Tuesday, February 18, 2014

French music market bounces back

(This story was originally published in the Feb. 4 issue of German trade magazine MusikMarkt)

By Emmanuel Legrand

For the French music industry, 2014 started with something unusual: Revenues from the sales of recorded music posted for the first time in years a slight increase. After a decade of decline, music industry executives had the feeling that a regain in CD sales and the strength of the digital market had finally helped the industry turn a corner.

At €603.2 million, sales of recorded music went up 2.3% in 2013 compared to the previous year, according to figures presented at the Midem show in Cannes on Feb. 2 by French trade body SNEP.

Digital sales posted a limited growth at €125.8m (+0.6%) and now represent 26% of total revenues with streaming accounting for about 43% of this amount. Sales of physical products went up for the first time since 2002 (+1% at €367.4m).

SNEP's figures incorporate the proceeds of neighboring rights on sound recordings as well as revenues from physical and digital sales, representing respectively 18%, 61% and 21% of total revenues.

This rebound owes a lot to one artist, Stromae, whose second album “Racine carrée” sold over one million units in France in 2013 (1,159,320 to be specific, according to monitoring company Gfk), a feat that had not been achieved since 2004, when the soundtrack to the movie “Les Choristes” passed the million mark.

The score achieved by the Belgian artist is even more remarkable when considered that the second best-selling album of 2013 is Daft Punk's “Random Access Memories” sold half his amount. Overall, 17 of the 20 best selling albums were by French-speaking artists. Bruno Mars was one of the few international acts on the list.

Return to growth
French music industry executives welcomed the return to growth, but warn that the current market situation is far from being ideal, with consumers switching their digital consumption from downloads to streaming, which impacts revenues, and the state of France's music retail remains preoccupying.

SNEP's Leblanc
The digital market is growing – not as much as we'd like, but it does grow,” says Guillaume Leblanc, Director General of French record labels' body SNEP, which regroups the majors and indie labels. However, the slight rebound of the French market was taken with caution by Jerome Roger, Director General of indie labels' association UPFI, which regroups over 400 labels. “There might have been growth, but it does not paint the whole picture,” says Roger. “Physical and streaming are growing and downloads are slowing down, but behind the success of Stromae and Daft Punk, for a lot of so-called 'middle class' artists – either new talent or in development – the volume of sales has gone down significantly and digital does not compensate.”

For Roger, indies are caught in what he calls a “scissors' effect”, with revenues down when, at the same time, marketing costs have not dropped. “The capacity [of indie labels] to break even on artist – even established artists – is harder to reach than ever,” he says, warning that the next two years will be the most challenging for indies.

In the the mid-term I am quite optimistic that streaming will be the dominant model, says Roger. “The challenge will be to resist during the next two years. While we hope that the market and generate revenues that will be significant to rebuild growth, we are forced to turn to the government and ask that they put systems in place to support indies. Maybe it's time to rethink about the CNM?”

UPFI's Roger
CNM – this acronym stands for Centre National de la Musique. It was the previous government, under the impetus of President Nicolas Sarkozy, that had set up a wide ranging industry consultation which led to the proposal of creating of what would have been a National Centre for Music (CNM), similar in its scope and function as the CNC for the film industry.

The CNM would have combined various existing structures operating in the music field (FCM, Fonds de Soutien, Bureau Export, Francophonie Diffusion, Irma), and provided significant financial support to labels, publishers, concert promoters and also coordinate France's international export efforts. The annual budget of the CNM was expected to be in the region of €130m, mostly financed through various mechanisms and from a transfer of budget from the CNC.

But the election of President Francois Hollande, and the appointment of Aurélie Filippetti as Minister of Culture, overseeing the music sector, had some serious impact on the industry and projects like the CNM. A few weeks after her appointment, Filippetti announced that she was dropping the project, creating havoc among the industry.

The CNM would have been a tool to help structure the music sector and help the mutation to digital,” explains Gilles Castagnac, Managing Director of IRMA, a music information and resources centre. “What was proposed remain valid and many are still calling for such a project to exist. In France, the other two major creative sectors – books and cinema – benefit from such a tool which combines competences and financing.”

Castagnac adds that because is was a project conceived in a period of crisis, the CNM was especially customised to focus on innovation. “What we are missing are tools to do prospective and prepare the future,” he says, taking the example of metadata related to music, a key to the digital economy, which could have been given a major boost through the CNM.

Public policies
The CNM case exemplifies France's long tradition of having its government involved in all things related to culture and arts. The general philosophy, which has been prevalent regardless of the political leaning of governments over the past 30 years was that there a “cultural exception” with creative works – such as films, books, music – and they cannot be treated like any other goods. In the music field, the sector has been looking less for subsidies than regulation and copyright protection.

Meanwhile, Filippetti appointed TV personality Pierre Lescure (tipped to become the next president of the Cannes Film Festival) to conduct a mission – yet another – with a vast consultation of stakeholders, and draft a report on cultural policy in the digital era that would offer solutions, especially with regards to digital challenges. The Lescure report, presented mid-2013, made a series of 80 proposals for the industry, even though few of them have so far been implemented.

The findings of the 711-page report were in general well received by the industry, although Lescure did not advocate the pursuit of the CNM. However, most players in the industry welcomed the fact that Lescure agreed that there was a need to continue with a “graduated response” system, albeit slightly loosened. SACEM said it was “pleased that the report demonstrates an underlying concern for the protection of artists’ remuneration. It also applauds the report’s positive attitude towards the cultural industry and its acknowledgment of the close affinity between music and digital sectors.”

Some of the key proposals from Lescure include: Introducing a tax on internet-connected devices such as smartphones and tablet computers that would be used to help finance the creative sector; Promoting up-to-date regulation on digital culture and fighting piracy especially through the transfer of competences of Hadopi to media regulator CSA; Broadening fans’ legal access to cultural works. “We had some reservations on the conclusions of the report,” says SNEP's Leblanc, “but now we need to turn it into operational terms.”

The report also addressed the issue of combatting piracy in the digital age. Many in the industry lamented that French public had been a very early adopter of broadband and also of file-sharing, leading to the passing of a legislation meant to limit the scope of file exchanges. The legislation introduced a “graduated response” regulation, known as Hadopi. “Piracy acts as unfair competition to legal offers,” claims SNEP's Leblanc, himself a former aide to member of Parliament Frank Riester, who was instrumental in getting the Hadopi bill passed by Parliament.

This controversial bill was proposed and adopted by the then Sarkozy administration, and many in the business credit Hadopi as a turning point by focusing on the consequences of file-sharing through educational campaigns. Lescure himself said in his report that Hadopi had a significant and positive educational role. In 2012, after the election of President Francois Hollande, the fate of Hadopi seemed in doubt, but as of early 2014, Hadopi is still operating and there are hints that the government would like its functions – albeit toned down – taken over by broadcasting authority the CSA.

Our main priority is to ensure that regulation on digital stays pertinent and improves,” says Leblanc. “We are not in the 'for or against Hadopi' – incidentally, Lescure said that graduated response works, and the system has been introduced in several other countries. This validates the need to fight against illegal peer to peer file sharing. But we need to make sure that there is a graduated response system and that copyright can continue to be protected and unfair competition limited.”

Digital champions
Transparency's Bert
Another interesting proposal from the Lescure report was the suggestions that improvement needs to be done in the field of digital rights management, and the development of trusted third parties to do the job. One such company is Transparency, a company based in Paris and founded in 2010 by Jean-Francois Bert who has been building a digital infrastructure and a team whose purpose is to monitor the use of content online and provide data to rights owners. Transparency's service is now used by authors' society SACEM to certify the reporting logs from video platform Dailymotion.

We provide a back-office B2B service,” explains Bert. “Our job is to connect the users of repertoire and rights holders. We work with collective rights management organisations but not exclusively. We do not collect rights, we manage data linked to rights. All this is meant to help rights management and provide a more accurate picture. The data we provide is used by SACEM to distribute rights from the use of videos on DailyMotion.”

Bert is a good example of the entrepreneurial spirit in the music and digital field in France. Having worked on the side of rights owners, he felt there was a gap in the market when it came to managing the huge amount of data generated by the digital use of content. “I did not know much about data but when I saw what data was collected from DM and YouTube, I realised there was a huge gap and I thought that rights management had to adapt to the digital world,” says Bert. “I developed the concept, looked for techs, and invested my own money.”

Transparency, which is currently monitoring YouTube usages in five countries and is hoping to convince other rights societies of the value of his service, is not the only French company active in the digital field. Others include streaming service Deezer, now present in over 180 countries, Believe Digital, now Europe's leading digital distribution company and France's largest independent company, Idol-Independent Distribution On Line, another digital distributor set up in 2006, Daily Motion, a video streaming site, My Major Company, a record label using crowd-sourcing to finance projects, or Qobuz, a downloading and streaming platform which specialises in high quality music files offering music consumers sound similar to that of the CDs.

The music market is by definition an international market, and some of the players need to have an international strategy,” says SNEP's Leblanc. “France has international champions like Deezer, Believe, or Daily Motion.”

Axel Dauchez, CEO of Deezer since 2010, has applied a full-speed strategy to the company, in order to compete on equal footing with the likes of Spotify. The company benefited from a partnership with phone operator Orange, which boosted it reach among consumers. In 2012, London-based company Access Industries, owned by Len Blavatnik, took a substantial share in Deezer, investing $130m in the process.

SNEP's Leblanc acknowledges that Deezer, with 80% of streaming market in France, is a key player, but he regrets that it relies too much on bundles with mobile phone operators. “What matters is the conversion rate [of users of the free service into paid subscribers],” he says, adding that streaming services should make more efforts to provide simple offers and develop schemes that would increase the conversion rate.

Adds Leblanc, “While we witness the growth of streaming – both through subscription and free models – downloading is slowing down in France, like in the US. At the moment, 50% of digital revenues come from downloading but streaming has potential to grow. Streaming is a mass market proposition, so there is a need for scale, like in Sweden, and if we had one French consumer out of ten subscribing [to s streaming service], we'd be in a different space. But we definitely see streaming as part of the future.”

Sound machine
One who is convinced of the digital future of music is Yves Riesel, whose company The Quobuz Music Group regroups indie label Abeille, active mainly in classical and jazz, and Quobuz, a streaming and download digital platform focusing on high-end top quality music files. Launched in 2008, it is currently available in nine European countries, Qobuz offers a catalogue of 15 millions tracks, including from such seminal labels as Germany's ECM, and has captured about 50% on the online classical market in France.

Qobuz's Riesel
[ECM founder] Manfred Eicher is obsessive about the quality of the sound and we provide an answer,” enthuses Riesel. “From the outset, we were focusing on the quality of the sound. I think that in the future, we will see general services that will be like commodities, and an upmarket and segmented market, with the likes of Qobuz. Alongside the Spotifys and the Deezers, who are going to be like the hyper markets of music, there will be room for specialised platforms like Qobuz.”

Riesel says the service is reaching profitability in France and in heavy investment mode for its international development. He eyes the German market through the audiophile angle. “The German market is very attentive to the quality of sound,” says Riesel. “There are some fantastic retailers selling amazing sound systems. Qobuz really fits in this environment.”

Through his label Abeille, Riesel is also exposed to the changes in the French market. He confirms that 2013 saw a renewed growth through physical sales. “We seem to be coming out of the tunnel as a market, but revenues are under pressure,” says Riesel, who laments the poor state of France's retail network that has been badly hit by the decline in physical music sales leading to the demise of key players such as Virgin Megastore, the problems faced by Harmonia Mundi (a network of independent stores operated by the eponymous record label) which had to scale down its operations, and the takeover of Saturn, a hardware retailer who also had a small record/DVD section in its stores.

Meanwhile, luxury goods and retail group PPR was considering selling FNAC, which operates the largest network stores selling “cultural” goods (music, books, DVDs, video games and hi-fi) in France, leading to a period of uncertainty for the retailer. “Sales picked up at FNAC by the end of the year,” says Riesel.

France's music retail sector was never as strong as Germany's or the UK's,” explains Olivier Montfort, former CEO of Sony Music France and EMI France, who was also one of the founders of the Virgin Megastore in France, alongside Patrick Zelnik. “But the past few years have been very tough.”

For Montfort, there are different reasons explaining the demise of the various retail chains. Some have been mismanaged for a some time, others did not invest enough in creating a good experience for consumers, others had grown too fast, or did not have the right locations. Virgin's flagship store on the Champs-Elysées in Paris close down in June 2013, alongside other stores across France, leaving some 950 employees without a job, and many distributors with unpaid bills.

Virgin was a story of a death foretold. There were signs that things were wrong,” says Montfort. “It is never a good thing for the business when stores close but stores that are not working properly and do not pay their suppliers also create problems.”

As opposed to Germany where the various players are scattered throughout the country, one of the characteristics of the French market is that everything is taking place in Paris. “France is a hyper-centralised country compared to Germany, which is closer to the US market with regions and their local media and distribution channels,” explains Montfort. “In France, all the main media are in Paris, and even the purchasing policy of retailers is centralised in Paris. There is very little action outside Paris.”

Overall, the French market can be tough but can also deliver the goods for local and international projects. As music publisher Petra Gehrmann from Métisse Music puts it, “The French market is in crisis like all music markets, but on the positive side, I love working with artists here, who have a great spirit, who are open minded. France is a real international music platform, with musicians from all around the world. The business is a bit more difficult, but it is still a good place for business.”

[This piece was part of a series on the French Music Market. Other stories include:

'Mature' French radio market relies on tight playlists

(This story was originally published in the Feb. 4 issue of German trade magazine MusikMarkt)

By Emmanuel Legrand

The French radio market is characterised by a high level of concentration and centralisation. The sector is segmented into national networks, that cover the whole territory, usually operating out of Paris, regional networks and local commercial and not-for-profit stations.

Aside from public broadcaster Radio France, three main groups control the bulk of France's radio frequencies: RTL, the affiliate of Bertelsmann, with RTL (full-service format), RTL2 (AC) and Fun Radio (Dance and electro); Lagardere Active, part of media group Lagardere, with Europe 1 (news and talk), Virgin Radio (rock) and RFM (Adult); and NRJ Group, property of media mogul Jean-Paul Baudecroux, with NRJ (CHR), Cherie FM (adult), Nostalgie (Golds) and Rire & Chansons (AC/Comedy). Other national operators include Skyrock (Urban music) and Next Radio (with news and talk station RMC and business news BFM).

Yacast's Mouhoub
In 2013, the radio market was rather stable, with no major changes in formats, but we've seen some swings in audience,” explains Ali Mouhoub, deputy Managing Director of Yacast, the French company that monitors national radio airplay. “The paradox is that the most listened to radio in France is NRJ, and its audience has been growing steadily over the past quarters, but other music station such as Fun, Skyrock or Cherie FM have problems. Overall, the Adult format has suffered.”

For Mouhoub, the French radio market is “mature” with strong brands and each national network targeting a specific audience with a specific format: NRJ with hits, Fun with dance, Skyrock with urban music and Virgin with pop/electro. “Each radio has its own market and NRJ is the dominant leader,” says Mouhoub.

From a promotional perspective, obtaining substantial airplay can be problematic: National networks only add a few tracks per week, and since each network has a specific format, very few tracks cross over to more than two or three networks. Labels also contend that the holy grail still remains being programmed on NRJ, which has the real capacity to provide massive exposure, but there are few elected songs that make it on NRJ's playlist.

Many non-mainstream tracks end up played on stations with more open programming policies like FIP, or rock station Oui FM, experimental station Nova, or electro/rock public station Le Mouv', or on the many local non for profit stations regrouped under the banner Ferarock. “You have the two extremes,”says Mouhoub, “with [free format public station] FIP, which plays over 35,000 different tracks each year, and tightly formatted station like NRJ that add two to five tracks maximum per week.”

With Urban, Dance and Pop being the taste of the moment (Robin Thicke's 'Blurred Lines' was one of the most played songs in France in 2013), other music genres are finding it even more difficult to access radio playlists. Even Rock as a genre has its own radio challenges, but for genres like Jazz, Classical and World, it is even tougher.

Media in France are not really open to non mainstream music, aside from a few exceptions like FIP or [Paris-based experimental station] Radio Nova,” says Petra Gehrmann, the German-born founder and CEO of music publishing company Métisse Music, which counts among its diverse catalogue such artists as Marina Cedro from Argentina, Jun Miyake from Japan, whose music is featured in Wim Wenders's documentary 'Pina', or La Caravane Passe from France.

Regardless of music genres, access to media remains a key issue. Record labels – through their representative bodies UPFI and SNEP – joined by SACEM have long complained that there is not enough diversity on mainstream media in France. In addition, indies claim that is no level playing field and majors tend to have an upper hand in getting their music played on the radio. Between the international hits provided by the majors and the local acts they produce, there is not much space left, lament indies label executives. And both majors and indies agree that radio stations constantly try to not respect the quota regulation.

These question were the object of a report (another one!), penned under the aegis of broadcasting authority the CSA. Presented to the Minister of Culture early January 2014, it attempted to tackle the issue of exposure of music on radio and TV. The conclusions fell short of the expectations of the industry, if judged by a joint statement issued by SNEP, performers' rights society Adami and SACEM.

They claim that the report does not address the issue of high rotations used by stations to meet their quotas (two third of the French-speaking output of radio stations targeting the youth are achieved with 10 tracks, according to SNEP), and does not propose solutions to address the issue of exposure of new talent on youth networks. [The issue of high rotations can be highlighted by the fact that during the third quarter of 2013, 0.7% of all the tracks played on radio represented 45.3% of the overall airplay.]

They also feel that the report's proposals to search alternative measures to quotas are not the right answer. “Quotas were asked for because the main FM stations did not play any domestic artists. They have been adjusted over the years, but radio stations keep trying to circumvent them,” says Monfort.

SNEP's director general Guillaume Leblanc says that the arguments of radio stations claiming that there is not enough material to play in French, especially because many French acts now sign in English, does not face the facts: among the albums by French artists that made it into the top 200 best-selling albums of 2013, 94% of them were sung in French and 17 of the Top 20 are from French-speaking artists. But he adds that out of 1,000 tracks in French sent to radio stations in 2013, only 10 accounted for over two third of the programming of tracks in French, and 50 tracks close to 100%.

If we did not have quotas, the share of domestic repertoire [in recorded music sales] would not be where it is today,” says Bruno Lion, Managing Director of peermusic France, also President of cross-industry organisation Tous Pour La Musique. “But quotas are not the only answer. The system is 20 years old, and everyone is testing the limits of the system.”

Share of music genres on radio in 2013 (in % of plays)
French chanson
International rock
International pop
French rock/pop
(Source: Yacast)

Ten tips to break the French music market

(This story was originally published in the Feb. 4 issue of German trade magazine MusikMarkt)

by Emmanuel Legrand

The French market operates with its own dynamics and idiosyncrasies, notwithstanding the language issue. But overall, it is a market worth exploring, not least because of its geographic position, in between Northern and Southern Europe, and because of its economic strength. Success in France can spearhead long careers for artists and steady income streams over the years. Here are a few tips to consider before trying to break the French market.

1 – Make sure you have the right the repertoire
Obviously if you have a catalogue dominated with German schalger, it's not worth trying export to France, but classical, world, jazz and electronic can do well. Pop and Urban are tricky, especially if sung in German, although Tokio Hotel sold thousands of albums to French teenagers, but they had songs people could hum and the proper packaging (and the marketing backing of Universal). Metal can be a steady market, as shown by the success of Rammstein recently and the Scorpions in the 70s. France is also “more open to articulate and artistic musicians which are often overlooked or viewed with slight suspicion” in their countries, says London-based Christine Chinetti, International Manager at Proper Music Distribution. This applies to artists like Joseph Arthur or Charlie Winston, among others.

2 – Don't rush!
France is a slow market, things take time to blossom, but once the machine is on tracks, it delivers. Take that in to consideration when planning. “In France, the audience faithful but it takes time to build a following,” says Ben Oldfield, Vice-President France and Benelux for digital distributor The Orchard. “You have to give time to time.”

3 - Find the right partners
The French system very complex, the administration is very heavy so you need local partners to go after your rights” says Jean-Raphaël Maraninchi, Managing Director of Buddemusic France. Hence the need to work with local partners – label, distributor, publisher, promoter, plugger, etc. Even better is to set up shop in France if you can generate significant volume. “It took me a long time to learn that when working international repertoire in the French market,” says Julian Wall, a former executive from BMG, PolyGram and Sanctuary, and who also worked for the BPI where he coordinated trade missions abroad. “You do have to bed down deeply with your French partner/distributor and let them by and large lead the way, even when you feel that the strategy might be a little long-winded, off kilter...or just plain wrong!”

4 - Be prepared to invest
For recordings, all options are possible: license to local labels, direct distribution deals, catalogue deals, album deals... But if you chose the route of direct distribution, “be prepared to spend money,” warns Christine Chinetti, International Manager at the UK's Proper Music Distribution. “Distributors are reluctant to release anything without tour or PR in place, so make sure you have strategy in place to ensure results,” she explains.

5 - Leave marketing and promo to locals
The French market has cycles that are different than the British or the German markets. Singles can take up to six month to become hits. Mainstream radio is tough to break and access to TV is not easy, but press can be open to new artists and genres. It takes people with experience to drive through the system. “I worked quite a few UK projects in France and one of my biggest problems was always explaining to my London bosses that things seem to take a longer time cycle in France and it's very hard to circumvent the recognised stages of developing profile and sales in the market,” says Wall. For Chinetti, Promo can be expensive and needs a long lead time, so costs can be prohibitive.”

6 - Touring is crucial
Jun Miyake
France has a very efficient and modern network of venues of all sizes, and one of the healthiest festival scene in Europe. Over 16 million tickets were sold in 2013 in France. It is important to have a local promoter who knows the market. “With pop acts, without radio support, you won't sell tickets. Not so with rock bands, who have a different dynamic,” says Francois Millet, founder of music publishing company vital song. “The difference between France and other Latin countries is that we sell a lot from acts that tour, that have a fan base,” adds Oldfield.

7 - In publishing, chose the right sub-publisher
Publishing requires real expertise,” says Maraninchi. And you need all your partner's knowledge to navigate the arcane of authors' society SACEM, and also a publisher who is well plugged in the synch market. There are about 100 music publishing companies of record that can either administer catalogues or work on specific projects.

8 - The synch market is growing
France is a good market for the business of rights, with a strong film industry and some of the world's largest ad agencies. With the appropriate catalogue, synchs and performance rights can deliver hefty dividends. “Advertising agencies are trying to lower prices, but the business is still strong. Electro and pop work best for synchs,” says Adrien Deniel, in charge of copyright and synchronisation at Métisse Music, whose signing, Japanese composer Jun Miyake, has been supplying instrumental music used in many synchs. Electronic is very much in demand for documentaries, films d'auteurs and online usage, according to Budde's Maraninchi.

9 - There's neighbouring rights too!
The 1986 copyright bill introduced in France neighbouring rights for recordings and performances, benefitting labels and artists. These rights are paid by broadcasters but also by manufacturers/importers of blank media, on which is applied a private copy levy. Revenues from neighbouring rights have grown to a point where they can represent up to 20% of the turnover of an indie label, according to Jérome Roger, Director General of collecting society SPPF. Comments Julian Wall, “France has delivered impressive uplifts in income from the sync and performance rights sectors, so holding onto and energetically pursuing those type of income streams is something that any rights-owner participating in the French market should be directly concerned with.”

10 – Be patient!
It will take time but the rewards can be high. “Given that France is a territory that is now showing actual positive growth, it's definitely a good time to be getting into the world's fifth largest music market,” says Wall.

[This piece was part of a series on the French Music Market. Other stories include:

Facts and figures about the French music market

(This story was originally published in the Feb. 4 issue of German trade magazine MusikMarkt)

By Emmanuel Legrand

The leading record company is Universal, which has a market share exceeding 35%. In France, Universal has not been allowed to incorporate EMI as part of the acquisition of the UK major by the French conglomerate Vivendi in 2012. As a result, EMI's French catalogue and infrastructure was acquired by Warner Music which has almost doubled its market share overnight. Sony Music comes second in terms of market share. 

Alongside the majors, there are about 400 indie label of significance, with Wagram, Naive, Believe, Because, Atmosphériques, Tot Ou Tard, Play On, being among the most important. Top distributors are Wagram, Naive, L'Autre Distribution for physical, and Believe, IDOL and The Orchard for digital.

The dominance of local repertoire in music sales – one of the highest in Europe – was built the last two decades. “The French market is very domestic-driven, with probably one of the highest share of local repertoire,” says Former EMI France CEO Olivier Montfort. The dominant music genre is “chanson francaise,” a blend of highly melodic tracks with prominent upfront vocals, and meaningful lyrics. It is the heritage of the elders such as Charles Trenet, Jacques Brel, Léo Ferré and Georges Brassens or Charles Aznavour, who at 89 shows no sign of slowing down.

One characteristic of the French market is the longevity of artists' careers. Artists who were popular in the 1960s like pop icon Johnny Hallyday, Michel Polnareff, Adamo, Sylvia Vartan and many others, are still professionally active and with significant following, although they are in their late 60s-early 70s. But for Montfort, this is also changing. He explains, “It used to be a very stable market on the long run, with very long careers, but it is less and less the case. The public is more volatile, and young talent have problems getting attention for their albums while it is getting harder for older acts.”

The chanson sector keeps on being vibrant with a new generation of singers who follow in the footsteps of the elders, with the likes of ZaZ, M, Zazie, Nolween Leroy, Christophe Maé. On a more edgy side, there are acts such as Dominique A, Miossec, Bertrand Belin, Camille, Benjamin Biolay, Woodkid or Vincent Delerm.

But there are two genres where France stands apart: hip-hop/rap and electronic and dance music. With the rise of a homegrown scene, France is believed to be the second largest market for Urban music. Acts such as MC Solaar, Supreme NTM, IAM launched the trend in the 1980s, and nowadays Maitre Gyms, Youssoupha, Sexion D'Assaut, Orelsan, La Fouine, Booba, Keny Arkana carry the torch of rap in French.

French artists nowadays are also very much active in electronic music, with what was described as “the French touch” introduced in the 1990 with the likes of Daft Punk, Air, and a few others. Today, France's electronic and dance scene is one of the most dynamic in the world, ranging from mainstream acts like David Guetta, Justice, and C2C to more specialised stylists like Gesaffelstein, Arnaud Rebotini, or Kavinsky.

France's Top 10 Best-Selling Albums in 2013
Artist Album Label Units
Racine Carrée
1 159 320
Daft Punk
Random Access Memories
509 209
Maitre Gims
Jive Epic
497 513
Les Enfoirés
La Boîte A Musique Des Enfoirés
421 200
Bruno Mars
Unorthodox Jukebox
419 459
Play On
390 005
Christophe Maé
Je Veux Du Bonheur
388 325
Génération Goldman
Génération Goldman 1
My Major Company
291 517
Florent Pagny
Vieillir Avec Toi
279 374
A L'Infini
214 661
(Source: Gfk)

Top 10 most played tracks in France in 2013
Daft Punk Get Lucky Columbia
Bruno Mars Treasure WEA
Saule feat. Charlie Winston Dusty Men PIAS
Robin Thicke Blurred Lines Polydor
Passenger Let Her Go Columbia
Macklemore Can't Hold Us WEA
Rihanna Stay Def Jam
Bruno Mars Locked Out Of Heaven WEA
The Lumineers Ho Hey Capitol
Major Lazer Watch Out For This (Bumaye) Because
(Source: Yacast)

Thursday, February 6, 2014

Things seen and heard at Midem 2014

by Emmanuel Legrand

The slogan of Midem 2014 – ‘Back to Growth? Make it Sustainable!’ – sounded more like a mantra than a reflection of the state of the business. There is still a long way to go to get to full growth, even if there are some positive signs. But to the participants of the trade show who made the trip to Cannes in the South of France, what mattered was that it was as busy a Midem as ever. Here's a round-up of things seen and heard on the Riviera.

Growth, what growth?
The french market for recorded music experienced growth for the first time in revenues after twelve years (yes, twelve years!!!!) of decline. OK, the growth was modest (up 2.3% at €603.2m) but significant nonetheless. Meanwhile, French authors' society SACEM announced collections in excess of €810m in 2013, 1.7% up on 2012. But revenues from digital in France are still below the level of other countries, despite the presence of a major streaming player in France (Deezer). Scale is not there yet. Other countries in Europe like Sweden, Germany or Norway have posted growth and everyone in the industry is looking for the day when scale will turn streaming into a real money machine. But many speakers felt quite confident about the future of the business.

Streaming gets massive boost
WME's Mark Geiger (Picture: Desjardins/Image & Co)
The apparent shift from ownership (downloads) to access of music (streaming) has been the source of many talks lately about the value and the sustainability of streaming as a model (Tom Yorke, anyone?). Marc Geiger, head of music at leading talent agency William Morris Endeavor, told audiences at Midem that time was no longer for lamenting, but embracing the trend. “We’re transitioning into the next stage of the system, which is streaming,” he said. But many questions were asked about the sustainability of the business model underpinned by streaming if operators of services could not convert free users to paying subscribers. Former Warner Music US CEO Lyor Cohen said he believed “in streaming as being the future of very healthy business.” And Radiohead’s manager, Brian Message, accepted that streaming was about scale. “It’s a volume game, and it’s going to get bigger and more important. And for everybody in the chain… we have to get to a point where everybody trusts and understands the revenue stream and revenue flow.” But at the same time, streaming is a massive promotional tool for music and artists, argued Emmanuel de Buretel, founder of Because Music. He said, “I spent a lot of investment on how to optimise streaming. The way you manage YouTube has nothing to do with the way you manage a physical release. It’s a total new world, and that’s why it’s exciting.”

Can streaming finance creation?
The question was asked by the CEO of Deezer Axel Dauchez who simply stated that “if 70% of the streams are done in the back catalogue, there will be no new creation.” He believes there is “a common responsibility to generate discovery, to force people to try new artists, new songs. Investing in new artists is not a marketing tool: it’s an industry need.” When shall we see Deezer, YouTube and others set up a pot to help finance new talent?

YouTube is under attack
YouTube has become a key source of revenues but many voices in the industry suggested that Google could do more for the industry. Googleannounced at Midem that YouTube has already contributed to one billion dollars in revenues to rights holders over the past few years, and the pot is growing. But Deezer CEO Axel Dauchez accused the video platform, owned by Google, of being “a legal pirate” by allowing non-licensed material to flow on the platform. Meanwhile, !K7′s Horst Weidenmuller questioned the end goal of Google. “I am concerned with YouTube entering the market because for YouTube everything is about dominance. And dominance is connected to destruction.”

Lyor Cohen thinks Twitter rocks
Lyor Cohen, until recently CEO of Warner Music US, was in Cannes to present his new independent company, 300, which counts Google among its investors. One of the first deals he's made was with Twitter’s music division. “We’re going to create A&R tools to find artists early, and help develop them,” he said. “We all are looking for talent in various places, and certainly Twitter is a terrific place to look at talent, just like YouTube. If you wanna get signed, I think you have to engage with Twitter, and of course YouTube. And we’ll be looking and trying to develop tools that the rest of the music community can utilise.” Well, aspiring artists, you know what you have to do now...

Jean-Michel Jarre (Picture: Desjardins/Image & Co)
Jarre extends the hand of friendship to tech companies
Although he had barely landed from Los Angeles where he is currently recording a new album, French electronic music pioneer Jean-Michel Jarre was in combative mode. He obviously takes very seriously his role as president of CISAC, the international body representing authors' societies. During his appearances at Midem, he repeatedly asked for creators to be given proper remuneration for the use of their works. “We are victims of a system that has not even been thought in the function of the content they are making so much money on. This is why this idea of fair remuneration is important,” he said. "If you think that digital is the future, we are in dire straits.. we need again to define a fair remuneration in the digital world." But he was also offering tech companies a way forward: “We need to sit around these people making billions with our content, and say ‘Guys, you love us, we are not hating you, we need to sit together and find a decent business model'.” Will he be heard?

And will.i.am wants the music to be more adventurous
Funny enough, will.i.am also alluded to technology during his keynote speech. In a video link with Los Angeles, the Black Eyed Peas's maestro had a few tips for the music industry. “Our industry is pretty lazy,” he said. “We should’ve been Facebook first. Our industry should’ve been Twitter. Our industry could’ve been Apple. Our music industry is powerful, but we don’t use it like we should.” He added, “The state of the music industry is delusional. I really encourage every single person in the music industry to try and compete not with other record companies, but compete with Samsung, compete against LG, compete against the big ones!” Hmm, competing with Samsung... Sounds like an interesting new mission statement for the music industry!

Paul McGuinness is in combative mode
One would think that now that he is no longer managing U2 Paul McGuinness would just keep quiet. Quite the contrary. The Irishman, who steered the career for over 30 years of what he called “a fascinating social unit” delivered one masterclass in artist management during the speech he delivered after receiving Billboard's 2014 Industry Icon Award. McGuinness could not let this occasion pass without giving a kick to Google, asking the tech giant to show “social responsibility” by “taking down the illegal sites” and to “pen their hearts a little and be more generous to the ecosystem that started their success a few years ago.” But most of his comments were about his protégés. There was an obvious bond between the artists and their manager, but McGuinness was keen to specify the limits of the relationship: “They were always my clients, not my partners.” McGuinness then stated, “When we started we knew nothing. They didn't know how to play their instruments, I didn't know anything about the music business.” Well, they all quickly learned! And in a video, the band paid a heartfelt tribute to their manager. “I don't think we've ever met another artist who have had the same manager for 35 years from day one and for that whole time who had been unfaltering in his integrity, in his excellent business acumen,” said Bono, while The Edge added: "We own our own master tapes, we own our own copyrights. We are in effect a a cooperative who shares those equally with the band and we were designed to survive and we were designed for something much harder: we were designed to survive success. And Paul it was your design.” Such design helped them sell some 160 million albums... Some achievement, indeed.

Ibrahim Maalouf
(Picture: Desjardins/Image & Co)
Artists adopt DIY attitude
Midem 2014 reflected the DIY attitude adopted by many artists these days. A lot of sessions were dedicated to showing how to better use the digital landscape. But it is not an easy road. The best way to sum up what goes through the lives of artists these days was expressed by Lebanese-born songwriter and performed Ibrahim Maalouf: "Artists can't afford 3 cooks. You have to be the cook and the salesperson. Artists have to do it themselves these days."

But labels are not dead!
The whole idea that you don’t need a label? It’s bullshit!” said PIAS co-founder Kenny Gates, reflecting the common view that dis-intermediation was great to a point and that labels do serve a purpose. “A lot of management companies found out after doing one or two DIY deals that they actually needed a label,” said Gates. “[Artists] don’t necessarily need a label: they need a team around them,” tempered Colin Daniels, MD of Inertia. Alison Wenham, CEO of AIM, the UK's independent label's body, claimed that “independents are a natural home for artists: independents take a long-term view about their role. They’re very much partnership-based. Their artists should be supported, they should be allowed to express themselves creatively in whatever way they want without putting deadlines or artificial constraints on whatever the artist wants to do.”

And their future is?
In no uncertain terms, de Buretel said the future of labels is to become rights management companies. “It’s extremely difficult, and that’s the role of a music company – not a record company – to know how to manage it.”

Indie publishers want to be heard
The already crowded music eco-system will have to make room for a new player, the International Music Publishing Forum, which aims at representing and giving a voice to independent publishers. This new organisation was launched at Midem a few hours after its first board meeting which elected as president Pierre Mossiat from Strictly Confidential in Belgium (for those not in the know, Strictly is co-owned by Mossiat with Michel Lambot and Kenny Gates from Play It Again Sam, who are influential members of Impala, the European indie labels' organisation). Mossiat said that this new association will not work against but alongside ICMP, the global body for publishers, and will give indie publishers a voice and a forum.

Licensing is still the oil in the business
Whatever the means of distribution, music gets to consumers via a licensing process between rights holders and platforms. At least for those who work with legal frameworks. And there was a lot of licensing discussions on stage and offline. While pan-European hub Armonia (regrouping France's SACEM, Spain's SGAE, Italy's SIAE among others) announced a major deal with YouTube covering over 120 countries, digital platforms and rights holders had several behind the scenes meetings, trying to iron out deals and partnerships. On stage, there were at least four, if not more, sessions dedicated to the theme. Florian Drücke, managing director of said Germany's trade bodies BVMI/IFPI, stated that "the next big thing is even better licensing, get more things licensed. We are making a lot of progress but there is a lot to be done."

Licensing in Europe is still a complicated game
Kerstin Jorna
(Picture: Desjardins/Image & Co)
If you think that launching a new digital music service is easy, you are wrong,” said Yves Riesel, founder of French hi-fi platform QoBuz, when asked how he found the current state of music licensing. But he said that complexity and dealing with rights fragmentation was a natural part of the process that platforms tend to factor in when starting, adding ironically that it was now “easier to deal with authors’ societies than with record companies.” Efforts have been made by authors' societies to create in Europe (and also elsewhere in the world) hubs to license repertoire. One such is Armonia, which regroups Italy's SIAE, Spain's SGAE, France's SACEM, among others. Another is project, currently under review by Europe's competition authorities, aims at regrouping PRS for Music (UK), STIM (Sweden) and GEMA (Germany). “We believe that authors' societies are the appropriate answer to massive use of creative works in Europe,” said Kerstin Jorna, who is in charge of the copyright unit at the European Commission's Internal Market department.

Europe is a worry
Several professionals and creators present in Cannes expressed their worries a a new consultation on copyright set up by the European Commission. Jarre urged fellow creators to go online and fill in the 80-question document. Started early December 2013, and initially due to close on Feb. 5, the consultation was given an extended deadline (March 5). SACEM's Jean-Noel Tronc expressed his worries that the process has been steered in such a direction that “sometimes it felt that the answers were already in the questions” and that the document only available in English was not easy to navigate for non-native English speakers. Jarre put this consultation into a wider context: “At a time when Bruxelles scratches its head on copyright, China and Korea see copyright as a way to boost economy, and many look at Europe as a model since Europe has been visionary as being the first continent to understand that if you want to have a strong identity, your culture has to be strong.”

Data, big data, metadata!
If the music business could cash in a cent each time someone mentioned at Midem the word data in all its guises, the woes of the industry would be over. Richard Conlon, BMI's SVP for corporate strategy, communications and new media, acknowledged that societies have to deal with a “huge volume explosion” of data which require the best business processes to make sure that data is identified and rights holders paid.

Where's the GRD?
The main absent at Midem this year (that is, with the sunshine…) was the GRD. Unlike previous years, no update was provided on this key project for the industry. The fact that some rights societies are having cold feet when considering the level of investments required to launch and operate the global repertoire database could explain such silence. Sources were telling me that the situation should clear up in the coming days as all the other societies contributing to the pot were awaiting for the decision from a major North American society to chip in or not. If not, some other societies could follow suit and put in jeopardy the whole project.

What's next for Midem?

Bruno Crolot (Picture: Desjardins/Image & Co)
The future of Midem was a subject of many discussions on the Riviera. Some were wondering if the trade show would be able to continue to weather the challenging crisis facing the music industry. Others were unfazed but the debates and just went on working, and apparently doing good business. Midem's boss Bruno Crolot announced 6,150delegates from 75 countries (slightly down from the year before) and confirmed that Midem 2015 would take place in Cannes January 31-February 3. So we'll be there next year to monitor if, indeed, growth has been sustainable.

PS: total respect to Stuart Dredge for his amazing coverage of Midem. This guy can type faster than people speak!

[Typed while listening to Mark Kozelek & Jimmy LaValle's 'Perils From The Sea' and I Break Horses's 'Chiaroscuro']