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American Music Moves The World

January 27, 2012

2011 might very well have been the year of British singer Adele (her album “21” recently surpassed six million sales in the US alone), but American music still set the pace all over the world.  In addition to supporting millions of American jobs, intellectual property has been the most important export of the US economy for years (see page 7 of IIPA report here).  But as recent reports attest, perhaps our cultural footprint abroad is even bigger than our economic one.

Earlier this week, IFPI released the 2012 Digital Music Report (available here) highlighting global trends in digital music listening.  On page 7, IFPI totaled digital song sales from all over the world.  Nine of the top 10 songs downloaded globally were by American artists; including Bruno Mars, LMFAO, Jennifer Lopez, and Lady Gaga.  The exception – of course – was the super talented Adele at number five.

For a broader look at enjoyment of US music overseas, the European Music Office and Nielsen released a comprehensive study of radio play and digital song sales across the largest European countries (the report is available here).  The executive study summarizes the results best: “The only music that crosses borders without limitations is US-based repertoire.”  In both radio airplay and digital track sales, no other country came close to the US in overall share across Europe.  Even in countries where English is not the primary language (including France, Germany, Spain, and others), US repertoire accounted for 30% to 40% of radio airplay and track downloads (page 17 of the report).

Regardless of whether you’re looking at economic or cultural significance, these reports highlight the central role of US music across the globe.

Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA


Music Groups Comment On New WIPO Report On Economic Contribution Of Creative Industries

January 26, 2012

Today the Organization of American States (OAS) and the World Intellectual Property Organization (WIPO) presented a series of studies on the impact and importance of the creative industries in various countries.  In response, the Recording Industry Association of America (RIAA) joined more than 30 music industry organizations and associations from throughout the Americas in a joint statement to spotlight the new report and piracy’s impact on cultural diversity, economic development and employment in the Americas.


JOINT STATEMENT:


The vibrant music of the Western Hemisphere is widely recognized as one of the great contributions of our peoples to global society. Yet our ability to continue creating and offering this magnificent music is under threat today like never before. The collective output of our songwriters, performers, musicians, publishers, technicians and producers is being stolen on a massive scale that, unless adequately addressed, could fundamentally undermine our hemispheric cultural treasure. This is not an issue of one or just a few of our countries-it affects us all.


The victims of this theft include the artists and songwriters whose creativity gets no reward; governments who lose hundreds of millions of dollars in tax revenues; economies that are deprived of new investments; consumers who get less diversity and less choice; and record producers and publishers who, due to rampant theft, have less money to invest in the development of new talent.
The greatest victim of piracy is local culture. It has had a devastating impact on performers, musicians and songwriters throughout the hemisphere. Local repertoire accounts for nearly 70 percent of the global music market. Unless there are rational economic reasons to invest in original creative production, such investment will dry up, and along with it will perish the fantastic diversity of music that has been our region’s legacy.


For these reasons we call upon policy makers to use this report on the contribution of the creative industries as a catalyst for the adoption of new measures so that we can turn the tide on the destructive forces of music theft. Governments, multilateral institutions and the private sector have an unparalleled opportunity to address current problems affecting economic development, cultural output and diversity through the implementation of strong and unambiguous measures to fight piracy, and to pave the way for e-commerce in cultural materials to prosper by creating standards that will ensure the protection of cultural materials in the on-line environment.


Submitted by the following organizations:


American Association of Independent Music (A2IM)
American Federation of Musicians (AFM)
American Federation of Television and Recording Artists (AFTRA)
American Society of Composers, Authors and Publishers (ASCAP)
Associacion Brasileira de Produtores da Discos (ABPD)
Asociacion Brasileira de Musica e Artes (ABRAMUS)
Asociación Colectiva de Intérpretes y Productores de Fonogramas (ACINPRO)-Colombia
Asociación Protectora de los Derechos Intelectuales Fonográficos de Colombia (APDIF Colombia)
Asociación Mexicana de Productores de Fonogramas (AMPROFON)
Asociación de Intérpretes y Productores de Fonogramas (ASAP)-El Salvador
Asociación Guatemalteca de Productores de Interpretes y Productores de Fonogramas (AGINPRO)
Belizean Society of Composers, Authors and Publishers (BSCAP)
Broadcast Music, Inc. (BMI)
Camara Argentina de Productores e Industriales Fonograficos (CAPIF)
Cámara Uruguaya del Disco (CUD)
Church Music Publishers Association (CMPA—USA)
Canadian Independent Music Association (CIMA)
IFPI Chile-Asociación Chilena de Productores de Fonogramas
Jamaica Music Society (JAMMS)
Music Canada
National Songwriters Association International (NSAI)
National Music Publishers Association (NMPA-USA)
Sociedad de Gestion Colectiva de la Industria Fonografica (PROFOVI)-Chile
Sociedad de Gestión Colectiva de los Productores de Fonogramas (SGP)-Paraguay
Sociedad de Productores de Fonogramas (PRODUCE)-Panama
Sociedad de Intérpretes y Productores de Fonogramas (SODINPRO)-Dominican Republic
Sociedad Mexicana de Productores de Fonogramas, Videogramas y Multimedia (SOMEXFON)
Sociedad de Gestión Colectiva de Interpretes y Productores de Fonogramas (FONOTICA)-Costa Rica
SoundExchange (SX—USA)
Recording Industry Association of America (RIAA)
The Copyright Protection Association for Composers, Authors and Producers (COSCAP)-Barbados
Unión Peruana de Productores de Fonogramas (UNIMPRO)


Why Closing Megaupload Matters

January 24, 2012

While much of last week was spent debating the language and suitability of anti-piracy legislation, on Thursday January 19th  the US Justice department charged the operators of Megaupload with a host of crimes, and the site was shut down (see here and here).  Megaupload had been one of the most popular and notorious file sharing services in the United States, and used predominantly for trading unauthorized content including music, movies, and other copyrighted works.  (If you need any evidence about its shady business model, read the federal government’s news release on the indictment or consider the fact that the Obama Administration’s trade representative listed Megaupload as a “notorious market” rife with theft last month).  Merely days later, we’ve seen other popular file sharing lockers like Filesonic and Fileserve curtail their own services, likely fearing similar charges as they functioned similar to Megaupload. (see here).  These shutdowns beg the question – what happens next?

Fortunately, shutdowns of these types of hubs for illegal activity are not unprecedented.  In October of 2010, Limewire (the most popular P2P service at the time) was shut down, and just like this week, millions of users were forced to find new sources for their content.  Although some contingent of users remain fixated on stealing music rather than using any of the myriad legal - and often free - services available (here), we have seen strong evidence that many users quickly switch to legal sources.  According to the NPD Group, Limewire users left by the millions in the months after the shutdown (see here).  And just like this week with Megaupload and its ilk, the shutdown of one major source led to decreases across other similar services as well.

So where did those users go?  There’s good data that shows many turned to legal services.  In 2010, digital album sales grew 13% while digital tracks only grew 1% according to The Nielsen Company, and many suggested that rapid growth in download sales was finished.  But in 2011, digital sales rebounded, with digital album sales up 19% and digital tracks up 8% versus the prior year.  But this chart from Nielsen shows what happened more explicitly.  Digital music sales that had been flagging jumped in the month immediately after the Limewire shutdown, and have remained stronger ever since (note that while the Beatles did go on iTunes in November of 2010, they only account for a small portion of that sales increase, and current music sales went up even more than catalog).  When Billboard looked at the data after the Limewire shutdown it said “The spike in sales was immediate, noticeable and lasting” (see here).

Collectively, this evidence strongly suggests that the shutdown of illegal sites helps create a thriving and diverse digital marketplace.  It encourages users to go to legitimate sites, and enables great new services to be launched - like Spotify, which launched in the US last year and quickly signed up millions of new users.  It’s always reassuring when the data we see in the market reflects what we thought was just common sense.

Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA


A Case For Closing OPEN: ITC, 33 Months Later...

January 04, 2012

The U.S. International Trade Commission (ITC) recently reported that it will delay ruling on an important patent infringement claim brought by well-known camera company Kodak against smartphone makers Apple and Research In Motion (RIM).  The case, originally filed in January 2010, now anticipates a ruling in September 2012. The delay now means that the ITC will have taken 33 months to decide on a high-stakes and time-sensitive issue.  So this is the “expedited” process SOPA opponents are embracing as an alternative in the proposed OPEN bill?

SOPA was introduced to address the devastating and immediate impact of foreign rogue sites dealing in infringing and counterfeiting works and products.  Every day that these sites operate without recourse can mean millions of dollars lost to American companies, employees, and economy, and an ongoing threat to the security and safety of our citizens.  Why in the world would we shift enforcement against these sites from the Department of Justice and others who are well-versed in these issues to the ITC, which focuses on patents and clearly does not operate on the short time frame necessary to be effective? In addition, the remedy traditionally offered by the ITC – an exclusion order to prevent foreign criminals from accessing the US market – is precluded under the OPEN Act.

More proof why the OPEN Act is not a meaningful solution to a serious problem.

Mitch Glazier
Senior Executive Vice President, RIAA