Business News CMU Digest

CMU Digest 01.05.22: Spotify, NetEase Cloud Music, Article Seventeen, Digital Services Act, PRS

By | Published on Sunday 1 May 2022

The key stories from the last week in the music business…

Spotify’s share price hit an all time low despite subscriber numbers continuing to rise. The streaming firm confirmed it added 2 million more premium subscribers in the first quarter of 2022, despite the Joe Rogan controversy and it having to close its Russian business. However, that was below investor expectations, and – with Spotify making more cautious predictions about growth levels in the next three months and general concerns about the digital entertainment sector in the investment community – a share price that’s been in decline for much of the last year dipped even further. It recovered slightly in the following days but still ended the week below the previous all-time low in 2019. [READ MORE]

Chinese digital music service NetEase Cloud Music accused its main rival Tencent Music Entertainment of infringing its intellectual property rights. NetEase said that Tencent’s various streaming services make available music that it controls without securing the right licences, and/or commissions ‘imposter tracks’ that sound like and have similar or identical names to its exclusive releases. It also said that the Tencent services have ripped off the NetEase Cloud Music app in terms of functionality and look and feel. Tencent has long pursued anti-competitive tactics of this kind, it added, but such infringements have intensified in the last two years. [READ MORE]

The European Union’s Court Of Justice ruled that the safe harbour reforms contained in the 2019 European Copyright Directive do not infringe on EU free speech rights. The court was responding to legal action filed by the government of Poland which reckoned that article seventeen of the directive – which set out various reforms of the copyright safe harbour long campaigned for by the music industry – infringed the freedom of expression and information guaranteed in article eleven of the Charter Of Fundamental Rights Of The European Union. But EU judges – following an opinion published by the court’s Advocate General last year – said that the directive already deals with the free speech concerns raised by increasing the obligations of safe harbour dwelling user-upload platforms. [READ MORE]

The final text for the European Union’s Digital Services Act was agreed. It seeks to clarify and increase the responsibilities of digital platforms across Europe when it comes to dealing with so called harmful content and other online safety issues. It doesn’t directly deal with copyright matters, although the music industry hoped it might increase the liabilities of internet companies to ensure that their business customers are transparent about their identities and operations, making it is easier to identify the companies behind copyright infringing websites. Similar transparency rules would also help the live sector to identify ticket touts. However, it seems likely that the new rules put in place by the DSA will be more useful in combatting ticket touting than copyright infringement. The final version of the text now needs to be voted on by the EU Parliament and Council. [READ MORE]

UK collecting society PRS reported that its income last year was up 22.4% compared to 2020, but still down compared to 2019. A key revenue stream for PRS’s songwriter and publisher members is the live and public performance of music, both of which were majorly hit by the COVID pandemic. The latest PRS annual report confirmed that things started to recover in that domain in 2021 compared to 2020, but COVID restrictions still had an impact for much of the year. So while 2021 performance income was up 59.6% year-on-year to £137.6 million, it was still down on 2019 levels. Digital revenues continued to increase at quite a pace, up 45.6% year-on-year to £267.8 million, but that wasn’t enough to counterbalance the ongoing COVID effect on the other revenue streams. [READ MORE]

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