Data

After 2017 growth, Sacem boss talks YouTube, Facebook and blockchain


Tags:

French collecting society Sacem has reported that in 2017, its collections from online surpassed those from physical music products for the first time. But both revenue sources are still behind that coming in from private-copying levies.

Total collections for 2017 stood at €1.4bn, an increase of 3.2% from 2016. Of that, online made up €83.8m, putting it ahead of the €80.8m from CD/DVD/Blu-ray revenue but behind the €95.8m that came from private copying levies.

Digital overtaking physical is, of course, primarily down to the continued growth of the former against the continued decline of the latter.

Jean-Noël Tronc, the director general of Sacem, tells Music Ally that the decline in the download market “now represents a kind of residual source of revenue”, but cites streaming as the inevitable motor for the overall growth in digital.

Spotify, Tronc says, was the major financial contributor here ahead of Deezer; but we should avoid “Spotify kills Deezer in its home market” headlines as this includes not just domestic income but also that coming from multi-territory licensing.

He also cites a fast-growing Amazon Prime Music and Apple Music as key contributory factors. Beyond namechecking several services, SACEM is steadfastly not offering a breakdown of online revenue by DSP.

The €95.8m from private copying was an historic high for the organisation but Tronc warns the upward trajectory in this revenue source cannot be guaranteed.

“There may be questions about this in the coming years as a result of new trends, especially the growth of streaming and streaming subscriber-based services such as Spotify,” he cautions. “This will eventually lead to fewer people copying files on their devices.”

The rise of access-based music consumption could equally drive a spike in smartphone and tablet sales, but the inclusion of hard drives in the overall numbers has to be considered as part of a transition in hardware ownership that happens in lockstep with a transition in digital format adoption. What the levies give with one hand, they take with the other…

The reporting process for Sacem has also become more onerous in the past year, with the organisation saying it processed 2.1 trillion streams and downloads in 2017, a 114.4% increase from the 983bn processed in 2016.

“This is the reason why, in our innovation strategy, we have signed the 10-year partnership with IBM that we announced at the start of last year under the URights brand,” says Tronc of the new data-processing complications Sacem and other PROs alike are facing.

“This music copyright management platform is aiming at precisely solving that. This is a huge and fast-growing amount of data that we have to process to be able to not only distribute but also to claim, bill and collect online revenues for our members.”

On top of its own members’ revenues, Sacem is also, under mandate, processing those from Universal Music Publishing International and, as of last year, Warner/Chappell as well as a number of independent publishers.

Tronc accepts that mismatched publishing data in the streaming world is still a concern but he feels his organisation is taking important steps to improve things here.

“I would not speak on behalf of [all] publishers, but we are very much focused on improving the identification process,” he says. “This is exactly the reason why, in our licences with the key digital service providers, we put a strong emphasis on this dimension. That includes the way the files are being sent to us, the data that is included in those files as well as the possibility to do audits if we think things could be improved in the way DSPs are delivering their files to us.”

In order to achieve the maximum effectiveness here he suggest two key issues must be addressed.

“You need to improve your own processing power – as with our URights strategy with IBM,” he says. “On the other hand, even in a relationship of trust, as is the case with our relationships with our DSP partners, you need to be sure that you receive all the data that you need. When some data is not enough, you need to look for new ways to identify your copyrights online.”

This was the wellspring for Sacem partnering with PRS for Music and Ascap last year on a joint blockchain initiative to vastly improve data accuracy.

“It uses a very simple ID where, if you match ISRCs [International Standard Recording Code] with ISWCs [International Standard Musical Work Code], you may improve the level of automatic identification of works that you identify online. This is exactly what this blockchain initiative has so far demonstrated.”

Inevitably YouTube was an issue for the organisation, but referred only as part of the “transfer of value” conundrum – which is effectively the industry’s diplomatic rebranding of the “value gap”.

Tronc feels that with regulatory involvement this issue can be resolved in a beneficial way for all parties, with the imminent changes to the EU Copyright Directive being central to all of this.

“That is very good news for everyone, including YouTube,” he claims. “If we don’t bring more transparency and more accountability into this industry [that will be an issue]. But let’s not call it the ‘value gap’ – let’s call it the ‘confidence gap’. That gap between players will continue to be wide.”

Finally, Facebook was seen as a potentially important licensing source in the coming years and one that Tronc feels will not descend into a similarly bitter battle of wills to that which the music industry currently has with YouTube.

“So far we’ve signed three deals with Facebook in early 2018 covering the use of our repertoire plus some of the repertoire [we are mandated for],” he says. “This not only reflects what we can do but also what we will be able to do in the future – which is global deals for global and innovative services. These deals are a very positive sign and even very new business models like ones on social media acknowledge the fact that they have to sign licences to pay copyrights.”

But will we, two years from now, be having the exact same debates about the transfer of value/confidence gap except where YouTube’s name has been switched out for Facebook’s? Will the deals Sacem has signed with the social network still be fit for purpose in 2020?

“You can never guarantee any deals to be future-proofed because nobody knows what the future will be,” Tronc says. “But I think that for such a deal to exist now is a very positive sign – on top of many other signs – that, when it comes to online, for those like us who fight to create more value for their members, it seems it is moving in the right direction.”

Eamonn Forde

Read More: Data News
Leave a Reply

(All fields required)