What IP lawyers should know about IFPI’s Digital Music Report 2015

What are the developments in the world of digital music illustrated by the International Federation of the Phonographic Industry’s (IFPI) Digital Music Report 2015? Tahir Basheer, a partner at Sheridans, considers some of the highlights of this report.

What are the five take home points of the IFPI Digital Music report 2015?

1. The strong growth in subscription streaming revenues confirms the already suspected shift in consumer attitudes from one of ownership to access. This trend can also be seen in the decline in both physical format sales and download sales, as well as the rise in the numbers of consumers streaming music on mobile devices (tablets, smartphones etc).
2. YouTube and safe harbour continue to be an issue.
3. Digital music revenues in the territories covered by the IFPI report are now equal to physical revenues.
4. There are now even more distribution methods through which an artist must exploit their recordings in order to be successful (music subscription services, YouTube channels, multimedia emoticons or ringtones, crowdfunding campaigns, social media proliferation, CDs, vinyl, downloads and performance rights licensing). This is important not only in terms of direct revenue streams but also in terms of publicity, promotion and reputation as various charts now incorporate this data. It is also becoming more common for streaming data to be used to calculate Gold and Platinum award certifications around the world. This is important for artists as record deals often contain uplifts on the amount of royalties the artist receives if a record reaches Gold or Platinum status.
5. Piracy is still an issue despite its decrease and the introduction of website blocking legislation.

What legal issues will new business models throw up?

The rise of subscription services has highlighted some issues in the way digital royalties are calculated for artists—for example, a number of artists including Thom Yorke and Taylor Swift have openly criticised Spotify for the low level of royalties they pay and have removed their work from the service. Streaming royalties should be dealt with sepa