2016 Music Revenue, Neil Young Streaming and YouTube Unpaid Royalties Settlement News, December 13, 2016

Experts indicated that the global recorded music business is headed for a significant recovery in 2016. Also, Neil Young said he is working on a hi-fi streaming service. And The NMPA announced a settlement with YouTube over unpaid royalties.


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Recorded Music Business Headed for Recovery


The global recorded music business is set for its first big recovery in over 15 years, said analysts. According to Music Business Worldwide, the growth is sparked by streaming, as it booms in markets where experts previously said it had already peaked.


Half-year data indicates that there are at least 12 nations that have seen significant growth in 2016. End-of-year numbers will likely point to five-percent growth worldwide in the label business.


The Netherlands saw the biggest growth: 23.3 percent year-on-year in overall recorded music, with a 52-percent growth in streaming and even a 2.4 percent growth in physical sales.


Sweden saw an 8.6-percent recorded music market growth in the first half of the year, and 85.8-percent of its revenue was streaming, reported IFPI. Neighbor Norway saw an overall 7.8-percent revenue growth, with streaming taking up 83 percent.


Spotify Director of Economics Will Page explained, “Whats notable is that Sweden, Norway and the Netherlands are three of our most established markets, yet they are now growing at an accelerating rate … Think of it this way – in the three markets where you would expect to see evidence of Spotify reaching saturation point and revenues flattening off … the opposite is happening.”


The UK also saw huge growth, with 10.9 percent increase in recorded music revenue in the first half of 2016, according to BPI. Streaming subscriptions were up 78 percent, and streaming revenue overall grew 67.3 percent to grab 40.1 percent of the total market.


The U.S. had the most notable revenue growth in the recorded music market. Revenue was up 5.7 percent overall in the first half of the year and reached $2.4 billion. In terms of retail, it was up 8.1 percent. Paid-for on-demand streaming jumped 112 percent.


Other countries that saw notable recorded music revenue gains were Finland, Canada, France, Belgium, Germany and Spain.


Brazil’s market, one of the world’s most quickly-growing streaming markets, was up overall by 10 percent. Streaming revenues increased 121 percent. Digital revenues in the South American territory were up 32.5 percent overall.


Japan was the only market that saw a decline. Japan’s total audio recorded music market was down in the first six month of the year by 2.4 percent. Still, Japan’s subscription streaming revenue was up 85 percent in the first half of 2016.


Music Business Worldwide said it expects to see the IFPI report an annual global income for 2016 of around $15.8 billion.


Neil Young Entering the Streaming Market


Neil Young announced his music company, Pono is launching a new hi-fi music streaming service similar to TIDAL.


Pitchfork reported that in an interview with Rolling Stone, Young said his company is working on a streaming service that will be offered with its PonoPlayer device and high-quality file download store. He added, “We’re pushing towards getting a presence in phones.”


Pono is working with a tech company from Singapore to ensure the quality of files remains high when the company enters the streaming market.


Young’s history with streaming services has been challenged by his belief that they do not offer users high enough sound quality. He removed most of his catalog from Spotify and Apple Music in 2015, stating that their sound quality is the “worst quality in the history of broadcasting or any other form of distribution.” He stated, “When the quality is back, I’ll give it another look.”


Young’s music showed up on TIDAL in May, and then in November, he returned his entire catalog to Apple Music and Spotify.


The NMPA Settling with YouTube over Unpaid Royalties


The National Music Publishers Association struck up a deal with YouTube over unpaid royalties. Billboard said the dollar amount was not disclosed, though “millions of dollars in previously unclaimed music royalties” was referenced in the press release. Music publisher sources previously indicated the number could be in the same range as the recent $30 million payout by Spotify.


The agreement is also designed to help make it possible for music publishers and songwriters to only get paid for works viewed on YouTube where ownership was unknown. They will also be paid for the works identified going forward.


A statement from NMPA president and CEO David Israelite read, “We appreciate YouTube’s willingness to work with us on behalf of the industry to help pay out millions of dollars in previously unclaimed royalties to publishers and songwriters … It is essential that we work with digital services like YouTube – the most popular digital platform for music discovery – to fix the challenge of incomplete ownership information to ensure royalties are no longer unmatched and music owners are paid accurately by the platforms that rely on their work.”


The settlement was set up as an agreement that is opt-in. Publishers have from December 12 until February 28 to serve notice. After that, they will have three months to claim songs from which royalties were owed – between August 1, 2012 and December 31, 2015 – from a list of works given by YouTube.


YouTube and Google Play Americas head of music partnerships Tamara Hrivnak stated, “The revenue earned by the music industry on YouTube continues to grow significantly year over year, and we’re committed to making sure that publishers are paid for the usage of their works on our platform … We are excited to partner with the NMPA to address the industry-wide challenges associated with identifying publishing ownership on digital platforms.”


This process will occur annually for 2016 through 2019. Unclaimed accrued royalties left beyond the claiming period will be distributed to publishers based on individual market share within YouTube.


Songwriters and publishers who do not opt into this settlement retain their rights going forward, which include the right to sue for copyright infringement. Some publishers and songwriters chose this option instead of opting into the Spotify settlement.

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