World streaming champions

Retrieved from TONO-News, no. 1 – 2013

No one has embraced streaming more than Norwegians, driving record growth in TONO's online revenue.

Since 2008, TONO's streaming revenues have doubled year on year, and from 2011 to 2012 the growth was a whopping 130 percent. The performance share of online music revenues ended up at NOK 50 million. If we add the mechanical share of streaming (handled by NCB), the online revenues in the TONO/NCB system last year totaled approximately NOK 70 million.

– Streaming revenues are large and increasing enormously. However, the impact is very different for the different creators. It is easier to get music released digitally and thus online revenues come from more creators than, for example, 15 years ago, when the eye of the needle for publishing was narrower, explains Inger Elise Mey, Director of Online Media at TONO. – Streaming revenues also come more frequently now and remain stable over a longer period of time, compared to, for example, CD sales or download purchases. We expect to soon be able to document that licensed streaming services will, over time, provide greater revenues to many of our members compared to well-known download services on the market today..

A technology in its infancy
TONO licensed its first web streaming service in Norway as early as 1996, but it was only around 2009 that the technology began to gain a foothold among the general public.

– Streaming technology is still in its infancy, but we are already seeing providers expanding their range of services. In May, WiMP launched a service for businesses, where each subscriber pays just over a thousand kroner per month. Providers are working hard to find new ways to increase profitability, new services will come and this will in turn mean that streaming revenues for TONO's rights holders will increase, explains Mey.

World streaming champions
Streaming is something close to a wet dream for the consumer, who gets access to almost the entire world's music library for a mere 100 kroner a month. Norwegians are world champions in streaming. Over a million people use Spotify, and more and more are subscribing to WiMP. In the first couple of years, the income for creators was about 1 øre per stream, but in June 2013 we can expect that a single stream has increased on average to almost 3 øre in income for TONO rights holders. It may not sound like much, but if you think a little long-term, this could represent very important income for TONO rights holders, as they will receive a settlement for every single time their music is listened to.

– TONO is to ensure the best possible conditions for the rights holders we work for, and we have actually managed to negotiate the best agreements in the world. No other management organization in the world brings in more money per stream to rights holders than TONO, states Mey.

– And how has TONO managed to become the world champion in streaming rates?

– We are very pleased with all the players who want to offer the TONO repertoire to the public through an agreement with us. We are also pleased with the good cooperation we have with the distributors, and that they understand that TONO has the world's finest product. We have spent a lot of time negotiating a right price for the music together with our customers, and are pleased that the players in the market are willing to pay what we believe the music is worth, says Mey.

Willingness to pay
One of the happy aspects of streaming's spread is that people are willing to pay for music.

– CD sales began to fall in 2002. Streaming came into its own in 2009. So it is not streaming that ruined CD sales, it was all the illegal services. What we are seeing now is that the legal services are far outpacing the illegal ones. A survey conducted by the Danish IFPI earlier this year shows that 81 percent of those who previously downloaded illegally have switched to paid streaming services. We believe the situation is quite similar in Norway. It is an exciting and encouraging development, says Mey.

Not the last step in development
In the past year, movie streaming has also begun to make a breakthrough. TONO has a large market area here and is constantly licensing new online movie services. Several other types of music playback technologies are also on the way.

– We want to facilitate new services, but do not compromise on our members' rights and the right to receive a fair remuneration for the use of their music. TONO will be the best in the world in licensing and at the same time give rights holders the best possible payment for their music. We will work to acquire all distribution technologies and services, and our "track record" shows that we have been successful so far. We will continue to do so, concludes Mey.
(The article is taken from TONO-Nytt no.2 – 2013)