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Global Music Report 2018 shows industry experiencing growth from subscription streaming, but Value Gap needs to be addressed for long term sustainability

IFPI today released its anticipated 2018 Global Music Report, providing a state-of-the-industry guide to the top global markets and highlighting industry-wide trends.

While Canada dropped from the sixth to seventh largest music market in the world, the domestic music industry can be encouraged by marked growth in subscription audio streaming, which grew in trade value from USD $95.34 million in 2016 to USD $160.9 million in 2017. This trend has contributed to the first three consecutive years of growth following 15 years of revenue decline.

In Canada, ad-supported streaming declined slightly in 2017, representing USD $16.24 million in trade value, compared to USD $16.59 million in 2016. Video streams represented USD $23.32 million in trade value in 2017, rising from USD $21.56 million in 2016. The total trade value for all types of streaming rose from USD $133.5 million in 2016 to USD $200.4 million in 2017, a 50% increase. This is similar to the global trend where overall streaming revenues grew by 41.1%.

“I’m encouraged by the consecutive years of growth we’re witnessing. But as streaming continues its rise, it’s more important than ever that this business model supports the people making the music,” says Graham Henderson, President and CEO of Music Canada.

“There are still regulations and cross-subsidies in place, in Canada and around the world, intended to get tech companies off the ground,” says Henderson. “These companies, like Google and Facebook, are now some of the world’s wealthiest and have unprecedented control over content online. Music Canada produced a comprehensive report on the Value Gap in Canada, and more than 3,600 Canadian creators have signed the Focus On Creators letter to the Canadian government asking for legislative help. Any future legislation, including the current Copyright Act review, needs to keep the well-being and future of Canadian creators top of mind.”

Frances Moore, Chief Executive of IFPI, also pointed to addressing the Value Gap as a top priority.

“The industry is on a positive path of recovery but it’s very clear that the race is far from won.” Moore explained in an IFPI release. “Record companies are continuing in their efforts to put the industry back onto a stable path and, to that end, we are continuing our campaign to fix the value gap. This is not just essential for music to thrive in today’s global market, but to create the right – fair – environment for it to do so in the future.”

Music Canada’s 2017 report, The Value Gap: Its Origins, Impacts and a Made-In-Canada Approach, proposes a range of practical, forward-looking solutions tailored to Canada’s marketplace, institutions and legal framework.

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World’s largest music stream ripping website to cease operations globally following legal action

IFPI, in conjunction with the RIAA and BPI, announced today that following successful legal action from record companies in the United Kingdom and the United States, the world’s largest music stream ripping website will shut down.

YouTube-mp3.org, a Germany-based site with 60 million visitors a month, facilitated the ripping of downloadable music files from online audio-visual works. Sites like YouTube-mp3.org typically extract large profits from advertising while delivering nothing to music makers. IFPI estimates the site generated “hundreds of thousands of dollars in advertising revenue per month, often from major brands.” In addition to agreeing to cease operations, the site’s operator has agreed to not infringe the rights of artists and labels in the future.

“The largest site dedicated to the fastest growing form of music piracy is shutting down. This is welcome news for music creators and the fans that support them,” says Graham Henderson, President and CEO of Music Canada. “Artists and advocates around the world are fighting for a better future for creators. As we continue to work with governments and legitimate music services to build a functioning ecosystem, it’s important that flagrant violations like stream ripping be met with firm action.”

In a joint release issued by IFPI, the RIAA and BPI, industry leaders welcomed the news:

“Stream ripping sites blatantly infringe the rights of record companies and artists,” said IFPI Chief Executive Frances Moore. “Today, music companies and licensed digital services work together to offer fans more options than ever before to listen to music legally, when and where they want to do so – hundreds of services with over 40 million tracks – all while compensating artists and labels. Stream ripping sites should not be allowed to jeopardise this and we will continue to take action against these sites.”

“This is a significant win for millions of music fans, as well as music creators and legitimate music services,” said Cary Sherman, Chairman and CEO, RIAA. “One of the world’s most egregious stream ripping sites has shuttered. Sites like these undermine the health of the legitimate marketplace and the livelihoods of millions of music creators worldwide. The swift and successful conclusion of this case should send an unmistakable signal to the operators of similar sites.” 

“This illegal site wasn’t just ripping streams, it was ripping off artists,” said Geoff Taylor, Chief Executive BPI. “Most fans understand that getting music from a genuine site supports the artists they love and allows labels to nurture the next generation of talent.  Music stands on the cusp of an exciting future in the streaming age, but only if we take resolute action against illegal businesses that try to siphon away its value.”

Piracy, and particularly stream ripping, remains a significant concern in Canada. A survey commissioned by IFPI in 2016 found that 27% of Canadian respondents reported pirating music, and 22% reported doing so via stream ripping. The age group most likely to use stream ripping sites was 16-24 year-olds, with 48% reporting doing so in the past year. While Youtube-mp3.org was the largest stream ripping site, the industry hope is that this legal action will send a clear message to other sites still in operation that they are breaking the law, and will face similar action if they do not shut down.

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Canada climbs to sixth largest global recorded music market in IFPI’s Global Music Report 2017

Toronto, ON – April 25, 2017:   Today the International Federation for the Phonographic Industry (IFPI) released its Global Music Report 2017, which shows Canada is now the sixth largest recorded music market on the planet, surpassing Australia.

The annual Global Music Report compiles revenues from physical and digital sales, streaming, synchronization and performance rights, to provide a ‘state of the industry’ snapshot while highlighting innovation and investment within the industry as it progresses further into the digital age.

Highlights of Canada’s 2016 music revenues:

  • Overall recorded music revenues rose 12.8% in 2016 and totalled CAD $489.4 million
  • Digital music revenues accounted for 63% of recorded music revenues in 2016
  • Total streaming revenues, including subscription and ad-supported streaming, more than doubled in 2016, rising from USD $49.82 million to an impressive USD $127.8 million
  • Subscription audio streaming generated the majority of all streaming revenues in 2016 at USD $94.45 million, compared to USD $15.72 million from ad-supported audio streaming and USD $17.59 million from video streams
  • Digital revenues grew to USD $233 million in 2016, up from USD $170 million in 2015
  • Revenues from physical sales continue to decline, falling to USD $99 million in 2016 from USD $114.4 million in 2015

Though music consumption around the world continues to rise to never-before-seen levels, the “value gap” remains a significant problem, as the revenues returned to music creators have not kept pace with music consumption.

“I am happy to see Canada regain its position as the sixth largest recorded music market in the world,” said Amy Terrill, Executive Vice President of Music Canada. “While the growth in overall revenues, driven by a huge increase in subscription audio streams is very encouraging, the music community must remain united and vigilant in fixing the value gap. I urge the Canadian federal government to put creators first in any future policy decisions, such as the upcoming Copyright Act review in 2017, so that creators can be properly compensated for the record levels of music consumption we’re witnessing.”

“The whole music community is uniting in its effort to campaign for a legislative fix to the value gap and we are calling on policymakers to do this,” said Frances Moore, chief executive of IFPI, in the report release. “For music to thrive in a digital world, there must be a fair digital marketplace.”

Key figures from global recorded music revenues:

  • Global revenue growth: +5.9%
  • Digital share of global revenues: 50%
  • Digital revenue growth: +17.7%
  • Growth in streaming revenues +60.4%
  • Physical revenues: -7.6%
  • Download revenue: -20.5%

Canada’s ascension to the sixth largest market follows IFPI’s announcement in February that Drake was named Global Recording Artist of 2016. Justin Bieber and The Weeknd took the number five and number ten spots, respectively, as Canadians occupied three of the top 10 positions.

Today’s Global Music Report 2017 shows that albums by Canadian artists performed very well at home in 2016, with six of the top ten album spots occupied by Canadian artists, including Drake’s Views at number one. Other Canadians in the top albums chart include Céline Dion, Leonard Cohen, Justin Bieber, The Weeknd, and The Tragically Hip.

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Canadian music companies successfully settle legal action against isoHunt

MC smallIFPI Small

FOR IMMEDIATE RELEASE

Vancouver, 25 July 2016:  Canadian and international music companies have settled litigation against isoHunt Web Technologies Inc. (“isoHunt”) and its founder Gary Fung (“Fung”) with the entering of orders by consent against isoHunt and Fung.  The settlement ends a lawsuit filed in 2010 alleging substantial copyright infringement of music on the isoHunt site, as well as an opposing action filed by isoHunt and Fung.

isoHunt and Fung agreed to a court order finding them liable for infringing the music companies’ rights in their recordings, which were made available for BitTorrent file-sharing through isoHunt’s websites. Fung and isoHunt further agreed not to be associated with any service that makes the music companies’ recordings available without authorization, including by BitTorrent or any other file-sharing technology.

“Music companies in Canada stand shoulder-to-shoulder in the fight against illegitimate sites that distribute massive volumes of creative works without compensation to creators,” said Graham Henderson, President & CEO of Music Canada. “Thousands of Canadian creators, our creative industries, and their employees are directly harmed by these activities. This settlement is a step forward towards providing consumers with a marketplace in which legitimate online music services can thrive.”

isoHunt was one of the largest unauthorized BitTorrent sites in the world, offering access to a vast array of music and films for instant download by millions of users. It operated out of Vancouver with worldwide reach.

“Courts all over the world have confirmed that websites such as isoHunt infringe rights”, said Frances Moore, Chief Executive Officer of IFPI. “Artists, creators and record companies pay a heavy price for that infringement, in lost revenues, lost jobs and lost investment. This settlement sends a strong message that anyone who builds a business by encouraging and enabling copyright infringement faces legal consequences for these actions.”

A timeline of legal activities involving isoHunt:

  • 2008 – isoHunt files a petition in British Columbia Supreme Court against Canadian music companies, seeking to have its BitTorrent file-sharing site declared legal under the Canadian Copyright Act;
  • 2009 – The British Columbia Supreme Court rejects isoHunt’s application, and grants the Canadian music companies’ application to have the petition proceed by way of an action or full trial. isoHunt files such an action;
  • 2009 – A US federal district court finds isoHunt liable for copyright infringement in a case brought by the Motion Picture Association of America (MPAA), citing unchallenged evidence that 95% of the files traded through isoHunt’s sites were likely infringing;
  • 2010 – Two dozen Canadian and international music companies file a lawsuit against isoHunt and Fung in British Columbia Supreme Court, alleging massive copyright infringement and seeking damages;
  • 2012 – The Canadian government passes The Copyright Modernization Act (Bill C-11), which ensures that businesses that enable infringement can be held liable for the activities they facilitate. In public statements, government representatives identify isoHunt as the type of “enabler” that the law is intended to target;
  • 2013 – A US federal court of appeals unanimously upholds the US district court’s decision;
  • 2013 – isoHunt and Fung agree to halt all operations worldwide and are deemed liable for a judgment of US$110 million in the US proceedings;
  • 2016 – by way of a consent order filed in the Canadian proceedings in British Columbia Supreme Court, isoHunt and Fung are liable for CAD$55 million in damages and an additional CAD$10 million in punitive damages.  isoHunt and Fung further agree not to be associated with any service that makes the music companies’ recordings available without authorization.

Despite these successful legal actions, piracy remains a significant problem for the music industry. IFPI estimates that 20 per cent of all fixed line internet users worldwide regularly access services offering infringing music. A recent report by the Digital Citizens Alliance demonstrates that one in three piracy sites contains malware, which could result in identity theft, stolen banking information, or exposure to hackers.

̶   Ends  ̶

For more information:

Quentin Burgess, Music Canada

qburgess@musiccanada.com

+1 (416) 967-7272 x106

 

Adrian Strain, Director of Communications, IFPI

adrian.strain@ifpi.org

+44 (0)20 7878 7935

 

 

Notes for editors:

About Music Canada

Music Canada is a non-profit trade organization that represents the major record companies in Canada, namely Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster.

About IFPI

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,300 major and independent companies in 61 countries. It also has affiliated industry associations in 57 countries.  IFPI’s mission is to promote the value of recorded music, campaign for record producer rights and expand the commercial uses of recorded music in all its member markets.

 

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‘Value gap’ growing, according to new UK figures

New figures released yesterday at Canadian Music Week by the BPI – the record labels’ organization that promotes British music – highlight the growing “Value Gap” that exists between consumption of music in the UK and the amount that record labels and artists receive in revenues from video streaming platforms.

Geoff Taylor, BPI Chief Executive, told delegates that the number of people streaming music in the UK doubled in 2015, resulting in a 70 per cent increase in payments from services such as Spotify and Apple to record labels, helping to propel the market to overall growth.

However, while UK streams of music videos almost doubled during the same 12 month period, the revenues paid to labels for those streams flat-lined, rising by less than half of one per cent. This disparity neatly encapsulates the market distortion characterised by the IFPI as the “Value Gap”.

Taylor added: “The rising flow of royalties that should be nurturing artists and labels has slowed to a trickle, as platforms that rely on safe harbours use consumer demand for our music to grow their own businesses at the expense of creators.”

Frances Moore, CEO, IFPI, gave the keynote speech on the ‘State of the Global Music Industry’ in which she referred to the findings of IFPI’s recently released Global Music Report, which showed that the music industry grew in 2015 for the first time in almost two decades, with digital revenues overtaking physical revenues for the first time.

Addressing the conference, Moore said: “We are at an extraordinary moment in our global business. Music is being consumed at unprecedented levels. Measurable growth is being achieved for the first time in nearly two decades.

“Yet the job of turning around the global music industry is really only just beginning and the scale of the anomaly to be fixed is huge. Music is driving economic activity and digital commerce. Yet, in terms of the value being returned to its creators and investors, music is massively undervalued.”

Cary Sherman, Chairman and CEO, RIAA, said: “DMCA reform has become an international phenomenon. Thousands of artists, dozens of music organizations and managers are speaking out and it’s beginning to make a difference. The fundamental unfairness of our existing laws, the stature of artists and power of music, is breaking through like never before.”

Graham Henderson, President and CEO, Music Canada, said: “The value gap is a striking example of how wealth has shifted from those who create content – our artists and their partners – to the large companies that build their platforms on that content. Creators are worse off today than they were when digital came into their lives. This is disturbing and was avoidable. Policy makers now have the opportunity to rebalance the framework in such a way that creators are fairly compensated.”

Dan Rosen, Chief Executive, ARIA, said: “The local Australian music business has done a great job in embracing new digital platforms, giving fans unprecedented access to the music they love. However, we need to ensure that the policy environment reflects the true value that music provides to digital services and allow money to flow back to the artists and labels to sustain a healthy ecosystem of creativity.”

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‘Music Cities’ Report Sets Out Roadmap To Economic Growth

Cannes, France, June 5, 2015: Recording industry groups IFPI and Music Canada have today released a new report that sets out how cities worldwide can take simple steps to help develop their music economies.

The Mastering of a Music City was launched at Midem, the world’s largest music industry conference.

The report provides a simple checklist to 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.

Graham Henderson, President and CEO, Music Canada, says: “A vibrant music sector delivers an extensive array of social, cultural and economic benefits to its community; from job creation and retention to city identity and music tourism, to social cohesion, music can play an essential role.”  

“Communities of any size, anywhere in the world, can assess the extent to which they have the essential ingredients for a Music City, and deploy the strategies successfully used in the likes of Nashville, Melbourne, Toronto, Berlin and other renowned Music Cities, in order to enhance or grow theirs. These strategies don’t necessarily require heavy investment – addressing red tape and establishing dialogue between leaders in the music community and city officials are inexpensive ways to grow music’s contributions.”

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:

  1. Music and musician-friendly policies, from licensing and liquor laws to parking and planning regulations to affordable housing and artist entrepreneur training.
  1. The creation of Music Offices to help musicians and music businesses navigate the broad range of government policies and regulations that impact music.
  1. The formulation of Music Advisory Boards to engage the broader music community in a collaborative way and to facilitate dialogue with city governments.
  1. Engaging the broader music community to ensure the people most affected by music policies are involved and informed.
  1. Access to spaces and places for artists to practice, record, and perform at every stage of their career.
  1. 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.
  1. 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.

In addition, multi-level government support for music, a broader city infrastructure conducive to the sector, music education programmes and efforts to highlight music history and identity are important.

Frances Moore, Chief Executive, IFPI, comments: “We’re delighted to be a partner in the Music Cities project, and we will work with our affiliates in 57 countries to spread the good work that Music Canada has been doing elsewhere in the world. They will be taking this report into City Halls worldwide, recognising that each place has different needs and priorities, but urging leaders to seize the common advantages offered by a growing music economy.

“We realise this will benefit the recording industry too, and that is the other reason we are co-sponsoring the report. Our job at IFPI is to improve the environment in which our member companies operate and this is one way that we can do that. Just imagine a world where you can go from country to country and find music cities in every one. That would be good for artists, good for record companies, good for city leaders and good for the wider public that just wants to enjoy great music.”

The Mastering of a Music City was produced after more than 40 interviews with music leaders, city and tourism officials, international focus groups and secondary research. It cites best practices and case studies from 22 cities. IFPI’s affiliated national groups will share the report globally to assist municipal leaders and other stakeholders to develop local music strategies.

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About IFPI:
IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,300 major and independent companies in 62 countries. It also has affiliated industry groups in 57 countries. IFPI’s mission is to promote the value of recorded music, campaign for record producer rights and expand the commercial uses of recorded music in all markets where its members operate.

About Music Canada:
Music Canada is a non-profit trade organization that represents the major record companies in Canada, namely Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster.

For more information, contact:

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