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DIGITAL BOOMING, THOUGH SO IS FILE-SHARING: IFPI DIGITAL REPORT The International Federation Of The Phonographic Industry published its annual Digital Music Report yesterday, looking back at all things digital in 2009. Despite all that growth - globally digital now accounts for 27% of record industry revenues, and has grown some 940% since the arrival of the iTunes Music Store in 2003 - download and streaming services are still not compensating for the all round slump in CD sales, meaning overall revenues generated by recorded music continues to fall. Overall revenues were down 12% in the first half of 2009, and the record industry has seen a sales slump of some 30% since the aforementioned launch of iTunes. Of course, the continued growth of widespread non-commercial piracy - file-sharing - is at least partly to blame. Or majorly to blame, if you speak to the IFPI. Their new report focuses on three markets in particular - Spain, France and Brazil - where they say rampant piracy is in danger of obliterating the local record industry and, therefore, all investment in local music talent. In Spain, where, as previously reported, the courts have generally proved unhelpful to record companies trying to stop file-sharing, IFPI say sales of music by native Top 50 artists slumped 65% in the second half of the last decade. In France, album sales have slumped 60% since 2003, while in Brazil sales of albums by local artists are 80% down on 2005 figures. File-sharing is, of course, prolific in all three. As previously reported, after a year of hard lobbying from the creative industries, the Spanish government this month announced plans to introduce new copyright rules that would make it easier for content owners to take action against websites that infringe their intellectual property rights, though three-strikes is not on the agenda there. For Universal Music digital chief Rob Wells, who spoke at the launch of the IFPI report in London yesterday, unless such rules are introduced very fast it will be too little too late for the Spanish record industry. Billboard quote him thus: "I think Spain runs the risk of turning into a cultural desert. Spain as a territory used to export vast quantities of domestic repertoire into Latin America. I think it's a real shame that people in authority don't see the damage being done not on a commercial basis, but on a cultural basis within their territory. From a sense of national pride I think it's appalling. Drastic action has to be taken to save the Spanish industry". Of course, drastic action is already taking place in France, where a three-strikes system for combating illegal file-sharing is already on the statute book, albeit not as yet actually up and running. France has suffered more than most in the wider European music market - a couple of thousand album sales can top the chart there these days - and the country's record labels will be hoping the new three-strikes system, considered horribly draconian by some outside the music industry, will help them reverse the ongoing decline of their sector. Giving said French labels a bit of hope will be other IFPI data that shows that in those countries where anti-piracy laws have been stepped up record sales have seen an increase. This includes South Korea, which was the first country to introduce a three-strikes style system last year, and Sweden, where new rules making it easier for content owners to discover the identities of and therefore sue individual file-sharers, coupled with the media coverage and result of last year's Pirate Bay trial, has resulted in a decline in recorded online piracy. Digital sales were up nearly three times the global average in South Korea last year, 32%, leading to an 18% increase in music sales overall. Sweden saw a whopping 98.6% increase in digital sales, resulting in a 10% revenue boost for the country's record industry overall. IFPI boss John Kennedy: "Much more urgency is needed [by governments]. Piracy is a massive disincentive to invest in the market. When [politicians] do engage [with legislation], we've seen in Sweden, Taiwan and Korea that when new laws come in it makes a difference, and that would be our message for 2010". Presumably in a bid to bolster the case for new anti-piracy laws worldwide, Kennedy reminded everyone that file-sharing is now an issue affecting the movie and television industries as much as the record companies. All of this is relevant in the UK, of course, because the politicians are already 'engaging' in the form of the copyright section of the Digital Economy Bill, which includes a form of three-strikes. Though said proposals are still strongly opposed by some, and, even if ultimately approved by most parliamentarians, may not get through the legislative process before the General Election. And while the Tories are mainly in favour of the DEB's proposals on piracy, they oppose enough of the rest of the bill that it would likely be back to the drawing board for the entire venture if the Conservatives win the election. -------------------------------------------------- CMU SAYS: PUTTING IFPI'S FIGURES INTO PERSPECTIVE And, of course, once the CD format is completely withdrawn from the equation, a record company's costs regards any one album release will be significantly cut. And major music firms are already starting to tap into other revenue streams associated with the artists they sign. And they could still make more efficiencies, principally by merging their record company and music publishing divisions, whose operations are getting more similar as the years go by; both soon will be primarily involved in the creation and licensing of music rights rather than the former being in the business of selling small plastic disks. All of which means there is no reason why the record industry - or, rather, that part of the music industry that provides most start-up investment in new talent - shouldn't start to see their revenues increase again by the end of the decade. And let's face it, once the money starts rolling back in, the industry will learn to turn a blind eye to the file-sharing that will no doubt continue unabated, in much the same way the record industry learned to ignore rampant home taping in the 1990s. But, that said, if tougher anti-piracy rules - whether that be more clearly stated liabilities for the providers of file-sharing services, or three-strikes style systems to deter more causal file-sharers - can be shown to speed up that revival of the industry's fortunes, as IFPI stats seemingly do, then you cannot blame the industry for persevering in getting such rules introduced in pretty much every market around the world. And especially those markets where piracy-fuelled decline has taken the local industry to the brink. -------------------------------------------------- GOVERNMENT PROPOSE 75/25 SPLIT FOR THREE-STRIKE COSTS Speaking at the Oxford Media Convention, the government's digital blokey Stephen Timms revealed details contained within a new statutory instrument that deals with this issue. And the government's proposal is that the content industries cover 75% of the costs, while the ISPs will be billed for the remainder. According to Music Week, Timms told the Convention: "I have not been convinced by the arguments of rights holders that the internet companies should bear much of the costs [of three-strikes]. It is the rights holders who benefit. So this week, we have issued a draft statutory instrument setting out a 75-25 per cent split between rights holders - the primary beneficiaries - and internet service providers for the costs of enforcement action on copyright infringement". Needless to say the record companies aren't impressed by this proposal. They say that Timms has ignored the fact that the actual monitoring of file-sharing activity isn't included as part of the government's three-strikes system, and that the cost of such activity will be incurred by the rights holders. Plus the ISPs also benefit from cuts in file-sharing, because file-sharers eat up more bandwidth than most other web users. Which is why they reckon the ISPs should saddle at least half of the main costs associated with three-strikes. Look, here's a BPI spokesman saying so: "A 50/50 share of the costs of processing notifications is the only fair way forward, particularly as ISPs freely admit they will benefit from a reduction in file-sharing traffic". -------------------------------------------------- RUFUS WAINWRIGHT PAYS TRIBUTE TO MOTHER Wainwright wrote: "When inevitably I read today in the papers that my mother lost her battle with cancer last night, I am filled with an immense desire to add that this battle, though lost, was tremendously fruitful during these last three and a half years of her life. She witnessed her daughter's marriage, the creation of my first opera, the birth of her first grandchild Arcangelo, and gave the greatest performance of her life to a packed crowd at the Royal Albert Hall in London. Not to mention travelling to some of the world's most incredible places with both my sister, her husband Brad, my boyfriend Jorn and myself". He continued: "Yes, it was all too brief, but as I was saying to her sister Anna last night while sitting by her body after the struggle had ceased, there is never enough time and she, my amazing mother with whom everyone fell in love, went out there and bloody did it". RECORD INDUSTRY TO TAKE CIVIL ACTION AGAINST OINK MAN? Billboard took the opportunity at that launch to specifically ask IFPI boss John Kennedy for his response to the ruling in Teeside Crown Court last week which said that Alan Ellis, founder of the Oink file-sharing community, was not guilty of conspiracy to defraud the music industry. Kennedy told the trade mag: "I cannot sleep at night while that man has still got £200,000 sitting in his bank account, so we will find other ways of going about it, [even] if it has to be civil proceedings". As previously reported, while the prosecution never had a great case against Ellis for fraud, there is a much stronger case for doing him for copyright infringement. But because the Oink website did not actually host any infringing content itself, that would require taking an action under the English law concept of authorising infringement. While related to the American concept of contributory infringement, which Napster, Grokster and, as of last month, BitTorrent tracker isoHunt were all successfully pursued for through the American courts, it isn't 100% clear what would happen if an authorising infringement claim was made through the English courts in relation to an Oink style service. The case against Kazaa in the Australian courts would be the most convincing legal precedent as to why Ellis should be liable for copyright infringement by operating Oink - authorising infringement exists in Australia too - but when feeding into the UK government's Gowers Review of copyright law back in 2006 record label trade body the BPI admitted any authorising case in this country would probably have to go all the way to the Supreme Court, and even then success would not be assured for the record companies. Which is possibly why that route was not taken first time round with Oink. The problem if a civil infringement action is now launched against Ellis - which Kennedy implies it might - is that, because of the nature of the conspiracy to defraud investigation in 2007, the record companies didn't go through the sending cease and desist letter stage that normally precedes a copyright action. Ellis could argue that had the labels formally told him his service was infringing copyrights he would have taken action to rectify that the situation. That isn't necessarily a defence in itself - the labels could still claim the £200,000 that Ellis apparently amassed - but it would weaken the record industry's case, making the outcome even more uncertain. -------------------------------------------------- CITIGROUP WANT TERRA FIRMA LAWSUIT MOVED TO LONDON As previously reported, Terra Firma, having failed to persuade Citigroup to knock a billion dollars off the figure EMI owes the bank, launched a legal action late last year saying that the bankers gave them dodgy advice in 2007 ahead of their purchase of the London-based major music company. They allege Citigroup had an interest in the takeover going ahead at a higher asking price, which resulted in a conflict of interest that led to the provision of bad advice and incorrect information. Had Terra Firma and its top man Guy Hands had correct up to date information from his bankers - they argue - they would never have bought EMI in the first place. The audacious acquisition, coming so soon before the credit crunch, has proved disastrous for the once booming Terra Firma. Citigroup deny all the charges against it. Why they want the case heard in a London court isn't clear - presumably moving the case here would be legally beneficial for the bank, either in terms of their chances of winning the case, or with regards the potential damages they might have to pay if they lose. Lawyers from both sides are expected to meet today to discuss a schedule for the lawsuit, though the motion to move the case to London won't be considered by the judge hearing the case until next month. In other Terra Firma news, the private equity group saw its profits slump in the financial year ending March 2009 - down 43% to £1.87m. That said, much of that was because of the costs associated with moving the primary base of the company from London to Guernsey to avoid the Labour government's new high end tax regime. NO GENESIS HALL OF FAME REUNION, SAYS GABRIEL Said Gabriel: "As far as I know, I'm definitely not going to sing. I learned at our last reunion [in 1982] that you can't just get up there. You have to rehearse". He added that rehearsals for his upcoming European solo tour will clash with the ceremony, making any such reunion rehearsals impossible, and even just attending the awards party in New York difficult. He said: "I'm trying to find a way to do it. It's not easy. If I can work it out, I'll go". Asked if there was any possibility of a reunion at all, he said that they had met five years ago to discuss the possibility, but reluctance on his part and, now, Phil Collin's previously reported health problems make it doubtful. He explained: "Initially I was open to it. But then it seemed to be growing. I know what it's like once you're in it - these things tend to expand. I always describe it as going back to school, since this was a school group for me. It's a fun place to visit and see your old friends, but it's not a place you want to live. [Now] Phil has had trouble with his wrists and his back, so it's pretty unlikely [that we'd ever get back together]". WE ARE THE WORLD 25TH ANNIVERSARY SINGLE PLANNED Stars, including Usher, Natalie Cole and John Legend, have been asked to stay in LA for one extra day after next week's Grammy Awards to record the song at the Nokia Theatre on 1 Feb. With so many big name singers in town anyway, it's expected that the finished song could turn into quite a star-studded affair. Profits will go to the Haiti relief effort, even though plans for the 25th anniversary re-record preceded the earthquake there. According to Friedman, plans are a little sketchy at the moment, but organisers hope to "invoke" Michael Jackson in some way on the recording. Rumours that they're flying Derek Acorah over for another séance are completely made up. By me. Just now. In other charity single news, Simon Cowell's song for Haiti, which, as previously reported, he is putting together at the request of Gordon Brown, will be a cover of REM's 'Everybody Hurts'. So far, Rod Stewart, Leona Lewis, JLS and Michael Buble are all on board. According to The Sun, Robbie Williams, Coldplay, Take That and Paul McCartney have also been approached to appear on the song. -------------------------------------------------- BUTLER EXCITED ABOUT NEW ARCADE FIRE Butler told Rolling Stone: "I'm just really excited about writing new songs. There's still nothing better in the world than writing a new song and hearing it for the first time and playing a song with a band, and when it starts to come together - that's never going to get old. I love this band, and I really have always. I feel like there's no solo albums in the near future". GORILLAZ ANNOUNCE NEW ALBUM DETAILS Other guests on the album include, Snoop Dogg, Kano, Gruff Rhys, De La Soul, Mark E Smith, Lou Reed, Mick Jones and Paul Simonon. Not bad. The tracklist looks like this: SPICE GIRLS MUSICAL IS ON Announcing the project, Fuller said: Craymer added: "I'm delighted that Simon Fuller and The Spice Girls are so supportive of the idea of 'Viva Forever'. I want to create a unique celebration of the band and its music, with its own flavour and joyful message. It is important to me that the excitement, style and humour of The Spice Girls is well represented on stage". SLAYER RESCHEDULE UK DATES Here are the new dates: 26 May: Leeds, Academy -------------------------------------------------- DELPHIC ANNOUNCE TOUR DATES Tour dates: 11 Mar: Edinburgh, Studio 24 RADIOHEAD'S O'BRIEN TO TELL MIDEM FILE-SHARING'S NOT THE PROBLEM He says in the interview: "I have a problem when people in the industry say 'file-sharing is killing the industry, it's the thing that's ripping us apart'. I don't actually believe it is ... [Pirates] might not buy an album, but they're spending their money buying concert tickets, a t-shirt, whatever. It's an analogue business model in a digital era. The business model has to change. You've got to license out more music - have more Spotifys, more websites selling more music. You've got to make it slightly cheaper to get music in order to compete with the peer-to-peers". He adds that is shouldn't be difficult to compete with file-sharing if well priced engaging services can be developed. He says: "BitTorrent is very utilitarian, it's deeply unsexy. The Richard Branson of nowadays would be able to set up a really amazing website for fourteen to 24 year olds that deals with their music ... and do something really innovative and make it really easy for people to buy music, and cheap. A lot of fourteen to seventeen year olds don't have credit cards, so how are they going to get music digitally? These are very, very, very basic issues - I find it staggering that the industry seems to be really dragging its heels on this - this is stuff that you could do in one week. Move quicker! That's been the whole problem in the last ten years. Why are we here now? Because the recording industry dragged its feet over digital". If you're heading to the Cannes party, you can go see the full interview tomorrow morning at 10.55am, and nod furiously or throw things at the screen, depending on your viewpoint. O'Brien's video-style opinions are also available online at www.midem.com. Midem kicks off tomorrow. PS: Pete Wentz is among the celebrity names to be speaking at Midem this weekend, talking about fan engagement. He's down in the programme as "musician, entrepreneur and activist". Well, that's better than "mouthy bass player and celebrity husband", I suppose. You know, I read somewhere letting pictures of your genitals slip onto the internet is one way to engage fans. WARNER PROMOTE CHATTERJEE Confirming the promotion, Tattersfield told CMU: "Raoul's understanding of today's commercial landscape is second to none and the breadth of his experience gives him a unique perspective on how to develop products and shape retail experiences that appeal to music fans. Raoul is an exceptionally original thinker with a keen sense of the business opportunities open to us and I believe he will provide very strong leadership for the Commercial team". -------------------------------------------------- CISAC BOSS TO LEAD SOCAN Confirming his new role, Baptiste told reporters: "SOCAN is a remarkable performing rights organisation, with a proud history of innovation and outstanding success throughout its 20 year history. It's a great honour to join its leadership team and have the opportunity to build on its success". -------------------------------------------------- MUSIC LAW FIRM OFFERS AUTO-CONTRACT SERVICE The service is due to go properly live in March at www.wiggin.co.uk. VERIZON BACKTRACK ON THREE-STRIKE DISCONNECTION CLAIM As previously reported, despite distancing itself from the Recording Industry Association Of America's attempts to get US ISPs to adopt a 'graduated response' system against illegal file-sharers, a spokeswoman for Verizon, Bobbi Henson, this week confirmed that her company had started sending out warning letters to suspected infringers. CNET reported that she also revealed a handful of people who had ignored the warnings had had their net connections cut off, though that most people stopped file-sharing once they had received a written warning. Henson subsequently backtracked on that yesterday, saying she had been misquoted by CNET and that while warning letters were being sent out by Verizon, not disconnections had as yet occurred. That would mean Verizon are on a level with many UK ISPs - who have voluntarily sent out warning letters to suspected file-sharers but so far refused to back up the warnings with the stick of net disconnection (or suspension). Dslreports.com quote Henson as saying: "I'm not aware that we've ever terminated anyone's account for excessive consumption, although we reserve the right to do so. That part of the CNET story is wrong. I did not say 'we've cut people off'; I said we reserve the right to do so". But CNET stand by their story, accusing Verizon of backtracking because they don't want to be seen as the one US net provider going hardline on the piracy issue, sending file-sharers fleeing to their competitors. They claim Henson definitely said "we've cut some people off" as well as "we do reserve the right to discontinue service" in a phone interview, while when asked by email for exact numbers of disconnections, Henson said "we don't give out these numbers, but I can tell you that they are small" - ie small, not non-existent. Make of all that what you will. BILLBOARD APPOINT NEW EDITOR Marks was founding editor of Blender magazine, which he continued to oversee until 2008, and has also had editorial roles at various other US music titles, including Spin, CMJ and Rolling Stone. He has more recently worked as Editor-In-Chief of music for CNET. His appointment follows the acquisition of the US record industry weekly by media start up E5 Global Media last month. VANILLA ICE NOT AN OLD SCHOOL JEDWARD FAN Ice told ITN: "I think they're great. I didn't know anything about them until a couple of weeks ago, but YouTube is a great thing. I got the invite to come over here. The song is great and it is a compliment to me". Well, I suppose you have to take your compliments where you can. Which must be why he also said this about their hair: "I had my hair like that. That is why it is such a huge compliment". |
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