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25.12.10 Music Week 3

In-depth study indicates illegal downloading is running riot among UK consumers

BPI warns against unchecked piracy

Online By Robert Ashton

THE ECONOMIC, CULTURAL AND SOCIAL CONSEQUENCES of allowing piracy to run riot has been laid bare by a hard-hitting BPI report which shows there are now 7.7m people regularly downloading illegal music in the UK.

With what is claimed to be the most robust, comprehensive and sophisticated study of consumer trends and behaviour around digital music, the BPI has unearthed a staggering array of statistics and data to back its argument that illegal downloading is out of control: more than 1.2bn music tracks illegally downloaded this year; non-P2P downloading on the rise; and nearly a quarter of the online population using P2P.

“2010 was the year when the digital market came of age. The Beatles were the last of the major hold-outs; now there are very few major artists who aren’t available online. But piracy is going up, the use of cyberlockers and MP3 search engines is increasing substantially,” says BPI chief executive Geoff Taylor, who insists the heat needs to be turned up on illegal downloaders.

His comments are endorsed by Harris Interactive research director Steve Evans, one of the authors of the Digital Music Nation 2010 report. Despite there being a very good awareness of the 67 legal services operating in the UK, Evans reports that 46% get unauthorised downloads from P2P with 54% sourcing illegal music from MP3 search engines or cyberlockers.

Frequency of use is also cause for worry – it is up for all sources of illegal music (see table) with nearly a 30% net gain for search engine usage.

This delivers the shocking figure that 7.7m people are downloading music illegally in the UK – higher than previous estimates. It also means somewhere around 100m tracks are downloaded illegally each month. Evans adds, “This is a real issue. This has become a habit. More needs to be done to deter this activity because it is already ingrained and is particularly worrying in a year when there has been so much news about the issue.”

The music industry’s strategy of dealing with the illegal downloaders is struggling to cope. Even the threat of action when the Digital Economy Act begins working next year has only deterred 12% of people who have quit using P2P. “Yes, we’ve done a good job of driving awareness of legal services, but illegal awareness is still high and the use of illegal services outstrips many legal services,” Taylor says.

The BPI will continue to help grow the market by encouraging new online services – its recentlylaunched Innovation Panel is continuing to talk to ISPs and other companies about these – and is also planning to reboot the Music Matters campaign in 2011. It also continues its ongoing education campaign about the consequences and risks of illegal filesharing.

But Taylor concedes that these on their own cannot wipe out illegal activity. The DEA is also needed. But with the underlying code for the DEA still snaggled up with Ofcom and the Department of Business Innovation and Skills, the BPI and others fear the legislation might not become operational much before winter 2011.

This means potentially another £1bn-plus lost to illegal downloads. “We are concerned about the amount of time it is taking. It could be months before there is any action on the ground,” he says, adding

Usage trend over the last six months

Source

Use more Use less Net

Overseas MP3 sites 49%

13%

MP3 search engine 45%

17%

Cyberlockers

38%

23%

P2P

35%

28%

Source:HarrisInteractive/BPIDigitalMusicSurvey

+36

+28

+15

+7

there is a big role for ISPs to help fight against unauthorised non-P2P downloading by blocking sites and steering people to legal sites.

Taylor adds without this action there will be significant consequences for the UK’s economy because the illegal activity will stunt the growth of the fastest-growing sector of the economy, will threaten jobs and the digital entertainment will be deprived of investment – meaning poorer services for customers.

But Taylor also points out that left unchecked the illegal music market will crush Britain’s cultural influence in the world with fewer new bands being signed.

There are also social ramifications, he argues. “People deserve to be paid for their work and stealing is wrong,” he says. “These concepts lay underneath our society so we need to think of the long-term social consequences.” robert@musicweek.com

Viewpoint Geoff Taylor, BPI CEO

Over the last five years, the legal digital music market has been an online innovation success story. There are now 67 legal digital music services operating in the UK.

Many music fans have embraced these services. Since 2004, more than 500m single tracks have been bought legally. Digital albums have also proved themselves a successful format and now account for almost 20% of all albums sold.

These achievements are dwarfed, however, by the widespread availability and use of illegal services. During 2010, three quarters of all music tracks digitally acquired in the UK were downloaded illegally.

Digital piracy is putting many thousands of jobs under threat and is holding back innovation and investment in the new sector of digital content services. Unless decisive action is taken quickly to create a properly functioning marketplace for digital entertainment, the UK cannot expect to remain a major global creative hub.

Through proportionate, education-led measures – such as those passed by Parliament in the Digital Economy Act – not only do we give our music the chance to flourish, but we will spur on digital innovation and investment.

If we falter and lack the courage to act, we risk creating a serious cultural deficit in the UK. The voices of a generation of new bands and artists simply won’t get signed and won’t be heard. We will have abandoned values that matter. We will be the poorer for it.”

Machine Management digs for Goldfrapp

Machine Management is ending 2010 with a big new addition to its client base after taking on Mute/EMI act Goldfrapp.

The duo of Alison Goldfrapp and Will Gregory join a roster already comprising the likes of

Mika, Friendly Fires,

Alphabeat and Sunday

Girl, having received two nominations ear-

lier this month at the 53rd annual Grammy Awards. They are shortlisted for best electronic/dance album for Head First and best dance recording for Rocket where their competition in both categories includes fellow British electronic duo La Roux.

“We were recommended to them by a variety of people: Mute, their lawyers, their press people who said, ‘You should speak to Machine Management,’” notes the company’s managing director Iain Watt, who becomes Goldfrapp’s manager.

Watt says the pair, who were previously managed by Basement Jaxx manager Andrew Mansi and before that by Tony Crean and Dave Harper at Midnight To Six, will be writing and recording next year while he wants to use 2011 to raise the profile of Goldfrapp .

“We’re looking forward to working with the band, focusing on their catalogue of music, artwork and videos and reminding people of the fantastic records they have made,” says Watt who will be working alongside his Machine Management colleague Molly Hawkins on Goldfrapp.

The Mute act’s fifth studio album Head First reached number six in the UK in March this year and has to date sold 70,000 units domestically, according to the OCC. Sales of their most successful album in the UK, 2005’s Supernature, are around the 500,000 mark.

IN THIS

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THE BUSINESS OF MUSIC www.musicweek.com

FEATURES CHRIS EVANS MW catches up with Radio 2’s main man as he celebrates a record-breaking year

FEATURES STAR ATTRACTION Why demand for production duo Stargate is bigger than ever

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REVIEW A LOOK BACK

AT 2010 Plus the new artists to watch in 2011

Major bucks the downward trend as it enjoys big sales and chart success in final quarter

Universal right on Q in final 2010 tally

Labels By Paul Williams

UNIVERSAL HAS TAKEN FULL COMMAND of the fourth quarter by defying a double-digit drop in the overall market to sell more artist albums than 12 months ago.

OCC data shows that up to last week the major had shifted 7.3m fulland mid-price artist album titles in the first 10 weeks of the quarter – around 69,000 more than over the equivalent period in 2009. This rise comes despite exclusive Music Week analysis that shows the overall market for artist albums has fallen off by 11.6% up to this point in Q4.

Take That’s million-selling Progress, which was yesterday (Sunday) on course to spend a fifth straight week at number one, has unquestionably been the major’s star attraction.

But Universal is also clocking up big sales numbers in the Christmas market with releases by acts including Black Eyed Peas, Bon Jovi and Rihanna (pictured).

These successes have resulted in Universal taking the massively important pre-Christmas market by the scruff of its the neck with a 34.2%

artist album market share in Q4’s opening 10 weeks, compared to 30.0% at this stage a year ago.

In the weekly chart market share covering the Top 75 artist albums chart, its lead has been equally convincing: it controlled 38.7% of sales in Chart Week 49 last week compared to 32.5% for secondplaced Sony.

Universal’s big lead this year is in sharp contrast to how Christmas sales stacked up in 2009, when it was almost neck and neck with Sony. Indeed, at this point in the quarter a year ago Sony was narrowly ahead of its big rival on artist album sales with around 30% of the market.

However, over the first 10 weeks of Q4 2010 Sony’s share was 23.9% and it had sold 2.21m fewer artist albums than it did over the same timeframe in 2009.

In last week’s artist albums chart Sony had four of the Top 10 albums, the same as 12 months ago. However, one big difference this year is that at this point in 2009 Sony had the runaway biggest seller with Susan Boyle’s I Dreamed A Dream,

which had sold nearly 1m units in just three weeks.

Twelve months on it has slightly fewer titles across the whole of the Top 75, claiming 23 in last week’s weekly chart, compared to 25 in the

Rihanna: number X in the singles chart and X in albums Top 75

equivalent chart in 2009 – although its festive hand has been strengthened by last week’s release of the Michael Jackson album Michael.

Universal had 25 albums in last week’s Top 75, down from 28 12 months ago, with Warner and EMI making gains on the big two.

Warner’s Q4 artist album sales are also down on 2009, having sold 613,000 fewer full- and mid-price titles during the first 10 weeks as its market share fell from 15.9% to

15.1%. For the second Christmas running Michael Bublé’s Crazy

Love is its leading album,

albeit this time in an expanded version, while in the Top 75 a week ago it claimed 16 titles, up from 13 in the chart 12 months ago.

EMI remains in fourth place, but has narrowed the gap over Warner compared to Q4 2009 and, like Universal, had sold more artist albums in the first 10 weeks of the quarter than a year ago. An additional 146,000 sales helped EMI to 14.2% of the artist albums market over this period, while in last week’s Top 75 Robbie Williams and Katy Perry led nine EMI titles, up from seven in the chart from exactly a year earlier.

Typically, for Q4 the independents do not get much of a look-in among the biggest sellers. However, the revival of Adele’s first album 19 – thanks to the exposure of Make You Feel My Love on The X Factor – had helped XL Beggars by last week sell around 105,000 more artist albums in Q4 than in 2009. Demon (Daniel O’Donnell) also figured in last week’s Top 75.

One notable characteristic of this year’s Christmas market is the number of artists cropping up among the main sellers who were there in 2009. Black Eyed Peas, Susan Boyle, Michael Bublé, JLS and Take That were in both last week’s Top 10 and the Top 10 from 12 months ago, while Cheryl Cole, Rihanna, Westlife and Robbie Williams were in the Top 20 both years.

Overall, 2.8m fewer full- and midprice artist albums were sold in the quarter up to last week compared to the same timeframe a year ago, while around 560,000 fewer compilations had been bought, representing a 10.7% year-on-year drop. As in Q4 2009, Universal heads up the compilations market, although second-placed EMI has narrowed its lead. paul@musicweek.com

Syco holds the cards as Cardle reasserts X Factor’s rule

THE X FACTOR HAS REASSERTED ITS DOMINANCE of the UK Christmas number one spot after this year’s winner Matt Cardle outsold his nearest challenger by almost four copies to one with debut Syco single When We Collide.

Cardle’s runaway success on the chart kicks into touch various online campaigns intent on replicating last year’s triumph for Rage Against The Machine, whose Killing In The Name kept 2009 X Factor winner Joe McElderry from

(Sunday) chart at number three. The highly-publicised multi-artist Cage Against The Machine’s X Factor protest 4’33” could only make it to number XX.

The X Factor’s return to Christmas chart-topping form runners-up only takes place once a label home for the winner has been decided.

“Syco has first refusal over who it wishes to sign to its stable, but it is thought that it will most likely take on representation of Matt and

NEWS CO-OP ARTISTS GET BOOST FROM ATLANTIC CROSSING 4 New York HQ and US distribution deal for label group SHADOW MINISTER ADOPTS UK MUSIC QUEST 5 Focus on creative industries edges closer

MEDIA NEWS AIRPLAY ANALYSIS 6 TV and radio airplay charts

REVIEW OF THE YEAR BRITISH TRIALS AND TRIBULATIONS 8

Nine pages of analysis, reaction and comment through 2010

FEATURES MUSIC WEEK PRESENTS 17

The sixth instalment in our MW Presents Talent CD series THE BIGGER BREAKFAST 19

Music Week talks to Chris Evans as the Radio 2 man celebrates a record-breaking broadcast year TEN FOR ’11 24 Our tips for the talent ready to break through in 2011 SHOOTING STARS 27 Production duo Stargate are ever more in demand. So just what makes this hit-making package so special?