CMU Digest 01.05.22: Spotify, NetEase Cloud Music, Article Seventeen, Digital Services Act, PRS

Business News CMU Digest

By Chris Cooke | Posted on Sunday, May 1, 2022

Key stories from the past week in the music business…

Spotify’s share price hit an all-time low despite subscriber numbers continuing to rise. The streaming company has confirmed it added 2 million more premium subscribers in the first quarter of 2022, despite the Joe Rogan controversy and having to shut down operations in Russia. However, this fell short of investor expectations, and – with Spotify making more cautious forecasts of growth levels over the next three months and general concerns about the digital entertainment sector in the investment community – a course of the stock which has been falling for much of the last year plunged even further. It recovered slightly in the following days but still ended the week below the previous all-time low of 2019. [READ MORE]

Chinese digital music service NetEase Cloud Music has accused its main rival Tencent Music Entertainment of infringing on its intellectual property rights. NetEase said Tencent’s various streaming services make music it controls available without obtaining the correct licenses, and/or commission “impostor tracks” that sound and have names similar or identical to its releases. exclusive. He also said that Tencent Services ripped off the NetEase Cloud Music app in terms of functionality and appearance. Tencent has long pursued such anti-competitive tactics, he added, but such violations have escalated in the past two years. [READ MORE]

The Court of Justice of the European Union has ruled that the safe harbor reforms contained in the 2019 EU Copyright Directive do not infringe EU freedom of expression rights. The court was responding to a lawsuit brought by the Polish government which found that Article Seventeen of the Directive – which set out various copyright safe harbor reforms that the music industry was campaigning for for a long time – infringed the freedom of expression and information guaranteed in Article Eleven of the Charter of Fundamental Rights of the European Union. But EU judges – following an opinion issued by the Court’s Advocate General last year – said the directive already addresses free speech issues raised by the increased obligations safe harbor users download platforms. [READ MORE]

The final text of the European Union’s Digital Services Act has been approved. It aims to clarify and increase the responsibilities of digital platforms across Europe when it comes to dealing with so-called harmful content and other online safety issues. It does not directly address copyright issues, although the music industry hoped it might increase the responsibilities of internet companies to ensure their business customers are transparent about their identity and operations, making it easier to identification of companies behind copyright infringing websites. Similar transparency rules would also help the live industry to identify ticket resellers. However, it seems likely that the new rules put in place by the DSA will be more useful in combating ticket sales than copyright infringement. The final version of the text must now be voted on by the Parliament and the Council of the EU. [READ MORE]

UK collecting society PRS said its revenue last year was up 22.4% from 2020, but still down from 2019. One of the main sources of income for songwriter and publisher members of PRS is the live, public performance of music, both of which have been heavily impacted by the COVID pandemic. The PRS’s latest annual report confirmed that things had started to pick up in this area in 2021 compared to 2020, but COVID restrictions still had an impact for much of the year. So while 2021 performance revenue was up 59.6% year-on-year to £137.6m, it was still down from 2019 levels. Digital revenue continued to rise at a fairly strong pace, up 45.6% year-on-year to £267.8m, but that was not enough to offset the continued COVID effect on other revenue streams. [READ MORE]

LEARN MORE ABOUT: The EU Digital Services Act | EU Copyright Directive | European Union | NetEase | PRS for music | Spotify | Tencent

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