The U.S. International Trade Commission has issued their report on the 2007 Korea Free Trade Agreement. The USITC had previously requested an A2IM Submission on the effects on A2IM members from the Korea Free Agreement. Read the USITC report HERE that was issued this week. See pages 3-9 and C-3 for comments by A2IM members and A2IM.
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Today A2IM was honored with an Export Appreciation Award for our commitment and success with increasing music exports via our MDCP funded trade missions to Asia, France and Brazil. The award ceremony,which took place at Baruch College, was a part of the 8th Annual World Trade Week NYC. Representative Charles Rangel (NY-13) presented the award to A2IM’s president Rich Bengloff and Randy Chin of VP Records. As a delegate on the trade mission to Asia and Brazil, Randy was given the opportunity to tell the audience about his experiences.
The Following Article was printed in
The Wall Street Journal
Friday, May 3, 2013
By HANNAH KARP
The federal government has helped American exporters sell telecommunication systems to Macedonia, tractors to Chad, and elevators to Japan.
Now, the U.S. government is helping push a different kind of export: rock music.
American music’s share of the global market has waned to 27% from 38% since 1990.
For the first time, the U.S. government’s trade arm is stepping in to help the music business, funding trade missions to Brazil and Asia in recent months for the heads of a dozen independent music labels, which make up one-third of the U.S. music market and represent acts such as the Black Keys and Sonic Youth.
It is a departure for the International Trade Administration, which has been spending $2 million annually to boost exports for the past two decades under its Market Development Cooperator Program but has never before given one of its $300,000 grants to the music industry, instead favoring sectors like machinery, technology and engineering services.
Until last year the agency hadn’t received a music-industry application worthy of the award, an ITA spokesman said. Indeed, it hadn’t received an application at all.
“We need to find new revenue streams,” said Rich Bengloff, president of the American Association of Independent Music, whose idea it was to apply for the grant. He led the trips and arranged meetings with local distributors, mobile-phone carriers, booking agents and ad agencies. “We now need to adjust to a smaller monetization at home.”
Indie labels see big opportunities in Latin America and Asia—and visiting in person pays off, especially in markets such as Japan, where fans favor foreign artists that spend time in their country engaging with locals and making TV appearances.
Many of the independent label heads that visited Seoul, Shanghai and Hong Kong this fall as part of the ITA grant program have since signed foreign distribution and licensing deals that will generate hundreds of thousands of dollars a year, Mr. Bengloff said. The deals could represent as much as a quarter of a small independent label’s revenue, he said.
Alec Bemis, managing partner for the New York indie label Brassland, said as a result of a government-subsidized trade mission, he recently signed digital distribution deals in Korea and Hong Kong, began negotiations to license a song for an Hyundai Motors 005380.SE -1.49% commercial and booked festival shows in Hong Kong and Taiwan that will pay five-figure fees.
Exports are part of a survival plan as the music industry struggles to adapt to sweeping transformations in technology. For independent labels, which lack the resources and reach of bigger labels, exports are even more crucial to growth. Moreover, American music’s share of the global market has waned to 27% from 38% since 1990.
U.S. music sales—both digital and physical—totaled $7.1 billion last year, according to the Recording Industry Association of America, down from $11.8 billion 10 years ago.
The music industry has been besieged by growing availability and quality of free music from YouTube, streaming services such as Spotify and Pandora, and illegal pirating. All of those things are pushing down prices of downloads and paid streaming subscriptions, shrinking domestic sales, Mr. Bengloff said.
While those forces are squeezing markets world-wide, the pressure has been far more pronounced in the U.S., where digital sales account for 58% of the music market, according to the International Federation of the Phonographic Industry. Germany, by contrast, buys only 19% of its music in digital format.
Japan, which was half the size of the U.S. market in 1990, could become the world’s No. 1 music market next year, analysts say, thanks to its robust appetite for records and CDs often packaged at premium prices with memorabilia. Digital music accounts for just 17% of Japanese music sales, according to IFPI.
Meantime, such countries as Australia, Canada, France and Britain have been far more pushing their music overseas, cutting into both the domestic and foreign market share of U.S. companies. Those governments have sponsored trade missions and marketing campaigns of their own.
The three major labels—Sony Corp.’s SNE -0.03% Sony Music Entertainment, Warner Music Group and Vivendi SA’s VIV.FR -0.30% Universal Music Group—are well entrenched in most foreign markets because their scale has allowed them to compete in small countries without much appetite for international tunes, said Mark Mulligan analyst at MIDiA Consulting.
But now the majors are focused on expanding their reach in Africa, aggressively signing and developing artists across the continent, which has a vibrant music scene but little musical infrastructure, Mr. Mulligan said. They are also competing to sign artists popular in countries where fans still pay for CDs. Universal, for example, said in April it was joining with Shawn “Jay-Z” Carter to distribute his Roc Nation label, in part because of the rapper’s global appeal.
Brassland’s Mr. Bemis, who returned from the mission to Brazil recently, says after comparing the record stores, club districts and facial expressions of locals at the mention of his bands, he thinks Brazil may prove to be even more lucrative than Asia. In Brazil, “lots of kids are into in Goth rock and hard-core, underground rock forms,” says Mr. Bemis, who spent a day strolling through a six-story São Paulo mall of tiny mom-and-pop shops devoted to rock music, posters and fashion.
Mr. Bemis didn’t ink any deals, but the market research, he says, was invaluable. “I thought, ‘Oh, this could work.’”
Write to Hannah Karp at firstname.lastname@example.org
Billboard.biz: “Q&A: A2IM President Rich Bengloff Talks Export Mission to Brazil“
April 29, 2013
With an eye toward nurturing new revenue streams and increasing their share of the global music market, representatives from 11 independent record labels headed to beautiful Brazil last week to meet with their South American counterparts. The trip was organized by A2IM and funded in part by a federal grant from the International Trade Administration. Delegates from labels including Naxos, Dead Oceans, Yep Roc and VP went looking for new partners in distribution, licensing, touring, performance rights and more. Read the Q & A with Rich Bengloff HERE.
As we have reported previously, A2IM’s second International Trade Administration (ITA)-funded trade mission went south of the border with 12 independent U.S. music delegates traveling to Brazil from April 18-22. The trade mission continues A2IM’s crusade to bolster the presence of independent music exports abroad.
U.S. delegates traveling to Brazil include: Rich Bengloff (A2IM), Robert Williams (335 Records), Paul Dryden (ATO Records), Seymour Stein (Blue Horizon Records), Alec Bemis (Brassland), Bruce McIntosh (Codigo/Fania), Phil Waldorf (Dead Oceans/JagJaguar/Secretly Canadian), Jurgen Korduletsch (Lollipop/Radikal), Jim Selby (Naxos USA), Randy Chin (VP Records), Tor Hansen (Yep Roc/Redeye), Jochen Becker (ZOHO Music) and Rich Bengloff (A2Im)
A2IM member Alec Bemis (Brassland) noted, “The internet has been creating a smaller, more connected world for over a decade — and I can attest that A2IM has been doing an amazing job of making that world smaller and more connected for its members as it has begun its program of trade missions over the past year.”
The pictures below were submitted by the trade mission delegates. They continue for several pages.