In our recent private copying reports we compiled European survey data relevant to analysis. In Europe, there is a big difference between the use of electronic entertainment devices in richer and poorer countries. Nevertheless, the real difference is between the number of people who sometimes and who never pay for downloaded music, films and software. In some countries of Europe, less then 10 percent of the population ever pays for the content that is loaded to their computers, smartphones and tablets. These survey data, accompanied by other objective data, can help explaining 96% of the variance among digital music sales levels within the EU countries, and it is highly relevant in calculating the economic benefit of home copying for users, and the harm for rightsholders.
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.
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.
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.
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.
Live music creates more than a half of musician revenues and account for probably 90% of the music industry jobs. The ability to play regularly paid concerts is the most important factor in the professional development and financial feasibility of shows.
After analyzing the cultural participation schemes of about 60,000 people in Europe we see striking differences in audience demography across Europe. The best live music markets have many visitors in their middle ages when their income level is peaking, and a life-long commitment to participating in music.
We use nationally representative, standardized consumer surveys that can be compared across Europe, and can be compared with 5 yearly EU-mandated research. We recompile data from different questionnaires in scientific research and business research. If you follow our method, you not only get proven, best practice market research information but also international comparison, that local pollsters will not offer to you. Our data can be used for benchmarking and as evidence for tariffs.
The Central European markets are characterized by the youngest audiences in Europe. The lack of strong, middle-aged buyers makes the purchasing power on these markets rather weak. We have made several analysis in Hungary and Slovakia to come up with policies that can help increasing audience sizes up to 40%.
Our surveys can help to understand piracy, home copying and provide evidence for the differences among royalty tariffs.
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.
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.
In our analysis, smaller societies under political influence could often not raise their revenues in line with the rising incomes of their economies. While the Baltics, the CEE and SEE region are not so poor compared to Western Europe as they used to be 20 years ago, most tariffs are way below reasonable levels. This is an opportunity. At the same time some societies are charging rather high and disputable tariffs in some cases to make up the revenue.
We started a cooperation with a few societies in 2014 to prepare for such an outcome, and to justify the differences among royalty tariffs in the EU. Our benchmarking reveals which tariffs can be disputed, and which tariffs may have leeway for increase.
Tariffs should be set to a level that music can be best exploited in broadcasting, digital, hotels, restaurants, clubs and all locations where people want to enjoy a better ambiance instead of noise. Too high tariff are illegal and will eventually result in less use of music.
Our experience with competition cases and regulatory approvals can help to review your tariffs, identify the threats and opportunities, and to balance them in a way that benefits your members and your users as well. We believe that our benchmarks fulfill the criteria set out by the ECJ in AKKA/LAA vs Konkurences padome, but it goes beyond the imagination of the parties involved in the case. Our CEEMID catalog consist of about 1000 objective indicators than can contribute to understanding differences in tariff levels across Europe.
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.
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.
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.
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.
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.
Country and industry specific data about the music, audiovisual and film industries in Central Europe.
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