Music Business Basics - a midem presentation

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Music Business Basics - a midem presentation

  1. 1. Music Business Basics?Bruno Crolot, Head of midem, Reed MIDEM (France) @bcrolot | @midem
  2. 2. Part 1Music, Brands &Technologies InteractTogether in New Ways
  3. 3. 7 of the top ten accounts are musicians1/3 of all videos are music-related9 of the top ten videos are music videos, summingup to almost 5 billion plays(Gangnam Style by PSY is 3rd as of Oct. 22nd)
  4. 4. 74% of music fans and 67%of labels agree that more fans willbuy directly from the artistsOver 5M artists now meet,engage & transact over onlinecommunities Source: Music Supported Here / The Oatmeal
  5. 5. 97% of people think that music canstrengthen their brand91% of consumers accept or arepositive about brand involvement inmusic entertainment and culture Source: Sounds Like Branding / Frukt
  6. 6. New Players
  7. 7. “Were using music now in every way,shape or form. Were innovating, workingwith startups, having writers write,having artists approach us, directorsapproach us, big stars wanting to do stufffor us” Kevin Roberts, CEO, Saatchi & Saatchi midem 2012
  8. 8. “There’s a new currency that’semerging in the music industry,which is how many people haveshared a given song or a givenartist on Facebook” Dan Rose, VP of Partnerships, Facebook midem 2012
  9. 9. “This gives me a platform that I would never be afforded maybe by Columbia Records for doing a song. I have to make it great, because this is maybe the biggest exposure I’ll have for a song”Mark Ronson, Artist, Producer and DJmidem 2012
  10. 10. A Changing Industryfrom a Complex ValueChain…
  11. 11. Source: Reed MIDEM
  12. 12. Towards aMusicEcosystem Source: Reed MIDEM
  13. 13. Part 2Basics of theMusic Ecosystem
  14. 14. The Global Business isThriving?
  15. 15. The Broader Music Industry Value (Billions)200175 168 152 Other Revenues 150 139 140150 Performance Rights 132 Digital125 Physical100 global recorded 75 music sales US$ billions, trade 50 value) -40% since 1999 25 0 2005 2006 2007 2008 2009 2010 Source: IFPI / Floor64
  16. 16. The Broader Music Industry Value in 2010 (billions) Publishing Performance rights market Music related video games sales 2,7% 2,9% 1,0% Music TV/mags advertising revenues Radio advertising revenues 5,4% 19,4%Music instrument sales 9,8% Recorded music retail sales 16,6%Live Music sector 12,9% Portable digital players 14,4% Audio home systems 14,9% Source: IFPI Estimates / Music 3.0
  17. 17. Focus on Recording
  18. 18. Music Sales in 2011-2012 2012 U.S. MID-YEAR SALES (Source: Nielsen SoundScan)Overall Music Sales Digital Album Sales(Transactions, Albums, Singles, Music Video, DigitalTracks - In Millions) (In Millions)Units Sold 2012 2011 % CHG. Units Sold 2012 2011 % CHG. 853,2 820,5 +4,0% 57,2 50,3 +13,8%Total Album Sales Digital Track Sales South Korea(Includes CD, Cassette, LP/Vinyl, Digital Albums - InMillions) (In Millions) grew by 6,4 % inUnits Sold 2012 2011 % CHG. Units Sold 2012 2011 % CHG. 2011, following 150,5 155,5 -3,2% 698,0 660,8 +5,6% a 12% increase in 2010 In 2011:  Album sales up for the first time since 2004: +3.2% w/ +19,5% digital album sales  Overall music sales break 1.6 billion mark for first time  But global revenue is down 3% Source: IFPI / Nielsen
  19. 19. Digital Market – Digital Services Digital services:  Downloads  Streaming  Internet radio  Music video  Mobile bundles  70% K-pop revenue comes through digital channels, vs 55% across the market as a whole. South Korea Placement in Global Market 500 legitimate music 2007 23 services worldwide offering up to 2009 14 20 million tracks 2011 11 Source: IFPI
  20. 20. Digital Market – Download Services  Digital singles are the main source of incomes.  The combined sales of the top ten digital singles grew by 11% in 2011.  Digital albums sales grew by 19,5% in 2011.  Mumford & Sons sell 600,000 units of their new album in first week Source: IFPI / Nielsen
  21. 21. Digital Market – Revenues Ringtones still make 4x more money than:Worldwide Online Music Revenues in 2011 Subscription Services 8,4% + +  Subscription to account for 30% in 2015. Download Services 57,3% Country Revenues from Personalization digital sources Services (ringtones) China 71% 34,3% South Korea 53% USA 52% Source: Evolver.fm / IFPI / Strategy Analytics / Gartner
  22. 22. Digital Market – Music AppsMusic app usage Music apps:  Usage increased 530% in 2011  9,000 music apps in iTunes (2% of the store)  For creation and consumptionUsers who downloaded music apps in 2012Global – 26%South Korea – 39% Source: Flurry Analytics / Ipsos & Music Matters
  23. 23. Focus on Live Music
  24. 24. Worldwide Live Music / Concert Revenues 2006-2011 (US$ billions)25 +3.7% 23,5 22,2 in H1 201220 20,8 19,4 18,1 16,61510 We see increasing demand from other markets such as 5 South Korea, China and Indonesia… Alan Ridgeway Live Nation – April 2012 0 2006 2007 2008 2009 2010 2011 Source: eMarketer / Pollstar
  25. 25. Focus onRights Collection
  26. 26. Collection Sets a New Record in 2010  Total collections in 2010: €7.545 billion  +5.5% worldwide year-on-year growth ASIA-PACIFIC  €1.151 billion collected  15.3% of the total royalties  12% increase in royalties (vs 2009) Source: CISAC
  27. 27. Part 3New Models & Trends
  28. 28. Tech Players Rovio & music music hack days Source: Rovio / Reed MIDEM
  29. 29. Brand Partnerships Coca-Cola & Music Dealers Innovative Partnerships Source: Reed MIDEM / Sugarland at Amex Unstaged
  30. 30. Direct-to-Fan Zoë Keating Joss Stone Source: Reed MIDEM
  31. 31. Connected by Music
  32. 32. IndustryMeetingsEvolution
  33. 33. Music Companies
  34. 34. Cutting-edge Technologies
  35. 35. Brands & Agencies
  36. 36. Artists Pete Imany Wentz Patricia Kaas Damian Kulash Selah Sue David Guetta Alison Balsom Mark Ronson Pharell Joss Stone Amanda Palmer Williams
  37. 37. midem 2013 trailer
  38. 38. 26-29 January 2013, Cannes, France Contact us: info.midem@reedmidem.com Visit midem’s website – www.midem.commidem is the place where music makers, cutting-edge technologies, Follow usbrands & talent come together to enrich the passionate relationshipbetween people & music, transform audience engagement & formnew business connections. BRANDS TECH MUSIC ARTIST Download midem iPhone App http://road.ie/midem

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