Thursday, March 26, 2015

Visions for 2015 by US industry executives

After a few dormant months, allowing me to settle in the US and start as the US editor for UK trade magazine Music Week, the blog is operational again.

I will regularly post material related to my work in the US, so don't be surprised if there's a shift in emphasis.

Let's start with a series of quick Q&As with US industry executives about the business in 2014 and their forecast for 2015. Initially planned for Music Week, they did not make it into the mag for lack of space. But since these comments have real value, it would be silly not to make them available...

The three questions:
1 - What were the key events that took place in the U.S. music business in 2014 and why were they significant? 
2 - What are, according to you, the key challenges ahead for 2015, and why?
3 - Any interesting new artist(s) to follow in 2015? 

Marty Bandier
Chairman & CEO, Sony/ATV 

1 - Without doubt the event that has been of paramount importance to us in 2014 has been our efforts to regain control of our performing rights in the U.S. We at Sony/ATV are continuing to lead the industry fight to change this and have made it our number one priority to achieve reforms that will allow the vital contribution our songwriters make to these services to be fairly rewarded.

2 - We are in a music industry that in the past year has changed at a far faster rate than anybody had anticipated with digital download sales falling at double digit percentage rates on both sides of the Atlantic and a rapid consumer shift to streaming services. As I have outlined, a key challenge will be to reform the streaming market in the U.S. to ensure it is fair for songwriters. Just as importantly, we also need to achieve a better balance between free and premium services.

3 - This has been by far the best year Sony/ATV has had creatively with our songwriters present on all five of the Grammy nominations for Song of the Year and all five Record of the Year nominations. We are looking forward to another successful year in 2015 with Hozier set to become an even bigger star, while we are also excited about acts including ASAP Ferg, Tinashe, The Wylde, Young Rising Sons, both Kwabs and Rhodes from the UK, and Lido from Norway. 

Chris Castle
Founder/Managing Partner, Christian L. Castle, Attorneys 
Editor, Music Tech Policy blog 

1 – There's two involving Taylor Swift’s album: In the background, Taylor Swift’s team did an under-reported but excellent job of controlling illegal copies on YouTube and other outlets for “pirate UGC” (i.e. 1:1 copies of works that are not covers or fair use). This showed that it can be done using DMCA if you have access to automated takedown tools. It also showed that YouTube could do it themselves but won’t. Second, Taylor Swift’s unflinching position on Spotify showed what can happen if artists stay together.

2 - I think the challenges are going to revolve around fair compensation to artists and songwriters. These are some immovable objects—YouTube, Pandora, Spotify, Sirius, etc., and it is going to take serious arguing and probably litigation to stop them. If we can’t get the legitimate companies to pay us, we’re all in even deeper trouble. “Something is better than nothing” only works in a world where piracy is offset by sufficient sales to withstand the bloodletter, and those days are officially gone.

3 - Shakey Graves!

James Donio
President, Music Business Association
MusicBiz's James Donio
1 - There is no doubt that the heightened transition from unit-based to access-based models was one of the most significant outcomes from the U.S. music business in 2014. Specifically, the importance of this shift was brought into focus when Billboard and Nielsen announced that they would begin including streaming numbers and digital track downloads in their calculations for the Billboard 200 chart. Immediately, Ariana Grande shot up 32 spots once the change was made, providing a more accurate representation of her popularity amongst listeners. Going forward, this change has the potential to significantly alter the perception of the industry, as we now have a complete picture of how and how much people are consuming music. 
2 - Seeing how the trends around streaming models and consumer behaviour will evolve is perhaps the biggest challenge for 2015. As the industry and its partners develop new ideas and strategies, we will also experience a range of opportunities for the global music business. Luckily, we now have a complete way to measure the progress of these advances, as I mentioned before regarding Billboard’s new Top 200 chart. Knowledge is power in this industry, and having a full understanding of how our decisions and actions impact consumption will allow us to move forward in the best possible way. 
3 - Personally, I’m really excited to follow the burgeoning careers of new Grammy nominees Meghan Trainor and Sam Smith. 

Laurent Hubert 
President, Creative And Marketing at BMG Chrysalis
1 - 2014 was the year the debate on PROs became central, but without resolution, thanks mostly to non-conclusive court decisions.

BMG's Laurent Hubert
The big surprise in 2014 was the steep decline of download. We did not expect a double digit drop like 15%. Time will tell if 2014 was an anomaly or the start of a major drop in digital rights. Sadly I think we reached a point of no return. Meanwhile, it's been a pivotal year for streaming.

For BMG, 2014 a good year, very transformative as we have continued our expansion in many different fields: publishing, recording, audiovisual – through the acquisition of Soundstage, which has a huge library of concerts and which is now developing HD content. We bought Vagrant and we will keep it as an imprint.

2 - In 2015, discussions with PROs and digital services will continue. And for BMG, we will be looking for more organic growth and we'll sign more talent. But we will also look into acquisitions, especially assets with high value added.

3 - Bebe Rexha, whose debut album will be out in 2015 on Warner Bros., Frank Ocean who has a new album in 2015, and also Sam Bruno, SonReal, Kranium, Decemberist and DJ Snake.

Jeffrey M. Liebenson
Principal, Liebenson Law
President, IAEL - International Association of Entertainment Lawyers 

1 - The key event was the emergence of streaming as the dominant form of music distribution. Streaming coupled with social and mobile vastly expand the potential for the music business. This will cause major shifts in the industry and in consumer experiences. Apple's drop in download sales and acquisition of Beats sums up what happened in 2014.

2 - We'll see major efforts to reform licensing in the US in order to bridge the legal gap between technology and rights owners. It could lead to major changes in the relationship between songwriters, publishers, and PROs.

3 - Sunset Suns, a band from UK/Australia. 

Michael O'Neill

BMI's Michael O'Neill
1 - It’s been a period of massive transformation in the media and music landscape. Important issues for us included rights withdrawal by publishers; the revisions of streaming royalty rates, to establish an accurate fair market value for the use of musical compositions; Copyright Law reform and consent decree review.

Despite these challenges, BMI announced a historic high in revenue results for the 2013-2014 fiscal year, the highest of any performing rights organization, making BMI the largest PRO in the world, both by revenue ($977 million generated with more than $840 million distributed and administered to its songwriters, composers and music publishers) and number of members (650,000).

BMI announced in December the renewal of our representation of Taylor Swift and also renewed the representation of the extraordinary and vast catalog of Michael Jackson, as well as Pink and Maroon 5.

2 - We are going to continue to experience the evolution of the traditional music business to digital media, moving from an ownership model (CDs, downloads) to a licensing model (streaming). Given this transition, the Department of Justice’s response to BMI’s request to amend its consent decree will have a significant impact. In 2015, as always, we will continue to identify and sign promising new songwriter/artists and composers. We’re optimistic about the year ahead and growing our leadership role in music rights management within the dynamic digital landscape.

3 - Sam Smith, who recently joined BMI, is taking the industry by storm. Also in the UK, BMI brought exciting new talent into its US representation, including George Ezra, Gavin James, FKA Twigs, Ella Henderson, Catfish & The Bottlemen, MNEK, Marlon Roudette, Alesso, and Gorgon City among others. . . .all ones to watch!

Casey Rae
CEO, Future of Music Coalition
Adjunct Prof. Communications, Culture & Technology, Georgetown University

1 - 2014 has been the year of streaming, or at least debates about streaming. Here in the US, we've seen many critics of the current on-demand model come forward, and non-interactive services have also come under scrutiny. Then there was the dust-up between YouTube and the indie labels over licensing terms for YouTube's new subscription service. Any solution, or set of solutions, is going to have to take into account the many different marketplace objectives of artists and composers. Choice, flexibility, transparency and accountability is the name of the game if we're to get this transition right.
FMC's Casey Rae

2 - Music has essentially been atomized. But our ability to account for this atomization—the countless ways that music is accessed and experienced on a global scale—hasn't kept pace with technology. Is it any wonder that the larger music services don't take us seriously if we can't get our house in order? We need stronger vision and integrity in the music industry or else our entire sector will be left behind.

3 - I was blown away by Seven Impale out of Norway. Sturgill Simpson made the album of the year, in my opinion. I also loved the twisty folk-rock of Ryley Walker, as well as Toronto vocalist/sound manipulator Lydia Ainsworth. 

Tom Silverman
Founder/CEO, Tommy Boy

1 - Taylor Swift may have earned the dubious distinction as the last artist to go platinum in America. This illustrates the end of the album format and the end of the dominance of "unit sales". In 2015, non-unit sales net net revenue (post-mechanicals, and manufacturing) will be the majority of music revenue in America.

In 2014, vinyl was the only music sales format that did not decline in double digits…it grew by 48%. Happy 65th birthday to the LP.

SoundExchange distributed more than three quarters of a billion dollars to artists and labels in 2014 and they paid it monthly with a world's-lowest overhead cost of under 5%.

2 - Accelerating the growth of music subscription services. There is no other music industry revenue source that can replace the decline in revenues that the industry has experienced since 2001 and that has the potential to drive the industry to $100bn. In 2015, we look forward to seeing the YouTube subscription service Music Key and the iTunes spin on Beats to drive big growth in music subscriptions.

3 - We are excited about many of our new artists but three I am really excited about are Pants Velour, Jamar Rogers and Adrian Daniel. From other labels I am excited by ASTR on 300.

Paul Williams
Songwriter, Chairman & President, ASCAP

1 - It’s now obvious that technology is transforming the way people experience music, with more and more listeners shifting to streaming rather than purchasing music. That’s sparked an important dialogue about what the changing landscape means for music creators, particularly in terms of how we’re compensated for our creative work across these new platforms.

ASCAP's Paul Williams 
2 - The biggest challenge is going to be taking the debate over streaming royalty rates and channeling it into meaningful reform of the regulatory system that governs how we license music in this country, which no longer reflects the reality of today’s music marketplace. It won’t be easy, but working together with all music stakeholders, I believe we can streamline and modernize the music licensing system in a way that serves the long term interests of music creators, businesses that license music and, most importantly, music fans. 

3 - There are some extremely talented songwriters on our radar, some of whom have emerged from ASCAP’s music career development programs: Meghan Trainor, Jesse Shatkin, Bobby Shmurda, Brandy Clark and St. Vincent. We’re so proud to play a role in all of these writers’ journeys and we’re excited to see what they do next.