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Ability Records presents
Bitkom predicts reasonably stable growth for downloads After an assessment of the Bitkom industry federation, sales of music downloads will increase in the current year in Germany to an estimated 78 million euros - an increase of around 30 percent, compared to the Bitkom calculation of last year that reached 60 million euros. Thereby decreasing the growth rate below the previous year's figure of around 33 percent, however, stressed Bitkom president Prof. Dr. August-Wilhelm Scheer: “The download market is growing by leaps and bounds.” The number of sales expected to the Bitkom-makers, will be at about 38 million individual songs and albums with only a volume growth of around ten percent over the previous year, however.
One reason for the difference between sales and sales forecast appears to be the assumed average price of the study: The cost for individual songs, according to Bitkom investigations, is currently at an average 1.84 euros. Music videos evolving into turnover booster The same study, that observed a declining interest by British music fans in illegal sources, sees a possible key to success in the digital business for music videos. This insight is also shared by the Universal Music Group. Entertainment Media Research (EMR) draws in its current investigation of the market the conclusion that video clips, under certain circumstances, could be the ‘trump card’ for the industry. Music videos are more important today than they were ever before and an excellent means for the labels to draw the customer’s attention to music, said Russell Hart, CEO of EMR. Online platforms, such as YouTube and MySpace, are serving in these circumstances primarily as transmission media. In the UK, according to the EMR survey, YouTube has become the main source for music, because almost three quarters of all users found the music of their choice there. Nearly half of the respondents therefore prefer to stream the video accompanying the song instead of just the song alone. The official music video is the most popular online content for 71 percent. Such findings provide already clear business plans at Universal Music: If they can’t agree on a contract extension with YouTube, the worlds largest Major will start his own video portal, said Chairman and CEO Doug Morris recently. This Hulu.com similar concept could already be operational in January 2009. According to Morris there will be another Major on board, if this should happen. With this, YouTube would at least lose half of the most viewed repertoire at a stroke. Morris told ‘Billboard’ that he has not jet definitely decided, but between the lines it seems clear were the journey will end: “At YouTube the quality is not really very good. And the contact prices per thousand hits are also lower than with other professional services.” In any case it’s indisputable that Universal Music earns good money with music videos right now. “Three years ago, we have lost seven million U.S. dollars annually with the production of videos. Eventually we started to make a profit out of it, because we getting paid whenever one of our videos is been seen,” explained Morris. Reports of a sales volume of 20 million U.S. dollars per year with clips were rejected by Morris: This amount is “not even close”. In this segment Universal earns much more. “Videos are very valuable. And harder to steal.” Music downloads conquer the mass market In the otherwise with the announcement of market figures perfectly restrained acting German music industry seems to be developing a race for interpretational jurisdiction in the digital business: Only a few days after the recent reports about sales figures and digital portions from media control and the recent Bitkom forecasts, the market researchers of media control now present selected details about digital sales and turnovers in the third quarter of the current year. Thus grew the number of commercial music downloads from early July until the end of September 2008, in comparison to the same period of the previous year, in all by 21.8 percent to 11.5 million units. The number of albums and bundles sold grew in the third quarter from 700 000 units in the previous year, in all by 61.2 percent to 1.1 million units, the number of individual tracks sold rose from 8.7 million units in the third quarter of 2007, in all by 18.6 percent to a total of 10.3 million units. Of the growing bundle sales, according to media control, the sales trend also profits: The earnings grew from July to September 2008 by 33.6 percent to a total 21.6 million euros. “Commercial music downloads are becoming a mass market,” concludes media-control director Ulrike Altig. Since the beginning of the year, the various music portals sold 33.7 million digital products with a value of around 61.7 million euros: “We expect nearly 45 million downloads until the end of year,” Altig predicts further. However, the digital growths continue not to be enough for a turnaround of the overall market, though. By early September, according to information from MusikWoche, there was a cumulative industry-wide drop of 7.1 percent, accrued to the previous year; numerous current or further upcoming focus releases should, however, provide a slightly friendlier picture till the end of year. Market researchers expect euro-boom in music downloads In the coming five years the market for digital media products in Europe will grow significantly, according to the Jupiter Research forecasts. Above all, the online sales of music should benefit. While within Europe only 1.4 billion euros have been spent for paid online content in 2007, it will already be up to 5 billion euros in 2013, the market researchers believe. The proportion of Europeans who spend money for online content would increase from 12 percent last year to 19 percent. The demand for free and often illegal content will remain much stronger than that for charged offers. But according to Jupiter Research the tide will turn in the coming years. The user habits will especially shift in the music sector. In 2007 merely 53 million free of charge suppliers were compared by only 6.9 million paying online music fans, but the ratio should be more balanced by 2013: the market researchers reckon with 63.7 paying music users and 55 million so-called "Freeloaders." Charged online music offerings will push the payment readiness for online content overall. While last year only 29 percent of all paid content was music, the share in the digital business shall raise up to 51 percent in Europe by 2013. Federal Court facilitates “Sampling” Two members of the band Kraftwerk accuse the producer and composer Moses Pelham of sampling a two second rhythmic sequence from their piece “Metall auf Metall”, recorded in 1977, thus having it electronically copied - and using it as a continuous repetition in the 1997 recorded Sabrina Setlur song “Only me” as an underlay. Thereby Pelham violated the rights of the record company, with which the band distributes their own works. The decision of the Federal Court (BGH) was expected anxiously by musicians all over Germany, clearing a fundamental problem in today’s music industry: since the early eighties “Samples” are part of the every day life of the producers of pop, hip hop and electronic music. Without them such successful songs like “Funky Cold Medina” by Tone Loc or “Bitter Sweet Symphony” by The Verve would not have created. But “Samples” are a permanent cause for copyright disputes between musicians, most recently between rapper Bushido and the Gothic-band Dark Sanctuary.
Music producers, who sample a lot, can now feel relieved: Although basically even the smallest parts of a music production are copyright protected, said the Senate chairman Joachim Bornkamm in the court's decision. But there are cases in which artists are allowed to use small fragments from other music pieces for their own productions.
The author has not even to agree - but only under the condition that a new song arises from the used samples, that differs significantly from the original song. Background is an exception in copyright law: the so-called right of "free use". It aims to ensure that musicians can work creatively with the sounds of others - and thus support the cultural creativity of musicians.
If Pelham handled the Kraftwerk sample creatively enough, is difficult to assess for laymen: On the one hand the power-incisive rhythms for connoisseurs of the piece are clearly recognizable - on the other hand originates in “Nur Mir”, due to Sabrina Setlurs recitative, rock guitar riffs and a new song structure, a song that sounds very different than the original Kraftwerk piece.
A judge of the Hamburg court has now to rule if Pelham has now to pay compensation to Kraftwerk. He must apply the BGH ruling in the Pelham case - and examine whether the Setlur piece “Nur Mir” differs clearly enough from the original Kraftwerk song. Consumers increasingly choose the download option The German consumers are expected to spend 220 million euros on media downloads this year. This would mean a rise of 27 percent mean compared to the previous year. This is the result of a recent study by the Society for Consumer Research (GfK) on behalf of the Federal Association for Information Technology, Telecommunications and New Media (Bitkom). Hence the technology-friendly Germans draw more and more to download the product, instead of buying music, videos, games or software traditionally in the store. By year's end the total number of paid media downloads will increase to 49 million, forecast Bitkom and GfK. Calculated on this basis, from January to September an average price was 4,09 Euro per download. A slowdown of this development is not expected: “PC downloads will rise 2009, despite the general economic weakness,” said Vice President of Bitkom Achim Berg. “No crisis is felt in the download market.” Faster internet connections encourage this trend and falling prices face increasing offers. Mobile usage is the landmark. With the new smart phones and cheap mobile data rates an attractive platform for the customer is becoming increasingly important. Berg: “Downloads have a high growth potential in the future. Mobile devices to download files from the web will be increasingly used by the customers.” Further potential can be recognized by the user structure: 64 percent of all download buyers are currently male, only 36 percent women are buying media downloads. Was the new kind of media buying so far mainly a youth phenomenon, older consumers are now also discovering the benefits. Between January and September 2008, 29 percent of users were older than 40 years.
Sources: Spiegel online, Musikwoche, Gamesmarkt, gfk, media control, Bitkom
Download business grows!
Digital business in 2011 will overtake the CD The outlook of the market researcher for the global music business will remain gloomy. A new projection by eMarketer sees further sharp falls on the physical market and explosive growth for the mobile business. Based on a global retail sales of recorded music of 29.2 billion U.S. $ in 2007, eMarketer expects for the current calendar year 2008 a global industry sales of 27.9 billion U.S. $, which would represent a further decline by 4.5%. The share of physical formats (CD, vinyl, cassette, etc.) thus shrinks to just ¾ of the total market, with a turnover of only 20.8 billion U.S. $. However, the online business, according to the forecast, will increase until the end of 2008 by 46% to 4.1 billion U.S. $ and the mobile business will even grow by 76% to 3.0 billion U.S. $. Therefore, these digital formats together would amount to a revenue share of 25.5%. Even more significant is the format transfer in the music business outlook for the year 2011. eMarketer estimates that the industry in three years will realize only a total of 26.2 billion U.S. $, which is 10.3% less than 2007. Until then the mobile and online businesses together shall create 56.5% of the revenues.
New Artist Ability Records: Soul Kitchen, André Carol, The original Hofbräuhaus Band & Lissi, The Steamy Dumplings, Mc Bain, Greg Sharp, Rüdiger Helbig, ERZ and Robespierre!!! Since March, download sales figures in Germany and Austria are included in the singles charts. This is already happening in the UK since last fall. More countries have announced their intention to follow suit. Therefore the „official acceptance by the market“ for downloads is continously advancing. As of January 1st, 2007, GEMA is now a functional electronic accounting system for download sales, hence closing the gap and completing the self-controlling system for the download area. Thus, the licences as well as the royalties will be cleared up to date for every quarter. |
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