Event maps future of international music business

Cannes, 06 June, 2016 – The international music industry gathered in Cannes June 3-6 against a background of increasing global music sales, a surge in streaming revenue and a significant slowing in the decline of physical sales.

And during Midem’s opening keynote panel of industry experts, Tommy Boy Entertainment Founder Tom Silverman confidently predicted that global music revenue will hit around $100 billion within 20 years.

Industry Rebound Seen at Midem

The mood among the 4,400 or so delegates in Cannes was buoyed by IFPI’s April report on the global music industry which announced that global music revenues increased by 3.2% last year to $15 billion – the first significant increase in two decades. The upswing was driven by a 10.2% rise in digital revenues to $6.7 billion, helped by a 45% surge in income from streaming services. This easily offset a 4.5% dip in physical sales – one of the smallest declines in recent years.

Despite over a decade of industry disruption that has challenged the music community and Midem, delegates were united in their support for the world’s leading international business event. Veteran rights and royalties expert Amos Biegun, Global Head of Rights and Royalties at Vistex, summed up the mood by saying, “Midem is essential to the industry. Deals get done here because the key decision-makers are present. Midem is responsible for a major part of our business.”

Midem first-timer Joakim Johansson, General Manager and Marketing Director UMG, Sweden, expressed his enthusiasm for his Midem experience. “I’ve heard so much about it and now that I see what Midem is, I can’t believe I missed it out every single year since I joined the business 15 years ago! You’ve got everything covered here, which is pretty impressive. This industry is evolving so quickly right now that finding an international forum where you can exchange ideas and help each other is essential.”

Day one at Midem brought together four industry icons to discuss the future of the music business. Addressing a packed auditorium, industry legend Seymour Stein – Chairman Sire Records, VP Warner Bros. Records – traded stories and views with Tommy Boy’s Tom Silverman, Glassnote Entertainment Founder and President Daniel Glass and leading entertainment attorney Joel Katz of Greenberg Traurig.

Silverman grabbed the audience’s attention by predicting that a global growth in such areas as smartphones and connected cars, coupled with a surge in music subscription streaming in China, India, Nigeria and other parts of Africa, would see global music sales surge to $100 billion in 20 years.

Interest in the Chinese market was evident as delegates flocked to Sunday evening’s final keynote by Alibaba Music Group Chairman Gao Xiaosong – making his first international address to the music industry. Gao Xiaosong described how the national authorities had tacitly supported the growth of the major Chinese digital platforms at the price of rampant piracy in the music industry but that since November 2015 legislation had come into force cracking down on pirates.

Day two of Midem saw another stellar lineup of keynotes beginning with Jon Platt making his first major industry address since taking the helm as Chairman and CEO of Warner/Chappell Music. Platt is credited with moving Warner/Chappell into second place among the US majors this year and has a reputation for challenging accepted wisdom.

He didn’t pull his punches when explaining his international plans for his company saying his next priority is to replicate the successful US model in other territories, starting in the UK.

In a conversation with hot US songwriter Justin Tranter, Platt recalled how on his arrival in the company, nobody at Warner/Chappell wanted to pick up a soon-to-expire publishing option from Tranter’s glam punk band Semi Precious Weapons, until he asked whether anyone in the band could write. “The danger in this industry is you know too much for your own good. There are too many reasons why things won’t work that people forget to target the one thing that might work.” Platt picked up the option and Tranter’s writing CV now includes mega-hits ‘Sorry’ and ‘Cake by the Ocean.’ Asked about the Warner/Chappell boss, an enthusiastic Tranter commented, “He put me to work. Sometimes double sessions of writing for three years. It’s as simple as that. He did his job.”

One question that the international music and music fan community has been asking is when Pandora is going to spread itself beyond the United States, Australia and New Zealand. Pandora Founder and CEO, Tim Westergren remained cautious while dangling the carrot of a future growth of the company’s footprint.

“It drives me crazy. It’s a licensing problem. We have identified our top 10 targets and you can probably guess where they are.” And on the subject of artist compensation, Westergren noted that “Half our revenues go to the music industry and we’ll have revenues of $600 million this year.”

And the June 4 keynote sessions were wrapped up by award-winning music supervisor Mary Ramos, long-time musical collaborator on Quentin Tarantino’s films and Midem first-timer. “It’s one thing to meet people on the internet, it’s another to meet them face-to-face. As a music supervisor I’m looking for interesting, new up-and-coming bands and I’m especially interested in international artists. Midem has been a great opportunity to meet new artists I haven’t been exposed to before.”

Midem Addresses Industry Change

On the thorny question of the amount artists receive from digital giants YouTube and Google, Daniel Glass said he believes the duo will pay more to talent, possibly as early as this summer. “They can’t be deaf to what’s going on. The revolution starts at the bottom with the indie labels and artists. People are upset about the inequality in compensation,” he commented.

Among the plethora of digital startup and tech companies that are now an established part of  Midem, France’s Playzer drew delegates to the Midem Pitch Corner as it promoted itself to investors and the wider music community. Playzer offers a multi-screen streaming service for on demand music videos with an ad-free, subscription business model.

Their pitch barely over and the Playzer team announced a deal with Warner Music France and ad agency TF1 Publicité providing Playzer with exclusive music videos from local artists for a period of a few days to coincide with record launches. The exclusivity clause is expected to drive up subscriptions to the platform (which charges subscribers €1.99 per week) and create buzz around new releases.

As debate continues on the role of record companies, UTA’s Neil Warnock told his keynote audience that many labels have been arrogant in their attitude towards fans and musicians and that booking agents have begun to take over the role of developing an artist’s career – a job traditionally handled by labels.

According to top entertainment attorney Joel Katz, who has represented the Michael Jackson estate, among the relationships that are evolving is that of the manager and the label. “The younger managers are very interesting people. They’re starting business with their (artist) clients and they have more control (than labels). Their talent is getting a larger slice of the income, the manager gets more of the income and the record company gets less.”

With almost 600 indie labels represented at Midem, many of them making their Cannes debut, the Label Summer Camp conferences were packed. Discussing marketing campaigns in the digital era, UMG Sweden’s Joakim Johansson urged his audience to use the digital platforms to engage with fans. He pointed out that the millennial generation is more interested in accessing music than in owning it. Asked which platform was the most effective to market artists, Claire Mas, Head of Digital at UK-based Communion Music replied, “You absolutely have to have Facebook.” Indeed, Mas suggested that instead of investing in online PR or blogs, labels should use their money to buy more effective advertising on platforms.

Addressing the increasing cross-border opportunities for artists related to the development of digital platforms, exclusive MIDiA Research data commissioned by Midem indicated that 47% of streaming music users say they have discovered international artists because of streaming, with curated playlists driving cross-border listening. And for smaller music markets, the digital platforms are providing access to global audiences.

Established and New Indies Meet at Midem

According to a report compiled for Midem by the Worldwide Independent Network (WIN) – representing the international indie label community – and by MIDiA Research and presented by Mark Mulligan of MIDiA Research and WIN CEO Alison Wenham, independent record labels contributed $5.6 billion to the global music industry in 2015.

The WINTEL report noted that the majority of the indies do not have an international distribution infrastructure and rely on international distributors or the majors. WINTEL added that indie labels have been quick to embrace digital music and streaming and provide a crucial platform for artists who do not fit the major label ‘mainstream model.’

Commenting in Cannes, Alison Wenham noted, “It is clear that the independent music community is playing an increasingly important role within the global music industry.”

Reflecting that role, some 172 indie labels came to Midem for the first time joining majors Sony, WMG and UMG and established Midem indie heavyweight attendees such as Britain’s Mute, Warp, Rough Trade, Domino Recordings, Beggars Group, Cooking Vinyl and Belgium’s Pias.

“We set ourselves a Midem challenge of hosting the top 50 independent labels in the top 10 music markets and we had 35 of them in Cannes,” noted Reed MIDEM’s Entertainment Division Director Jérôme Delhaye.

Veteran Seymour Stein, one of 28 industry execs to receive pioneer medals for attending more than 40 Midems, said that he is convinced that indies remain at the centre of the music business. “Every musical trend was ushered in by the indies,” said Stein. This view was reiterated in the WINTEL report which said “Independent labels play a vital role globally in discovering and nurturing new talent.”

French Minister and European Commission Confirm Support for Music Industry

Attending her first Midem since being appointed as France’s Minister of Culture and Communication, Audrey Azoulay stressed the government’s commitment to supporting the French music industry and encouraging dialogue between the industry and the major online platforms for a more equitable distribution of revenues.

Noting that music streaming services offered the promise of a return to growth, the minister said that the French government has a three-pronged policy designed to support the creation and distribution of diverse music, encourage a better sharing of online revenues and stimulate the development of French music distribution within Europe and beyond.

She reiterated the French government’s backing for European Commission efforts to reassess legislation covering the major online platforms and their obligations regarding artist remuneration. “Like any other actor which broadcasts or distributes works, these platforms must remunerate (content) creation and participate in cultural diversity,” the minister noted.

Present in force for the first time at Midem, the European Commission, headed by the EC’s Director General for Education and Culture Martine Reicherts, indicated that the future EU programme for culture after 2020 should include specific funding for the music sector.

Martine Reicherts stressed the huge potential of live music in Europe and the continent’s role in the development of digital platforms such as Spotify and Deezer. She said these ventures merit the support of the EU. The Commission used Midem to conclude several months of dialogue with the European music industry which are expected to result in a funding and support programme for the music industry somewhat similar to the EU’s former MEDIA programme for the audiovisual sector.

EC insiders commented that after a positive first experience at Midem they envisaged a return in force to Cannes in 2017.

More Countries & More Pavilions at Midem

With 85 countries represented (10 more than in 2015), Midem remains the music industry’s only global business event.

The Brand New Ghana pavilion and Independent Music Export South Africa (IMEXA) pavilion heralded a growth in African participation with South African delegates in Cannes from Africori, Gresham Records, Gallo, Samro, Universal Music and Music in Africa Foundation.  Other African countries represented at Midem included Burkina Faso, Nigeria, Kenya and the Seychelles.

Industry veterans Seymour Stein and Joel Katz both predicted that revenues from Africa will rise significantly in coming years spurred by the continent’s vast array of talent and the high level of mobile phone ownership and use.

Inside the Midem exhibition halls national pavilions abounded. Among them, the Japan Music Publishing Association, the China Audio-Video and Digital Publishing Association, the American Association of Independent Music, the sizeable British at Midem stand, the Korean Creative Content Agency (KOCCA) and pavilions from  France, Germany, Turkey, Malaysia, Canada and Brazil among others.

“The increase in the number of national pavilions and the number of countries represented in Cannes is testimony to the internationalisation of the music industry,” commented Reed MIDEM’s Jérôme Delhaye, “The international dimension of the music ecosystem was the central theme of Midem, as we discussed new strategies for cross-border business and examined global best practices in digital, marketing and monetisation.”

50th Midem Celebrated in style

Throughout the event, delegates celebrated 50 years of Midem. Proceedings began on June 3 with a packed beachside Opening Party and concert which saw Midem delegates mingling with Cannes locals.

Breakfast on June 4 saw 28 Midem pioneers receiving commemorative medals for attending over 40 editions of the event. Among them, Midem Founder Bernard Chevry, former Eurovision Song Contest winner Sandie Shaw, US industry icon and Sire Records Chairman Seymour Stein and Catalyst Music Publishing Managing Director Peter Knight who holds the unique distinction of having attended every Midem in Cannes, Miami and Hong Kong.

June 4 brought the inaugural International Midem Awards gala dinner to honour four industry icons; Glassnote President Daniel Glass, Timbaland, Believe Digital’s Denis Ladegaillerie and BMG CEO Hartwig Masuch. Delegates were treated to live performances by British singer-songwriter Flo Morrisey and Midem Artist Accelerator (MAA) Coup de Coeur Far From Alaska.

As part of what was often an emotional and festive dinner, and in recognition of Midem support for the music publishing industry over five decades, Reed MIDEM CEO, Paul Zilk received the ICMP Ralph Peer II Award for Outstanding Contribution to Global Music Publishing. The evening was rounded off with a spectacular fireworks display offered by the City of Cannes.

With over 100 international artists performing as part of the Midem By Night live programme, saturday featured star of the event Calypso Rose as she put on a memorable performance. All 12 finalists of the MAA appeared live with the MAA online community selecting Brazilians Far From Alaska, Al Bairre (South Africa) and Ghanian Koo Ntakra for additional sets at Midem’s Opening Party.

Across Cannes, delegates and the public were treated to a mix of K-Pop, jazz, classical and late-night DJ sets that included appearances by Belgium’s 2manydjs and France’s Etienne de Crécy.

Fans of Jazz were out in force on June 5 for France’s Generation Spedidam Night featuring the Laurent Coulondre Trio, the Agathe Jazz Quartet and the Aurore Voilqué Septet.

“True to its roots, this year’s event was clearly an international business gathering that combined a celebration of 50 years Midem. When you have industry leaders such as Seymour Stein, Jon Platt, Daniel Glass, Joel Katz, Stu Bergen, Neil Warnock, Tim Westergren, Tom Silverman, Mary Ramos or Gao Xiaosong taking the time to address packed conferences, you not only understand the vibrancy of the music industry but also the demand for a global event like Midem to bring people together to map out the future,” noted Reed MIDEM’s Jérôme Delhaye. “From the Legal and Copyright summits, the Innovation Forum discussions, to the startups participating in Midemlab and the important presence of France’s Culture Minister Audrey Azoulay and the European Commission delegation, Midem is a unique platform for an industry that has incredible growth potential,” Delhaye concluded.

The 51st edition of Midem will take place in early June 2017, in Cannes. Exact dates will be communicated shortly.

About Midem – Midem is an annual international b2b event dedicated to the new music ecosystem, with a tradeshow, conferences, competitions, networking events and live performances. It’s the place where music makers, cutting-edge technologies, brands & talents come together to enrich the passionate relationship between people & music, transform audience engagement and form new business connections.www.midem.com

About Reed MIDEM – Founded in 1963, Reed MIDEM is an organiser of professional, international markets that are essential business platforms for key players in the sectors concerned. These sectors are  MIPTV, MIPDOC, MIPCOM, MIPCANCUN and MIPJUNIOR for the television and digital content industries, MIDEM for music professionals, MIPIM, MIPIM Asia, MIPIM UK, and MIPIM Japan for the real estate industry and MAPIC, Retail Real Estate Market brought by MAPIC in Shanghai and MAPIC Italy for the retail real estate sector.

About Reed Exhibitions – Reed MIDEM is a division of Reed Exhibitions, the world’s leading event organiser, with over 500 events in 43 countries. In 2015 Reed brought together over seven million active professionals from around the world generating billions of dollars in business. Today Reed events are held throughout the Americas, Europe, the Middle East, Asia Pacific and Africa and organised by 41 fully-staffed offices. Reed Exhibitions serves 43 industry sectors with trade and consumer events. It is part of the RELX Group plc, a world-leading provider of information solutions and analytics for professional and business customers across industries. www.reedexpo.com