Data on the state of the music industry – in Australia and elsewhere – is remarkably rubbery. Lack of consistency in how the industry is measured – here and elsewhere – makes analysis difficult. Continual changes in how the industry is measured compound the problem. In Australia, irregular mapping does not assist.
Doom, gloom and piracy have been the catch cry of many sectors in the music industry for a decade or more. Some of the available data suggest that the industry is in crisis. Some do not. Some suggest both and some suggest evolution. Nonetheless the picture is not an altogether rosy one, especially in respect to incomes.
An interesting snapshot of the music industry globally is contained in the RIAJ Yearbook for 2011, pages 23-24. Drawing on data from the International Federation of the Phonographic Industry, it tracks the global share of sales of recorded music in millions of U.S. dollars (page 23) from 2004 to 2009 inclusive. The bad news is that total sales plummeted from $33,613.6 in 2004 to 18,606.2 in 2009. However, while America’s share of this pie fell from 36.2% in 2004 to 24.5% in 2009, and Japan’s share rose from 15.4% to 22.8%. Australia’s rose from 2.1% to 2.5%.ABS).
If things are tough for Australian musicians generally, they are tougher for Indigenous musicians. Song Cycles is a joint research project of the Australia Council and the Australasian Performing Right Association (APRA). It finds that “[f]or many Indigenous music artists, basic rights issues that non-Indigenous people assume daily, present untold challenges. The fundamental issue of social disadvantage which the vast majority of Indigenous Australians face is, regrettably, ever present in the lives of Indigenous music artists.Despite the talent and audience interest, attitudes, physical distance, training and education are significant barriers that prevent Indigenous artists from reaching wider audiences.
The past decade has been particularly volatile for those in the music sector. New business models are emerging. Some have failed. Some are working. Piracy has been an issue across the globe.
Long term trends are not yet clear and research and data collection typically lag behind industry developments. So looking to the digital future, in 2011 the Music Council commissioned Dr Hugh Brown to research, develop, and deliver an annotated set of links and, where appropriate, an annotated bibliography, identifying best practice in digital marketing, promotion, and distribution of music in digital environments. The resultant report, Digital Marketing, Promotion and Distribution, provides links to related business services that are arguably best practice. 46 articles are presented in six sections: Social Media Strategy, Marketing, Promotion, Distribution, Other (covering topics such as fundraising, radio airplay and licensing) and Research.
While the media landscape is dynamic and evolving, radio remains strong. Its value to the listening public can be demonstrated by the fact that “total advertising expenditure on radio increased by seven per cent in 2010 to exceed $1 billion for the first time”. Airplay drives music sales.
While there are no quotas for feature films – such as apply in countries like South Korea and France – they are captured within the drama subquota for television when they are broadcast.
As noted above, the definitions of “Australian” vary depending on whether the prime consideration is the requirements of funding agencies, or the Australian content quota for television. However, nowhere is Australian music a precondition as is the case, for example, with producer/director/writer/cast.
The 2011 Office for the Arts publication Creative Industries, a Strategy for 21st Century Australia notes (p. 17):
In 2003, the Australian Film Commission identified ‘six broad policy levers available to government to achieve current and future cultural policy objectives’, namely:
For elucidation of these options, see Appendix B.
As has been mentioned above, consideration of how Australia will regulate online services is a key part of the current Convergence Review, which is expected to deliver its final report to Government at the end of March.
Thus far, the Music Council has argued to Government that regulation of online broadcasting-like services should be deferred but that the developments in this arena be closely monitored during a period of rapid change until clear trends and evolving businesses models become evident. A rush to regulate may well have unanticipated consequences.
The experience of an early move to regulate radio services is salutary.
In 1923, Australia introduced the so-called ‘sealed set’ regulations for radio. Spectacularly unsuccessful, the regulations had failed to predict audience preferences and audience behaviour. Less than 1,400 licences were taken out as consumers circumvented the regulations. The regulations survived less than a year. The introduction of a two tiered licence system (with A and B stations) in 1924 was hardly more successful and led to a Royal Commission in 1927.
Around the world, regulators have approached online broadcasting-like services differently.
In 2008, Screen Australia canvassed the initiatives in other jurisdictions. Extracts can be found at Appendix C.
Excerpt from Building Support , 2011, pp 35-36
Crowd funding has developed alongside the emergence of digital technology in Australia. It involves the collective pooling of funds, usually via a website, for a particular project or initiative. Originally used for the creative industries and design sectors in the US, there are now a raft of successful international crowd funding sites for a gamut of projects ranging from music to film, to the development of biofuel cars. In Australia, crowd funding is recognised as a successful vehicle for arts fundraising, with platforms continuing to emerge in many countries around the world.
The crowd funding model provides an accessible platform for individual artists to seek and garner community support for specific projects and initiatives, outside the more traditional funding methods. This is supported by research and consultations undertaken by the Review which indicate there is a real desire by donors to support individual artists and specific projects, and that donors are also more likely to favour local and community arts.
New digital media and the National Broadband Network will further enhance opportunities for artists, particularly in regional Australia, as crowd funding becomes accessible to a greater audience. This is particularly relevant to Generation Y—those now aged between their late–teens and early–thirties with their “enthusiastic embrace of the IT revolution”, according to Hugh Mackay
The Review was convinced of the potential for crowd funding to capture new donors who are otherwise not inclined to give to the arts in more traditional ways. Coupled with a matched funding component as an initial stimulus, it is likely that this is a model which could successfully fund, through private sector support, a range of innovative and exciting projects.
Recommendation 8: The Australian Government develops a crowd funding initiative with a matched funding from government component.
How could this look?
This program could involve the government providing a matched funding incentive over two years, where crowd funding initiatives raise 80 per cent of the funds needed for a project and the government contributes the remaining 20 per cent. The program aim is to encourage the small scale, artist–led projects, and therefore government contributions per project should be capped to reflect this.
Organisations such as Rio Tinto have recently recognised the capacity of new funding models, such as micro loans, to kick–start initiatives in Indigenous communities. In 2011–12 the Australian Government is piloting a micro–finance project, supporting small creative enterprises within the Australian music industry. The pilot will provide participants with new business development knowledge and skills, expert creative industry mentoring support and access to seed investment to grow their business. Government funding of up to $10,000 will be provided towards the business development plan on the basis of interest–free matched loans being provided by the private sector. This is an excellent example of how innovative models, using government funding, can encourage the growth of a private giving base for artists and arts organisations. Based on the success of the pilot, micro–financing could be applied more broadly across the arts sector.
Recommendation 9: The Australian Government provides funding to support a micro–loans scheme for the arts sector.
See Regulatory Options Table (right) in two sections covering funding schemes and content obligations, and content access regimes and promotion and provisioning, respectively.
Screen Australia, 2008, Flexible Vision v.2.0:A compendium of new and emerging audiovisual content delivery platforms and government intervention, 2nd edition.
Canada: The Canadian Radio-television and Telecommunications Commission (CRTC) was one of the first regulators in the world to clarify the position of broadband on the Internet. It announced its decision not to regulate the Internet in May 1999.
The CRTC applies the New Media Exemption Order to Internet and mobile telephony services offering content. This Order means that these services are not subject to licensing or other regulatory measures under the Broadcasting Act (Canada).
The CRTC considered the circumstances that led to the need for regulation of Canadian content in traditional broadcasting, as they do not currently exist in the Internet environment. It believed that market forces were providing a Canadian presence on the Internet that was also supported by a strong demand for Canadian new media content. If Canadian content on the Internet diminishes, is under threat, or disappears altogether, the CRTC maintains the power to intervene and regulate to support the production/creation of Canadian Internet content.
Under the Telecommunications Act, the CRTC has refrained from applying tariff filing and approval obligations to Internet Service Providers (ISPs) and mobile operators, while retaining other powers including the ability to prohibit “undue preference”. The CRTC has also exempted ISPs from the “common carrier” obligations of the Act with respect to content of a carrier's own Internet service. The CRTC is currently undertaking a comprehensive policy review of potential regulation of new audiovisual technologies called the New Media Project Initiative. This initiative seeks to investigate the social, economic, cultural and technological issues associated with New Media, and what actions, if any, the CRTC should take to ensure that New Media Broadcasting meets the objectives of the Broadcasting and Telecommunications Acts into the future.
The purpose of this Initiative is to provide a solid basis for policy development in the new environment. It will build on the foundation of a 2006 report entitled The Future Environment Facing the Canadian Broadcasting System.
European Union: The European Union has decided to impose baseline regulation of audiovisual content covering different broadcasting and media types. In December 2007, the European Parliament agreed to a new Audiovisual Media Services Directive (AVMSD) to replace the Television Without Frontiers Directive (TVWF) first introduced in 1989 and updated in 1997. The new directive is modernised to take into account digital TV and broadband. The AVMSD introduces the concept of “audiovisual media services” with a distinction between “linear services” or traditional broadcasting, and “nonlinear” or on-demand services. “Nonlinear” audiovisual services will be subject to minimal blanket regulation. A channel will remain regulated in the country from which it operates.
The European Union chose a graduated regulatory approach:
The amending directive was adopted on 11 December and entered into force on 19 December 2007. Member States have two years to transpose the new provisions into national law, so that the modernised legal framework for audiovisual media services will be fully applicable by the end of 2009.
France: Until 2004, the French regulatory framework did not take into account new media. In 2004, a new law “pour la confiance dans l’économie numérique” (21 June 2004) made a new distinction between:
New Zealand: The Broadcasting Standard Authority (NZBSA) does not have jurisdiction to deal with the content of programs broadcast over the Internet through website downloads and audiovisual content published on overseas-based websites. However, in a recent report on the future of media regulation, the NZBSA reviewed the need to change media regulation. The report identifies gaps and inconsistencies in the current regulatory regime revealed by new formats.
The report suggests filtering and labelling, voluntary standards and self-regulation as the key to regulating Internet content in the future.
United Kingdom: The Communications Act 2003 (UK), which gives statutory powers to the Office of Communications (Ofcom), was deliberately kept technologically neutral in order to reflect the convergence of media to deliver services. Television and radio broadcast over cable, satellite and terrestrial platforms, or private IP (Internet protocol) networks running for example over ADSL, are regulated by Ofcom. However, Internet content is largely unregulated under the Communications Act 2003 (UK) with video streaming and audio streaming unregulated. Television in section 233 of the Communications Act 2003 (UK) is defined as “not … a two-way service”. Video streaming over the Internet would normally be seen as a part of a two-way service. Internet content was explicitly excluded from Ofcom’s regulatory remit except in the context of media literacy.
However, during a debate organised by the Internet Service Providers’ Association (ISPA), Lord Currie – chairman of the Ofcom – did not rule out the possibility of regulation. Laws relating to obscene publications, defamation and copyright continue to apply.
United States: There is no specific regulation of broadband. The government has sought to bring in two laws to censor offensive online content but both have been struck down on the grounds of the First Amendment. One was the Communications Decency Act and the other was the Child Online Protection Act. Both attempts have been struck down on the basis of the First Amendment.
Lynn Gailey. 20 March 2012.