Category Archives: in English

Private copying remuneration is not subject to VAT

While there is a consensus around the issue that creative and cultural industries have one of the best proposition to create value added and jobs in the national industry, many EU countries are taxing the field in a way that is a job killer. A new ECJ ruling will bring more highlight on the issue.

VAT on music
Value added tax on live music across Europe – the royalties are subject to similar levies.

In the  Minister Finansów v SAWP  case  the Polish collective management society successfully argued that the compensation paid for unlicensed home copying in the EU is not subject to VAT taxation, because it is not in essence not a service but a compensation for a harm.

Hopefully the case will not only bring about changes the way private copying remuneration is administered, but start a general debate about how musicians create value added and jobs for the industry, and how could they create more.

National and regional Google Analytics is back

After some programming changes, CEEMID again features Google Trend analytics.  We are comparing Google searches on the web and YouTube over time, countries, regions and cities.

Fluctuation of concert searches in countries
The fluctuations of strong and weak month in the Croatian concert market are about 40% compared to the average, more than twice of the Austrian fluctuation.

An important aspect of the relatively week CEE markets is the very strong seasonality aspect.  Ljubjlana, Zagreb, Budapest and Prague are full with life and concerting opportunities in December, but the difference in interest for concerts among peak months and low month can be as much as 40%, about the double of the all-year Viennese market.  Summer festivals obviously alter the picture, but it is essential for tour organizers as well as concert promoters to understand seasonality and to build longer tour seasons in these countries.  Cultural spending is not necessarily low in off-peak season but may be diverted to cinema, theatres or outdoor activities.

We use R program code to retrieve concert, cinema, theatre and other relevant search information from web searches and Youtube.  We produce data that is comparable across the whole CEE region. We make time-series, forecasting, benchmarking and other data analytics applications on the data. The main use is forecasting, because tickets sales are known when searched for and not after sales are reported. The granularity of the data can help to understand seasonality of months, weeks, best time for touring, for cinema scheduling.

Our Google Trend Analytics is included in our private and public reports.  Google Trends is an interesting toy if you use it interactively.  Combined with regular, programmatic data extraction and surveys it is an extremely powerful tool to provide timely forecasts and to give your surveys an extra granularity in time, or down to city level.  For example, combining seasonality analytics with demographic analysis can explain most of the difficulties of market development in the Czech Republic, Croatia, Hungary, Poland or Slovakia.

 

October updates to the CEEMID databases

New updates were added to our CEEMID data catalog on 16 October.  Apart from new visualizations, we made inroads into economic impact assessment with value-added and employment multipliers.  The biggest advocacy advantage of the music industry is that it has a vast impact on employment. In the CEE region, where the automotive industry is preferred by economic policy makers, we can show that a fraction of the investment into creative industries can create many times bigger employment. Especially among young people who are extremely hit by lack of work experience and a sustainable entry into the European labor markets.

Because multiplier calculations and input-output economics is hard too, and it is a very specialized field, we made all the CEEMID program codes open source.  They will be part of the ROpenGov packages, and will be subject to peer review to avoid potential mistakes and increase usability.

CEEMP Session: Licensing, how to tackle the value gap and a discussion on licensing initiatives

CEEMID had the honor to participate in the third panel of CEEMP in Warsaw together with Ben McEwen from ICE; Jules Parker from Spotify and Dominic Houston from Netflix, and Chris Butler from Music Sales, who is also the chairperson of ICMP. Our panel was moderated by Nigel Elderton from peermusic, who is also the new chairperson of PRS in the UK.

Jules from Spotify spoke about their new initiative, Spotify for Publishers.  Spotify pays out about 20% of its royalties to publishers.  Because the labels are the bigger stakeholders, they often do not provide the necessary information for work identification in the case of publishers.

Dominic from Netflix is already one of the biggest buyers of music, and I believe that his company’s footprint will just continue growing.  His time buys licenses only 10% of their music from publishers. They mainly use original film music, and to a significant degree, catalogs.

Ben made a presentation about their innovation efforts at ICE digital rights management. Working with some of the largest repertoires represented by PRS, GEMA and STIM, they really offer world class services. Next year they promise to scale services to smaller repertoires, who can immediately benefit from low-cost identification from the cleaned data of these large societies.

Digital gap between household cultural spending and CE / S European music industry revenues in the digital world
Comparing household cultural spending with digital music revenues in Europe’s main regions.

Daniel’s short presentation highlighted the fact that the CEE region’s is much richer in terms of household cultural and recreational spending that it is thought by the music industry, because the music industry is really lagging its Western and Nordic peers in tapping into this pool of money.  There are many reasons for this, all a bit touched upon the other speaker’s issues, and their implementation difficulties n the CEE region, especially different revenue stream breakup, strong collective management and relatively underdeveloped publishing.  The region is about 200% or more below its benchmark in the sales we were talking about in this session.  The conversation will continue in Brussels, Prague, Budapest, Bratislava and Warsaw in the coming weeks.

Musician Career Paths

In our survey, we ask musicians about the most important milestones of their career and their achievement in the past 12 month. So far we have surveyed more than 2000 music professionals and 900 film production professionals in Croatia, Hungary and Slovakia.

The Changing Musician Career Path
The Changing Musician Career Path (Croatia, 1935-2016)

In the 20th century the first career step was to get on stage and create a credible live performance. After several years on the stage musician’s got a recording contract, and usually even later they registered their first composition. The recording stream was the most important revenue source. The making of a record was expensive and offered considerable royalties or advances.

In the 21st century the live music stream is far more important than the recordings. Creating recordings is much cheaper and stage performances are expensive. Musicians usually create their music, also register it as a music work and offer it to the public on an online portfolio of mp3 downloads, YouTube and music streams.  Often they are booked for their first live performance after publishing a recording.

What does it mean for the musician and the manager?  First and foremost that traditional career development strategies do not work anymore. A convincing stage performance is mandatory with a good touring strategy.  Recordings are often not profitable, but equally important in building the audience. Making the recording stream a revenue stream instead of the cost stream requires a very good understanding of the costs and benefits of the different digital channels. CEEMID also contains market information on these issues.

Career information in CEEMID

  • Milestones of the musician’s career
  • Level of professionalization, secondary career paths
  • Income level and basic live standards information
  • Production and concert volumes
  • Revenue breakup in all the three major income streams, i.e. publishing, recording and live.

The data is available for Croatia, Hungary and Slovakia. Breakup by genre, gender, birth year, age cohort, capital  / countryside is also possible.  Similar surveys are being conducted in the film production industry.

 

 

Made in Hungary: Studies in Popular Music

Being visible in the world is always difficult in the Central and Eastern European region.  Made in Hungary is the first book in the Popular Music Studies series of Routledge from the region.   A description of our first datasets, the motivation of the research and the CEEMID concept is laid out as a closing, quantitative chapter in the book.

Emília Barna, Tamás Tófalvy from the Department of Sociology and Communication of the Budapest University of Technology and Economics put a lot of enthusiastic work into editing this book.  I hope that in the future we will find a research and educational cooperation with their great team in Budapest.

Mapping the Croatian music industry

Daniel Antal presented the preliminary findings of the Croatian music industry research in the International Authors’ and Creators’ Conference (Međunarodna autorska kreativna konferencija, #MAKK2015) in Zagreb on 24 November 2015. The presentation was largely based on analysis of various CEEMID databases.

Four country comparison 2015

The Central European music industry, as shown by processing the data of more than 2000 musicians in the region is even more reliant on live performances than the British music industry.  Even though Croatia appears to be more similar to the UK than the region, a deeper analysis of the data reveals that this is not the case. The most important difference between mature markets and emerging markets is the lack of good distribution and monetization strategy for recorded music.

Collecting and analyzing industry data is very important for small, national music industries that do not have a large enough repertoire that can be easily promoted on global platforms such as Spotify, Deezer or YouTube.  New digital platforms produce relatively low income for Central and Southeastern European artists and labels, but they are growing at a rate similar to mature markets with a short, 1-5 years lag. Understanding the different strategies of global service providers, forthcoming liberalization and data-driven analytics are very important to maintain the share of domestic music in the radio and television channels and further expand it in the new channels.Digital distribution markets: Croatia and Hungary

More insights will be published on our blog and the forthcoming Regional music industry report. To be involved in the data collection and sharing of the Croatian national industry report please contact HDS-ZAMP, ZAPRAF, HGU or Unison in Croatian or CEEMID in English.

You can view the presentation slides below.

Granting and policy evaluation framework in Hungary

The data and intelligence of CEEMID was used in Hungary to create an ex ante evaluation of the new Cseh Tamás Program to support popular music development in Hungary.  Our mandate was to create concrete granting proposals that have a high chance of making a change in terms of the later royalty earning capabilities of artists.

In the first phase of the project, we made two workshops with the eight fields development method to understand the challenges and existing working practices that result in a low level of royalties paid out in Hungary. This methodology requires a groupwork of all stakeholders and professionals of the industry. In this case, we worked in groups of 30-40, covering various artists, stage, light, sound technicians, producers, managers and even band transporters.  One group predominantly was Budapest-based and one in Eastern Hungary, to have a different view on working and market conditions in the metropolitan city and in the countryside. While royalties are not applicable for live music, it was well understood by the granting authority and the music industry that royalties cannot grow without a healthy live music sector in the country.

In the workshop, the consultant with several aides facilitates a very structured conversation that starts with a desired state of the industry which is not described by slogans but by actual characterizations of a desired working environment.   Instead of envisioning that “everybody gets a grant”, we describe the ideal project planning and management cycle of a new tour or record to see how a granting can fit into this workflow and what type of grants add effective assistance to realize goals.  For each goal and change we envision how that effects the work of the performing artists, her manager, the technician crew, even the schedule of the tour bus driver.  We discuss if the change makes any material change in the way we can prepare for a new album release.

In the latter stages what sort of changes we envision in day practices, programmers, institutions and what concrete steps are needed to be made to get there.  As a controlling step, we assign indicators that can be objectively judged, and which can show the degree of change if recommended actions are taken.

The advantage of the eight-fields methodology, which was originally developed to support EU and global aid program design is that it allows conflicting viewpoints, finding consensus, and display very highly detailed policy and program scenarios already in a day. It is generally a very enjoyable experience for artists and professionals.  If the workshop takes place over 2 days, a first draft program is already presented on the second morning and by the end of the day participants usually have a detailed program.  In this case, we came up with dozens of concrete proposals, many of which could be addressed to the stakeholders themselves without any action taken from the granting authority.

In the next stage we carried out the annual CEEMID Music Professional Survey with additional questions where artists, managers and technicians could rate the proposals.  They could also optionally give their next year development priorities in the fields of live performances, recordings and composition, in the context of their current work, pre-existing financing and professional assistance of financial assistance needs.  In Hungary, more than 1000 music professionals filled out the survey in 2015.

At the end of the workshop and the survey, we could present a very comprehensive policy and granting program, with preliminary estimates on granting needs, ideal and minimum grant sizes, and grant contractual conditions to avoid grant calls that cannot be contracted out to winners due to unrealistic prerequisites.

These results, with suggested cultural policy indicators, program indicators and budgetary outlines were presented to the granting authority of the Cseh Tamás Program (currently named: Hangfoglaló)

Value added by music in public performance and home copying: economic theory and empirical applications in tariff setting

This presentation held on the CISAC Good Governance seminar set the basis for the later regional cooperation and the creation of the CEEMID music industry databases.  Collective management organization that represent authors in music, audiovisual and literary fields are under increasing competitive pressure from global buyers such as YouTube, Spotify and Netflix and are increasingly subject to tariff disputes and targets of competition policy.

The presentation was based on various tariff pricing and business development work carried out for the region’s largest CMO in turnover size, Artisjus in Hungary.