Norwegian musicians and creators have faced tougher conditions in recent years, despite the music industry as a whole increasing its revenue. This is evident from a report on the impact of digitalization on the Norwegian music industry conducted by BI and Menon Economics on behalf of the Ministry of Culture.
/ 05/02/2019 / Willy MartinsenPhoto above: From the launch of the report on January 31 (photo: BI Norwegian School of Business)
The report "What Now - The Impact of Digitalization on the Norwegian Music Industry" was presented to Minister of Culture Trine Skei Grande at a press conference on Thursday, January 31. TONO has been among the main contributors to the report, which has been prepared by the Centre for Creative Industries at BI Norwegian School of Business in collaboration with Menon Economics.
“With this report, we wanted to see what consequences digitalization has had on sales in the music market, on market constellations, on authors and performers, and on diversity,” says Irina Eidsvold-Tøien, associate professor at BI Norwegian School of Business and former legal director at TONO. She was the project manager for the work.
One of the main findings of the report is that Norwegian musicians and rights holders have been financially strained in recent years, despite the fact that the total Norwegian music market grew from NOK 5 billion in 2011 to NOK 7,6 billion in 2017. The share of authors, performers and record companies in total revenue has decreased from 39 percent in 2011 to 33 percent in 2017. It is the authors and performers who are pulling this down the most – from 29 percent to 24 percent. During the same period, streaming services have increased their share of total revenue in the music industry from 5 to 14 percentage points.
The streaming economy has created a “winner takes all” market. The report shows that among TONO members who have had income from streaming services, the top 10 percent of earners account for almost 80 percent of all income. By comparison, this segment, along with the top 10 percent, accounted for about 60 percent of income in 2010.
– The streaming economy is growing overall, but the results are very different when it comes to individual creators and performers. A few are successful and have significant incomes. The vast majority, on the other hand, experience the streaming economy as financially frustrating. If we also compare it with what the report shows about the decline in physical sales, it is obvious that income from recorded music has decreased in recent years, and contributes greatly to the fact that it is difficult for the vast majority of creators and performers to make a living from creating and performing music, says Inger Elise Mey, Director of Online Media at TONO, who was interviewed about the online economy seen through TONO's eyes in the work on the report.
Digitalization has also led to increased gender gaps. There have been more women in the middle income category of 300,000–600,000 kroner, but far fewer in the income group over 600,000. Income gaps are also large in TONO. The proportion of women is 10 percent in the one percent with the highest incomes.
The situation for the live area is also not encouraging. Although concert and festival activities in 2017 accounted for 40 percent of performers' and creators' music-related income, the share has decreased by 6 percent in the ten-year period from 2007 to 2017 at the expense of other income areas such as educational activities, public support and events. At the same time, Rambøll's "Art in Figures 2017" report showed an overall increase in revenue within the live area of 10 percent from 2012.
The report proposes a number of measures that will strengthen the position of Norwegian authors and performers. Among the proposals are increasing the Norwegian share in radio with licensing requirements, a more watertight system for coding and registering performed music, and supporting ongoing legislative work on the right to payment from social media (Read more about the proposed measures in the report from page 149).
The report also recommends further research into the conditions and position of collective management organizations (for example, TONO and Gramo) in the digitalized and globalized music economy.
– The report emphasizes that it is important that the management organizations are secured in the competition with international players. The management organizations must maintain their negotiating power so that they can negotiate reasonable remuneration for authors and performers. This is crucial for a healthy ecosystem in the music field that is sustainable and ensures growth and diversity. As the situation is now, the income of creators and performers has decreased over the past ten years. What other professional group would have tolerated a decrease in income after 10 more years in the job? We cannot have it like that, concludes Eidsvold-Tøien.
Related issues:
https://www.bi.no/om-bi/nyheter/2019/01/new-page/
https://www.aftenposten.no/kultur/i/G1W016/Vil-tvinge-radiokanalene-til-a-spille-mer-norsk-musikk
Download and read the report here: