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September 16, 2019Spotify’s podcast play
Flash Report, ReportsSpotify is investing heavily in podcasting through acquisitions, original content and product innovation. It is under pressure to reduce dependence on record labels, whose power makes generating large profit margins difficult. Podcasts promise a non-music content genre where Spotify can capture more value. Secondary benefits abound: Spotify can take an active and lucrative role in modernising online audio advertising, it can solve the podcast discovery problem, and engagement across more forms of audio will improve retention
September 10, 2018Japan’s recorded music market starts to stream
Flash Report, ReportsRecorded music revenues in Japan are stuck in decline as physical sales sag, although 2017 marks the first year when streaming gained a foothold with 8 million subscribers. J-pop fans spend on 'experiences' with their idols including events, merchandise, CDs and DVDs, which streaming cannot replicate. Top native LINE MUSIC offers integration with a popular messaging app and bundling with mobile. Serving international repertoire, Apple Music claims more subscribers than Spotify in Japan, which is more localised, and has most users on the free tier. Amazon Prime Music is a looming constraint on the adoption of subscriptions.May 17, 2018Wall St Shuffle: Spotify’s non-IPO
Focus Report, ReportsSpotify is now the world’s first publicly listed on-demand music streaming service. Its global footprint generated €4 billion in 2017 from over 70 million paying subscribers and 90 million ad-funded users across 65 countries. As it expands, the service is steadily but surely moving ever closer to profitability, with a 2019 operating profit a very real prospect. So far and for the near future, Spotify’s global pre-eminence versus competition from Apple, Amazon and Google proves remarkably resilient. Plans to build upon its differentiating features will become ever more decisive as the tech titans will continue to wield their resources and ecosystems against the comparatively undiversified company.
September 15, 2017Global recorded music forecasts 2017-21
ReportsFor the second consecutive year, the global recorded music industry body IFPI reported rising trade revenues, growing 5.9% to reach $15.6 billion in 2016. Our forecasts supplement IFPI’s trade revenue data with richer national-level consumer expenditure data from local bodies in core markets, and project CAGR of 2.3% to 2021, tapering off as streaming approaches maturity. This fairly modest topline growth for global recorded music streaming trade revenues is the product of our judgement that the marketplace remains awash with free music. Streaming trade revenue growth could be higher still if the industry finds a solution to piracy through technological or regulatory means, obviating the need for the ad-funded compromise.
August 29, 2017Video Market Outlook – FY17: SVOD is driving growth of the mark [...]
ReportsThe Australian Video Market is plateauing, as growth continues for SVOD alongside losses for traditional media. We anticipate the market to reach A$5.3b by 2022. Streamed digital media (SVOD, TVOD and EST) are growing strongly at the expense of physical media (Blu-ray and DVDs). SVOD subscriptions are anticipated to reach over 6 million by 2020, driven predominantly by Netflix.
June 22, 2017US music publishing royalties for 2018-22
ReportsThe “fair return” to US music publishers and songwriters for rights used by interactive streaming services will be decided in 2017 by the Copyright Royalty Board (CRB). Rights owners want to switch to a fixed per-stream or per-user rate on all tiers, arguing music has an inherent value. Apple is asking for a much lower per-stream rate. Amazon, Google, Spotify and Pandora warn of disruption to free and ad-supported tiers if the revenue-share tariff is not rolled over, and the CRB could side with them
April 12, 2017Spotify secures UMG royalty discount
ReportsAs Spotify wavers around the breakeven point, the deal with UMG is good news for royalty costs and thus for the likely advent of the IPO rumoured for autumn 2017. Royalty costs will reduce if Spotify reaches the subscriber growth targets that have been agreed – these have not been disclosed, so are hard to track. Question marks persist over whether a two-week optional windowing of new releases on the premium tier will significantly drive upgrades from the free tier.
April 7, 2017The Future of Audio and Radio
ReportsAudio media are converging, with various crossmedia platforms already on the market. We explore what this means for the future of audio, how the market is being impacted and discuss how far this convergence is likely to go.
January 13, 2017Music subscription streaming 2017
ReportsStreaming is now mainstream and we predict 113% growth in expenditure on subscriptions for 2015-18 in the top four markets (US, UK, Germany and France).
Free vs paid-for streaming is the central question for the music ecosystem: free yields fractions of pennies, making subscription the only credible business model.
Market leader Spotify is facing competition from tech giants Amazon, Apple and Google, with deep pockets, for whom content is a pawn in a larger game.
December 21, 2016Australia Radio Market Outlook
ReportsThe radio market is dominated by five big players, yet is facing disruption from emerging digital competition. We discuss the current and future market trends, considering consumer behaviours, including audio consumption and advertising expenditure. Additionally, taking into account the uniqueness and time spent listening to radio, and the rise of emerging technologies, we consider what radio broadcasters can do in order to retain their position in the market amongst disruption.
October 12, 2016New Zealand Advertising Market Outlook
ReportsWe discuss the New Zealand Advertising Expenditure market assessing the actual and forecast revenue as well as the key drivers of these for the Digital, Broadcast Television, Print, Radio and Outdoor markets.
June 28, 2016Global music publishing 2016
ReportsMusic publishing revenues are trending up in a broad sustainable manner across the US, Europe and Japan, underpinned by longstanding music rights regimes.
June 3, 2016Is Audio’s Netflix moment approaching?
ReportsCompetition is set to increase between radio and online streaming as major players seek to perfect the total audio experience – though no-one has yet fully married music with the spoken word. We discuss the rise of audio adjacencies, their expected future growth and the impact this is likely to have on traditional audio formats.
May 26, 2016Google Home takes on Amazon Echo
ReportsGoogle Home will compete against Amazon’s Echo in the contest to supply voice-activated home hubs to US homes.Google claims Home is better at voice-based search due to its superior capabilities; pricing is unknown, but is likely to be at par with Echo ($179).Prime, Fire devices and media services are competitive advantages for Amazon in the US that will make it hard for Google Home to succeed there.
February 16, 2016Millennials, mobile and traditional media
ReportsMillennials are the mobile generation, and their preoccupation with mobile erodes time spent with other media, but also offers new opportunities for traditional media brands. Millennials have a different relationship with traditional media; mobile has provided them with control over what they consume and the convenience to access content where and how they like. New content forms such as very short videos have added to the mobile experience, creating social discovery opportunities for media to reach millennials.Sector Broadcast TV, Media, Mobile and Wireless Technology, Music and Radio, Press, print, Telecom, TV.
December 18, 2015Pandora’s 2016 music royalties to rise 12%
ReportsThe Copyright Royalty Board (CRB) delivered its Web IV ruling on statutory SoundExchange licensing rates for webcasters for 2016-20, raising Pandora’s total music royalty costs by a forecast 12% in 2016. Had the CRB sided with SoundExchange, rates for Pandora’s non-subscription tier would have shot up 79%, leaving the company floundering in a sea of red ink. Nevertheless, these increased licensing costs for Pandora over 2016-20 will postpone the moment when the company attains net profitability.
November 6, 2015YouTube Red: Google’s original bid for premium content
ReportsAt launch, Google’s new subscription service YouTube Red competes most directly with premium music streaming services, also offering ad-free videos. YouTube’s augmented revenue model re-boots incentives for native talent to produce content for the platform, and will also widen its appeal for established content producers. Although consumers are likely to find paid subscription for ad-free videos a weak proposition, Red holds much potential for YouTube as it competes for attention across device ecosystems, and presents little risk to its existing advertising model.
October 26, 2015ITV acquires UTV TV – where next?
ReportsThe launch of UTV Ireland in the Republic has proved less than successful for UTV Media and has led to its divestment and that of its Channel 3 licence in Northern Ireland. ITV has bought UTV Television for £100m cash and will own 13 of the 15 regional Channel 3 licences, though we do not see a play for STV in the medium term. UTV Media is now able to fully focus on its main profit centre – its growing radio business in the UK and Ireland.
October 12, 2015Turnbull takes the reins
ReportsMedia reform may not be quite as near as many believe in light of Malcom Turnbull’s elevation to PM. The NBN is likely to become even more of a political football (if such a thing is possible), while government policy is likely to support innovation, start-ups and digital transformation.
October 12, 2015Music publishing in Germany 2014-17
ReportsGermany remains the second largest market in Europe for the exploitation of composition rights by their authors, with €382 million paid out to them in 2014, up 8% on 2013 (63% share of distributions on average). The German Government intends to secure an even “better balance for authors” in their contracts with music publishers, by allowing the composer to “re-tender” their contracts after five years to secure a better deal. GEMA, the collecting society, has a strong position in Germany and is poised to lead the development of the digital single market for online music services. Together with PRS for Music (UK) and STIM (Sweden), GEMA has formed a joint venture (JV) to offer multi-territory licensing and copyright administration services to services, music publishers and other CMOs, cleared by the EU Commission. Music publisher revenues from domestic collections could rise from €225 million to €247 million from 2014 to 2017, due to a moderate rise in broadcast revenues on the back of the economic recovery, a boost to public performance revenues from a higher live music tariff and flat royalties from recorded music expenditure, as the decline of physical mechanicals is offset by the rise of online royalties.
October 1, 2015PSB at risk in the world
ReportsAustralia’s ABC and Canada’s CBC/Radio Canada have each suffered severe budget cuts imposed by governments without public or political debate and in spite of strong audience support. These cuts have impaired the international reach of ABC and CBC, as well as their investment in news and locally originated content. The UK’s reputation and standing in the world relies on the BBC’s services, its online presence, channels and its programming sales. And, just as in Canada and Australia, this valuable national soft power is and will be diminished by current government policy.
September 30, 2015Video Market Outlook – Physical makes way for Digital
ReportsWe don’t expect the overall size of the video entertainment market to change materially but we do expect the platform share to change dramatically over the next five years. We expect xVOD services to represent 20% of the overall market from around 5% currently (replacing Physical Media and Premium Pay-TV).
August 24, 2015Music Publishing in the UK 2014-17
ReportsThe UK is the top music publishing market in Europe, at £428 million in 2014, despite being second to France and Germany for collections, because mechanical royalties for the reproduction rights (CDs, vinyl, digital) flow only to music publishers, while performance royalties are shared with writers. Thanks to the recovery of the UK economy that started in 2013, royalties from performance on radio, TV and in public have risen more strongly in recent years than in the difficult period of the recession 2008-10, providing a more promising context for sustained growth of the performance component of music publisher revenues. For online royalties, which accounted for 12% of music publisher revenues in 2014, the withdrawal by major music publishers of their rights to Anglo-American repertoire has shifted licensing to SOLAR, a joint venture of PRS for Music, STIM, and GEMA, also offering an aggregated repertoire and copyright administration services. This makes PRS for Music a leader in the development of multi-territory licensing of digital music services.
June 18, 2015Apple at WWDC: intelligent design
ReportsApple has confirmed the launch of Apple Music, its streaming music service, available on iOS devices by the end of June, and later on Android. Priced at the same level as Spotify’s premium tier and lacking a free ad-supported offer, much hinges on the appeal of its curation tools. Other key announcements included a news app, the roll-out of Apple Pay to the UK, improvements to maps, and new operating systems for Mac, iPhone/iPad and Watch. The main theme was one of increasing intelligence in services, with Music and News both being curated and the software getting better at understanding and predicting user needs. This is a necessary step to prepare for the next wave of consumer technology: wearables and connected devices.
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