When the gods dance...

Thursday, August 23, 2012


Forecast: Global Digital Music Sales Will Pass $8.6 Billion In 2012


Global revenues from online streaming services will increase 40% to $1.1 billion in 2012, while revenues generated from digital downloads will grow 8.5%, to $3.9 billion (vs. 2011). That's the word from Strategy Analytics' latest "Global Recorded Music Forecast," which also projected that overall digital music spending (including mobile) will increase by 17.8% ($1.3 billion) in 2012 to $8.6 billion, compared to a 12.1% decline ($1.9 billion) in sales of physical product (also vs. 2011 figures). These numbers suggest that digital music will increase its overall share of global recorded music spending to 39% in 2012, a significant amount but still much lower than packaged music sales, which will account for 61% of spending. Strategy Analytics forecasts that digital spending will overtake physical sales on a global basis in 2015, although some countries - including the U.S., Sweden, and South Korea - are making the transition to digital sales at a much faster rate. "Although downloads still account for nearly 80% of online music revenues, this market is maturing and spending is flattening in all key territories," observed Ed Barton, Strategy Analytics' Director of Digital Media. "Streaming music services such as Spotify and Pandora will be the key growth drivers over the next five years as usage and spending grow rapidly." [Full story: mi2n]

Legislative Draft Seeks Parity For All Artist, Label "Performance Fees"


Rep. Jerrold Nadler (D-NY) this week released a discussion draft of a bill that would increase compensation for recording artists by place cable, satellite, and Internet radio all on the same royalty-setting standard. The proposed legislation, which seeks to quell the debate over whether broadcasters should pay music artists a royalty fee when playing their songs over the air, would put AM/FM, cable, and satellite radio services on the same royalty-setting standard as internet radio - effectively forcing them to pay higher royalty fees to labels and artists. "The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair," Nadler said in a statement. "We can't start a race to the bottom when it comes to royalty rates and compensation for artists. The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us." The National Association of Broadcasters quickly launched a counter-attack, saying the draft bill "fails to recognize the unparalleled promotional value of local radio airplay" and also "would kill jobs at America's hometown radio stations." And Ted Kalo, executive director of the musicFIRST Coalition, added, "The only real solution is for Congress to create a legal performance right, but raising terrestrial radio's digital royalties is an important interim step towards that goal. The discussion draft proposes a 21st century marketplace standard that treats artists and platforms fairly and equally." [Full story: The Hill]

Musicians' Advocate: Pandora Is Trying To Cheat Artists, Make Billions


Pandora cofounder Tim Westergren is well-known for publicly railing against the steep performance fees his online streaming company is forced to pay to record labels and musicians. In fact, his outrage about the inequity between what Pandora and other internet streamers pay (over 50% of revenues) vs. for instance, Sirius XM (7-8% of revenues) has led, in part, to the draft of the parity-seeking Internet Radio Fairness Act recently introduced on Capitol Hill (see above story). But musician advocate Ray Hair, head of the American Federation of Musicians, says Westergren really is trying to hurt musicians rather than establish platform parity. Noting that "Westergren is absolutely correct that it's unfair that Pandora pays artists while AM/FM radio doesn't," he claims that "the disparity doesn't mean that everyone should pay artists less. To me, it sounds more like a clever way for Pandora to make billions in profits by cheating artists out of their fair share of the internet radio revenue pie." Despite the fact that Pandora and most other digital audio services have never been profitable, Hair claims that "even internet radio stations like Pandora pay musicians a small fraction of a penny per performance. That's the miniscule price to support the musicians that give life to the songs we love, and bring joy to the world. Paying musicians isn't an inconvenience to radio's business model - it's an essential part of it." [Full story: Digital Music News]

Recording Academy Launches Campaign To Promote Liner Notes


As the music industry rapidly shifts from the sale of CDs to digital downloads, liner notes increasingly are becoming a scarcity - and the Recording Academy is looking to do something about it. Academy President/CEO Neil Portnow announced today [August 23] that he is launching "Give Fans the Credit," a campaign designed to give music listeners more information on the people behind the creation of a song, rather than just the song's main performer. Specifically, he said The Academy wants be sure fans are getting liner notes for albums, and that songwriters, non-featured performers, producers, and engineers are highlighted for their work. "We can watch movies online with the credits included, and the same should be true for digitally released recordings," Portnow's statement reads. "If music devices can access millions of tracks in the cloud, we're confident we can find a way to acknowledge those who created the tracks here on earth." The Academy's statement said a team of "honorary ambassadors," including T Bone Burnett, music producer RedOne, Jimmy Jam, Sheila E, songwriter Lamont Dozier, and producer Don Was, plan to meet with digital music outlets "to brainstorm ways to deliver more robust crediting information on digital music platforms." [Full story: Washington Post]

Grooveshark Adds Ten New Labels, Seeks Dismissal Of Lawsuit

Despite its ongoing legal issues (known as "Arista v. Escape Media"), Grooveshark just signed ten new independent record label agreements to license new music. According to Spacelab, the list includes Paper + Plastick, Warrior Records, 1320 Records, Bang Gang Records, Duckhead Green, Palaver Records, Amplifi Digital, Accendo Media, Dox Records, and Eponymous Entertainment. "We love what Grooveshark does, providing a service for bands and labels to instantaneously make their music available to millions of people," said Vincent Fiorello, Owner of Paper + Plastick as well as being a member of the Ska band Less Than Jake.

Grooveshark's legal problems started last summer when Arista claimed the company was paying employees to upload music to its servers, in direct violation of the Digital Millennium Copyright Act (DMCA) safe harbor provisions. Grooveshark has moved to dismiss that lawsuit, claiming that the major record labels "have made spurious claims that aren't backed by real evidence or sources, including an anonymous 'whistleblower' comment on Digital Music News.'" Note: DMN has no connection to this newsletter. [Full story: Spacelab]

Rdio Signs License Deals With TuneCore, CD Baby

Digital music service Rdio (yes, that's spelled correctly) has signed new partnerships with indie music aggregators TuneCore and CD Baby. According to a company statement, the deals - on top of those already in place with ONErpm, BFM Digital, Zimbalam, AWAL and Ditto - have helped Rdio increase its music catalog to more than 18 million songs. "Rdio, with its strong focus on the social elements of music sharing and discovery, accessible via the web, mobile devices, and offline, is yet another exciting venue for our artists to reach new fans and promote their music globally," TuneCore marketing vice-president, Julian Groeger, said. And CD Baby president Brian Felsen added, "Our artists have asked for Rdio to be added to our partner network, and this partnership will generate a great combination of exposure and revenue to support our independent musicians, especially with a dedicated and growing subscriber-base." [Full story: ARN Net]

Al Bell Presents American Soul Music ... And American Soul TV

If you're into classic and contemporary Soul, R&B, Blues, Gospel, Jazz, Hip-Hop Soul, Rap Soul, and Neo-Soul, we invite you to listen to Al Bell Presents American Soul Music. Former Stax Records owner and Motown Records Group President Al Bell personally has programmed this awesome radio station online, presenting your favorites from the 1960s and '70s [and some '80s], a lot of the best new music that's being released today, and some real gems you haven't heard in a long, long time. Come to www.AlBellPresents.Com
 and hear it for yourself!

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