Ranking
as the fifth largest recorded music market in the world, France
offers significant upsides for music publishing companies. As the
country of birth of “authors' rights,” France has a very high
level of royalty collection and thanks to strong film, advertising
and TV production arenas, its synch sector is growing.
Revenues
for the sector have been on an upswing at close to €200m ($270m),
thanks mostly to the development of the synch market (see sidebar),
but publishers admit that it's been a difficult market for the past
few years. One
of the attractions of the French market has always been the high
level of collections, with some of the highest rates in Europe paid
by media for the public use of music on radio, TV or in clubs.
 |
| peermusic's Bruno Lion |
“The
use of music in media is the main source of revenue and France has
some of the best rates in the world,” says Bruno
Lion,
Managing Director of peermusic
France,
as well as President of cross-industry organization Tous
Pour La Musique.
But like in other markets, publishers see extreme pressures of rates
negotiated on their behalf by authors' society SACEM
or
on the fees that they negotiate directly for synch purposes, for
example.
Central
to the life of music publishers is authors' society SACEM, which has
collected €803m in 2012 on behalf of authors, composers and
publishers, 14% of which comes from digital use of music. The society
has been going through a major renaissance under the aegis of newly
appointed CEO Jean-Noel
Tronc,
a former executive from Orange
and pay-TV group Canal+.
“In
a difficult context, we are changing the way we approach our business
and so do authors' societies,” says peermusic's Lion, who is a
board member of SACEM. “Sacem as a tool is changing. A new team has
been put in place for the past 18 months and is now fully
operational. Over 2013 and 2014, fundamental changes will take place.
The new deal signed with YouTube
is a good example of these changes.”
Issues with rates
However,
if most publishers agree that SACEM is very efficient when it comes
to collecting rights, some publishers are also critical at the way
SACEM handles the distribution of rights, citing delays and
inaccuracies in the process. “There
are major challenges in the transformation and modernization of
SACEM,” says Stéphane
Berlow,
Managing Director of
BMG Rights Management France,
“and as a publisher with a significant catalogue – we are now the
fourth largest publisher in France – we have problems linked to
size and scale. That said, there are also good aspects to the
modernization, but on a daily basis, it is tough.”
 |
| Sony/ATV's Nicolas Galibert |
“SACEM
is very well structured now and more efficient,” says Nicolas
Galibert, Managing
Director of the combined Sony/ATV
and EMI
Music Publishing France.
“But as one of the board members, one of the main issues for me is
the level of rates. We should not let them slide. If the DVD sector
is asking for lower rates because the market is going down, why
should we accept? This is unfair.”
One
publisher explains that the publishing rights for YouTube streams are
“ridiculously low,” offering the figure of €150
for one million views in France, about 20 times less than what labels
receive. These rates could not be confirmed since the new global deal
between SACEM and YouTube signed in 2013 includes an NDA.
But
the main worry of publishers is what will happen if streaming becomes
the main way to consume music.
“Streaming takes over downloads and that has an impact on our
revenues,” says Francois
Millet,
founder of boutique publishing house Vital
Song.
“It is now frequent to have some tracks for which 75% of the
revenues come from streaming.”
For
Berlow, changes in consumers' behavior with increasing adoption of
streaming will have an impact on the level of revenues. “We will
face real problems ahead if streaming continues to grow,” says
Berlow. “Publishing gets the worst deals when it comes to
streaming. It might be the future but this is a real issue for us to
reach proper remuneration levels. One generation listens via YouTube,
a younger one via Deezer.
Lots of kids listen via Deezer. Music radio is starting to see a drop
in audience, and as one mode of consumption replaces another, our
levels of revenues are going down. Scale is one of the answers and we
hope that services like Deezer and Spotify
will reach enough scale to generate revenues.”
He
continues, “In addition, the
economic model [for publishers] is tougher and this affects our
ability to take chances with new talent. It
is hard
to be optimistic in the short term but when we work on a daily basis,
it does not affect us. We just move on and do our things.”
And
things publishers do have expanded over the past few years. Gone are
the days of simply collecting the proceeds from sub-publishing deals
with international catalogues or cashing in publishing royalties with
local when the manpower and the money were coming from record labels.
One of the significant changes in the model is the dearth of
investment in talent and new recordings from the labels, which has a
trickle-down effect on music publishing, forcing publishers to change
the way they approach their craft.
“The
business of publishing has not fundamentally changed – which is to
bring the right project at the right time -- but the partners have
changed a lot,” says Lion. “Before, we worked a lot, and mainly,
with the A&R departments of record companies or artists'
management; now we work as well with TV or film production companies,
concert promoters, not to mention artists as stand-alone units.”
New publishers join in
As
a sign of the times, the number of music publishing companies has
been growing, reflecting the view that publishing can still deliver a
steady flow of revenue that can offset other declining parts of the
music business. But it
also highlights the growing number of artists who are self-published,
or the rise of small DIY structures, according to Angélique
Dascier,
General Manager of the Chambre
Syndicale De l’Edition Musicale (CSDEM),
the French music publisher's association.
“We
have a lot of new members, especially small structures,” she says.
“Many of these new members set up a publishing unit aside from
another business – they can be concert promoters, labels, etc. And
there's a lot of young people, new faces, and this is quite dynamic,
because they are also adopters of new practices, using the digital
tools of today.”
 |
| Buddemusic's Jean-Raphael Maraninchi |
This
influx of new players in the publishing arena and the fact that
revenues are growing offer good business opportunities, according to
Jean-Raphaël
Maraninchi,
Managing Director of Buddemusic
France,
the affiliate of German music publishing house Buddemusic. Budde has
developed an expertise in electronic music and dance. One of its
recent signings is David
Shaw,
a British DJ living in France. It also represents many catalogues
signed by its parent company as well as international catalogues
signed just for the French market.
“Publishing
requires real local and international expertise,” says Maraninchi.
“A lot of new companies set up by [indie] labels come to us to
administer their rights – we are very good at collecting
[royalties]. The French system is very complex and because it is in
France, administration can be very burdensome. We also do a lot of
partnerships with small labels and help them finance projects and do
the back office. We also do a lot of co-publishing with labels.”
Peermusic's
Lion sees the job of publishers evolving towards becoming service
companies: “We bring a specific service, especially in the
administration field, to many independent artists who need to have
this part of the business properly handled. That's what we've been
doing with [EDM act] Agora
for 14 years, or with the Gipsy
Kings
or Kassav.”
With
labels consolidating, a lot of the creative work is now falling in
the hands of music publishers, but BMG's Berlow warns that publishers
“are not immune against the changes in the marketplace.” He adds,
“The role of A&R development has always existed, but it is
tougher. We are happy when we sell 10,000 albums of a new artist when
it was 50,000 a few years ago, so it creates a real economic
problem.”
BMG,
which started from scratch in France a few of years ago, has made a
steady number of acquisitions (Francis
Dreyfus Music,
the catalogues of De
Palmas, Louis Chedid
and Gold,
as well as FKO,
home to Fela
Kuti's
works and the French catalogue of Virgin).
Berlow describes the catalogues as “a foundation” which allows
them “to be strong in sync and song pitching.”
Berlow
says many acquisitions, as well as new projects, include publishing
and masters, since it has become more and more difficult to find
labels that will finance new recordings. “There's less labels and
also less labels taking risks, so we have to step in,” says Berlow.
“Publishing is one of the few music sectors that is not helped
[financially], so I hope we can continue to do that.”
Domestic acts top charts
Local
repertoire is dominant in France so continuing to invest in domestic
talent is paramount for publishers. In 2013, 17 of the top 20
best-selling albums were by French-speaking acts (Stromae's
sophomore effort Racine
Carrée
topping the charts with over a million album sales). 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 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.
 |
| Métisse Music's Petra Gehrmann |
Petra
Gehrmann
is 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'
documentary Pina,
or La
Caravane Passe
from France.
She confirms that it is not simply with the financing of the
recordings that publishers have to be involved in these days. “More
and more companies are closing down among indie labels and
distribution companies, so we do more and more management for our
artists and try to find opportunities for our artists outside France,
where it's become difficult,” says Gehrmann.
Gehrmann
takes the positive view when it comes to the synch market. With over
200 films in production every year in France, the local industry
offers many opportunities to either place music or to provide
original scores. “There is a strong film industry in France and it
helps,” she says. “There are a few music supervisors who work on
many different movies and they are quite open. TV documentaries are
also a good platform for music. In cinema, when a composer is picked,
the publishing is usually grabbed by the production of the movie and
we can do a co-publishing deal with a 50-50 or a 60-40 split, and
sometimes they take it all if they finance everything.”
Flexibility
and adaptability are the key word these days for publishers, partly
for business reasons but also because, as bluntly put by Francois
Millet, founder of boutique publishing house Vital Song, “capturing
publishing rights is a national sport, and it impacts every single
project you can work on.”
Nicolas
Galibert agrees: “Everybody wants a piece of publishing. Labels now
systematically ask for a cut in publishing. It is part of the
contracts. That was not the case.” But he also says publishers have
to understand when to split their publishing share. He explains,
“When it is a musical and the producer of the show takes the
financial risk, I don't mind doing a co-publishing deal – the
revenues will come from so many sources: live performances, radio,
TV, and even merchandising. Same when you place a song with [veteran
rock icon] Johnny
Hallyday.
You know he is a market puller, and you are going to benefit from his
exposure.”
And
since publishers end up working more and more directly with artists,
more than often financing their recordings, this allows publishers to
often own both the publishing and the recording rights, which is a
bonus for synch deals. In addition, France has a very sophisticated
system of collection for neighbouring rights (performance rights paid
to performers and labels for the public use of recordings).
“Neighbouring rights are very important and represent over 20% of
our masters' revenues,” says Berlow, whose company has been
building catalogue in both recording and publishing.
Expanding the business
Some
publishers like Lion or Galibert go as far as registering for
neighbouring rights all the demos and recordings that they have paid
for from the artists/songwriters signed to their companies. “These
can be used in many different ways such as inclusion in box-sets, or
as extra songs on albums, and so much for the better if on top they
generate ancillary rights,” says Lion. “We are going to focus on
neighbouring rights,” concurs Galibert. “Even our demos will be
registered. And we will be producing shows like musicals. We see that
segment evolving nicely alongside concert music for films. This is
the kind of repertoire that is rarely played live and we see a lot of
potential.”
Galibert
had the opportunity to experience first hand how to structure a music
publishing company fit for the digital age when he combined the
French units of Sony/ATV and EMI Music Publishing. The integration of
the two companies took about two years and is almost complete
(mergers in France can take time due to stringent labor laws). “We
have a team of 27 people with about 25% in A&R, 25% in the sync
department and 50% in admin and royalties,” says Galibert. “Our
policy was to take the best from all sides, but it was not always
easy to achieve. Then we had to put in place processes. Everyone has
seen the workload increased, so it was necessary to create processes.
The French are really productive, unlike conventional wisdom.”
To
grow their business, French publishers have joined forces to set up
of a database of French lyrics, which – after over two years in the
making – is now fully operational and provides access to the lyrics
of 50,000 songs in French, coming from catalogues of both independent
and major publishers. The B2B site (paroles.net)
is managed by Musicstory
and licensed to third parties. “Each publisher keeps ownership of
its content,” explains CSDEM's Dascier,
adding
that a deal with global platform Lyricfind
is
in the works.
 |
| Vital Song's Francois Millet |
“There
was no market for lyrics in the physical word, but with digital,
lyrics started to get a lot of usage, but usually not through legally
cleared platforms. We felt there was a need to do something and we
built the database from scratch,” explains Dascier, who adds that
revenues so far are under €100,000 but growing.
“This
has created a new market and a new revenue stream for publishers,”
confirms Vital Song's Millet, who was involved within CSDEM in the
setting up of the database. “It is a guarantee
that our lyrics can now be available legally on the net and are
exploited on a constant basis. And
no site can now take the excuse that there is not legal ways to
access lyrics in French. No
more excuses!”
[This piece was part of a series on the French Music Market. Other stories include:
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