Covid-19 global, US and European updates

GLOBAL

> Goldman Sachs Report: Global music revenue to drop 25% in 2020; full recovery expected by 2022
The global music industry — comprising live music, recorded music, and publishing — will experience a 25% drop in revenues to $57.5 billion in 2020, according to Goldman Sachs's 'Music In The Air' report, which was previewed by Rolling Stone. The report was The report was coordinated by the investment bank's media and internet equity research managing director Lisa Yang.
  The report forecasts a 76% decline in revenues from live music, 5% for the music publishing market, and 8% for the recorded music market by 8%. In 2019, Goldman Sachs estimated that the value of the global industry was about $75bn in 2019.



  Looking at the short-term impact of the Covid crisis on the music industry, Goldman Sachs expects the live sector to rebound in 2021, when mass gathering will be re-authorised around the world. Despite the C-19 impact on the music industry, Goldman Sachs did not change its long-term prospects for the music sector, forecasting that it would reach $140bn by 2030, in line with previous estimates.
  “We expect a strong rebound in outer years, with the live music industry nearly returning to its pre-COVID-19 level by 2022,” reads the report, forecasting a compound annual growth rate (CAGR) of 6% for the period of 2019 to 2030. "We believe the industry’s long-term growth outlook is intact," said the report.
  By 2030, the recorded music sector will have fully made its transition to streaming. The report estimates that The bank estimated that the paid music streaming market could reach up to 1.2 billion users by 2030. “While user time spent may shift away from music streaming to other forms of entertainment in the short term, overall we believe the industry’s long-term growth outlook is intact, driven by the secular growth of paid streaming, growing demand for music content and live events, new licensing opportunities, e.g. TikTok, and positive regulatory developments,” reads the report.

> Film piracy rises during lockdown  
The coronavirus lockdown has resulted in a significant increase in film piracy, according to piracy data specialist MUSO. MUSO data shows that film piracy increased by 41% in the US, 43% in the UK, 50% in Spain, 62% in India and 66% in Italy between the last week of February 2020, when the lockdown started, and the end of March.

  "These numbers confirm that it has never been easier to view content illegally and people have never been more relaxed about doing so," wrote MUSO CEO and co-founder Andy Chatterley, in a white paper titled 'COVID-19: The demand for content and a new dawn for discovery'. "But it’s not just piracy: Netflix reported 16 million new subscribers to the platform in the first 3 months of the year, however the company was careful to state that they did not expect further growth of this nature; indeed it forecasts a deceleration in new subscribers."

  Looking at the post-confinement, Chatterley surmised that "in order to ride out the aftermath of mass unemployment and job uncertainty, luxuries such as cinema tickets and entertainment subscriptions may be amongst the first expenditure to be sacrificed."

  He warned: "Make no mistake — the need for entertainment will never go away — but the ability to pay for it on a regular basis is already being severely curtailed. Accessing content via unlicensed sites, on the other hand is free, and add to the mix Generation Z — who never grew up trying to illegally download albums via dial-up — realising that anything you want to watch or listen to is available for free, often from the first page of Google and almost instantaneously. Suddenly a whole new army of 'can’t pay, won’t pay' consumers may well have been born."

UNITED STATES

> Music organisations oppose the HEROES Act

Organisations representing music creators and independent companies have expressed their opposition to the HEROES Act, recently introduced in the House of Representatives.
  The bill would allow TV stations that are part of larger groups to apply for small business loans, when instead their ownership would not qualify them for. The National Association of Broadcasters, which supports the bill, said it would provide television and radio broadcasters, as well as newspapers, "the same treatment as hotels and restaurants received under the original CARES Act PPP (Small Business Administration Paycheck Protection Program) – eligibility based on a physical location basis." To qualify for a loan, local stations would have to have revenues under $41.5 million annually.
  “NAB thanks Speaker Pelosi and chairwoman Velázquez for their inclusion of expanded access to Payroll Protection Program loans for local radio and television stations in [the] draft Coronavirus economic relief legislation," said NAB president Gordon Smith.
  House Energy & Commerce Committee ranking member Greg Walden(R-Ore.) expressed his opposition to a bill "written behind closed doors in the Speaker’s Office." He added, "House Democrats confess this legislation has no chance of becoming law, yet they wasted time writing an 1,815 page spending manifesto rather than working with us to craft real solutions."
  Reacting to the bill, a coalition regrouping SoundExchange, the American Association of Independent Music (A2iM), the Future of Music Coalition, and the Recording Academy said, “Language in the HEROES Act introduced in the US House of Representatives essentially green-lights a warrantless Big Radio Bailout for every massive broadcaster within the multibillion dollar industry who can lay claim to a smaller station within their portfolio. To be clear: there are a small number of broadcasting companies who own hundreds of stations in markets of all sizes across the country, and the language in this bill will provide more help, even if unintentionally, to companies like iHeartMedia, Cumulus, and Sinclair than it will to the small independent broadcasters truly hurting in this environment."
  The four organisations added: “There is a difference between supporting vital local news outlets and billion-dollar broadcast conglomerates, especially given that these enormous radio conglomerates refuse to compensate recording artists for using their music, in contrast with satellite radio and streaming services that do pay. With so many people in need at this time, let’s keep the focus where it should be: small businesses and workers, not on big broadcasters.”

> Members of Congress warn of predatory behaviour in the live music sector in the wake of the C-19 crisis
US Senators Amy Klobuchar (D-MN), Richard Blumenthal (D-CT) and Cory Booker (D-NJ) have sent a letter to Assistant Attorney General for Antitrust Makan Delrahim in which they express their concern that the coronavirus pandemic could have direct consequences for the live music sector's competitiveness, with bigger and better financed companies trying to buy into struggling independent companies.
  In the letter, they urge the Department of Justice "to ensure that a vibrant and competitive live performance marketplace will exist after the coronavirus pandemic."
  The letter continues: “As a result of the pandemic, live performance venues were among the first to close. And given the risks posed by large group gatherings, they will likely be among the last to reopen. This has caused event spaces across the country to close their doors, with little prospect of reopening in the near future and no alternative sources of income."
  It continues: "We recognise that independent industry participants may face additional challenges in weathering this crisis and are concerned that Live Nation Entertainment, a company that already dominates the live entertainment industry, will emerge even more powerful once it is over."
  They conclude: “When Americans are ready to go back to stadiums, theaters, and concert halls, they deserve a competitive marketplace that offers value, choice, and a variety of entertainment experiences. Accordingly, we urge you to closely monitor these markets during and after this pandemic to ensure that all industry participants and consumers benefit from free and fair competition.”

> NIVA launches petition calling Congress to support independent venues 
The National Independent Venue Association (NIVA), the newly created organisation representing independent venues in the USA, has launched a petition titled "Save Our Stages" urging signatories to "tell your legislators to save independent music venues!"
  The petition, targeting Congress, asks to "support federal assistance that ensures the survival of independent venues and promoters." The petition states that "90% of independent venues across America will most likely not open again," if they are not allowed to reopen rapidly.
  It reads: "Independent music venues are economic multipliers, community builders, and beloved institutions. A Chicago study estimated that $1 spent at a small venue resulted in $12 of economic activities for neighboring restaurants, hotels and retail shops and we believe that level of financial contribution is consistent in cities and towns across America. What would our communities look like without them? We must ensure their survival. Thank you for your extremely hard work for our state and our country in these absolutely uncharted times."

> US consumers watched more TV during the lockdown
T​he consumption of non-linear content via internet-connected devices, such as smart TVs and other multimedia devices, rose week after week in March, hitting its peak the week of March 23, 2020​, according to data from Nielsen.
  However, data show​ed that streaming trends varied across markets, age groups and times of day during the first month of living restrictions in the US. ​For example, states and cities that moved quickly to enact stay-at-home orders in mid-March, such as New York, Illinois, Washington and California, saw some of the most dramatic increases in streaming consumption between the weeks of March 2 and March 23.​ ​Across Nielsen’s 56 largest metered markets, streaming increases have been persistent across all hours of the day​ with​, the most significant gains have been in the early afternoon hours. ​
  Nielsen also measured an increase in streaming of non-linear content across all age groups in Nielsen’s 56 largest metered markets during March 2020​, in particular among people ​aged ​25-54​, whose consumption​has increased ​by ​almost 100% year-on-year. ​


  "​The current outbreak has further accelerated streaming’s growth among the key advertising demographic as consumers find themselves with more time in front of the TV glass​," said Nielsen.

> Motown launches The ABC Initiative
Motown Records has launched a multi-faceted campaign branded The ABC Initiative with the moniker #MotownABCs, aimed at "helping communities navigate the fundamentals of life in these unusual times" and bring "immediate, tangible aid to the hungry, small business owners and others who are particularly vulnerable in the face of the Covid-19 pandemic."
  Over a 13-week period, the label said it would "unveil compelling social media content to entertain, inform and inspire Motown’s followers." Ethiopia Habtemariam, President of Motown Records and Executive Vice President of Capitol Music Group, said: “Motown is a label that was birthed in community and has always led by example. #MotownABCs will uplift our artists and their work, other creators, Black and Brown-owned businesses and various non-profit relief efforts. At the heart of this campaign is what is at the very heart of our label: being an unfaltering pillar of strength for our community in times of levity and in times of crisis.”
  #MotownABCs include:
  - Heritage grants, with 25 Black and Brown-owned businesses each receiving an $800 gift from Motown to help support their operations.
  - Motown will fund 100,000 meals for families and individuals in need via a donation made to Feeding America.
  - Via a donation to #HashtagLunchbag, Motown will subsidise 2,800 meals for children in need living in New York, Los Angeles and Chicago. 

> Hachette unveils plan to help independent bookstores

Hachette Book Group has started a new programme to assist independent bookstores in their attempts to reopen and recover after the lockdown in the US. The programme, which will kick off in June, includes dating into 2021 for new orders, improved discount terms on current and future orders through 2020, an extended time-line for stores to pay older invoices, and a freight offset credit for returning inventory that did not sell due to the pandemic.
  The initiative covers both HBG-published books as well as those distributed by the Lagardère-owned company (Abrams Books, Chronicle Books, Disney Book Group, Hachette UK, Kids Can Press, Lonely Planet, Moleskine, Octopus, Phaidon Press, Phoenix International, Quarto, and Yen Press).
  "We know independent stores are grappling with a steep fall-off in business which has dramatically impacted their ability to pay staff and their bills. While they have worked to continue to serve their customers through curbside delivery, home delivery and online orders, their margins, their cash flow and their sales are nowhere near pre-pandemic levels," said Alison Lazarus, Executive VP and director of sales at HBG.
  She added: "These terms are responding to business concerns that we have heard in discussions with the ABA and our independent customers. The survival of independent stores is critical to our business, and to the communities that depend on these stores; these enhanced terms are one of the ways in which we, and the publishers we distribute, are working to ensure that independent stores survive and thrive.”

> Prospect 100 launches global online talent competition
Prospect 100 has launched a global online music talent competition for youths under 21 — singers, producers, instrumentalists, and other musician — designed to help them work towards their artistic goals during the Covid-19 pandemic. Applicants have until June 26 to submit music pieces in any language or format, under the condition that it has to be an original work. Works will be judged according to originality, sound, and performance.  
  Judges for this competition include Kimberly Davis of R&B group Chic, American singer Theophilus London, Israeli DJ Guy Gerber, American rapper Rico Nasty, Italian DJ Mathame, Antiguan-German singer-songwriter Au/Ra, American rapper Iann Dior, Brazilian pop star Giulia Be, Emma Banks of CAA (Kanye West, Lorde Katy Perry), former Michael Jackson and Stevie Wonder manager Guy Holmes, Migos’ manager Danny Zook, Alex Hardee of Paradigm, Preye Crooks, A&R from Columbia Records and founder of Strawberries and Creem, Derrick and Matt of Jamiroquai, Simon of Kaiser Chiefs, and American indie pop band Beach Bunny.
  Prospect 100 was co-founded by three young entrepreneurs, Head of Events Adam Flanagan (18), Head of Operations Harry Beard (20), and Chief Brand Officer Alexandre (Millinsky) Daillance (23). Prospect 100 is a network of creative young talents that runs physical and online events across several industries, from tech to music.

EUROPE

> EU Culture Ministers meet to recap actions to support the creative sector
Under the aegis of European Commissioner for Innovation, Research, Culture, Education and Youth Mariya Gabriel, European Union’s Ministers of Culture held May 18 an online meeting aimed at recapping the measures taken at European and national level to help the cultural sector through the pandemic. It followed a previous meeting on April 8.
  Gabriel made few announcement but listed measures such as the implementation of the SURE programme for unemployment and relaxation of tax rules for state aid taken by the Commission as important initiatives. She also announced a call for "performing arts" with an allocation of €2m.
  "Today's video conference was extremely useful," said Gabriel at a press conference after the meeting. "We see that in a month-time many actions can be taken by member states. We also see that restrictions are being lifted gradually that allows us to leave behind the emergency measures and look at medium and long term actions."
  Croatia's Minister of Culture, Nina Obuljen Koržinek, whose country holds the rotating presidency of the EU, said that the participants discussed the need for EU countries to align their legislation to incorporate the Copyright and the Cab-Sat Directives"in order to favour our culture and our diversity an protect artists, creators and performers."
  She added that the exchange will continue in the context of the Croatian presidency and then, from July 1, with the German presidency. "We hope that during the German presidency we are going to meet in person and continue our exchanges and that artists will start to move around Europe again," she said.
  The key date on the European agenda will be on May 27 with the 2021-2027 budget discussion involving all Commissioners, during which a vast recovery fund will be unveiled. In addition, the budget will show how much has been allocated to the Creative Europe programme and to EU’s long term research and innovation programme Horizon will be included.
  "We look forward to hearing the Commission's plans with Creative Europe, Music Moves Europe and the Recovery Fund," said Helen Smith, Executive Chair of IMPALA. "Promising announcements have been made and now is the perfect time to recognise the key role that music plays in Europe today economically, socially, culturally, and of course in terms of citizen well-being. The future EU programmes must boost those who play a key role in investing in music."
  Prior to the meeting, IMPALA reiterated its call for an ambitious five-year recovery strategy for this sector, which included boosting interest-free loans with delayed repayment and as little red-tape as possible for small and medium businesses; reduced VAT on cultural goods and services; adopting national tax credit schemes for small and medium sized businesses investing in creation; and accelerating the implementation of the Copyright Directive.
  GESAC, which represents European rights societies, also welcomed Gabriel’s efforts to ensure multiple resources are available for Member State, but insisted that Europe should be using all available resources for creators and propose an ambitious budget for culture.
  "We now urge Member States to take the concrete steps to make the most of the resources at their disposal for the cultural and creative sector, and we further urge them to ensure that funding and support reaches individual creators as well," wrote GESAC. "It is essential that the creators, who are at the heart of the creative sector, especially those who continue to suffer the most during this economic crisis, be eligible for the use of aforementioned funds at national level."
  GESAC also invited the EU to be "ambitious in its budgetary plans for culture. In particular, it must foresee culture as an ecosystem under the recovery plan, which can include a 'solidarity fund' for Europe’s creators to ensure immediate help to those most vulnerable, in addition to more sustainable and long-term measures for the businesses and SMEs in the sector."

> ESNS to focus on Europe post-Covid
ESNS (Eurosonic Noorderslag), the conference and music festival traditionally taking place in Groningen in the Netherlands in January, will focus its next edition on Europe.
  The 35th edition of the ESNS festival and conference, to be held January 13 - 16, 2021, "will be in a different light due to the Covid-19 pandemic," said the organisers.
  They wrote: "ESNS's mission is to stimulate and push the circulation of European music across the European continent as well as beyond. And that’s more relevant this year than ever before. For the upcoming edition, the organisation is breaking with the traditional spotlight of one European country, but opts for a focus on Europe to underline the importance of European music once again."
  The organisers added: "ESNS is following developments closely, but intends, in whatever form, to release an edition in January that, after unprecedented major setbacks, can contribute to the development of the European music industry. With the recent events fresh in memory, new experiences and undoubtedly with new insights and challenges, ESNS wants to contribute as constructively as possible to building a new future."