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Music News Recap: Music’s Role in Digital Content Shrinking, FCC Announces Audits, RIAA Wins Piracy Case

Posted by Glen Sears | February 29, 2016 10:11 am | No Comments

Digital music has a small role in all digital content, and its share is getting smaller

Story of the Week

The Role of Music in Digital Content is Small And Shrinking
At this year’s Mobile World Congress in Barcelona, MiDiA Research’s Mark Mulligan focused on digital music and its relation to mobile apps and sources like video in the broader digital content ecosystem. One of the themes of the address was how the streaming music business relies on almost the same model as mobile games like Clash Of Clans—by counting on a very small percentage of the total audience to pay the bills.

The difference of course is the average paying user’s overall contribution. A Clash of Clans “King” user averages $290.41/year while for UMG the annual contribution of a streaming music subscriber is $29.77. Mulligan gives credit to UMG for breaking streaming records, but insists that getting music streaming to scale isn’t enough when only 10% of streaming music users are paying customers.

Yet the most impactful takeaway from the speech is how small digital music’s role is in the broader ecosystem. Digital music (at retail values) will be just 10% of digital content revenue by 2020, down from 16% in 2015. Not only is digital music relatively small, but it will continue to lose market share. Online video, which is at an earlier stage of its development, is already bigger (at retail value) than the entire recorded music business (at trade value), while mobile app revenue is double that of online video.

Read more on the MidiA Blog here.

Top Music News Stories

The U.S. Copyright Office takes a stand against “100 Percent Licensing” proposal. The change would require PROs, namely ASCAP and BMI, to allow “100 percent licensing,” giving any partial owner of a song (no matter how small their percentage) the ability to license the entire work to a service like Pandora.

RIAA wins $22M MP3Skull judgement. Despite the victory, it is doubtful the award will ever be paid as the parties behind MP3Skull have never been identified, appeared in court, or responded to the criminal complaints.

Studies are conflicted on how music piracy affects the music industry. Rachelle Wilber of MusicThinkTank says that, “To date, no unbiased studies have been completed to prove that piracy negatively or positively affects album sales.”

U.K. government explains new rules that govern collection societies like PRS for Music. The rules are part of a set of EU measures to improve digital rights in Europe, making it easier for businesses to operate across borders and rights holders to get paid.

BBC releases long-awaited BBC Music mobile app. The iOS and Android app boasts many unique features, including a search function allowing listeners to stream tracks played on BBC Radio in the last week and the ability to export music directly to Spotify, YouTube, and Deezer.

Samsung reportedly in talks to purchase Tidal. Industry sources told the New York Post last week that, after 16 months, mobile giant Samsung restarted talks with Tidal as part of their larger goals in the mobile music arena.

Spotify claims they are “pretty excited about our Googley future.” In a major digital music infrastructure shakeup, Spotify announced they would be moving their entire platform from self-managed servers to Google’s Cloud Platform.

FCC announces first round of 2016 EEO audits for Radio and TV stations. Letters to about 280 radio and television stations went out on February 24 asking for evidence of their compliance with the FCC’s EEO rules.

Will “Windowing” Become The Music Industry Norm? Major artists like Adele and Taylor Swift delaying their album releases to streaming services raises questions about whether the practice can be effective for any but the biggest stars.

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