What is a Digital Download?

The modern music industry heavily relies on digital downloads as a major source of revenue. Independent songwriters, those with publishing contracts, and music publishers must understand the concepts of digital downloading to capitalize on this income and avoid exploitation of composition copyright. Record labels and artists also benefit from comprehending digital downloads to ensure transparency and the best use of their assets. Lawmakers and industry players strive for an equitable means of exploiting this revenue while ensuring the best interests of everyone involved, including music consumers. Read our guide to fully comprehend the importance of digital downloads in the music industry. It is a must-read for anyone seeking to gain a better understanding of this vital revenue source.

In this newsletter:

Germany-based music collection society GEMA reports to have achieved its best-ever results in 2022.

The IFPI's Global Music Report shows the neighboring rights market generated $2.5bn revenue in 2022.

Organizations urge the Copyright Royalty Board to finalize Phonorecords III decision, releasing $700M-$800M in owed royalties.

Now, the details...

Exploration Weekly - April 7, 2023
Compiled by Ana Berberana

German Collection Society GEMA’s Revenues Rose 13% YOY $1.24BN in 2022

Germany-based music collection society GEMA reports to have achieved its best-ever results in 2022. The organization’s total revenues for the financial year were €1.178 billion ($1.238bn at annual average exchange rates as per the IRS), up 13% versus 2021’s €1.039 billion. Additionally, GEMA says that the sum to be distributed to its members and rightsholders worldwide will exceed the billion-Euro mark for the first time. GEMA reports that it achieved these results “despite the challenging situation in society and the economy”. GEMA represents the copyright of more than 90,000 members (composers, lyricists and music publishers) in the German market, and more than two million copyright owners globally.

PPL Paid Artists and Other Rightsholders $21.5M in International Neighboring Rights Money in Q1

According to the IFPI‘s recently published IFPI Global Music Report, the global neighboring rights market grew to USD $2.5 billion in revenue in 2022 – up 8.6% YoY, and accounting for 9.4% of the worldwide recorded music market. This week, UK-based PPL announced that it will pay out GBP £17.4 million (USD $21.5m at current exchange rates) in its Q1 distribution of international revenues (aka neighboring rights revenues). That money is distributed, said the London-headquartered, non-profit org, to over 26,000 performers and recording rightsholders in the UK and around the world. The first of four payments made by PPL annually, the royalties paid out by PPL provide an important revenue stream for session musicians and well-known performers, as well as independent and major music companies, as part of their overall portfolio of income. PPL’s Q1 2023 payout consisted of revenue collected from 76 CMOs (collective management organizations), with significant payments from France, Germany, Italy and the USA.

Songwriters Call On the CRB to ‘Accelerate Finalization’ of Phonorecords III Determination

Songwriters of North America (SONA), as well as the Black Music Action Coalition and the Music Artists Coalition, just recently called on the three-judge Copyright Royalty Board (CRB) to make official the Phonorecords III ruling, which arrived after years of opposition from Spotify, Amazon, and others. Apple didn’t push back against the Phonorecords III rate hike, it’s worth noting, and notwithstanding criticism over an alleged lack of transparency, a Phonorecords IV (2023-2027) settlement was hammered out last year and approved by the CRB in December. Despite the latter agreement, songwriters and publishers have yet to receive the better part of a billion dollars in owed compensation under Phonorecords III, according to a letter that the above-mentioned organizations sent to the Copyright Royalty Board. (SONA initially believed that songwriters were entitled to roughly $373 million more from Phonorecords III, per an update published two days ago, but subsequently learned that the number is “much higher” than that.) “We write to you collectively, and with the support of our creative community, to implore you to accelerate finalization of the Copyright Royalty Board (‘CRB’) Phonorecords III preliminary decision upholding an increased mechanical rate for all songs streamed between 2018 and 2022,” the entities penned in an almost 600-word-long message to the CRB.

Recording Academy Partners With United Nations Initiatives in LGBTQ+ and Women’s Rights, Climate Justice and More

The Recording Academy has announced it is teaming up with several United Nations Human Rights-supported global initiatives in an effort to use music to promote social justice. The multifaceted campaign will engage major artists to use their talents and platform to galvanize support for United Nations Human Rights goals, including advocacy for LGBTQ+ rights, gender equality, women’s empowerment, climate justice, and a broad range of other human rights issues. The “Right Here, Right Now” music initiative aims to combat the human rights crisis resulting from climate change. The first activation is the Right Here, Right Now Mini Global Climate Concert Series, which will feature artists performing in small concert venues while raising awareness about climate issues such as floods, droughts, fires, tornadoes, hurricanes, tsunamis, food insecurity, clean water, ocean acidity, deforestation, mental health, and more. Hosted by United Nations Human Rights and the Recording Academy, the Mini Global Climate Concert Series will kick off April 13 at the Boulder Theater in Colorado with headliner Wesley Schultz of the Lumineers and powerhouse singer Yola. The inaugural concert, which will be filmed by Citizen Pictures for a later broadcast, is being produced by AEG Presents and supported by the University of Colorado Boulder. Right Here, Right Now Music is planning to host Mini Global Climate Concerts in numerous cities on multiple continents. Proceeds from Right Here, Right Now Mini Global Climate Concerts will go to United Nations Human Rights climate justice initiatives and MusiCares, Recording Academy’s charitable wing providing music people with health and human services.

IFPI Officially Addresses Italian Court’s Latest Ruling in Cloudflare Dispute: ‘An Important Precedent’

London’s International Federation of the Phonographic Industry (IFPI) just recently addressed this latest development in the dispute with San Francisco-headquartered Cloudflare. The latter, the IFPI claimed last summer, had been “providing services for users to access three copyright infringing BitTorrent sites.” And these alleged copyright-infringing sites, the IFPI also indicated at the time, had previously been blocked by Italy’s Authority for Communications Guarantees (AGCOM) telecommunications regulator. Moreover, the IFPI further specified that the court had given Cloudflare 30 days “to implement technical measures to stop users accessing the identified sites via its public DNS service. By ordering CloudFlare to stop providing access to these sites, the Court of Milan has made an important ruling that we believe sends a clear message to other online intermediaries that they too may be subject to action if their services are used for music piracy,” IFPI head Frances Moore relayed approximately eight months ago.

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