The global recording industry is celebrating a fourth consecutive year of growth, according to the latest IFPI figures. There was good news for the UK, which advanced to third place, while the US has consolidated its No.1 position with a strong transition to streaming.
In the first part of our IFPI Global Music Report Q&A, Music Week talks through the key issues with international execs from each of the big three record companies, including streaming subscription prices, the rise of Amazon Music and the US and UK streaming transition...
The UK has moved ahead of Germany in the IFPI rankings to No.3. How do you view the UK as a growing streaming market?
Stu Bergen, CEO, international and global commercial services, Warner Music Group: “It’s exciting. The decline of physical can take a lot of wind out of a market, but as that number becomes smaller the substantial growth in digital just makes it all that much more pronounced. Germany had a situation where they had [in 2017] a significant neighbouring rights settlement that distorted the market slightly, which leads to a more depressing minus 9.9%. But as you get into the real focus on digital, which is where we’re focused as a company, it gets more exciting. We’re always trying to innovate in all areas of the world to find what will work for our artists, not just in the UK.”
Adam Granite, EVP, market development, Universal Music Group: “It’s an incredibly important, vibrant market. A wide range of music, and the UK has had an incredible history of their artists finding success around the world – and I don’t see that slowing down at all. It’s great artists, first and foremost. It’s strong penetration of services, strong penetration of smartphones, good payment methods are all helping drive it.”
How has the US made such a strong transition to streaming?
Stu Bondell, EVP, business and legal affairs, international, Sony Music Entertainment: “Obviously, it’s a very developed economy. You have the economic groundwork for a pay market, which is important and you’ve got a big consumer base. If you look at things like Netflix and other subscription services, it feels like there should still be a lot of room to move in terms of household penetration before we max out.”
We’ll continue to be vigilant to make sure that it’s a healthy ecosystem for all who contribute
With streaming now so established, should subscription prices go up to reflect the value of your repertoire?
Stu Bergen: “They set their pricing. We constantly are on a quest to make sure that our artists and rights-holders are appropriately compensated. We’ll continue to be vigilant to make sure that it’s a healthy ecosystem for all who contribute. Regional and local services are important in developing some of these other markets as well, such as Africa and a telco-connected service like Boomplay.”
Adam Granite: “Just to be clear, we don’t set the prices, it’s not up to us. The value of music across the world is incredibly important and we continue to work as an industry to make sure that we see that value for our artists increase as much as possible.”
Would you like to see more competition in streaming?
Stu Bondell: “We always welcome new entrants into the digital field. We work with many partners around the world to increase the availability of licensed music in all countries. More is better.”
Stu Bergen: “Ultimately, the conventional wisdom is that competition is good for fans and drives innovation. We should all welcome that.”
Adam Granite: “We encourage competition as much as possible. In the US specifically, you’re seeing Amazon Music come on as a very strong contender, we’re seeing a strong investment from the various Google services as well. Competition is great and we expect to see it continue, particularly in the world’s largest market, the US.”
How’s the Spotify IPO changed the music business?
Stu Bergen: “I don’t think that event necessarily changed the environment. It was certainly a successful offering – it added more confidence to the music ecosystem in general.”
Adam Granite: “They are one of our largest partners, we want them to succeed, we very much view this as working in partnership – as they succeed, we expect to succeed along with our artists. Our main focus is on finding the best artists, creating the best music and everything follows from there.”
Click here to read the breakdown of the IFPI Global Music Report. For industry reaction to the Q1 figures in the UK, see the new issue of Music Week, available now, or click here.