The MIDEM conference, held in Cannes, France on June 5 through 8, gathered several thousand international music professionals for four days of panel discussions on many of the issues facing the industry today. Delegations from as far away as Africa and China attended with an eye (and ear) to reach key decision makers from record labels, publishing companies and live music executives. Artists showcased as well, with nightly concerts dedicated to music from Taiwan, China and the African continent. Between the croissants, these were some of the hot topics MIDEM attendees were talking about.
A Publishing Bubble?
With the recent acquisition of EMI Music Publishing by Sony/ATV ($2.4 billion for a 60% stake, bringing the overall value to $4.75 billion, nearly twice what EMI was bought for in 2011), and Wall Street looking at publishing assets as a growth area ripe for investment, is the current climate actually a bubble? BMG CEO Hartwig Masuch cautions, “You can see some signs of it. I would be very careful right now.” According to recent financial projections, growth on the publishing side of the music business it expected to relatively flat, so why such high multiples? Said Masuch: “If people right now say the music industry is growing by 7 to 10%, what is actually growing? Yes, streaming may be growing by 8%, but that may not translate to publishing. … It’s very aggressively valued. But can you make sense of it as a buyer?”
Scott Pascucci, CEO of Concord, which this year purchased Imagem for over half a billion dollars, says his company’s investors are more than content. “[They] love the music business, it’s not just an investment for them,” he said. Still, the concern remains that new entrants to the publishing market might not have a passion for music or be as invested in the sector’s overall health but are only looking to cash out.
The Value Gap
The disparity in payouts between DSPs remain, with YouTube still the worst offender, paying one-tenth of the rates of Spotify and Apple Music, but the gap is slowly inching towards a close. With legislation in the European Union pending and efforts being made in the U.S. Congress to modernize the way creators and rights holders are paid, there appears to be a faint light at the end of the tunnel. Speaking of YouTube at a panel titled “All Eyez on Stream,” Warner Music’s John Rees said that the key element to the video giant’s relationship with the music industry is “to convert free users into paid, and to market to the free users, to educate them on the benefits of a paid subscription versus their current ad-supported functionality that they have.”
Path to Parity
The industry’s efforts towards gender equality was a topic addressed at the second annual Women in Music gathering on June 6. There, Fox Rothschild attorney Monika Tashman introduced award winners Jennifer Newman Sharpe of OneRPM (Guardian award) and Neeta Ragoowansi (Trailblazer Award) of NPREX (National Performing Rights Exchange), who noted that the gender gap doesn’t just exist in the board room, but on popular music playlists. That theme was echoed on a June 7 panel moderated by Vanessa Reed of PRS Foundation and featuring Songtrust’s global head of business development Molly Neuman, MusicTech Germany founder and VP Claudia Schwarz and manager Jim Hatch. Pointing out that the majority of the world’s citizens are women, Neuman offered that there’s “something’s wrong with the ratio of only 13% of a playlist being women… It’s just not really okay.” Solutions were harder to come by, but Chris Clark, director of music at advertising agency Leo Burnett, shared a philosophy that resonated with the Women’s Global Leadership Summit attendees: “In my quest for music, I consider women for it,” he said. “It is so easy. And I ask clients I work with whether they are working with women on [a] project. Men need to give a shit.”
A conversation with Neil Jacobson, president of Geffen Records, and Snapchat VP of partnerships Ben Schwerin focused in on the millennial demographic. Schwerin revealed that 55% of Snap’s audience is under 25. “That’s a demographic that’s increasingly hard to reach anywhere else,” he said. Jacobson equated the popularity of Snap stories to early MTV. “It’s a young demographic,” added Jacobson. “Being able to get to a user base like Snap’s, where it understands that under-25 demographic, much like I feel we understand that demographic, is really special.” It seems MIDEM is also reaching the age group. During a Q&A with Scooter Braun, manager of Justin Bieber and Ariana Grande, an informal survey of those gathered in the auditorium showed that more than half were under the age of 30.
Although MIDEM is a draw for those working in territories outside of the U.S., ongoing legislation in America, particularly the Music Modernization Act which is currently making its way through making its way through the Senate, already passing in the House by unanimous vote, was top of mind for many of the speakers taking part in panels dedicated to rights holders issues. The complex payment structures were dissected in detail on a June 7 talk titled “Copyright Reforms in North America: What Next?” Moderated by Cooke Chris, MD of CMU Insights, the panel featured Joe Conyers, co-Founder & GM / VP Technology of Songtrust; Downtown Music Publishing Group’s Christopher Harrison, who is also CEO of the Digital Media Association, attorney Dina LaPolt, who represents Steven Tyler and Britney Spears, Canadian artist and label owner Miranda Mulholland and Cary Sherman, outgoing RIAA chief. Sherman also delivered a speech on the conference’s final day that illuminated some of the many issues the industry is currently grappling with. “The struggle’s not over,” he said. “There is work still to be done on many other fronts. But music’s ship of state has turned, and in a direction we can all be pretty proud of. And one thing is for sure – in the music business today, everyone should understand the need to pay attention to public policy.”
The African continent, home to 1.2 billion people and some 420 million mobile phone users, could be music’s next great frontier. “The potential is definitely there,” said Yoel Kenan, CEO of Africori Distribution. “Today we’re seeing the market mature to a level that we’ve been expecting for quite a long time.” Buzz about African artists has indeed been permeating popular music, as evidenced by beats used by rappers like French Montana, and at least one major act, Nigeria’s Davido, who is signed to Sony Music (RCA in the U.S.), is poised to break through. In a Q&A session held on June 6, the singer boasted that though many African artists are looking to break in English-speaking countries, he, for one, isn’t coming for America, but rather, “The American market is going for me.” Indeed, Davido is set to perform at several high-profile festivals this summer including Afropunk and Made In America.