for the first time, on a par with physical. The headline statistics of 2014 speak for themselves, with overall revenues still largely flat, down by 0.4 per cent. Music companies are charting a path to sustainable year-on-year growth. That path was never going to be straight, but we are making great strides along it, embracing new models, licensing, investing and improving consumer choice.”

Key trends highlighted in the report includes the increased consumer engagement with licensed digital services, based on a new research study undertaken by Ipsos across 13 of the world’s leading music markets, including Canada. The Ipsos research found that the rise of streaming is driven in large part by young consumers, and that there is substantial untapped potential for growth in paid subscriptions.

The report also notes that bundling partnerships between telecom and digital music companies are becoming standard in markets across the globe, and are playing a significant role in the growth in emerging markets. The report notes that services are also increasingly tailoring their payment models to reach various segments of the market, citing MTV Trax, which offers users in the UK access to 100 songs for £1 per week, ranging to Deezer Elite, which specializes in high quality audio for $20 per month.

The report also addresses the “value gap” in the digital music market, noting the market distortion caused by the way some digital services circumvent normal music licensing rules. The IFPI illustrates this by comparing the share of revenue rightsholders derive from services like Spotify and Deezer to those derived from platforms like YouTube and Dailymotion. The report estimates that music subscription services have 41 million paying subscribers and more than 100 million “freemium” users globally, which generated US$1.6 Billion in rightsholder revenues in 2014. By comparison, YouTube alone has more than one billion monthly users and is considered one of the most popular access routes to music, and yet generated just US$641 million for rightsholders in the same time period.

“The value gap is a fundamental flaw in our industry’s landscape which sees digital platforms such as Dailymotion and YouTube taking advantage of exemptions from copyright laws that simply should not apply to them,” said the IFPI’s Frances Moore. “Laws that were designed to exempt passive hosting companies from liability in the early days of the internet – so-called ‘safe harbours’ – should never be allowed to exempt active digital music services from having to fairly negotiate licences with rights holders. There should be clarification of the application of ‘safe harbours’ to make it explicit that services that distribute and monetise music should not benefit from them.”

The Digital Music Report also covers plans for Global Release Day, which is the industry’s decision to synchronize the release schedule for all markets, allowing consumers to access new music on the same day worldwide. Beginning July 10, 2015, Friday will become the new release day, reducing the risk of piracy by shortening the release gap between markets, and providing new marketing opportunities for record labels over the weekend.

The report also examines music’s impact in the wider economy, with data illustrating the effect of record companies’ investment in artists. The recording industry invested US$4.3 billion in 2013, which, at more than 15% of industry revenues, is a larger share than other sectors like leisure (6.3%) and automobiles (4.2%). This investment is a catalyst for economic activity, said Max Lousada, chairman and CEO of Warner Music UK. “As an industry we make financial investments in our arts that have a ripple effect on the wider economy, whether that is driving new and innovative businesses or creating work for all the specialists that work to develop and sustain artists’ careers from producers, graphic designers and stylists to lawyers and accountants.”

The report looks at the role of music in driving tourism, citing the experience from Austin, Texas, and research from Toronto and the United Kingdom. Music is also a major driver of activity on social media, as the report notes that seven of the ten most-followed people on Twitter are musicians, and nine of the top ten most-watched YouTube videos are music related.

The report also profiles industry efforts to counter piracy, which continues to be a massive problem for the music industry. Research by Ipsos shows that most consumers recognize digital piracy is harmful and should be addressed by governments and intermediaries. 52% of respondents in Ipsos’ survey agreed that downloading or streaming without the copyright owner’s permission was theft. 53% of respondents agreed that licensed services should appear above pirate sites in search engine results, and 52% agreed that companies should not advertise on pirate sites. The report identifies major brands found to be continuing to advertise on egregious pirate sites, which drives revenue for the pirate site and advertisers, but while those who create the music involved receive nothing.

In the global charts, the soundtrack to the motion picture Frozen was the top-selling album internationally, while Pharrell Williams’ Happy was the top-selling digital single. Taylor Swift received the IFPI’s Global Recording Artist Award in 2014, as the most popular artist across formats ranging from CD sales to YouTube views.

To view the full report, visit http://ifpi.org/digital-music-report.php.

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Digital Music Report 2014 released by the IFPI

DMR14 largeToday, the IFPI released the Digital Music Report 2014, which provides a comprehensive overview of today’s global digital music sector, including statistics on international markets, developments in the licensed online marketplace, and industry efforts to tackle online piracy.

The IFPI says that despite positive growth in most markets, overall global music trade revenues fell by 3.9% in 2013, to US$15.0 billion. This was heavily influenced by a drop of 16.7% in Japan, which accounts for more than one fifth of global revenues. Excluding Japan, the overall global recorded music market was generally flat, declining by 0.1% in 2013.

This report highlights the growth in music subscription services, which helped drive growth in most major markets in 2013, as revenues from subscription services grew by 51%, helping global digital revenues grow by 4.3%. Global revenues from streaming and subscription services topped the US$1 billion mark for the first time in 2013.

Digital downloads and physical formats remain an important revenue stream for the global recorded music industry, as downloads account for 67% of digital revenues, and physical product sales account for more than half (51.4%) of all global revenues.

Performance rights revenue, generated from broadcast, internet radio, and venues, saw strong growth in 2013, as performance rights income to record companies reached US$1.1 billion, an increase of 19% over 2012. Income from synchronization deals, where music is placed in film, television, or advertisements, declined by 3.4% in 2013, now accounting for 2.1% of total industry revenue, the report states.

The report includes the IFPI’s Global Recording Artist Chart, which measures the popularity of an artist across an array of channels, including digital downloads, streaming services, and physical format sales. One Direction topped the chart in its first year of being tabulated, while Burnaby, British Columbia’s Michael Bublé achieved the #9 position.

The report also profiles how record labels utilize the digital world in promoting artist releases, with features on innovative promotional campaigns, including:

  • Sony Music Entertainment’s global campaign for Daft Punk – Random Access Memories , which coordinated physical advertisements like billboards with television ad buys and digital teaser videos to achieve the robot duo’s vision of a global album release
  • Universal Music Group International’s campaign with Avicii, which partnered with Ericsson to create a ‘crowd sourced’ hit song, and later unveiled the album as a live performance at the Ultra Music Festival, helping Avicii grow from a club DJ to a global superstar
  • Warner Music Nashville/Atlantic Records’ innovative ‘Youtube Orchestra’ campaign with Hunter Hayes, which enlisted a range of ‘Youtube Stars’ to post their own versions of his song, Everybody’s Got Somebody But Me, with Hayes and Justin Mraz creating a mashup of the videos in a one-shot music video
  • Passenger’s partnership with German indie label Embassy of Music, which worked with Sony Music Netherlands to campaign in the smaller Dutch radio market to establish a foothold on the airwaves
  • Katy Perry’s PRISM campaign, in which Capitol Music Group developed multiple promotional campaigns for the album’s various singles, including international events in Canada, Australia, France, Germany, Italy, and Japan

To view the full report, visit http://www.ifpi.org/digital-music-report.php.

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