Professional Documents
Culture Documents
Report 2011
Music at the touch of a button
1
Contents
Introduction: Digital music – 2011 is the Year When
03 Governments Can Turn the Tide
04 Artists’ Voices
21 Content Protection
2
Digital Music – 2011 is the Year When
Governments Can Turn the Tide
Does this mean all is well with music in the We are also being responsible educators. IFPI
digital age? Regrettably not. The key statistics this year backed two international education
of this report sum up the story of recent years projects aimed at schools. Many are calling
– on one hand, spectacular growth in digital for better education of young people on the
revenues, up more than 1000 per cent in seven value of intellectual property in creativity and
years; but on the other hand, the loss of nearly commerce. We agree and are acting.
one-third of the value of the entire recorded
music industry. While record companies are Yet tackling digital piracy is ultimately a task for
Frances Moore innovating and licensing every viable form governments. Are they prepared to stand by
Chief executive, IFPI of music access for consumers, the music and allow an internet where normal laws and
industry is still haemorrhaging revenue as a values do not apply? There were encouraging
“Music at the touch of a button” is a fitting result of digital piracy. signs in 2010 that the tide of government
strap line for this report. Music fans have never opinion is turning.
had such choice and ease of access to This is a crisis affecting not just an industry –
licensed music. Around the world, legitimate but artists, musicians, jobs, consumers, and the Many governments are now recognising the
music services are catering to the lifestyle, wider creative sector. New figures in this report need for proportionate and effective steps to
taste and modes of access preferred by indicate piracy is hitting investment in new curb piracy. In the last year, France and South
consumers. These four hundred services music on a global scale, with the sales volume Korea implemented “graduated response”
include download stores offering tracks and of best-selling debut titles falling precipitously measures that will for the first time engage
albums, streaming services, free-to-user sites, in recent years. Meanwhile, large numbers ISPs in reducing peer-to-peer infringement on
internet radio, subscription models and online of jobs are disappearing, and many more their networks.
video channels. are under threat. The first comprehensive
study of the impact of piracy on employment, Similar moves are underway in the UK, New
And the new offerings keep on coming. published in March 2010, projects that more Zealand and Malaysia. The European Union
This was the year we “broke the seal” on than one million jobs will disappear from the is reviewing its enforcement legislation. The
subscription services. Highlights in 2010 creative industries in Europe by 2015 if piracy momentum for a solution is building, and that
included the advance of music subscription is not addressed. It is no wonder that trade is grounds for optimism.
services such as Spotify and Deezer, as well unions are now speaking out.
as partnerships with ISPs, such as Telia in As we enter 2011, digital piracy, and the lack
Sweden and Eircom in Ireland. of adequate legal tools to fight it, remains
There were encouraging the biggest threat to the future of creative
Music is leading the creative industries into signs in 2010 that the industries. Great new legitimate music
the digital age. We are forging the new offerings exist all over the world, but they
models that aim to make digital music both
tide of government will not survive if the market continues to be
consumer-friendly and commercially viable opinion is turning. massively rigged by piracy. “Music at the touch
for creators. New licensing models helped of a button” captures just how far we have
take the digital share of music industry We are not just waiting for government. The come in a few years in response to consumers.
revenues to an estimated 29 per cent in music industry is stepping up to the task of Yet we also need an internet guided by
2010. To put that in context, the film and book protecting its content. Industry pressure in the rule of law. This is the opportunity for
industries’ equivalent shares are only one and the last year alone has led to the closure of governments to seize in 2011.
two per cent respectively. Limewire, the blocking of The Pirate Bay in
Italy and Denmark, the removal of more than
seven million infringing links and growing
successes against pre-release leaks.
3
Artists’ Voices
“Music has an intrinsic value and it’s great to see a new wave of services that respect that. These new
sites are easy to use and much more flexible than some in the past. Fans can get great value tracks and
albums, while artists, songwriters and the army of people that work at record companies (who are at risk
of losing their jobs) are paid so we can afford to carry on making new music.”
Enrique Iglesias
“Music has a way of touching people’s hearts like no other medium. Whether it’s purchasing a
download or streaming an entire album, the ease-of-use access to music is putting all artists even closer
to the fans.”
Ricky Martin
“I am a committed and obsessed music consumer. My favourite places to buy the physical thing are
Soul Jazz, Honest Jon’s and Rough Trade - great advice, great selections - it’s like going into an awesome
art gallery. The online solutions to this that have emerged over the last decade are a superb alternative if
you need your music fast and digital. The ones I use, boomkat, eMusic, Spotify and iTunes are legal, easy,
occasionally beautiful and right at your fingertips. What more could a music fan ask for?”
Jamie Cullum
“It can take months of writing and studio time to make a great album that people want to listen to.
Writing music is a love but is also a job and I’d love to see those who are stealing music perform their
trade, knowing the client doesn’t even value it enough to pay for it.”
Elly Jackson (La Roux)
“Legal downloads of digital music are a great way to reach consumers and allow them to acquire their
favourite music. Nowadays technology gives artists the opportunity to instantly reach the fans that enjoy
our work.”
Vicente Fernández
“I love recording an album; it’s a great team work, so many people involved to make sure my fans get
the best of my music. I always encourage my fans to buy legal music, as doing so will ensure there will be
great music tomorrow.”
Chayanne
“On the internet, you still find millions of tracks offered illegally and downloaded without the people who
made this music, the creative minds behind all these tracks, receiving fair payment for their work. Some
of us are in the lucky position of continuing to benefit from our past successes, so internet piracy mainly
hits young, up-and-coming talents for whom every single euro really counts.”
Roger Cicero
“It’s amazing how things have changed since I bought my first album and had to catch the bus to
Livingston to go to the record shop. Now you just press a button. It’s phenomenal the choice people
have.”
Susan Boyle
4
Digital Music – Summary
of Statistics
13 million – tracks licensed by record 30% – the percentage of their
companies to digital music services revenues record companies invest in
A&R and marketing
400+ – licensed digital music services
worldwide -77% – estimated fall in debut album unit
sales in the global top 50 2003-2010
US$4.6 billion – trade value of the
digital music market worldwide -12% – fall in the revenues of the global top
50 tours in 2010 2
6% – growth of global digital music
revenues in 2010 -17% – fall in the number of people
employed as musicians in the US
29% – the proportion of record 1999-2009 3
companies’ global revenues from
digital channels 1.2 million – the number of jobs projected
to be lost in the European creative industries
1000%+ – the increase in the value of due to piracy by 20154
the digital music market 2004-10
4240 billion – estimated cumulative lost
-31% – the decline in the value of the retail revenues to the European creative
global recorded music industry 2004-10 industries from piracy 2008–2015 4
16.5% – proportion of internet users 0 – the number of local debut artists in the
purchasing digital music in the US 1 annual Spanish Top 50 in 2010
US$5 billion – the estimated amount -45% – fall in the number of domestic
record companies invested in artists in 2009 releases in Mexico 2005–10
5
Consumers Drive
New Business Models
13
million
6
29%
industry
revenue now
US$4.6
digital
billion digital
revenue
in 2010
7
Music
New services
customers
- the draw
£100m+ for ISPs
per year
to UK ISPs
by 2013
Subscription gains ISPs and mobile operators: ISPs are moving into music services in various
forms. Daniel Ek, CEO of Spotify, says: “ISPs
momentum logical partners need to start looking at these strategic
Spotify is the biggest digital retailer in Norway Record companies see enormous potential partnerships as a marketing tool, and integrate
and Sweden, and the overall number two in continued strategic partnerships with it into their core operations. There are benefits
digital service in Europe, after iTunes. Deezer internet service providers (ISPs) and mobile for them. So why not develop a legal service
has achieved significant reach in France, operators that have billing relationships with which is going to give a lot of additional value
where it is used by more than 13 per cent of a wide customer base. This makes them for the user and might create an additional
active internet users (The Nielsen Company, ideal partners for subscription services, either revenue stream?”
October 2010). bundled within the cost of a broadband fee
or paid for separately. Deals with mobile operators are also seen
In North America, Slacker is one of the top as pivotal. “You cannot achieve scale in
two radio subscription services, alongside this marketplace without the involvement
Pandora. Slacker has seen its customer base
grow seven fold since April 2010 and says
“ISPs need to start looking at of operators”, says Slacker’s Jim Rondinelli.
“That means highly visible distribution on
it has one of the highest conversion rates these strategic partnerships the handset and direct billing that puts the
to a paid service in North America. Both as a marketing tool and consumer no more than two clicks away from
companies offer a low-price entry-level music
service targeting young consumers. Pandora
integrate them into their the transaction. There is simply no substitute
for that.”
now has more 75 million registered users, up core operations.”
from 20 million in 2008, and 500,000 paying Third-party research conducted in 2010 points
Daniel Ek, CEO of Spotify
subscribers. Subscription services MOG, Rdio to the potential commercial value of music
and Thumbplay have all recently launched in to ISPs and mobile operators. Ovum’s report Is
North America. There a Commercial Argument for ISP Music
For ISPs and mobile operators, music services Services? estimated that ISPs in the UK alone
One of the key challenges for record may also bring key benefits. First, they are a could achieve additional revenues from new
companies remains migrating users of valuable way of acquiring new customers music services of more than £100 million per
unlicensed services to legitimate digital in a highly competitive market; second, they year by 2013. Meanwhile, analysis by Informa
services. A new generation of subscription have a significant effect in reducing “churn” Telecoms & Media, Unlocking the Real
services aims to do this by attracting the large and retaining customers. In addition, music Value of Mobile Music, found large mobile
‘lean-back’ audience. services can increase ISPs’ average revenue operators in Western Europe could realise as
per user (ARPU) and can be a valuable brand much as 278 million each in the first year from
“The lean-back customer is someone who repositioning tool. partnerships with established music streaming
loves music and is willing to pay for it, but services, such as Spotify.
simply has no idea how to go about finding
it”, says Jim Rondinelli, vice president of digital
development, Slacker. “Their access to music
in retail outlets has diminished considerably,
yet these consumers have showed us there is
no lessening of their demand for music.”
8
Churn
reduction
Brand
repositioning
278m
per year to mobile
operators in Western
Europe
Deals take off with ISPs something that you cannot explain to anyone, In South Korea, SK Telecom launched MelOn,
but you only need to try it before you realise a monthly subscription service, as early
Music industry-ISP partnerships were struck its power. The customer already has a billing as November 2004. The service made SK
around the world in 2010. These generally relationship with us and we can answer their Telecom a leader in data revenues in the
follow one of two models: where the ISP questions directly. That makes it possible to country. In Australia, teleco AAPT partnered
develops its own-branded music service, such drive a market for paid music subscriptions.” with EMI Music to offer a subscription service
as TDC Play; or where the ISP partners with an bundled with its broadband and fixed line
existing music service, such as Telia-Spotify in Gunnar Larsen, global sales director of packages. Songs from multiple labels are
Sweden. Aspiro, highlights the “win-win” result of this available through the service. In Taiwan,
agreement: “Operators can provide a leading ISP Far EasTone Telecommunications
In Sweden and Finland, ISP Telia offers a four music service that their customers want in an is to launch streaming service Omusic in
month free Spotify subscription to its customers environment that they trust. By connecting partnership with seven record companies.
when they sign up to a mobile package. The themselves to music, operators can also move
partnership was cited by Telia in its earnings into new segments, attracting new users.” In the mobile sector, Vodafone has the largest
announcement for 2009 as one of three number of paid digital music subscriptions
reasons for its strong performance that year. in Europe, with more than 600,000 customers
across eight markets. In Spain, a market
In Denmark, TDC was the first ISP to offer Music industry-ISP devastated by piracy, Vodafone was the
unlimited music downloads to its mobile partnerships were struck biggest digital music retailer in 2010, offering
and broadband customers at no additional
charge. In November 2010, TDC announced its
around the world in 2010 a data tariff bundled with an all-you-can-
eat music service which attracted in excess
customers had downloaded 250 million songs of 300,000 subscribers. Vodafone is now
since launch – the equivalent of 45 downloads In Italy, FASTWEB launched a music service in developing its MP3 bundle concept – song
per person in the country. Moreover, since partnership with Dada in November 2010. It vouchers that can be redeemed during
launch, streams have increased by an enables fans to access millions of songs from the month of purchase (such as 10 songs for
average of 52 per cent each month. Music major and independent labels for 26 per 25.80). In the UK, Vodafone has sold more than
has helped TDC reduce broadband churn by month. They can download 15 high-quality 100,000 ten track bundles.
approximately 50 per cent. tracks and stream the entire catalogue.
In North America, Slacker has partnered
In Norway, Telenor launched a subscription In Ireland, Eircom announced the launch with four of the seven largest mobile
service, WiMP, in cooperation with mobile of its MusicHub service in December 2010. operators. Its application is pre-loaded
content provider, Aspiro and Platekompaniet, MusicHub offers free and unlimited streaming on millions of devices, while the operator
Norway’s largest chain of music stores. The of four million tracks without advertising to integrates the billing for the subscription and
service is also available in Denmark. WiMP existing Eircom broadband customers. Users markets the service.
does not offer an ad-supported tier, but with can also download DRM-free tracks for 32
its free trial period it has managed to convert cents and keep them even if they leave the
70 per cent of those that try it into paying service. Customers can also build playlists and
subscribers. Kim Sørensen, senior marketing recommend songs through social networking
manager at Telenor, says: “Streaming music is features.
9
Music in the living room New frontiers of music
In the digital age, record companies seek to “The most successful access: smartphones
engage consumers wherever they want to network operators will The rising penetration of smartphones, such
access music. Music in the living room is the
obvious next step.
be those who can offer as the iPhone and Android devices, saw a
growing proportion of downloads in 2010
connected services to coming directly from such handsets.
Several innovations came to market in this the living room and
area in 2010. They included the partnership
between Spotify and Sonos, allowing Spotify
portable devices.” The growth in smartphone usage has also
brought other benefits. Digital services offer
premium subscribers to stream songs in any Francis Keeling, Universal Music mobile applications (apps) that significantly
room in their home through the Sonos Multi- Group International increase the value of premium subscription
Room Music System. The service has been offers, expanding the paying audience for
made available in seven European countries. services such as Spotify. Apps can also be
used to market music alongside other
In Sweden and Finland, through Spotify’s Music in the cloud digital tools such as Facebook and Twitter.
partnership with Telia, subscribers can now The “cloud” is now a watchword in digital Apps are expected to be a key sector of
access music through their TV set. Apple music, even though the business models innovation in 2011.
also launched the new version of Apple TV, are still in their infancy. Cloud services
allowing iTunes customers to access their respond to consumers’ growing interest Music services bundled with smartphones
digital libraries from their TV. in “connectedness” between music and have been focused on developing markets,
devices. They can either act as a “locker” to where mobile usage far outpaces fixed line
enable a consumer to access their own music internet access. Nokia’s Ovi Music service, for
collection through a range of different devices example, has seen healthy take-up in markets
How and where do people listen to music?
or offer that user access to a catalogue of such as Brazil, India and China.
Living Room (hifi, TV, games console, DVD player) 79% tracks owned by the service provider.
Car 76%
Sony Corporation’s Music Unlimited is a cloud-
The continued rise of
PC 46% based music streaming service, launched music video
in the UK and Ireland in December 2010 and The massive reach of music video creates a
iPod 39%
in the US in January 2011. The service allows potentially sizeable ad-supported business.
Mobile 20% subscribers to house their music on remote YouTube remains the biggest platform for
Source: ICM for Omnifone, Feb 2010 (UK) servers (clouds) for use in a range of internet- viewing videos online. It accounts for 43 per
connected devices such as smartphones, cent of online videos watched in the top three
game consoles, TV and Blu-ray players. European markets (UK, Germany and France),
Music in the living room is now a central or some 8.7 billion videos watched per month
element of commercial deals with ISPs. Francis In 2010, Carphone Warehouse and Best Buy according to ComScore (October 2010). In
Keeling, vice president, digital, Universal Music launched a licensed cloud music service. the US YouTube accounts for 39 per cent of all
Group International, says: “The most successful Several others are reported to be in the videos viewed online.
network operators will be those who can pipeline, with parties involved including
offer connected services to the living room Google and Tesco. Other services, such as VEVO and MTV, are
and portable device. We have seen rapid also commanding significant audiences.
developments on mobile platforms, and key Record labels have taken different
to the development of music services for the approaches to licensing online music video
future will be the TV set top box.” services, some partnering with YouTube
through VEVO and others with MTV and by
launching artist-branded websites. Michael
Nash, executive vice president, digital strategy
and business development, Warner Music
Justin Bieber’s Baby video was watched Group, says: “We offer consumers artist-
worldwide by more than 430 million branded channels on YouTube. In a world
viewers by January 2011, making it the where over half of the active rosters are signed
to extended rights agreements, it is extremely
most watched music video in YouTube’s important for us to have a strong marketing
history. partnership with our artists.”
Source: YouTube
10
Sweden:
A case study in digital music
The introduction of new legislation and a
landmark court decision on The Pirate Legislation has an impact
Bay in 2009 helped make Sweden a positive Music downloading among broadband subscribers in Sweden
case study for digital music. Yet 18 months
later, lack of active copyright enforcement
40%
threatens to reverse the gains the market
Q2 2009 Q2 2010
has made. 37%
33%
11
The Shape of Digital 29%
Music in 2010 industry
revenue now
digital
US$4.6
billion value
of the digital
music industry
Record companies’ trade revenues from The overall US digital market is estimated to In Asia, the Japanese music market continued
digital channels grew by an estimated six have seen single-digit percentage growth to suffer in 2010, with a substantial impact on
per cent in 2010, to total US$4.6 billion. Digital in 2010, mainly due to a steep decline in the the entire region. By contrast, there was strong
channels now account for an estimated mastertone and ringtone business. There growth in digital revenues in South Korea,
29 per cent of record companies’ revenues, has been continued strong growth in the coinciding with improvements in the legal
compared with 25 per cent in 2009. performance rights sector, with an increasing environment. The overall recorded music
number of consumers accessing digital market in South Korea grew by 10 per cent
Music and games are leading the creative broadcasts through services such as Sirius XM in the first half of 2010, with strong growth in
industries in the digital environment. The value satellite radio and Pandora. music services from major internet portals such
of the digital music market today amounts to as Naver and Daum, which now reach as
more than four times the combined online In Europe, digital revenues surpassed the many as 22 per cent and 17 per cent of active
revenues generated by the book, film and expectations of many in 2010, growing internet users in South Korea respectively
newspaper industries. by almost 20 per cent, with double-digit (The Nielsen Company, October 2010).
percentage increases in most major markets. Digital revenues in India increased
The US is the largest digital music market Record labels saw increasing revenues from significantly as well.
in the world. In 2010, revenues from digital download stores, but also from subscription
channels accounted for almost half of record services, with Spotify becoming the second In Australia, digital revenues grew by 32 per
companies’ US trade revenues, driven by a largest source of digital revenue for labels in cent in the first ten months of 2010, driven
combination of increasing digital revenues Europe. Record companies in Europe are by the download model. However, overall
and the sharp decline in CD sales caused more reliant on physical format sales than industry revenues are well down from previous
in part by the closure of physical retail stores in the US. Digital channels still accounted levels due to a steep fall in physical sales and
across the country. Single track unit sales for less than 20 per cent of labels’ trade growing digital piracy. 2010 also saw a range
increased by one per cent in 2010, with digital revenues in 2010. of innovative offerings come to the market,
albums up 13 per cent, accounting for 26.5 including AAPT’s bundled subscription service,
per cent of total US album sales (Nielsen Guvera and Bandit.fm.
Soundscan).
Revenue from digital channels in Latin
America is expected to have grown by more
39% Global Digital Revenues Share than 50 per cent in 2010. Argentina, Brazil and
Mexico combined represented more than
80 per cent of digital music sales across the
29%
region. Record companies’ trade revenues
from digital channels are expected to have
more than doubled in Mexico, and increased
by more than 30 per cent in Brazil in 2010.
4%
2% 1%
Game Music Newspaper Books Film
12
Best seling global Artist Title Sales (m)
digital singles of 2010
The best selling digital single 1 Ke$ha TiK ToK 12.8
of 2010 was Ke$ha’s TiK ToK,
selling a total of 12.8 million
units. This compares to 9.8
2 Lady Gaga Bad Romance 9.7
million digital copies of Lady
Gaga’s Poker Face which 3 Eminem featuring Rihanna Love The Way You Lie 9.3
topped the chart in 2009.
This is the first time a digital Lady Gaga
single has crossed the 10 4 featuring Beyoncé Telephone 7.4
million mark.
5 Usher featuring Will.i.am OMG 6.9
Source: IFPI. Period 12 months to November 2010. Sales are rounded. Combines all versions of the same song.
13
Digital Piracy –
Facts and Trends
“I know loads of really talented artists, but they are finding it more difficult to get signed.
That’s because less money is flowing into the industry with the inevitable consequence
that fewer acts are being signed.”
Jay Chou
Digital music piracy exists on a vast scale Further research confirms the sheer scale of
and is growing globally. Illegal file-sharing on illegal music file-swapping in all markets. In the % of active internet users visiting
peer-to-peer (P2P) networks remains rife, and UK, for example, Harris Interactive found that 76 unlicensed services
alternative forms of illegal distribution such per cent of all music obtained online in the UK
as cyberlockers, illegal streaming services in 2010 was unlicensed. The survey found that Spain 45%
and forums are also a serious and growing the majority of unauthorised downloading
problem. was coming from P2P networks but that music Brazil 44%
piracy through cyberlockers is on the rise.
EU Top 5 Markets 23%
Digital up 1000%+,
Revenues down 31% Limewire down, BitTorrent up Source: The Nielsen Company
The overall impact of digital piracy has been Despite variations by country, there are some Active internet users refers to monthly users of the internet.
Unlicensed services refers to selected P2P and non-P2P
to contribute substantially to the dramatic common trends across markets. The popularity
services that are used to access music and other content.
erosion in industry revenues in recent years. of Limewire, appears to be in decline after
Despite the surge by more than 1000 per cent the US court injunction in October 2010. On
in the digital music market from 2004 to 2010 the other hand, usage of BitTorrent is growing
to an estimated value of US$4.6 billion, global across most markets, indicating that P2P Virtually all P2P content
recorded music revenues declined by 31 per networks are still a significant source of pirate is illegal
cent over the same period. The two figures content.
Third-party research consistently shows that
powerfully illustrate how, in the face of piracy, the vast majority of content distributed on
even the most progressive strategy of licensing Among other forms of digital piracy, use of
file-sharing networks is copyright-infringing.
hundreds of digital music services has been cyberlocker services such as Megaupload
In Australia, the Internet Commerce Security
unable to prevent the steady decline in the and Hotfile is growing rapidly. Websites
Laboratory study, Investigation Into the Extent
overall legitimate music market and that and forums linking to content hosted on
of Infringing Content on BitTorrent Networks,
decline will continue unless action is taken. cyberlocker services are also on the rise.
found in April 2010 that 89 per cent of all torrent
While the use of illegal streaming services
files from a sample linked to infringing content.
Piracy trends vary markedly by country. is still limited, this is another growing area,
Independent research shows Brazil and together with mobile piracy.
A US study of the P2P service Limewire came
Spain to be among the markets with to similar conclusions. Richard Waterman,
the highest numbers of users accessing Professor of Statistics at the University of
unlicensed services with 45 per cent and Nearly one in four active Pennsylvania, logged the number of times
44 per cent of active internet users
respectively visiting selected unlicensed
internet users in Europe visit Limewire users sought to download each
of the files in a sample of 1,800. His study of
services in a single month (The Nielsen unlicensed sites monthly October 2010 estimated 98.8 per cent of the
Company, October 2010). This compares to files requested were copyright protected or
23 per cent across the top five EU markets.
The Nielsen Company
highly likely to be copyright protected and
thus not authorised for free distribution. The
Even in countries with comparatively low study was used as evidence in the Limewire
levels of usage of unlicensed services, court case.
the volume of unauthorised music
consumption vastly eclipses the volume
of legal music consumption.
14
Spain: A case study and a warning
A grim list of statistics makes Spain a reached it since then. In each of the past
case study of a legitimate music industry two years, not a single new Spanish artist
10 =
struggling for survival because of has featured in the country’s top 50 selling
digital piracy. albums compared with ten in 2003.
0=
7,000 in 2009. In 2010, Spain’s number one
Local artists, in particular new acts, have albums sold an average of just 6,000
been the principal victims of the crisis. copies per week.
The strength of A&R in Spain, particularly
until 2000, made Julio Iglesias, Alejandro The Spanish government is currently Spanish
Sanz, Enrique Iglesias, Miguel Bosé, pushing long-delayed legislation aimed
Mónica Naranjo, La Oreja De Van Gogh, at reducing website-based piracy. While debut artists in
Estopa, Jarabe de Palo and David Bisbal an important first step, it is unlikely to the Top 50
international stars. Until 2004, at least one address the country’s P2P piracy problem,
Spanish act would sell more than one which reaches as much as 21 per cent in 2010
million album copies across Europe every of active internet users every month (The
year. In 2007 one act, Alex Ubago, reached Nielsen Company).
that mark, but no other Spanish act has
15
Digital piracy –
counting the cost
Developing artists are
The pressure on new artists globally the victims
Debut album sales fell 77%, 2003–10
Digital piracy’s impact on music sales feeds
through directly to reduced investments in
200 48 50
artists. Data published in 2010 by IFPI (Investing
180 45
in Music) indicates that around 16 per cent of
Top 50 album sales – all titles (m units)
160 40
35 the recording industry’s revenue is invested
120
29 28 30
in developing artists annually. This proportion
100 25
was more than any other industry, including
80 17 20
pharmaceuticals, invests in research and
13 14 development. With a further 13 per cent spent
60 11 15
Source: IFPI. 2010 figures are estimates based on Jan-Nov actual sales. These figures illustrate a fact that remains
crucial to the music industry’s economic
model – namely the importance of recorded
music sales as the platform for artists’ careers.
Lower music sales means fewer jobs
While much attention is paid to the live music
50 15
market and to revenues from branding and
14
45
13 other non-recording revenue sources, these
Recorded music shipments (US$ billion)
Musical groups and artists (thousands)
12
11
tend to be the privilege of established artists
40 10 rather than new and developing acts. For
9
8 example, Pollstar reported the top five tours
35
7
of 2010 were by Bon Jovi, AC/DC, U2, Lady
6
30 5 Gaga and Metallica – mostly artists with
4
3
extensive catalogues established through
25
2 record sales. Once an artist has established
1
20 0 their name through their recordings, they can
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
then generate substantial income through live
performances and merchandise. By contrast,
Recorded music shipments and employment of musicians and artists 1999–2009 no major artist to date has been able to build
Source: US Department of Labor, RIAA
a career on live performance alone.
famous acts, it’s about the thousands of bands you Total box office sales of the world’s top 50 tours
fell by 12 per cent in 2010 to US$2.93 billion,
have never heard of who are trying to make a living according to Pollstar.
16
1.2
million job
-12%
decline in the top
losses in Europe 50 tours’ revenues
in 2010
by 2015
Debut artists hit globally These figures indicate that the music industry’s
Mexican recorded music market 2005-10 greater loss of revenues due to piracy is
A similar trend is now appearing internationally. having an impact on the success of new
Domestic releases -45% The trend in global top 50 album sales in recent artists as investment comes under pressure.
Investment in new artists -69% years shows a striking decline in both the Consequently, fewer new acts are also
Units sold of local repertoire -56% number and proportion of successful releases breaking into the top selling charts.
globally by new artists. Between 2003 and 2010,
Source: Amprofon, Mexico
the combined sales of debut albums featuring Fewer artists are also able to make
in the global top 50 fell by 77 per cent, from 47.7 professional careers out of music. US
The pressure on investment in new local artists million to 10.8 million*. By contrast, non-debut Department of Labor statistics underline
as a result of piracy is highlighted in individual album sales fell 28 per cent over the same the link between recorded music sales and
markets such as Spain and Mexico. In Mexico, period. Debut titles accounted for 27 per cent musicians’ jobs. According to US employment
the number of local releases fell from 367 of all global top 50 sales in 2003, a healthy share figures over the last decade, the number of
in 2005 to 190 in 2010. The number of local for new repertoire which has since fallen to people employed as musicians in the US fell
repertoire units sold fell from 18.1 million in 2005 only 10 per cent in 2010. At the same time the by 17 per cent between 1999 and 2009, on
to 7.9 million in 2010. number of debut albums in the Top 50 has the back of a 53 per cent decline in recorded
fallen, from 10 in 2003 to 7 in 2010. music shipments.
The fight by creative industries against digital A series of educational notices to the customer
piracy is an economic necessity, not a moral would culminate in a sanction, which could 53 per cent stopped or cut
crusade. Illegal file-sharing and other forms include restrictions on the use of their internet
of online infringement constitute unfair service, for those who refuse to stop infringing.
back since the passing of
competition to legitimate commerce and Research indicates that the vast majority of the HADOPI law
a threat to investment in artists. Innovation, customers receiving such notices would stop
licensing and business skill alone are infringing in order to avoid such a sanction.
not adequate solutions to this problem. cent of French consumers would be willing
Cooperation from ISPs is a key component. Unfortunately, efforts to establish a voluntary to check the internet use of others in their
Where voluntary cooperation is not possible, system of cooperation have failed in most household if there was a risk of losing their
government regulation has to ensure a level countries, in large part due to individual internet connection. Research company
playing field. ISPs’ concerns over potential competitive BVA, carried out a survey in October 2010 and
disadvantages. Yet barely five years after found that since the passing of the law, 53 per
The music industry has urged greater the music industry first promoted graduated cent of those who had illegally downloaded
cooperation from ISPs for several years, response as a solution to P2P piracy, many stopped or cut back on their activity (29 per
both by blocking services that offer access governments are either legislating or giving cent stopped and 24 per cent cut back).
to unlicensed content and addressing the approach active consideration.
file-sharing by individuals on P2P networks. South Korea is another early adopter of
graduated response. A law passed in April
In dealing with infringement over P2P Graduated response 2009 provides for suspension of user accounts,
networks, the industry favours a preventative
and educational approach involving
gains momentum excluding email, for less than one month for
communication with subscribers over the France led the way in 2007 by enacting a first time offenders; one to three months for
more punitive and less effective alternative graduated response law, which is now in second time offenders and up to six months
of mass-scale individual lawsuits. operation. The Creation and Internet Law thereafter.
created a new independent administrative
The solution to P2P piracy, now being adopted authority responsible for alerting copyright Graduated response notices started to be
and debated in countries around the world, infringers about their illegal activity (HADOPI). sent in March 2010 and the first account
is the so-called “graduated response” model After two warnings, HADOPI can refer repeat suspensions were announced in November.
requiring responsible steps by ISPs to help infringers to the courts where available
address piracy on their networks. sanctions include fines or temporary Parallel to the graduated response
Graduated response is a proportionate suspension of internet access for up to 12 programme, portal sites, such as Naver, Daum
approach that involves a system of months. The law began to be applied, with and Nate, have introduced filtering on their
educational notifications and warnings, notices sent, in September 2010. networks. This development is significant as
culminating in deterrent sanctions for those portals dominate online activity in South Korea.
who refuse to stop infringing. ISPs are provided While it is too early to assess the full impact The government has also been active in the
with evidence from rights holders identifying of the HADOPI law, some independent area of consumer education, introducing
the ISPs’ customer accounts used to publicly studies point to an effect on French copyright classes in schools. These elements
disseminate copyrighted music or other media. consumer behaviour based on awareness coincide with improving market conditions.
of the law and its implications. A study by In 2009, music sales grew by 10 per cent and
IFOP conducted in June 2010, before the in the first half of 2010 the market grew by a
implementation of the law, found 77 per further 10 per cent.
18
France takes the lead with new law
For the man tasked The new law has seen an active education Another project led by the French
with managing campaign by HADOPI, starting with mass government is the “Carte Musique” which
France’s new leafleting at motorway toll booths in offers people aged 12-25 the opportunity to
graduated response August 2010. purchase for 225 a card that enables them to
system, Eric Walter, it is buy 250 worth of music from a variety of digital
a long-overdue The French market fell by only 2.7 per cent in services. The government and industry have
response to years of 2009, compared with a global decline of promoted the scheme through a high-profile
failed attempts to 7.2 per cent. In the first ten months of 2010, national advertising campaign.
tackle illegal downloading. “Discussions have French music sales were down by two per cent,
been going for ten years now”, says the reflecting digital growth of 14 per cent and a
general secretary of HADOPI. “We could have physical decline of five per cent (well below the
waited and while we waited, things would global average).
have become much worse. But now we have HADOPI publicity material
the chance to do something, and we are the
Un internet Un cadre Mettre en place
L’Hadopi,
La réponse graduée
addressing
Protection this problem.” Artistes
Internet a modié nos usages Pourquoi ?
Innovation
Web
Les usages non autorisés à grande échelle se sont multipliés. La sécurisation de la connexion à internet a pour but d’éviter
Beaucoup de personnes téléchargent, apprécient et échangent les utilisations non autorisées d’œuvres protégées par un
des œuvres sans toujours respecter les droits des créateurs. droit d’auteur. Comme pour son domicile, il est nécessaire
ForMusique
Walter, the new law is primarily aboutInternet
Vérication des éléments
Rédaction d'un procès verbal transmis par les ayants droit aux internautes d’envisager différemment l’utilisation de leur
Internet est un espace de liberté, Derrière l’œuvre, des créateurs par les ayants droit
connexion internet par leurs proches.
d’expression et de partage Une œuvre implique toute une chaîne de métiers. Elle s’écoute
Label incontournable. Le développement
grâce à des ingénieurs du son, des interprètes, des producteurs.
Comment ?
creating awareness
Diffusion of personal responsibility.
Elle se regarde grâce à des cadreurs, des réalisateurs, des
Création
maquilleurs. Elle se vit grâce à des programmeurs, des
des nouvelles technologies de régisseurs, des distributeurs…
Transmission du dossier au
Parquet. Décision du juge. Envoi d’une recommandation Pour sécuriser son accès à Internet, l’abonné peut :
par voie électronique à l’abonné
communication permet une Toute cette lière a des droits. Des droits qui bénécient à la
fois à ceux qui créent l’œuvre, l’interprètent, la nancent, c’est
- Protéger son poste grâce à un mot de passe,
- Installer des logiciels tels que le contrôle parental,
multiplication des échanges culturels. à dire à ceux qu’on appelle les ayants droit. La diffusion d’une les anti-virus ou les pare-feu,
“HADOPI
Œuvresis an educational system, Usages not a
œuvre constitue le principal revenu de toutes ces personnes. - Protéger son wi en utilisant une clé WPA.
Nos usages se transforment Utiliser une œuvre sans autorisation c’est donc les priver de leur
responsables rémunération. Ce type de service est proposé par les concepteurs de moyens
et offrent une plus grande liberté. Un comportement responsable dans l’accès aux œuvres, de sécurisation (fournisseurs d'accès à internet et autres).
c’est un choix qui respecte leur créativité, leur travail et leur
Néanmoins, bénécier de nouvelles
Pédagogie
Décision de l’Hadopi de transmettre En cas de nouvelle constatation, En cas de nouvelle constatation
3
Commission de Protection des Droits
Délai maximum
Délai maximum entre l'envoi
Un label
pour se protéger
Pour orienter les internautes Avec le label "Hadopi offre légale", il sera plus Dans un univers technique qui peut paraître complexe,
facile d’identier les offres respectueuses du droit le label "Hadopi moyens de protection" permettra
vers des pratiques responsables,
s: Livre Multimédia la loi a créé en 2009 l’Hadopi.
d’auteur. Il existe aujourd’hui sur Internet des sites qui
garantissent la qualité et l’authenticité des contenus
et mettent en avant la créativité des auteurs. L’une des
Qu’est ce que la négligence caractérisée ? Que risque l'abonné ? Quels sont les droits de l’abonné ?
à l’internaute de s’orienter clairement et rapidement.
Il aidera l’internaute à choisir un dispositif able de
protection de son accès à internet.
is just to d’auteur
send a message about the need
La négligence caractérisée, c’est l’infraction S’il est reconnu coupable par le juge de L’abonné peut faire valoir ses observations à
ement missions de service public de l’Hadopi est d’identier qui sanctionne le fait pour un abonné de ne négligence caractérisée, l‘abonné s’expose à l’Hadopi à chaque étape de la procédure de
NE PAS JETER SUR LA VOIE PUBLIQUE
Droit Culture
ces supports. pas avoir sécurisé son accès à internet. Cette une amende allant jusqu’à 1500 € d'amende réponse graduée.
Ainsi, grâce au label, l’internaute pourra faire le choix contravention, prononcée par le juge, peut être et à une peine complémentaire de suspension
d’une pratique responsable et respectueuse de la décidée au terme de la réponse graduée. de son accès à internet allant jusqu’à un mois.
lière.
’il doit
net an
soit
for responsible behaviour on the internet.” 100810_depliant_exe.indd 2 12/08/10 13:52
efaçon.
L’Hadopi vous souhaite
bonne route …
sur internet !
The UK became the third major recorded
Hadopi 4, rue de Texel
75014 Paris data protection rights. The pilot phase of the Action in the US, China
music market to enact a law incorporating agreed graduated response programme is
graduated response measures in April 2010. underway, with Eircom sending notifications
12/08/10 13:52
In the US, new legislation, the Combating
The Digital Economy Act will see graduated to infringing users. Online Infringement and Counterfeits Act, was
notifications sent to infringers. If it fails to introduced last year to provide enhanced
sharply reduce piracy, ISPs could be required The European Union (EU) is also moving to enforcement tools against websites
to implement deterrents, including technical act on online piracy. In 2010, the European “dedicated to infringing activity”. The Bill
measures, against persistent offenders. Parliament adopted the Gallo Report, would authorise the suspension of domain
signalling that intellectual property needs names, as well as orders preventing US firms
New Zealand is in the final stages of further protection online. In January 2011, the from providing these sites with payment or
enactment of a graduated response law, European Commission published a report advertising services. The Bill was approved
which is expected to pass in early 2011. The and opened a consultation as part of its by the Senate Judiciary Committee and is
law proposes a series of notices followed review of the Enforcement Directive. The report expected to be re-introduced in the new
by sanctions for repeat infringers in the form points out the need to adapt the legislation to Congress in the first half of 2011.
of fines of up to NZ$15,000 (US$10,800), with deal with online piracy and calls to expand
account suspension available if the fines are the involvement of ISPs as they could play an In China, which has long seen piracy levels
“not having the desired deterrent effect”. important role in curbing online infringements. of virtually 100 per cent, the government
announced in November 2010 it intends to
Graduated response was introduced in Legislation adopting principles of graduated crack down on the problem. Rights holders
Ireland by a legal settlement between the response was enacted in Taiwan in July hope this will translate into sustained action.
country’s largest ISP, Eircom, and IRMA, which 2009 and in Chile in May 2010, and is
represents the recorded music industry under consideration in a number of other
in Ireland. The settlement was bolstered countries. Elsewhere, rights holders and ISPs
by a significant court ruling in April 2010, are discussing the possibility of a graduated
confirming that this method of enforcing response through voluntary agreement.
intellectual property rights does not violate
“Every time you buy a subscription for the internet, the Internet Service Provider (ISP) is also cashing
in on the option for people to download music for free. For young artists and songwriters just getting
started, the prospect of paying your rent with this going on is extremely grim.”
Bryan Adams
19
Consumer Education
has a Key Role
Consumer education plays an important Pop4Schools is a programme for helping
role in the music industry’s digital strategy. IFPI primary school children to gain a better
and national affiliates are actively involved understanding of how music is produced. The
in dozens of public education programmes programme was designed in collaboration
worldwide. Some of these are highlighted below: with teachers and piloted in five very different
schools across the UK in 2009/10. It launched
Music, Film, TV and the Internet - a guide in the UK in December 2010 and is set to rollout
for parents and teachers is an international internationally in 2011. Children write, produce
campaign aimed at parents and teachers and promote a piece of music, role-playing
which started being rolled out in schools in the basic process that takes place in a record
November 2010. The guide is published by company environment. Teachers match
international children’s charity Childnet and pupils’ skills to certain tasks, such as performing
is backed by music industry organisations, the song, designing artwork or writing sleeve
including Pro-music, and the film and notes. They can use Pop4Schools to teach
television sector. It provides simple and key curriculum subjects such as literacy, maths,
practical advice for parents and teachers science, history, art and music.
advising young people on how to enjoy music www.pop4schools.com
and films safely and legally on the internet.
www.childnet.com/downloading The Value of Ideas is an education
programme that originated in Austria. The
Music Matters was created in the UK by the multi-media resource showcases a variety
music industry, including artists, retailers, of jobs in the music industry and takes pupils
songwriters, labels and managers. The step-by-step through the process of making
campaign consists of two parts: first, a series a record. It can be used cross-curricular or
of short dynamic videos on the work of in subject-based lessons. More than 10,000
different artists, some made by performers copies of the resource have gone into schools
themselves, aimed at reminding listeners of across Austria. The materials are now used by
the significance and value of music; and German-speaking schools in Germany, Italy,
second, a “Music Matters” trust mark which Netherlands, Poland, Switzerland and Turkey.
acts as a guide for music fans to help them www.ideensindetwaswert.at
differentiate legal music services in the UK from
illegal ones. When users choose sites carrying Tous Pour La Musique is an education
the trust mark they can be sure the site is campaign supported across the music sector
legal and copyright holders are paid for their in France, aimed at protecting the livelihoods
creative work. of all those involved in the creative chain
www.whymusicmatters.org and raising awareness of legal online music
services. The project is aimed particularly at
Pro-music is an international information young people. The website informs on the jobs
campaign about online music supported by and roles performed in the music sector, and
major and independent record companies, lists legitimate downloading and streaming
music publishers, musicians, performers and sites available in France.
retailers. The resource provides guidance www.touspourlamusique.org
and information about online music and links
to a list of more than 400 legitimate services
worldwide.
www.pro-music.org
“By paying for music today from a legal music service, you are ensuring
there will be great new music tomorrow from all the artists you love.”
The Saturdays
20
Content
Protection
Strategic litigation In Italy, in February 2010, ISPs were ordered it more difficult for its search engine to be
to block the most popular BitTorrent site, The used as a vehicle for piracy. The company
The music industry actively protects its content Pirate Bay. Between February and October announced it would make it easier for
where it can, through negotiation and, as a 2010, usage of The Pirate Bay in Italy tumbled rights holders to submit takedown requests,
last resort, litigation. The aim is to deter and by 54 per cent. This compares to sharp improve its process for preventing the use of its
stop large-scale infringing services. There were increases in usage of the service in other Adsense programme on infringing websites,
some key successes in 2010. countries, including Germany, Australia, US and look at ways to make legitimate content
and Brazil, where The Pirate Bay has not been more readily accessible in search results. The
In October 2010, a US District Court issued an blocked. Overall usage of pirate services fell in music industry is watching to see how these
injunction requiring the file-sharing service Italy in the month of the block and remains at proposals will be implemented.
Limewire to cease supplying its software and a lower level nine months on.
to block the sharing of unauthorised files.
Limewire was the biggest source of illegal
Tackling pre-release piracy
In November 2010, the Court of Appeal in
music downloads in the US. The IFPI global anti-piracy team secured the
Sweden upheld the convictions of three
removal of more than seven million infringing
men who operated, financed and promoted
One of the most popular BitTorrent sites, links in 2010. Curbing pre-release piracy is a
The Pirate Bay. The court handed down
Mininova, was ordered to disable its infringing particular priority for the recording industry, as it
custodial sentences and ordered the men to
service by a Dutch court in November 2009. hits albums at the most vulnerable point in their
pay damages for the harm they had caused
Mininova claimed to have had more than sales cycle. An album typically sells over half
rights holders.
10 billion downloads from the service, mostly of its copies in the first four weeks of release.
consisting of copyright protected films, games, Pre-release monitoring in collaboration with
music and television programmes. Since
The role of intermediaries record companies in release planning has
then, the popularity of the service has fallen Intermediaries such as Google have a pivotal been effective: In the last few years, the typical
dramatically, with usage down by more than role to play. In December 2010, following leak time has reduced from a few weeks to a
80 per cent in major markets. discussions with rights holders, Google few days before an album goes on sale.
announced it would take steps to make
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21
The Squeeze on
the Smaller Players
“We can’t downsize, we can only close”
Major record companies are often at the Mexico’s high rate of online piracy, with
centre of debate on the impact of piracy. an estimated 5.1 billion tracks illegally
Yet independent labels and management downloaded in 2009 (IPSOS), has made
companies are often even more hard hit. it more difficult for San Martin to sign and
support artists. He says: “The amount I have
Filippo Sugar is the president of Sugar Music, been able to invest in artists has fallen by
Italy’s largest independent record company. around 80 per cent in just two years. As a
He notes the most successful Italian artists result, we are releasing more compilations
are those that were given their initial break rather than developing new artists.”
by independent labels that in many cases Filippo Sugar, Italy
have now gone out of business. “Piracy is Laura Tesoriero is the chief executive of EPSA
an enormous problem for independent Music, an indie label in Argentina. She says
companies. Italy has always had a track times are tough for smaller producers as well.
record in breaking artists internationally, but Her company has shrunk in size from 25 to 15
now the Italian industry is in an emergency employees despite her attempts to innovate
situation. Majors can downsize. We can’t in the digital music sector. “In 2006, I thought
downsize, we can only close.” people were not buying music because they
didn’t have the chance. I started my own
Mike Batt is the founder of UK indie label website with more than 300,000 tracks from
Dramatico, whose roster of artists includes majors and indies around the world. After Mike Batt, UK
Katie Melua. He says the industry suffers an three years, I had to close because people
image problem when trying to convince went to the site, looked for what was new and
policymakers about the importance of then downloaded it from peer-to-peer sites.”
combating piracy. “People judge the music
industry by looking at those who earn the Smaller niche acts are not immune, even if
most. They don’t realise that most people in our they can fill out arenas with live performances.
industry do not earn large amounts of money.” Marc Marot is the chief executive of the
management company SEG Entertainment
Batt says live performance revenues in London. He describes the problems faced
Luis San Martin, Mexico
cannot make up for the fall in recording by Shpongle, a group that has built up a fan
income: “A lot of artists require ‘tour support’ database of 77,000 members. The band has
to play live. In other words, it can be a sold out gigs at major London venues through
massive loss making situation. We often their website. Yet when they released their
spend hundreds of thousands of pounds album on their own label, Twisted Records, it
tour-supporting artists who are subsequently sold just 4,000 copies in its first week. During the
not successful and with whom we sadly have same period, 15,000 unlicensed bitTorrent links
to part.” He cautions: “A smaller marketplace to the album appeared online.
is a difficult environment for the survival of
independent labels. Larger companies can Marot says: “We can’t grow the band
Laura Tesoriero, Argentina
survive by making a smaller profit per unit, through live alone. If we saw some of the
because they have vast catalogues. Smaller pirate copies of the album translated into sales
companies just don’t have that option.” then we could invest in the publicity needed
to bring Shpongle to a wider audience and
Luis San Martin runs Mexican indie label develop their career. At the moment, it’s like
Multimusic. He says: “Digital channels are the they’re on a hamster wheel, covering their
future for independent labels. I have been costs but not able to reach the next level of
talking to ISPs about potential legal music development despite the fact there is clearly
services, but it is an uphill struggle while online demand for their music. Piracy impacts niche
piracy is so widespread.” genre performers just as it does mainstream
Marc Marot, UK
pop artists.”
22
Piracy and the Other
Creative Industries
“Ultimately, if nothing is done, we just won’t be here”
Warnings on film piracy A growing problem for In terms of digital penetration, book publishing
is still far behind the music industry’s global
Movie studios have suffered from physical book publishers figure of 29 per cent. Hachette UK, one of the
piracy for decades, but the problem is now There is evidence that the advent of digital major book publishers, generated 0.25 per
being eclipsed by digital piracy. The film books threatens the industry with a problem cent of its revenues through digital channels in
industry is licensing online services but in a that could evolve to match that faced by film 2009. George Walkley, the company’s head
marketplace that, similar to the music market, studios and record companies. of digital, expects this to climb to 10-12 per cent
is being swamped by digital piracy. within three years.
In October 2010, online content protection
Available statistics show that film and TV firm Attributor released a study indicating Walkley, whose role is to get as many of the
piracy have sharply increased in the last two there had been a 50 per cent increase in company’s titles as possible into a digital
years. Research in the UK in October 2010 from Google searches for unlicensed copies of format on the broadest range of platforms
Harris Interactive found 14 per cent of internet books during the past year, and a 20 per cent available, says: “We represent thousands of
users download both films and television increase in pirated downloads since the iPad authors, some of whom have an income of
programmes from illegal P2P services. In became widely available in some markets just £6,000 a year. They are dependent on the
November 2010, MGM filed for “Chapter 11” in May 2010. Vampire novel Breaking Dawn revenue from their sales. If we can’t secure
protection from bankruptcy. Film studios have by Stephanie Meyer registered as the most some kind of system that enables them to be
increasingly found it difficult to generate pirated book in the Attributor study. paid for their work then many may simply give
revenue through DVD sales, which fell by 9.8 up writing altogether.”
per cent and 4.7 per cent in 2009 and 2010 Book piracy is moving fast up the agenda of
respectively. the publishing business. “Book publishers and Walkley believes that ISPs are a vital
record companies face similar opportunities component of any solution to digital piracy.
Jeremy Thomas has been an independent and challenges from the digitisation process”, “We see this problem as very difficult to tackle,
film producer for more than 30 years. His says Victoria Barnsley, chief executive of other than at an ISP level. I think from an ISP
long list of films ranges from The Last Emperor Harper Collins, UK and International. level it is a winnable fight and the technology
to Crash. He says digital piracy is killing exists to tackle the problem.”
investment and independent producers are “As digital content becomes legally available
the most vulnerable. across more platforms and hardware devices,
such as the Kindle, which are designed
“I’ve seen tens of thousands of links to my films specifically to enable e-reading, so the threat
all across the internet before they’ve even of piracy also necessarily increases. Yet
been released in cinemas. Larger studios we need the support of a robust legislative
can protect themselves somewhat through framework to underpin our actions. If illegal
bulk global distribution and mobilising use of creative work is allowed or tolerated,
big marketing budgets. Independent film how will authors earn a living in future? Where
makers are dying on the vine. They won’t be will the next generation of Hilary Mantels and
able to recover until governments wake up Jonathan Franzens come from?”
to the fact that what is going on is a crime.
”Thomas believes that the time has come for Barnsley supports the UK’s Digital Economy
governments to take action. He argues: “I love Act, believing ISPs should take some Jeremy Thomas
freedom, but I don’t like burglary. I’ve seen responsibility for protecting creative works
what’s happened to the music business. It’s online. “It is nonsense to suggest upholding the
happening in film. ISPs are turning a blind eye interests of rights holders presents an obstacle
to the problem and some governments don’t to creating internet-based business models.
seem to want to touch this because they are We should be shouting that message very
worried about alienating voters. Yet we’ve loudly to the government.”
seen France take action because it has an
honourable tradition of protecting artists. It is
time for others to follow. Ultimately, if nothing is
done, we just won’t be here.” Victoria Barnsley
23
Digital Music
Services in Profile
Omnifone Lewis believes digital music consumption
will leap over the next five years. Research
Rob Lewis carried out by ICM for Omnifone in February
2010 found 79 per cent of people listen to
Omnifone is a business-to-business firm that music in the living room compared to 39 per
powers digital music services around the cent on a portable players. “The mass market
world, on its multi-award winning MusicStation enjoys music in the living room, but digital
Platform. Current deals include a partnership services have traditionally focused on PCs and
with Hewlett Packard, which ships 48 million portable players. We see a huge opportunity in
computers worldwide per year, to provide delivering music services through connected
the MusicStation unlimited music service consumer electronics optimised for the living
on a range of HP PCs as well as providing room in addition to existing channels.”
PlayNow plus, Sony Ericsson’s prelicensed
unlimited music service, for mobile and PC “Most consumers love listening to music, but
internationally. they don’t know what to search for in a typical
download store. They want the same simple
Rob Lewis, executive chairman of Omnifone, user experience they get with Sky TV and are
says: “Our goal is to run the ultimate music not interested in the technology behind it.”
delivery platform for any party that does not
want to spend five years developing their own
in-house offering.”
26
Mflow Mflow is integrated with Facebook and
Twitter enabling its users to invite their friends
Oleg Fomenko to join and publish their own “flows”. A typical
user is aged 18-25, frequently engaging
Mflow is a UK-based streaming and download with the service and highly informed about
service that enables users to discover new new albums and singles. The service is also
music through recommendation. Users developing as a source of music reviews.
promote tracks from Mflow’s library of five
million songs through playlists dubbed “flows” Mflow has ambitious expansion plans, but
and if other people buy the tracks they Fomenko believes unlicensed competitors
recommend, the first user is rewarded with 20 represent a major barrier to growth.
per cent of the sale price.
27
Digital Music
Services Worldwide
ASIA PACIFIC Mobistar Egypt
PIAS shop Alamelphan
Australia “I love the fact that all the new digital PlayNow Arena Mazzika Box
Bandit.fm
BigPondMusic
services make it easy for people to Proximus (Vodafone
Live)
Cartell Download discover my music, and for me to keep my Sony Music Myplay Estonia
DanceMusicHub Music Store eMusic
Get Music fans updated on what I’m doing.” Studio 100 MP3 shop Muusika24
Guvera
Hutchison Jason Derulo
Bulgaria Finland
Inertia
4fun 7digital
iTunes MusicOne Ohdio Total Reservation eMusic City Market CM Store
Jamster MusicStation Soribada True Digital Hitbox.bg DNA Musiikkikauppa
Liveband Musicxs Soriya VoiceTV M.Dir.bg download.MTV3.fi
MIA PCCW Mobile You2Play mp3.bg Download.NetAnttila
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Digital music
services in profile
“It is great what all the new technologies allow us to do. Having the access to buy any music
from all over the world at any given moment, taking away the geographical boundaries
allowing fans worldwide to enjoy music instantly.”
Thalia
30
Photographer credits
Page 3 Page 17 Page 25
Frances Moore – Philippe Molitor Brendan Barber – Jess Hurd Morgan Donoghue – Steve Dykes
Page 13 Page 23
Ke$ha – Patrick Fraser Jeremy Thomas – Jessica Thomas
Lady Gaga – Max Abadian Victoria Barnsley – Martin Argles/Guardian
Eminem – Nigel Parry News & Media Ltd. 2009
Usher – Walid Azami Page 24
Katy Perry – Ari Michelson Rob Lewis – Chris Lusher/Morgan Ommer
Joe Kennedy – Peter DaSilva
© IFPI 2011
All data, copy and images are subject to copyright and may not be
reproduced, transmitted or made available without permission from IFPI.
31
Copyright © IFPI 2011
www.ifpi.org