Recorded music
The notion of "recorded music" refers to different sectors of the music industry: phonographic production and distribution, the sale of records or music online, as well as, to some extent, music publishing. Within the Ministry of Culture, the Directorate General of Media and Cultural Industries (DGMIC) is responsible for designing and evaluating the support and regulatory mechanisms necessary for the balanced development of this economic sector.
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The music recorded in France
Economic model and structuring of the sector
The economic model of recorded music is based on two modes of remuneration:
- Direct remuneration, corresponding to the exclusive right to authorize, based on the rental, sale or provision of phonograms (physical or digital) for their live listening (via streaming or broadcasting in public places for example).
- Indirect remuneration, corresponding to legal licensing schemes (fair remuneration, remuneration for private copying) and other related rights.
The sector is composed of major players, subsidiaries of multinationals (3 majors), and a dense and varied network of SMEs and independent VSEs. Together with music publishers, show producers, managers, broadcasters and distributors, they form an ecosystem around creators (authors, composers) and performers.
Changes due to the record crisis and the digital transition, market figures and consequences of the covid-19 pandemic
In the early 2000s, the recorded music sector experienced a major crisis leading to the destruction of nearly 60% of its added value over the period 2002-2015. This crisis, partly due to the development of illicit uses and reinforced by an initial difficulty of the actors of the sector to adapt to the digital, had, beyond its social repercussions, a significant impact in cultural terms, in particular for musical diversity, the renewal of talent and the maintenance of a plurality of actors (concentration, disappearance of SMEs and VSEs). In addition, this situation has increased the difficulties of access to the market, whether in terms of media (radio and television broadcasts) or distribution conditions (physical and digital).
To cope with the crisis, many players have developed a “360° strategy”, that is to say a diversification of their resources by seeking out themselves, without resorting to subcontracting or licensing, income from the different holdings of the recordings. In this case, the development chain is concentrated in one and the same operator, either by the integration of dedicated personnel, by the acquisition of companies, or, finally, by the internal development of ad hoc structures, to take over the new activities distinct from the operator’s initial core business.
Since 2016, the sector has recorded fragile growth, partly based on the rise of digital sales, particularly through streaming (streaming). Recorded music revenue, which had fallen by 60% in 15 years, is now growing at a moderate pace (+3.9% in 2017, +1.8% in 2018, +5.4% in 2019).
This trend is confirmed in 2020, with revenue stagnating (+0.1%) despite the health crisis, then benefiting from a strong rebound since 2021 with an increase of 5.1% in 2023 (€968 million).
Streaming confirms its leading role in market growth, with revenues representing nearly 70% of all sales. Paid streaming supports this growth: paid subscriptions represent 77% of streaming revenue, while ad-supported streaming represents only 12% of revenue in 2023. Although revenues generated by physical media are steadily declining, they still represent nearly 1/4 of sales. Vinyl is growing particularly (+5.5%) and continues to appeal to a growing segment of consumers. It now represents nearly 35% of the physical market, with a sales volume tripled in five years.
The restrictive measures taken to fight the Covid-19 epidemic have led to the closure of some of the 4,000 record outlets, to the cancellation of concerts and festivals, thus limiting the promotion and sale of music. However, the main negative effects of the crisis have been on revenues from the collection of neighbouring rights (impact of the closure of stores and public sound venues, combined with the decline in advertising revenues of traditional media), and synchronization rights (collected when a musical work is broadcast to the public by being incorporated into other protected content, including audiovisual content. In practice, this is mainly music for the image: films, series, commercials, etc.). The structural rise in streaming has helped to offset the cyclical decline in other market segments more impacted by the health crisis. However, it has benefited the sector quite unevenly, some of which remain extremely dependent on physical sales.
Support and regulation of the sector
The ministry’s support policy for the music sector falls under the responsibility of the Direction générale de la création artistique (DGCA), as regards live music, and the Direction générale des médias et des industries culturelles (DGMIC) for recorded music, that is to say the various sectors of the phonographic industry: phonographic production and distribution, the sale of records or music online, as well as music publishing. Thus, the two Directorates-General are working together to ensure a coherent follow-up of this hybrid sector, which concerns both artistic creation and cultural industries.
As regards the music industry, the Directorate-General for Media and Cultural Industries (DGMIC) is responsible for designing and evaluating the support and regulatory mechanisms necessary for the balanced development of this economic sector.
Regulating the digital transition
Remuneration of creators and sharing of value
In 2013, the Minister entrusted to Mr. Christian PHELINE, Master Advisor at the Court of Auditors, an objective mission on the sharing of value in online music. This mission made it possible to analyze the distribution of the value generated by the online exploitation of music, both between artists and phonographic producers and between them and online music platforms, and recommended, among other things, a better framework for contractual practices.
With a view to improving relations between producers and online music platforms, the report also recommended that, in the absence of self-regulation, the principles set out in the charter of "13 commitments for online music" be included in the act. (developed under the supervision of Mr. Emmanuel HOOG). Finally, it recommended the establishment of a specialized mediation procedure to resolve conflicts between platforms and producers or between artists and producers (which finally emerged through the creation of a Music mediator).
As an extension of this report, a mediation mission led by Mr. Marc SCHWARTZ led to the signing of a memorandum of understanding «For an equitable development of online music» in October 2015 by teneight organizations representing the music industry. Through this agreement, the actors of the music sector, performers and their representatives, producers of phonograms and platforms have committed each other, alongside the public authorities, for a balanced development ensuring a fair distribution of the fruits of the new modes of music distribution.
The producers, in particular, agreed on the need for a minimum remuneration guarantee for performers in return for the digital exploitation of their recordings. They also agreed on a framework for the rules for calculating the remuneration base for artists. The law of 7 July 2016 on freedom of creation, architecture and heritage (LCAP) has thus introduced the principle of this minimum remuneration guarantee for streaming broadcasts («streaming») phonograms, which could be materialized for the scope of the national collective agreement of phonographic publishing in an agreement concluded on May 12, 2022 between representative organizations and collective management organizations of performers, and representative organisations and collective management bodies of phonogram producers.
The 2015 memorandum of understanding also made it possible to strengthen the transparency of the sector’s economy and to improve the exposure of music and cultural diversity on online music platforms, while reaffirming the government’s commitment to supporting the development of the legal online offer.
Exhibition of music in the media
The exhibition of music in the media is a subject of permanent demands for the music industry given the essential role played by radio and audiovisual media. The mission entrusted to Mr. Jean-In 2014, Marc BORDES came up with proposals to improve the exposure of francophone music and young talents in order to support the development and creativity of the music sector in the face of technological and competitive changes and new expectations of the public. This report highlights the importance of maintaining francophone music quotas.
The CNM today produces an annual study on diversity in music broadcasting in France, which assesses the diversity of works exhibited and broadcast in the media (TV, radio), on the platforms of streaming (audio and video) or in phonographic production.
Respect for copyright and related rights
The passing of Acts No. 2006-961 of 1 August 2006 on copyright and related rights in the information society and No. 2009-669 of 12 June 2009 promoting the dissemination and protection of creation on the Internet, enabled, in particular by creating the high authority for the dissemination of works and the protection of rights on the internet (HADOPI, now merged with the CSA within ARCOM) and the graduated response mechanism, to place respect for intellectual and artistic property rights as a fundamental and unavoidable principle.
Similarly, the French Government has strongly mobilized for the adoption of Directive 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the digital single market. It strengthens the ability of rights holders to be remunerated by online content sharing platforms and improves the protection of the rights of authors and performers in their relations with the operators of their works.
It thus marks a major step forward in the protection of creators in the digital age. As access to works is increasingly online, this text reaffirms the importance of copyright as a historical foundation for fair remuneration of artists and creativity of European companies.
In particular, the transposition into French law of articles 17 to 23 allows creators to be paid by sharing platforms that massively disseminate their works, obtain the application of effective preventive measures guaranteeing the unavailability of unauthorized works, while providing greater legal certainty and new rights to users. It also enshrines the principle of appropriate and proportionate remuneration while strengthening transparency obligations for authors and artists. This transposition of the directive at the national level was mainly carried out through an order issued on 12 May 2021.
Moreover, faced with the emergence of alleged fraudulent practices observed on online music listening services aimed at artificially modifying, in particular through «false listening» online («streams»), hearings of certain content in order to capture undue revenues, the Minister of Culture Roselyne BACHELOT-NARQUIN entrusted in June 2021 a study mission to the National Music Centre, whose objective was to establish in the consultation a diagnosis of the practice of «manipulation of streams» and to study its consequences, both in terms of redistribution of income to rights holders, but also in terms of preserving musical diversity. The study, which highlights the efforts implemented by the platforms to identify and counter these practices, also illustrates the various aspects they can take, and recommends collective and concerted responses.
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