Phonofile Indie ownership Transparency. History 1999 started with catalogue 2002 built own store (musiconline.no) 2009 merged with Artspages (Norway)

PhonofileIndie ownershipTransparency

History•1999 started with catalogue

•2002 built own store (musiconline.no)

•2009 merged with Artspages (Norway)

•2009 acquired Klicktrack (Sweden)

•2011 largest Nordic indie aggregator

Organization

OwnersOwners BoardBoard

Sweden Sweden one personone person

Denmark Denmark 50%50%

FI, SA, ES, FI, SA, ES, EE 50%EE 50%

NorwayNorway7 persons7 persons

Owners•29.4% FONO (association of

independent Norwegian record labels)

•26% Alliance Venture (Norwegian VC)

•12% NOPA (Norwegian association of authors and composers)

•32.6% Employees and smaller owners

Board• Erling Andersen, chairman (FONO)

• Erling Maartmann-Moe (Alliance Venture)

• Petri Lundén (Klicktrack/Hagenburg management)

• Giert Clausen (NOPA)

• Dagfinn Sætra (former CEO Artspages)

• Morten Lindberg (2L record label)

• Yngve Dahle (Viaduct, business consultants)

• Yngve Dahle (Viaduct)

Staff I•Erik Brataas, CEO (started the

company in ´99, one of the most experienced persons within digital distribution)

•Magnus Solvåg, Trond Stian Førde and Per Øyvind Øygarden, tech development and delivery. Tech platform is developed and maintained in-house.

Staff II•Knut Bøhn, financial manager (years

of experience in the international music industry as studio engineer and mixer in NYC with Nile Rodgers and others, with Phonofile since ´01)

•Trond Tornes, Marketing Director, with Artspages since ´04, after years of experience within international booking & management

Staff 1II•Mona Fimreite, digital marketing

specialist, one of the best in the Nordic with huge experience from brands and music such as Helly Hanssen and Sony Music.

•Rune Danielsen, Label Relations, years of experience from physical distribution companies, also a DJ for many years.

Staff IV•Daggan Stamenkovic, Country manager Sweden. With Klicktrack (S) since ´06, worked with label and design for years.

•Troels Kjeldgaard, hired to service Phonofile in Denmark through Volcano. Volcano is a music service company doing Artist Management, Booking, Concert Promotion, Venue Operation plus working on a strategic and operational level for Phonofile.

Intnl partners•Miguel Bustos - Detroit and

Chicago

•Jordi Puy, Sound Diplomacy - Barcelona

•Hilton "Roach" Roth - South Africa (African Dope)

•Gapi / Ghamro - Ghana

•Toomas Oljum, mananger - Baltics

Subsidiaries

•Laura Sun - Beijing Artspages. Beijing Artspages was launched as a co-owned Norwegian and Chinese company in 2002. Laura has been working with us from Beijing for almost ten years.

Phonofile•Companies and labels

•900 labels

•Also, distribution companies like Border(S), Indie Distribution(N), Ministry of Sound

•300k tracks (up from 235k in one year)

€

Overview environment

PhonofilePhonofilePhonofilePhonofileLabelLabelLabelLabel

Artist/Artist/ComposeCompose

r/r/ProductioProductio

nn

Artist/Artist/ComposeCompose

r/r/ProductioProductio

nn

Download Download & &

StreaminStreaming g

Download Download & &

StreaminStreaming g

PromotioPromotionn

PromotioPromotionn

AudienceAudienceAudienceAudience

MediaMediaMediaMedia

D2FD2FD2FD2F

CopyrightCopyrightCopyrightCopyright

€€

€€

€

Transparency

Digital sales world 2012•Total revenue USD 5.6bn (up 9%)*

•Digital being 34% of total revenue*

•3.6bn downloads (up 8% year on year)*

•20m paying subscribers to music services (significantly streaming), up 44% year on year)* *IFPI

Digital revenues 2102

Phonofile figures•Revenue 2009 - Xm NOK

•Revenue 2010 - 24m NOK

•Revenue 2011 - 38m NOK

•Revenue 2012 - 50m NOK

•Revenue 2013 - >60m NOK

•Share streaming revenue 2011 (up xx% year on year)

Phonofile figures

Norway music market 2007-2011

Digital market - Download vs Streaming

Digital market - Download vs Streaming

Digital market - Download vs Streaming

Perspectives- Consolidations in the Music Industry- UMG, Sony and Warner will continue to focus on market

shares- Few global services will have much of the power- Streaming will be the dominant music consumer technology - New markets opening (Deezer, iTunes, Spotify, Google,

Nokia etc)- The growth in advanced markets will flatten out- Phonofile; organic growth and potential strategic

partnerships

Phonofile milestones• 2004 first iTunes revenue

• 2008 revenue more than 10m NOK

• 2009 merger Artspages, acquire Klicktrack (S)

• 2011 revenue more than 35m NOK, signed with Ministry of Sound, Representation on the Merlin board of Directors

• 2012 Launched Phonofile Analytics and FB shop

• 2013 Started massive skills development for independent labels and built version 1.0 of Label Login Tools section

Trends• 9 in 10 of the most liked people on Facebook are artists

• 20%+ Spotify users convert to its premium service

• Music is the most searched-for art form on the internet, and that doesn’t happen by accident. It’s driven by investment in new music. Max Hole, chairman and CEO, UMG International

• 7 of the top 10 most followed people on Twitter are artists

• Case study: 2012 online use of Spotify v the Pirate Bay in the Netherlands: The Dutch digital music market saw the biggest growth in Western Europe at 66%

• EUROPE radio vs sold tracks

• Over 391 Million Tracks sold in 2012 Over 75 Million Radio Spins in 2012 (source IFPI)

Spotify vs Pirate Bay?

Norway figures 2012-2013

• Q1 and Q2 2013 shows increase of 17% in total music sales, compared with Q1 and Q2 2012.

• Digital music salesStreaming up 66% compared to Q1 and Q2 of 2012, now representing 66% of the total music sales. (Up from 46% in 2011).

• Q1 and Q2 2013: Download sales down from 21%-14% compared to same period 2012

Norway figures 2012-2013

• Total digital digitalt music sales (download and streaming) Q1 and Q2 2013 – up 39% compared to same period of 2012

• Digital sales is a growing sector. Q1 og Q2 2013 makes 80% of the total music sales (up from 67% Q1 and Q2 in 2012)

• Physcial music salesDecreased 29% compared to Q1 and Q2 2012

• Physical sales is now 20% of all recorded music sales so far in 2013, same period in 2012 being 33%

Phonofile milestones