Music – a vibrant cultural and economic sector
Music is one of the most popular forms of art, widely consumed, and a vibrant expression of Europe’s cultural diversity. The sector is composed of many diverse players, with a varying degree of market influence and very different interests (e.g. authors, performing artists, recording companies, music publishers and collective rights management bodies), and it relies on several operators for distribution (e.g. broadcasters, digital service providers, retailers).
Music is a sector with a complex value chain, largely based on small and medium size businesses, and contributing significantly to Europe’s economy: among the Cultural and creative sectors (CCS), it is the third largest employer in the EU (employing more people in the EU than the film industry) and, in the past years, it generated revenues of more than €25bn per annum.
In 2015, digital became the primary revenue stream for recorded music globally. Digital revenues today account for 45% of total revenues compared to 39% for physical sales. Performance rights revenues to producers and artists represent the remaining of 14%. Streaming is the recorded music industry’s fastest growing revenue.
… facing new challenges
Over the past decade, the creation, production, distribution and consumption of music have fundamentally changed. Like other CCS, the sector suffers from the fact that European markets are fragmented. New distribution channels, powerful digital players, business models and consumption patterns have emerged through online distribution (music streaming).
Digitisation has brought not only opportunities of additional and tailor-made audience development, but also challenges in terms of how to monetise in a digital world and how to cope with illegal downloads and streaming. Market imperfections related to the digital shift force creators to adapt. They have to fight for consumers/audiences by making use of new online tools to develop a fan base and attract the attention of concert venues, festivals and music businesses (live events are equally important to build a fan base). While music is being consumed at record levels in terms of music streamed across the world, artists and producers claim that this volume is not returning a fair remuneration to them (value gap).
Artists also wish to see more transparency and balance in their relations with producers, with performers calling for an unwaivable right to fair remuneration. On major streaming platforms, European content, in particular music from smaller countries, is less visible compared to music from the US or the UK and difficult to access for those who are not aware of its existence.
… calling for an answer at EU level
Complementing Member States’ action, the EU has different tools at its disposal to promote creativity and innovation in the European music sector, to safeguard and expand cultural diversity and to help the sector deal with digitisation and reap its numerous benefits. EU policy action and support for the sector include:
- Music-focused cooperation projects, platforms, networks, prizes (Creative Europe programme)
- Regulatory framework (e.g. Copyright reform proposals addressing the issues of value gap and balance in creators’ contracts)
- Policy initiative & dialogue (e.g. the Music Moves Europe initiative)
Dialogue with key music stakeholders has confirmed the sector’s expectations on the EU for more specific support to address the challenges faced, notably in fields such as distribution, professionalisation and education, artists and repertoire development, data and innovation. There is an increasing demand to strengthen music creation and to promote diversity in Europe, and a pressing need to explore more effectively the opportunities offered by music online and offline distribution for both artists and consumers.
An immediate concern relates to better discoverability of European content on streaming platforms. In addition to ongoing policy and regulatory work, the Commission proposes to use the momentum to give a boost to the European music sector building increasingly on Europe’s key assets in the field: creativity, diversity and competitiveness. A series of inventive activities should help prepare, in the next generation of programmes (post-2020), a new scheme dedicated to music that specifically supports European cultural diversity and talent as well as the competitiveness of Europe’s music sector.
The European Commission will host a “Music Moves Europe” pavilion at Midem 2017. Highlights include pitches from 8 music startups, via Connectors Studio/Startup Sesame, and the presentation of innovative European playlists for use on streaming platforms, created in cooperation with the European Music Export Exchange Network.
Martine Reicherts, the EC’s Director General for Education, Youth, Sport and Culture, will also keynote Midem, June 6.