European Commission Opens Public Consultation on Content Market

A public consultation on ways to stimulate the growth of a true EU single market for online digital content, such as films, music and games, was launched by the European Commission today. The Commission intends to encourage the development of innovative business models and to promote the cross-border delivery of diverse online content services. It is also keen to ascertain how European technologies and devices can be successful in the creative online content markets. Input to this consultation will help shape a Commission Communication on Content Online, due to be adopted at the end of the year. The deadline for replies is 13 October 2006.

 “Supplying content on line, such as films, music and games, not only helps to make Europe’s culture more accessible, but will also be a tremendous opportunity for Europe’s content industry to expand its own markets”, noted Information Society and Media Commissioner Viviane Reding. “Easy access to, and secure distribution of, online content is a crucial challenge. I expect input to today’s consultation to identify clearly any remaining obstacles to a competitive, pan-European online content industry which the EU needs to tackle. Only a cross-border market for online content, in which authors, artists and creators are able to reap a fair reward for their talent and skills, will enable Europe’s content sector to compete with other continents.”

The public consultation “Content Online in Europe’s Single Market” launched by the Commission today intends to pave the way for a true European single market for online content delivery. Online content can play a crucial role for the growth of Europe’s sector for information and communication technologies (ICT) and media. Western European online content-sharing frameworks and markets are expected to triple by 2008 (with the user/creator part growing tenfold). These developments are expected to multiply across the sector, already accounting for 8% of EU GDP today.

Notes From the Label

Very good music related comic strip at Bassit Wanted by American artist Porter Mason

Tell Me What I Want to Hear

Very good music related comic strip at Bassist Wanted by American artist Porter Mason

Universal Music Group Has Good Semester Despite Turmoil for Giants

 

According to the report issued last week by UMG’s parent company Vivendi Universal, the year has been kind to sales. Figures show an increasing of 5,5% over the same period last year, totalling 2.2 € billion. Digital music sales account for 10,1% of all UMG’s sales, a number that has been growing steadily over the last few quarters. 

Recently Sony/ BMG had reported losses of about 14,4% and other competitors are expected to report a decline in revenue for the first semester of 2005. However Sony/BMG’s situation has been worsened by the annulment of the joint venture by the European Court of First Instance recently, leaving company and analysts in shock. Plans by EMI to acquire it’s rival Warner Music were subsequently withdrawn reportedly “until the legislative climate in
Europe is favourable”.

 

Kazaa To Pay $115 Million Settlement to Recording Industry

 

It was announced today that a settlement had been reached between Sharman  Networks, owner of Kazaa and several companies and organizations representing the music industry in the United Satates. The settlement requires the payment by Kazaa of 115 Million USD and the creation of a new subscription service that filters illegal content.

The announcement made by the IFPI (International Federation of the Phonographic Industry) and the RIAA’s (Recording Industry American Association) was considered ground breaking, bringing to mind Napster’s route to legality a few years back in very similar circumstances. Yet many observers don’t share the industry’s optimism. The fact that many of the files shared through Kazaa were plagued with virus and spyware made the number of users decline heavily in recent months, causing many to migrate to other emerging services such as LimeWire and eDonkey. For these analysts file-sharing tendencies will not be significantly affected by this settlement.

 

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Commission Opens Public Consultation on the Protection of Minors Using Mobile Phones

 The European Commission today launched a public consultation on the potential risks for children of using mobile phones. Input is invited from any stakeholder, including child safety, parent and consumer organisations, mobile network operators, content providers, handset and network manufacturers, and regulators. The consultation will run until 16 October 2006.

“Mobile phones are part of our daily lives, not only for adults but also for teenagers and increasingly for younger children. Mobile communication is a great opportunity for the development of
Europe’s economies and societies. However, at the same time, the protection of minors needs to be guaranteed”, said Viviane Reding, Commissioner for Information Society and Media. “In my view, protection of minors in mobile communications is the responsibility of all actors: industry, child safety associations and public bodies. The more efficient self-regulation can become, the less the need for State intervention.”

The new consultation launched by the Commission today addresses issues linked to content and behaviour, such as access to harmful or illegal content, bullying (e.g. distribution of abusive or compromising messages and photos amongst children), grooming (e.g. strangers “making friends” with children with a view to meeting them), risks to the privacy of children, and the risk of unexpectedly high expense.

In the last few years, the use of mobile phones by children and young people has increased dramatically, as have the capabilities of mobile phones. According to a Eurobarometer survey of May 2006, 70% of European youngsters aged 12-13 years and 23% of children aged 8-9 years own a mobile phone. Handsets can now be used for video messaging, entertainment services (downloading games, music, and videos), access to the internet and location-based services.

The growth in mobile use clearly helps people link-up in an Information Society. But it also gives rise to concerns about the safety of children. The consultation aims to gather factual information and views from different stakeholders on the types of risks faced by children in their use of mobile content services, the technical and regulatory solutions that exist and the scope for further action, in particular at European level.

The consultation launched today is part of a process which started in June 2005, when a plenary session of the Safer Internet Forum attracted 200 representatives from the industry and child welfare organisations. The Commission would like such a European level debate to lead to the kind of self-regulation which is already developing in some Member States. It is therefore supporting several related initiatives of mobile operators, NGOs and other stakeholders.

The Safer Internet Forum is part of the Commission’s Safer Internet Programme, which has been running since 1999, and aims to equip parents and teachers with the knowledge and tools they need to ensure internet safety. The current 4-year programme (2005-08) has a budget of €45 million to combat illegal and harmful internet content. It also covers other media, such as videos, and explicitly addresses the fight against racism, and e-mail “spam”.

 Source: http://ec.europa.eu/

IFPI PIRACY REPORT 2005 – Executive Summary

 

The music industry is stepping-up the fight against pre-release piracy on the internet; seizing record amounts of pirate discs and equipment; and pointing to a list of top 10 “priority countries” whose governments most need to act to combat digital and physical piracy. Despite these efforts, music piracy remains an acute problem that harms the whole music community. John Kennedy, IFPI Chairman and CEO: “This report outlines a list of top 10 priority countries where actions – not lip-service – are most pressingly needed. Some of these governments have made progress in 2005. As this report outlines, much more is needed.” 

• More than one in three CDs sold worldwide is a fake
• Record seizures of discs and equipment
• Canada, Italy, Greece among top 10 “priority countries for action”
• Public education and action against pre-release piracy stepped-up
• A new approach in Mexico
• Strong growth for legitimate digital sales
• 20 billion illegal downloads estimated globally in 2005  

IFPI Digital Music Report 2005: Facts And Figures

The Growing Legitimate Digital Music Market

• Legal music sites have quadrupled to over 230 in 2004
  • up from 50 a year earlier
  • Over 150 services available in 20 countries in Europe
  • Over 30 services in the UK, more than 20 in Germany and 10 in France
• Available repertoire has doubled over 12 months to 1 million tracks from January 2004 to January 2005
• Paid-for downloads up tenfold in 2004 to over 200 million
  • from 20 million up to 140 million in the US (Nielson Soundscan)
  • from zero to nearly 6 million in the UK (UK Official Chart Co, BPI)
  • up dramatically in Germany with nearly one million from Musicload in December (Musicload)
• The digital music market was worth US$330 million in 2004 – up on 2003 and set to double in 2005 (Jupiter research). This represents about 1.5% of record company revenues
• Some third analysts and record companies predict digital sales could reach 25% of revenues in five years
• It is estimated that 50 million portable players were sold in 2004 (IDC), of which 10 million were iPods (Apple)

File-sharing trends

• Infringing music files on the Internet overall (peer-to-peer and other) are down to 870 million in January 2005 from 900 million in January 2004
• Infringing music files solely on P2P networks worldwide is an estimated 760 million, down from January 2004’s 800 million and sharply down on April 2003’s one billion
• A drop of 900,000 users on the most popular peer-to-peer service (FastTrack, which includes KaZaA) since January 2004, from 3.2 million to 2.3 million
• Use of services other than KaZaA is increasing - but not necessarily of music files. Music files represent a smaller proportion; eg. an estimated 25% of files on eDonkey are music, compared to an estimated 75% on Kazaa
• 75% of all distribution of illegal music files on P2P networks is accounted for by 15% of individuals (NPD)

Consumer awareness

• 7 out of 10 people in Europe are aware that file-sharing without permission of copyright holders is illegal
• More people are buying music online legitimately. The same number of music downloaders say they download from a legal source as from a P2P service (44% each)
• More people intend to buy music online legitimately. Almost one third (31%) of music downloaders say they are likely to download from a legal service (compared to 22% now) and 55% say they will download from a legal source, including eg artist website (compared to 44% now)
• Awareness of legal online music services has risen. 49% of 16-29 year olds Dec 2004 are aware of legal ways to buy music online, up from 38% in December 2003 (GfK)

Hello, and welcome!

Welcome to Cyberextazy’s Digital Music Forum. 

Cyberextazy is the digital music arm of a group of Iberian companies dedicated to the production, publishing and distribution of music. 

Cyberextazy’s Digital Music Forum is an independent place on the web to search for news and comments about the European digital music market. It’s also a place where we will put you up to date with our own productions and releases, where you can get a more personal account of what it is like to work in the music business, and read tips, suggestions and our opinions on the latest music and music products out there. 

The Forum is moderated by me, Luis de Matos, owner of Cyberextazy and long time associated with the music industry as executive producer, manager and senior executive of several leading companies for over 10 years. You can address questions and suggest topics for discussion. Once in a while I will post a few interesting, insightful and many times comic stories I have lived through (and survived!) over the years in the business. 

You can also use our general mail at cyberextazy@mail.com to get in touch with us. 

Be sure to come back soon.