See RIAA Chairman & CEO Mitch Glazier’s Medium commentary on the report here.

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View the full report here.

The study found that social media users follow music and musical artists more frequently than other types of celebrities and content, and 9 out of 10 participate in some kind of music related activity on social media apps. Even a quick look at musicfuels.com bears out the results of this study, as musicians hold most of the top spots for followers, likes, and views on the most popular social media platforms.

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Inspired by reports that look at the impact of music on the economies of specific cities like Nashville and New York, we engaged the help of Stephen Siwek from Economists Incorporated, an expert on determining the economic impact of intellectual property. With data from government and other outside sources, he analyzed the broad range of businesses that comprise the modern music industry.  Everything from musicians to record labels, radio stations to digital music platforms, music teachers to instrument makers, and many more.  None of those businesses or their employees work in a vacuum, so the report also looks at the downstream effects of the music industry – the economic impact beyond the direct sales, salaries and products sold.

As steadfast believers in the power of music, even we were impressed by the breadth and impact of the music economy shown by this study.  The results are presented here, both in summarized form as well as the essential details of the analysis. This report is not the endpoint – the industry has evolved rapidly in the digital era, and is sure to continue to change.

Joshua Friedlander

SVP Strategic Data Analysis, RIAA

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We are excited to officially launch a new microsite, musicfuels.com.  We all know that music dominates social media, right?  But when you start to break it down and look at the most followed accounts on Twitter, Facebook and Instagram on a daily basis – with their tens of millions of followers – the dominance of music and musicians is truly startling.

Our new site is updated daily.  The technological tool behind musicfuels.com checks the top accounts of those three social media platforms and updates the follower numbers.  It’s designed to be a living, breathing dynamic resource for everyone who cares about music.  And each day, you’ll find that the overwhelming majority of most followed accounts are those of artists.

It’s probably obvious why we chose the term #musicfuels.  Music – and the record labels that help musicians find and grow their audience — is the fuel for so much of online conversation and pop culture.  We’ve often said how musicians drive social media (see here, here, and here for examples). That fact is especially true during music awards shows. For example, this year’s Grammys in February saw more than 13 million tweets about the broadcast during monitoring hours, according to Nielsen. And August’s MTV VMA Awards logged more than 21 million tweets. In fact, according to Nielsen Social, the VMAs was the most tweeted-about non-sporting event in the nearly four years it’s been keeping track of social media.

Music also plays a defining role in our culture. Just look at some of the most popular or buzzed about TV shows – HBO’s upcoming ‘Vinyl’ set to premiere in January 2016, FOX’s always hot ‘Empire,’ ABC’s ‘Nashville’ continues to impress in the ratings, and NBC’s ‘The Voice’ are just a few music-focused shows that viewers tune into time and time again, creating plenty of fodder for the social media ‘water cooler.’

There are many reasons WHY musicians are often the most popular figures on social media. It’s partly because music speaks to us in a personal, evocative and human way, more so than any other art form.  It is that connection to the music – and the performer giving it life – that draws fans in.  The research firm MusicWatch recently confirmed this, finding that connecting through music and artists had the highest importance to users’ social media experience.  Clearly, artists are tastemakers and cultural drivers.

#Musicfuels many things in our society.  Our new site is one way to demonstrate that.  We hope you like it as much as we do.  Check it out, tell your friends, and of course, keep on following your favorite artists!

Cary Sherman
Chairman & CEO, RIAA

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“Valuing Music In A Digital World” explains some of the factors that contribute to the undervaluing of music like a broken DMCA and holes in the licensing laws such as the lack of a performance right for terrestrial radio.

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“It’s such a universal language…I don’t know anybody who doesn’t like music.”

In the video, Sherman speaks about the importance of copyright to livelihoods of music creators.

“When people create music, it’s a job. And they need to be able to get paid for it, they need to be able to support their family, they need to be able to send their kids to school. It’s a form of property that needs to be protected – that’s what copyright is.”

In between playing a medley of songs on the piano, Sherman also offers his take on ‘mood music’ and the unique ability of a song to capture or inspire a feeling.

“It’s about having something that is this force that you can use any time you want to lift you up or inspire you or change your mood, or affect social change. Music drives our culture.”

We hope that during this ‘musical’ World IP Day, you will join us and countless others across the globe to reflect on what music means to you and the special moments in your life where music played a unique role.

Happy World IP Day, this Sunday, April 26!

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According to the report, core copyright industries (including music, movies, publishing, and many others) contributed more than $1.1 trillion to US GDP, and provided employment for about 5.5 million people (or 4% of the entire US workforce).

Big numbers followed by lots of zeros are always fun to look at, but the report really goes much further than most other sources of data to present details of the copyright economy. Public data sources tend to be very good at looking at traditional economic metrics, but specific data on a group of industries as diverse and rapidly evolving as those that specialize in copyrighted materials is hard to come by, and does not always lend itself to easy collection. This report makes extensive use of government data sources, but augments that information with further analysis to provide more detail than is generally available.

For example, one of the challenges is quantifying the impact of digital sales on the US trade balance. At midyear 2014, the music industry derived over 70% of its US sales from digitally distributed products, including a rapidly growing share from streaming services. Determining the contribution of those services towards US exports is especially challenging (think about trying to determine the foreign trade contribution when a music fan in France listens to a song by an American artist on a US music label, on a digital music service operating out of Sweden).

As Siwek describes in the report (page 15), he uses enhanced methodology to determine the foreign sales of specific copyright industries. We already know that American music is hugely popular overseas, so it’s no surprise that in in aggregate, four core copyright industries (including music) had foreign sales of more than $150 billion in 2013. That’s more foreign sales than any other industrial sector, including Chemicals, Aerospace, Food, or Pharmaceuticals. And US music alone had more than $6 billion in foreign sales (page 20).

Our takeaway – sound evidence that those who create original material are doing their share for the economy. Not just contributing to GDP, employment, and exports, but providing the basis for a whole range of economic activity ranging from newspapers to cutting edge technology.

Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA

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The House Judiciary this morning convenes a second subcommittee hearing on music licensing.  Cary Sherman, CEO of the Recording Industry Association of America (RIAA), will testify.  In his opening testimony, Sherman calls for a series of reforms, including:

• Grant a broadcast performance right for sound recordings
• Make sure artists who recorded before 1972 are paid
• Allow rights to be bundled and administered together
• Create an across-the-board market-based rate standard
• Consider a one-stop shop for musical work licenses

He also touts a new report from the RIAA, submitted to the committee on Tuesday:  “Labels At Work:  The Music Business In The Digital Age.”   In his testimony, he cited some of the new facts and figures unveiled in the report:

In the process of embracing digital distribution, record labels have revolutionized the business, streamlining their operations and allocating a higher proportion of their revenues to investing in artist career development. Record labels provide the investment on which everyone in the music value chain depends, “seeding” the entire music ecosystem with $20 billion in U.S. talent investment – including artists, songwriters and music publishers – in just the last decade (and that’s just from the major labels). The majors also invested an additional $6 billion over the same period to market recordings in the U.S.

And even in tough times, our investments in creators have been significant. As a percentage of U.S. net sales revenue, over the last decade major label payments for artist advances and royalties have increased by 36% and mechanical royalties for songwriters and music publishers have increased by 44%.

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“Modernizing the licensing system for musical works is a win for everyone…must be a collaborative exercise,” says RIAA CEO

WASHINGTON – Simplifying the licensing system for musical works is key to further expanding the digital music marketplace, providing fans with more music options and creating healthier revenue streams for music creators, according to the Recording Industry Association of America’s (RIAA) official comments filed as part of the U.S. Copyright Office’s examination of music licensing. But simplification will only occur, RIAA notes, if all stakeholders in the music community engage with an open mind.

The RIAA’s comments examine the complex world of licensing the underlying musical work in a sound recording, a system that industry leaders throughout the music business would like to see modernized.  Today, a new release by a record company can require a vast number of licenses to meet consumer demand.  For example, RIAA notes in its comments that one record company responsible for a current, successful release had to obtain 1481 mechanical licenses for the project.  Digital music services face challenges launching with millions of songs.  RIAA argues that a new system should simplify licensing by aggregating rights under a blanket license, much like ASCAP and BMI offer; ensure that owners of musical works receive fair market value for their works; and cover all the rights needed to bring modern music releases to market.

In its filing, RIAA emphasizes its desire to work with its partners across the music community in exploring new ideas to tackle the challenge:

…While the systems for licensing sound recordings are working reasonably well in many respects, everyone agrees that the systems for licensing musical works are not…We believe that fixing this system will require all stakeholders to work together to take bold steps, rather than just a little tinkering… The key is to update the systems that address the inherent challenges of musical work licensing in a way that all can agree will fairly and appropriately serve creators, rightsholders and the marketplace. 

The groundbreaking proposal that RIAA hopes to work through with its industry partners would encourage blanket licenses that include all the necessary rights instead of multiple licenses from multiple entities with overlapping rights; and it includes a suggestion that publishers and songwriters be compensated with rates negotiated and agreed to by industry partners rather than those set by courts:

It is understandable that reform will be neither possible nor desirable unless songwriters and music publishers believe that it provides for rates that are more market-based than rates determined by the Copyright Royalty Judges or rate court. …One possibility would be…a rate that is an agreed, consistent, set percentage of label revenues from modern music products…Only if a precise percentage were negotiated and agreed by stakeholders might it then be suggested as legislation, so that no party would be agreeing to reform without understanding its economic consequences. This would be a market-based royalty, because labels’ deals are negotiated in the marketplace, and publishers and songwriters would receive the percentage of that deal that they had previously negotiated with record companies. 

Some of the potential advantages to such a licensing structure, according to the RIAA, include:  market rates for publishers and songwriters; more consumer choice as simpler licensing procedures attract funding and development of innovative services; more revenue for services and higher royalties for creators resulting from savings from simplified licensing and payment procedures; improved accuracy of payments, transparency, and audit rights for publishers and songwriters; and viability for ASCAP and BMI, which would, among other things, continue to license radio, TV and venues as they always have.

“Modernizing the licensing system for musical works is a win for everyone — from digital music services to songwriters, music publishers, artists, labels, and fans,” said Cary Sherman, CEO, Recording Industry Association of America.  “That’s the only way this will work – it must be a collaborative exercise.  We don’t pretend to have all the answers.  But we know the status quo is not working like it should.  It’s time to have this conversation.  It’s time to think outside the box and begin to build a modern music marketplace – based on market-based concepts — that work for all music creators.  We appreciate the efforts of Congress and the Copyright Office in undertaking its examination of the complex licensing system.”

RIAA also proposed incorporating pre-1972 recordings into the federal statutory license system and echoed the Copyright Office’s call to establish a terrestrial performance right so that artists and labels can be paid when their music is played over AM/FM radio.

For a copy of RIAA’s filing please contact Cara Duckworth Weiblinger at cduckworth@riaa.com.

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