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ISSUE 22
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NEWS UPDATES
Emerging Income Streams for Music from the perspective
of the International Federation of Phonographic Producers
(IFPI)
By. June Okal and Edward Sigei
As per statistics and trends observed
by the International Federation of the
Phonographic Industry (IFPI) above, the
music business continues to expand into
new markets and internet has created new
business models and respective share of
incomes streams keep changing.
Traditional revenue streams and modes of
distribution in the music industry have now
been disrupted with increased mobile and
internet penetration the world over. e
twin phenomenon of digitization and the
internet has presented new opportunities
for content creators to benet from: both
economically and to gain new audiences.
“e chart shows the extent of the
transformation of the global recording
industry over the past years.” (IFPI)
First, it has become a truly digital
industry, revenues from digital services
surpassing income from physical sales.
It is clear from the aached chart that
users no longer purchase physical
copies of the work; and if they do, the
numbers are much lower than they
were before.
Second, consumption is shiing from
ownership” to “access”. Subscription
streaming services have become the
driver for the 3.3 % revenue growth in
the industry.
Subscription - based music platforms
such as Spotify and Apple Music are now
common as they grant users ease of access,
exibility as well as control of what they
listen to.
Ownership is bestowed on the rights
owners and licenses granted to users
who subscribe to the platforms. Such
licenses grant users limited, non-exclusive,
revocable licences solely for personal and
non-commercial use.
Some of the Premium Services allow
users to store cached content or download
content on the platforms on a select number
of devices for varying periods. Access is
limited as passwords to the platforms (for
paid services) may not be shared which
increases the number of users on the
platforms.
ird, industry revenue sources
continue to diversify. For instance,
sound recording performance rights
have become an increasingly important
part of the modern recording industry
revenue mix, representing already
over 10 % of global recording industry
revenues.
Furthermore, Revenues from
synchronisation deals — which is the
uptake and use of music in advertising
media TV adverts, lms and brand
partnerships is a new revenue stream for
musicians.
Moreover, Revenues from advertising-
supported streaming services, such as
YouTube, Vevo and locally known music
downloading platform Mdundo are on the
rise.
e 3.3 % growth in 2015 has to be put in
context however; global industry revenue
has decreased by some 45 % since year
2000. is means that everyone in the
music value chain have suered over the
past years, we need to be careful to ensure
that nascent growth is allowed to continue.
For instance, providing adequate protection
to right holders world-wide by adopting the
WIPO 1996 treaties is essential to ensure
that right holders across territories can
participate in the growth of digital markets.
As indicated in many studies and reports,
Kenyas creative sector could catalyse the
countrys economic growth by increasing
its contribution to the Gross Domestic
Product (GDP). As it is, the diminishing
incomes from the sale of hard copy music is
keenly felt in Kenya.
Kenya Copyright Board has noted the lack
of preparedness by the whole copyright
sector to harness opportunities oered by
digitization and internet. is is coupled
with the apathy noted among users of
copyright works. is a recipe for tragedy
for the sector.
is is conrmed from a survey conducted
by the Kenya Copyright Board a few years
ago which showed that only a slim minority
know how to monetize their assets online.
And soon, the online market will be the
only growing market. Where does that
leave Kenyas music sector?
(e article is adapted with the kind
permission of IFPI)