Recorded music: is the US bouncing back?
US album volumes in 2011 rose for the first time since 2004, but lower pricing may continue the revenue decline
UK album volumes declined 5.6% in 2011. HMV’s new-found breathing space removes a key risk for the outlook
US radio royalties to music publishers have been agreed in principle and will see a return to a revenue based payment |
Media, Music and Radio, Non-UK Media |
January 2012 Access this report
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EMI: the game of musical chairs continues
Citigroup has agreed to dispose of EMI’s recorded music division to Universal Music Group, and a Sony-led consortium is buying EMI’s music publishing division
UMG’s merger with EMI may raise competition concerns in the US and EU on the already concentrated recorded music market. Citigroup bears no risk
Depending on the nature of the strategic alliance between Sony/ATV Music Publishing and EMI Music Publishing, the EU may raise competition concerns on digital licensing |
Media, Music and Radio |
December 2011 Access this report
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Spotify's freemium model gains traction
Spotify has just passed the 2 million subscriber mark in Europe and the US, and could reach 2.5 million by the end of 2011
Smartphone adoption and partnerships with MNOs and ISPs have proven a key driver of subscription in Europe for Spotify, which lacks a telecoms partner in the US. We think subscription is profitable
Spotify’s lower usage caps on the freemium tier will help compress total losses in 2011 in relation to the £25 million reported in 2010, despite the US launch |
Media, Internet, Music and Radio |
November 2011 Access this report
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UK commercial radio – advertisers tuning in
In this report we present our latest analysis of the UK commercial radio sector. Impressive listening figures for the first half of 2011 should help commercial radio listening to increase by 3.2% in 2011, following a similar improvement last year. The advertising outlook is also promising: despite the retreat of the COI, we expect advertising revenues to grow by 3.0% in 2011, backed by a strong Q3. The shift towards branded networks should reduce operating costs and make it easier for advertisers to invest in radio, building on sales house consolidation in the late 2000s. |
Media, Music and Radio |
September 2011 Access this report
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UK advertising growth slows to a crawl
Whilst UK GDP growth crawls along at a snail’s pace in 2011, (real) private consumption, its principal component, has been in sequential decline since Q4 2010, dragging consumer facing industries down
UK media are not equally affected. The internet continues to grow through search as well as display, but we expect TV NAR to be flat in 2011
Press advertising is worst affected by the downturn due to its exposure to retail advertising on top of the structural shift of classifieds to the internet |
Media, TV, Press, Internet, Music and Radio |
September 2011 Access this report
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Recorded Music and Music Publishing 2011
This report provides our annual assessment and forecasts for recorded music sales and music publishing revenues, which engage all four of the ‘majors’ – Universal Music Group (UMG), EMI, Sony and Warner Music Group (WMG). In the context of the ongoing physical-to-digital transition of music consumption, retailing and buying, documented in the report, we estimate a 10% decline in recorded music sales to $18.4 billion in 2010, the sixth consecutive year of decline. We also project further overall declines in our forecast period to 2015. |
Media, Music and Radio |
July 2011 Access this report
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The Hargreaves Report: tilts at windmills
The Hargreaves review of UK intellectual property law proposes to introduce a “limited private copying” exception to legalise existing recopying across devices
The proposed Digital Copyright Exchange (DCE) is a good idea, but industry reticence to financing and using a DCE is a challenge
Practical solutions to licensing digital content-based services should be the focus of Coalition efforts to spur innovation and economic growth |
Media, Internet, Music and Radio |
May 2011 Access this report
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Virtual goods and competition law
Publishers are committing no offence by using Amazon as their agent and insisting on a high price for their e-books. Owners are entitled to set their own price and remunerate retailers with a standard percentage commission
On the other hand, retailers such as Amazon that demand publishers do not sell their e-books through other channels at lower prices may well run into legal trouble |
Media, TV, Press, Music and Radio |
March 2011 Access this report
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UK commercial radio update 2011
After a bounceback of 3% in commercial radio consumption in 2010, we forecast a return to the long term trend of decline, at an average rate of around 1.2% a year, as young people increasingly turn to other music listening options
We forecast revenue growth in 2010 of +3.8% for 2010, despite the collapse of COI money, due to stronger private sector appetite for radio as an advertising medium
The removal of localness requirements and liberalisation of product placement rules should help improve the operating model of large industry groups like Global |
Media, Music and Radio |
February 2011 Access this report
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EMI and WMG: into the end game
Citigroup acquired Terra Firma’s EMI Group on 1 February and may look for buyers in the near future. Although Terra Firma paid far too much for EMI Group in 2007, it significantly improved the operating metrics
Warner Music Group has entered the fray as a buyer or a seller of music assets. We think WMG’s management will keep the recorded music division and sell Warner/Chappell |
Media, Music and Radio, Non-UK Media |
February 2011 Access this report
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HMV high street sales in decline
HMV’s poor trading update for the crucial Christmas period was due to the decline in demand for CDs, DVDs and games, and competition from supermarkets and e-tailers, compounded by bad weather
Waterstone’s outperformed HMV as the challenges of high street book retailing are not (yet) as acute as for CDs and DVDs – we consider it possible that HMV will divest the chain
HMV’s strategy for the store network is a key challenge for 2011 – in addition to planned store closures, further closures may be needed to maintain current profitability |
Media, TV, Music and Radio |
January 2011 Access this report
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Sky Songs silenced, Spotify sings
Sky Songs will shutter on 7 February 2011, ending a brand extension experiment that probably cost parent BSkyB some £5 million end-to-end
A PC-based ad-free subscription service, Sky Songs failed to offer the mobility and exclusive content that music fans are most willing to pay for
Spotify’s reported 750,000 European customers as of November 2010 have moved the subscription side closer to breakeven, while the ad-supported side bleeds on |
Media, Internet, Music and Radio, Non-UK Media |
December 2010 Access this report
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Music market trends in H1 2010
US recorded music sales continued to slide in H1 2010 (-9% year-on-year for physical and digital formats (excluding ringtones), on a track equivalent basis). The UK recorded music market has been stronger than the US in recent years, and H1 2010 was no exception (down -1.5%)
Music major revenue declines on recorded music are being partly offset by growing licensing fees paid by music streaming services, as well as artist and merchandising services under 360 degree contracts |
Media, Music and Radio |
September 2010 Access this report
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Recorded music and music publishing
This report provides our annual assessment and forecasts for the recorded music market on the one hand, and the music publishing industry on the other hand. The reason for our dual focus is the key role played by mechanical revenues generated by the sale of recorded music formats in revenues of the music publishing industry, despite their decline since 2000 |
Media, Music and Radio, Non-UK Media |
June 2010 Access this report
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Commercial radio update: pressure continues
This report updates our coverage of the commercial radio sector. In Q1 2010, RAJAR data showed that the average number of hours listened per listener and the total number of hours listened, across both the commercial sector and the BBC, fell by 2.7% and 1.2% respectively compared to Q1 2009. This continues the long term trend of gradual consumption decline we have highlighted in the past. Another consistent trend is the relative robustness of listening to BBC radio, whilst the brunt of the decline is borne by the commercial sector |
Media, Music and Radio |
May 2010 Access this report
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Apple: The power of music
Apple’s hardware-driven strategy for music recently passed two major milestones, with 10 billion paid track downloads and 250 million iPods sold
In 2009, Apple ‘returned’ to record labels and publishers roughly $1.9 billion, while generating gross profits in the region of $3.2 billion from the sale of iPods and music
Of wider significance to Apple is the music strategy’s contribution to building a mass market brand and expanding its customer base, helping to drive adoption of their computers and, more recently, the iPhone |
Media, Music and Radio |
March 2010 Access this report
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Spotify and ad-supported music models
Spotify is among the leading providers of legal online music streaming services in major European markets such as the UK, France and Spain. Entry to the US is rumoured and would make sense to establish the brand as a global one
As this report details, the commercial viability of the ad-supported ‘free’ service in a market that is five times the size of the UK will depend crucially on the royalty structures agreed by licensors, including recorded music companies and publishers |
Media, Music and Radio, Non-UK Media |
January 2010 Access this report
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Sky Songs: Does the music get any cheaper?
Just-launched Sky Songs offers a ‘new’ online music model, combining on- demand streaming with credit towards DRM-free downloads, for a single monthly payment
Sky Songs combines the best features of Spotify and iTunes, with lower average per track prices for in-bundle downloads, which will appeal to the music purchaser, and drive industry revenues provided regular use is made of the service
Sky Songs is backed by the power of Sky’s brand, serving the UK’s most entertainment-conscious clientele, with initial promotions targeting Sky’s 2.2 million broadband customers |
Media, TV, Music and Radio |
October 2009 Access this report
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On the brink: UK anti-piracy regime
By 29th September, all submissions on the government’s anti-piracy proposals will need to be in to the Department of Business Innovation and Skills (BIS), with furious lobbying taking place in the lead up to the tabling of the draft Digital Economy bill in November |
Media, Music and Radio |
September 2009 Access this report
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Recorded Music and Music Publishing
Steep declines in CD sales in major recorded music markets continued in 2009 as we had forecast last year (Recorded Music and Music Publishing [2008-39])
Sales of recorded music continue to be decimated by physical and online piracy, plus the disintermediation of the album purchase by the digital purchase of ‘cherry-picked’ tracks
A further knock-on effect on CD sales is the reduction in retailers’ shelf space devoted to music, including as a result of the bankruptcies of major chains (Circuit City, Woolworths and Zavvi) – what we have called the ‘perfect storm’ for the CD |
Media, Music and Radio |
June 2009 Access this report
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