As Bulletin board was mentioned On Thursday (October 24), global rights collections rose 7.6% to a new high of 11.75 billion euros ($10.9 billion, based on the average exchange rate for 2023), according to trade body CISAC (the International Confederation of Societies) based in Paris d´Auteurs et Compositeurs). This article covers the key news — digital collections up 9.6% to €4.52 billion ($4.18 billion). Radio and TV collections fell 5.3 percent to 3.37 billion euros ($3.11 billion) after a significant jump the previous year. and live music and background music collections rose 21.8% to 3.06 billion euros ($2.82 billion), fueled mainly by a resurgent concert business. There are more details in the news article.
Now let's take a longer-term look at the state of the market to see where all the recent growth has come from and what it means for the future. As of 2019, the business of music collections has grown from €8.92 billion ($8.24 million) to €11.75 billion ($10.9 billion), an increase of 31.7% over five years, that is, an annual increase of more than 6%. This arguably presents a more accurate picture of market trends than year-over-year changes from this period, given that concert activity has been so disrupted by the pandemic.
Most of that growth came from digital, which grew 119% — from 2.06 billion euros ($1.9 billion) in 2019 to 4.52 billion euros ($4.2 billion) last year. Perhaps most importantly, the €2.46 billion ($2.27 billion) of digital growth represents almost all of the business's growth over that period. And that growth is starting to slow. In 2023, digital growth slowed from 35.1% to 9.6%, which contributed to overall growth slowing from 29% to 7.6%. Some of this is inevitable – subscription flow growth has leveled off in the US and Western Europe, the biggest markets that have traditionally driven the business. Together, the US, Western Europe and Canada account for nearly 75% of box office revenue. Digital revenues will almost certainly continue to grow — from price increases and new products, among other factors, but the glory years of digital growth may be in the past.
However, the state of global rights collections offers other reasons for optimism. First, a caveat: These numbers don't provide a perfect picture of music publishing activity or even public performance rights, as some digital royalties are paid through direct deals. These numbers represent the best global picture of the collecting business available, however, and it seems safe to say that direct deals, for which numbers are not available, roughly follow these trends. This almost certainly understates the growth of the music publishing business, however, as it does not include US engineering rights, sync rights and a variety of new types of deals.
The challenge for collecting societies is that the second largest source of revenue, TV and radio plays for compositions, does not appear to be growing. It was 3.4 billion euros ($3.14 billion) in 2019 and is now 3.37 billion euros ($3.11 billion) — a more significant drop than it might seem, given inflation. Since these revenues are tied to the TV and radio businesses in most markets, some of them appear to have been transferred to the digital market, which has replaced them as the most important source of revenue.
There is more hope in the live business. The pandemic shutdown made it hard to see, but live music and background music rights have been steadily growing — from 2.71 billion euros ($2.5 billion) in 2019 to 3.06 billion euros ($2.83 billion ) last year — up 12.7%. It's not that big, split over five years, but live is growing faster than the rest of the category and increasing ticket prices for the bigger tours will lead to more rights revenue in areas where it's linked to ticket prices. This trend is expected to continue as well. This could make live music a significant source of growth in both established and new markets.
Currently, the collective management company's revenue breaks down as follows: 38.5% of money comes from digital. 28.7% from TV and radio. 26.1% from live music and background music. 3.2% from CD and video sales. 2.4% from private copy levies (which the US does not have). and 1.1% from other sources. What might this look like five years from now? It's hard to imagine digital climbing more than half, as that would mean a significant reduction in TV and radio revenue. Live royalties should increase, perhaps significantly, and BGM revenue could increase in some markets, although not likely to increase as much in the US and Western Europe.
The origin of receipts will also change: There is also really impressive growth coming from parts of the world that were barely generating much revenue five years ago. Collections in Latin America rose 26.2% last year, but 108.2% over the past two years, driven by Mexico and Brazil and the spread of streaming across Latin America. Right now, this impressive growth doesn't change the overall picture much – the region still only accounts for 5.9% of box office revenue. But if this growth pattern continues, the market could become significant soon. Over the past five years, Latin American collections have grown from 4.1% of the global total to the aforementioned 5.9% share.
The same applies to some markets in Asia. Overall, not much growth there – down 0.3% due to Japanese currency fluctuations, but up 6.8% on a constant currency basis. However, Vietnam, Indonesia and the Philippines, where between 80% and 85% of collections revenue comes from digital, grew by 270.4%, 111.6% and 325.8%, respectively, over the past five years. Those increases aren't big enough in terms of revenue to improve the overall business, but they're growing fast enough that they could make a difference five years from now. Hailed as having so much potential, Africa seems stuck: From 0.7% of global music collections to 0.6%. This won't matter much to overall revenue any time soon. But it shows how the music industry still faces serious challenges in Africa, and how those challenges affect real, working creators. These problems are complex, but they are also urgent: Creators in Africa deserve better.
However, growth continues in larger markets. The top 10 markets grew 6.3% last year. Over the past five years, the US and Canada grew by 44.4% and 38.9% respectively, with the UK, France and Germany growing by 44.5%, 34.7% and 20.2%. The strongest growth during that period was in Korea, up 70.9%. The health and stability of the larger markets should make it easier for the fast-growing smaller ones to improve the overall business.
from our partners at https://www.billboard.com/pro/music-publishing-royalty-collections-can-they-keep-booming/