Last month in Germany, the Federal Court made a ruling which moved to limit the liability of parents for their minor children’s illegal music sharing. The court’s decision stipulates that parents are not liable for the illegal music file sharing of their minor child if they have educated their children enough about the prohibition of participating in file sharing on the Internet.
The ruling represents a setback for the music industry, which demanded several thousand Euros for damages and legal fees. The case was triggered by a 13-year-old who illegally downloaded music and spread it on the net.
As Florian Drücke, the Head of the Federal Association of the Music Industry, warned, the judgment does not mean that parents no longer need to worry about the surfing habits of their children. “The recent statement of the Supreme Court should not be ‘misunderstood’ as a free ride for parents and their children to careless file sharing,” explained Drücke. “What concrete steps parents must take, especially for repeated violations, remains to be seen in the view of for the judgment.”
The issue is not about monitoring the children — we know that over-supervision is not a recipe for success when it comes to 13-year-olds. Rather, it’s about building their awareness for the value of music, films and books. The question is, how do you do that?
It’s not just 150 German music companies, but also advertising agencies and digital music marketers which are presenting themselves on January 28-31, 2012 at the world’s largest music industry trade fair MIDEM in Cannes. The midem committee is expecting 8,000 trade visitors from 80 countries at the Palais des Festivals on the Côte d’Azur. The repertoire of music offered ranges from pop and rock to jazz and classical.
Over the past few years, midem has seen a significant change in its customers. The midem festival used to be the place where artists met record labels, publishers and producers. Now, technology is the driving force that pushes music into the future. midem 2012 is packed with the tech industry’s leaders, teachers, and rising stars, and this year, Germany has a prominent place among them.
Dr. Heinz Stroh, CEO of the Germany Music Publishers Association (DMV) in Bonn, said: ”Visitors to midem get to know the latest developments in digital music. Never before has the interest in German Music been so big.”
This might be thanks to the new licensing agreement between Bitkom and GEMA, which has lifted the ban on music services like YouTube and Spotify. The digital world in Germany promises much growth as the industry become more favorable to services like Spotify, including Simfy, Deezer, Apple’s iTunes Match, Nokia Music, Mix Music, Google Music, and more.
I’m looking forward to seeing what midem has in store for labels and digital music companies this year.
Perhaps the greatest jukebox of the Internet has arrived to Austria and Switzerland. As of last week, Spotify is available to Austrian and Swiss Facebook users, through agreements with the Austrian performance rights societies AKM and Austro Mechana, and with Switzerland’s Suisa.
Germany however will have to wait, because rights holders are still not granting any licenses.
Spotify allows users to browse through and stream over 15 million songs. Any new subscriber can listen to unlimited music for up to six months, after which the free service is capped at 10 hours per month. For a €4.99/month subscription, users can listen to music on their computer with no time limits and commercial-free. For €9.99/month, users can also listen to songs on their smartphone.
With the latest additions of Austria and Switzerland, the Swedish streaming service is now available in 11 countries, with Scandinavia, the U.K. and France being Spotify’s first markets, and including the U.S. which launched the service in July. According to Jonathan Forster, the European manager of Spotify, of the more than 13 million users, 2 million – or 15% – pay for their access.
Although the service is not yet available in Germany, the music labels are ready to work with Spotify to offer their songs and albums for streaming. However, Spotify cannot come to an agreement with GEMA, the German performance rights organization.
Issues with GEMA
While Spotify wants to compensate rights with a flat rate, GEMA apparently wants to enforce a charge per stream. This would make it difficult for Spotify to calculate the service and the profit margins would diminish as more users sign up.
Why can’t they just mirror the agreement they made with the Austrian and Swiss collecting societies? They would… but all the details of the agreement are secret.
Facebook Partnership Promises Growth
Representation in the major European markets is of great importance for the company’s growth strategy, particularly since Simfy already offers a streaming service with very similar features. Furthermore, according to a New York Times article, Spotify has apparently not reached profitability with its business model. The company lost more than 40 million dollars in 2010.
A partnership with Facebook will ensure a steeper growth in user numbers. Spotify is Facebook’s preferred streaming service and offers, among other things, the possibility to listen to songs with friends on the streaming platform.
Alas, we will wait with bated breath. Germany, stay tuned!
According to a recent survey by the Bundesverband Musikindustrie (Federal Association of Music Industry) in Germany, legally purchased digital music is an expanding market in which it is worth investing.
The music industry has often been criticized for having too few available digital music and streaming deals – which is one reason why illegal streaming services are so popular. Indeed, the industry seems slow to recognize that there is a large demand for legal services. The Bundesverband Musikindustrie has uncovered that in the context of BVMI market statistics, the digital music market grew by about 20% in the first half of 2011 and that we have more than 70 legal digital music services.
The biggest potential lies in the the so-called cloud-based music services.
According to an ABIresearch article on the topic, these cloud-based services will deliver music to over 161 million subscribers around the world by 2016, giving them access to their favorite songs anytime, anywhere. This development is driven by the growing use of mobile phones as music players, particularly smart phones.
The dog days are over, we hope. Legal music is the way of the future!
According to Stefan Michalk, CEO of the Federal Association of the Music Industry (BVMI) in Berlin, the German music market is set to grow again as of 2013 when digital revenues are expected to compensate for the losses made in physical sales.
Digital business is expected to contribute some 20% to revenues in five years time. The figure was 7% in 2008. In the opinion of Michalk, growth in the digital market will come principally from the sale of digital albums as well as subscription models such as Spotify or Napster, and music depending on Internet access, as offered by Internet service providers.
The figures presented by Michalk are taken from a forecast published by the GfK market research institute in Nuremberg, based on data from consumer research with 25,000 consumers, supplemented by interviews with experts in the record industry and the digital sector. In this study the experts project an average annual decline of 5% in the physical market for the coming five years, but growth of 17% in digital sales. Whereas today only one in five buyers of music makes digital purchases, the number of digital buyers is set to treble to 15 million from the current five million. According to Michalk, many of the new buyers are to come through music bundles offered by Internet service providers. Increasing broadband penetration is creating new target groups.
