SPA

IN

MUSIC MARKET ANALYSISJulio Rodriguez-LavinID: 09037075

Spain

Member state of the European Union.

Government: parliamentary democracy under a constitutional

monarchy.

Population: 46.7 millions.

GDP per capita: US$ 33,700.

The 9th largest economy in the world.

Capital: Madrid.

Religion: Roman Catholicism (76%).

Language: Castilian (Spanish), Catalan, Euskera and Gallego.

Current rate of unemployment: 20.5%

Music Business scenario

Spain is the 10th largest record market

in the world.

One of the worst-performing markets

in Western Europe over the last 5

years.

From 2005 to 2009:

European sales fell by 23%.

Spanish sales dropped 43%.

The market is 38% of its value in 2001.

World Ranking

2009

Physical sales 10

Digital sales 13

Performance rights

7

Total 10

*(IFPI, 2010)

Music Industry features

The “Big Four” control the 91% of the market. The rest of the pie (9%) is divided among the

independent labels.

31%

28%

18%

14%

9%

Market Share 2009

Sony MusicUniversal MusicWarner DROEMIRest

Top Independent labels

Market share

Blanco y negro 3,68%

Discmedi 1,42%

Divucsa 1,31%

Harmonia 1% *(FEDEA, 2010)

Main industry bodies

Promusicae is a trade group representing the Spanish recording industry. Its main goal is to defend the interests of Spanish music producers.

SGAE is the main collecting society for songwriters, composers and music publishers in Spain. It is similar to ASCAP.

The sound of Spain: platform created to support the Spanish music at the international markets. Special trade missions: New York (07-08), Beijin (08) and Mexico (09). It has attended the most important international meeting points, such as Popkomm (Berlin) or Midem (Cannes).

Music Industry Features

Main magazines Revista 40 Principales Rolling Stone

Radio 40 Principales Cadena Dial Cadena 100 M80 Radio 3

TV

40tv 40 latino MTV Sol musica

*(PRISA)

Genre

Spanish Pop/rock

Melodic song

International Pop/rock

Flamenco

Classical music

Blues/soul

Dance/House

Jazz

Hip hop

Music video

Recorded music sales trend 2009

*(IFPI, 2010)US million

Online piracy

A total of 8.6 million* users are engaged in illegal file-sharing.

32% of Internet users frequently downloading illegal music

from P2P sites. More than double of the European average

(15%)*.

Recently, a new report from IDC Research showed that 96% of

all recorded music acquired online in Spain is pirated (2010).

Main causes: 29.1 million Internet users

(72% of the population). Economic recession. Legal vacuum.

*(IIIPA 2010)

Physical piracy rate has dropped to 10% in 2009

IMPACT

In 2009 total value of the market set at $246 millions (-14,3%). “For every ten copies bought in Spain at the beginning of the

decade, today's fans will take home only three” (Economista, 2010).

Decline of investment

20002009

0%

20%

40%

60%

80%

Local actsInterna-tional

While 10 domestic new acts would be signed by a major in 2005, today only 3 or 4 are signed.

In 2009, no presence of new acts on the top 50.

*(IF

PI, 2

010)

Repertoire

Best selling albums 2009

Artist Title Company

1 Joaquín Sabina

Vinagre y Rosas Sony Music

2 Fito y los fitipaldis

Antes de que cuente diez

Warner Music

3 Alejandro Sanz

Paraiso Express Warner Music

4 David Bisbal Sin mirar atras Universal/Vale

5 El Barrio Duermevela Ed. Senador

6 Amaia Montero

Amaia Montero Sony Music

7 U2 No line on the Hotizon

Universal Music

8 Estopa X Anniversarium Sony Music

9 Raphael 50 años después Sony Music

10

El Canto del loco

Radio La Colifata presenta

Sony Music

*(IFPI, 2010)

Format GoldPlatinum

Album 30.000 60.000

Single 20.000 40.000

Music DVD 10.000 25.000

Master ringtones

10.000 20.000

Only the top 3 acts managed to sell more than 100.000 copies

Certification

Response to the current scenario Government developed “The Sinde Law” A provision aimed to regulate copyright and intellectual

property rights on the Internet. Websites offer illegal material to download will be

targeted, through a Commission (IPC) depending on the Culture Ministry.

Legal vacuum Previous cases judges argued P2Ps do not infringe the

law, because content is shared without a “commercial profit”.

The law allows to make private copies of copyrighted work without the author's consent for published works if the copy is not for commercial use.

The provision is in “limbo” until next year

Live music: good news

In 2009, live music reached a profit of US$ 367.4 million vs US$ 246 million from the recorded music sales.

In 2000 21.8 million viewers while in 2008 more than 33 million.

In 2000, 71,045 concerts took place in Spain, whilst in 2008 the numbers doubled to 144, 859 concerts.

During the same period, ticket’s price has raised 75%.Main Music Festivals Audience

FIB Heineken de Benicàssim

200.000

Sónar 148.000

Primavera Sound

*(IFPI, 2010)

The future

Physical sales will keep dropping during 2010 (A recent research shows -12% during the 1st semester).

Live music revenues will not grow due to the economic hardship.

Less investment = more difficult to develop new talent= no international acts.

Established acts are focusing on other territories (Latin America/North America). They are adapting these international patterns to succeed.

Legal solution on the way?

Thanks!!!!!!

ANY QUESTION?

Gracias!!!!!!

References Chacón, F. (2010) Los conciertos mueven en España 275 millones, El Mundo, 24 Feb. 2010 [Online] Available from

http://www.apmusicales.com/PDF/Clipping%20prensa%20X%20Aniversario%20APM.pdf [Accessed 13 Nov. 2010].

El Economista (2010) La venta de música en España cayó un 17% en 2009, El Economista, 21 Jan. 2010 [ Online] Available from http://www.eleconomista.es/noticias/noticias/1850416/01/10/Cae-un-17-la-venta-de-musica-en-Espana-que-esta-en-cabeza-en-pirateria.html [Accessed 10 Nov. 2010].

FEDEA(2010) Informe sobre la industria de la música 2010 [Online] Available from http://www.fedea.es/ [Accesed 18Nov. 2010]

IFPI (2010) Digital music report 2010 [Online] Available from http://www.ifpi.org/content/library/DMR2010_KEY_HIGHLIGHTS.pdf [Accessed 10 Nov. 2010].

IFPI (2010) Recording Industry in Numbers 2010, IFPI: London

IFPI (2009) Recording Industry in Numbers 2009, IFPI: London

IIPA (2010) Special 301 Report on Copyright protection and enforcement [Online] Available from http://www.iipa.com/countryreports.html [Accessed 8 April 2010].

Llewellyn, H. (2010) Spanish Online Piracy Rate Nears 96%, Billboard, 2 June 2010 [Online] Available from http://www.billboard.biz/bbbiz/content_display/industry/e3i4811cd742d860d933faa7d0f818f0a7a [Accesed 18Nov. 2010].

Ministerio de Economia y Hacienda (2010) Proyecto de Ley de Economia sostenible [Online] Available from http://www.economiasostenible.gob.es/wp-content/uploads/2010/03/01_proyecto_ley_economia_sostenible.pdf [Accessed 15 April 2010].

Pormusicae(2010), Sound from Spain, 8 Oct. 2010, [Online] Available from http://www.promusicae.org/espanol.html [Accessed 13 Nov. 2010].

Rodriguez, S. (2010) Cierre de 'webs' por la puerta de atrás, El Mundo, 19 March 2010 [Online] Available from http://www.elmundo.es/blogs/elmundo/catalejo/2010/03/19/cierre-de-webs-por-la-puerta-de-atras.html [Accessed 13 Nov. 2010].