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The ‘Value Gap,’ Transparency and ‘Despacito’: Takeaways From the 2017 MIDEM Music Conference

The MIDEM conference, the June confab of music industry professionals and artists that takes place in Cannes, France, wraps on Friday, June 9, but not before a full assessment of four intertwining sectors: streaming, synch, marketing, and A&R.

Some 4,200 delegates from all over the world were in attendance, according to organizers, marking a slight uptick from the previous year. Among the highlights: keynote Q&As by Def Jam CEO Steve Bartels, Deezer chief executive Hans Holger Albrecht, Tencent Music Entertainment Group VP Andy Ng, First Access Entertainment’s Sarah Stennett, a conversation with Latin superstar Daddy Yankee, and a real-time songwriting session by Linkin Park’s Mike Shinoda and Blink-182’s Mark Hoppus which was broadcast via Facebook Live and reached more than 500,000 users within 24 hours (a keynote by former Epic Records chairman L.A. Reid was canceled in the wake of sexual harassment allegations made against the executive). In addition, more than two dozen international acts showcased their music in the MIDEM By Night and Artist Accelerator programs, including ex-Fugees member Wyclef Jean, French dance artist Kiddy Smile and Israeli duo Lola Marsh.

Panels addressed such topics as copyright management, sync licensing, and legal issues concerning rights in multiple territories, dropping an overwhelming amount of expert knowledge on registrants. Read on for five key takeaways from the 2017 edition of MIDEM.

1. The “value gap” is getting wider: If there was one buzzing topic during MIDEM, it was the “value gap” suffered by artists and songwriters in the streaming age. An example cited during a panel moderated by Complete Music Update’s (CMU) Chris Cooke: The United Kingdom saw an 88% increase in video streams in the last year, while payments to labels were flat at 0.4%. “The worst part is that this gap doesn’t seem to be getting smaller, but wider and wider,” said a representative for IFPI (the  International Federation of the Phonographic Industry). The most egregious offender, the panel asserted, is YouTube, with whom all the labels have licensing agreements, but which generates one-twentieth of the revenue per user that Spotify does. Further, they added, the platform that should not be treated like radio or as “free promotion” since it’s not a “lean back” service, but rather, the biggest on-demand jukebox.

2. Emerging markets in India and China offer opportunity and challenges: Two of the most populous countries in the world also have an ingrained culture of piracy, Andy Ng, of China’s Tencent, told MIDEM attendees during a Wednesday session. His company has seen premium subscribers to its music service increase from five million in 2015 to 10 million in 2016, and currently stands at 15 million halfway through 2017. By 2019, it’s expected to reach 25 million. While piracy still rules the majority of music consumers, Tencent believes that in educating music listeners that content has a value, “this is a very good start. We are charging them a small minimum in order to attract the users who will pay for the services.” Tencent is also dipping into live concerts as another potential revenue streams, citing that nearly 80% of Tencent’s music users are aged between 15 and 27. It’s a key demographic, he added, because their parents may are, quite simply not willing to pay.

3. The success of Luis Fonsi’s No. 1 hit “Despacito” was no fluke: In a morning panel on Thursday moderated by the premiere expert on Latin music, Leila Cobo, Daddy Yankee deconstructed the phenomenal success of Luis Fonsi’s “Despacito” – a No. 1 hit in the United States and multiple territories around the world. “I knew we had something special, but at the end of the day, music is a bet,” he explained. “It’s unpredictable and the audience are the judges.” The Justin Bieber-assisted track (his vocal is featured on the remix) has moved the goal post by becoming the latest track to log more than a billion audio and video plays. “I consider Justin Bieber very talented,” said Yankee, crediting both radio and streaming for breaking the track, but ultimately, its embrace by music fans globally. “I had people from Europe, Africa, India writing me [about the song]. … Streaming is the new street market.” Still, he added, “I don’t make music thinking it’s going to be a crossover record.” The independent artist and Reggaeton trailblazer, who’s charted more Billboard Hot 100 entries for songs in another language than any other artist, said he and other Latin artists sidestepped the traditional label process with entrepreneurship. “We became entrepreneurs by obligation, we had no tools.” No doubt powerbrokers will look upon the success of “Despacito” as a gamechanger.

4. Streaming services need to think globally, act locally: In a keynote Q&A on Thursday, Deezer CEO Hans-Holger Albrecht explained his company’s philosophy and that of streaming services overall. Citing that only 7% of the market has been penetrated in what’s viewed as early days for the streaming sector, the French platform currently boasts 12 million paid users and is looking at growth of 40% year-over-year, while revenues are at 300 million Euros, Albrecht revealed. Part of the company’s strategy, he added, was “localization and local content. You have to pick the genres you want to focus on.” He went on to explain that in Brazil, where Deezer has significant presence, gospel music has proven to be a robust silo, while in Germany, audio books are a driving force of engagement. “People respect [localization] and like it,” he added of a philosophy that differs from Spotify and Apple Music. “There is not one solution that fits the world.”

5. Transparency is key: As publishers and PROs look at devising systems that allow their constituents to view activity of their work in real-time, data collection across multiple platforms remains a difficult goal. On a Thursday panel exploring copyright, Benji Rogers, CEO & Co-Founder, dotBlockchain Music Project, likened current efforts to modernize a unified database to “syncing up all the telegraph cables while the telephone is being invented in the middle of it.” Indeed, formats like the MP3 are more than 25 years old while many recording contracts seem just as antiquated. “Today, an artist has to express their rights into a PRO, into a label, into a publisher … into a series of intermediaries who all have to coordinate.”  Artists, he added, “consistently give power away to larger companies and hope that they do the right thing.” The proposed solution of a “smart song” or “smart asset,” then, is “extremely powerful,” particularly as territories define their own copyright laws.

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