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Pandemic Recovery in Live is Slow, Digital Collections Bolster Losses – Billboard

October 27, 2022 - Uncategorized

Global performing rights collections began to rise again in 2021 as the world reopened from COVID-19 restrictions — up 7.2% from a record low the year before. But, according to the International Confederation of Authors and Composers Societies’ (CISAC) annual report released Thursday (Oct. 27), music collections for its worldwide members were still down 5.1% from pre-pandemic levels as live and public performance income struggles to regain its footing. For 2021, music collections totaled 8.48 billion euros ($10.03 billion) compared to 7.91 billion euros ($9.03 billion) in 2020.

So far this year, CISAC reports, concerts and festivals appear to be faring well, and the tourism industry is eyeing 2023-2024 as a target for a return to normal collections, giving good cause for optimism. Japan in particular has become a leader in pandemic recovery, offering its citizens discounts, coupons and subsidies for domestic travel to stimulate the economy. This has helped the return of large scale festivals like Fuji Rock and Summer Sonic, CISAC says. In South America, major festivals and tours like Rock in Rio and Lollapalooza are also expected to have a strong impact on 2022’s forthcoming numbers for live music in the region. 

Though collections from in-person events got off to a slow start in 2021, streaming and digital music income “exceed[ed] expectations” with a 27.5% increase in collections from 2.39 billion euros ($2.74 billion) in 2020 to 3.06 billion euros ($3.62 billion) in 2021. This makes digital income an unprecedented 36.1% share of total music collections for 2021. Futuresource, the company that provides insights for CISAC’s report, anticipates further growth with double digit hikes in music subscriptions year over year and that there will be over 1 billion music subscribers by 2026. Subscription numbers for streaming video on demand (SVOD) are expected to falter amid inflation, a potential recession and what the report calls the “cost of living crisis,” but music subscriptions are expected to stay more stable because users only need to pay for one service to receive a rapidly growing catalog of songs rather than paying for multiple video streaming services, each with exclusive, smaller libraries. 

There’s also room for growth. As Marcelo Castello Branco, CISAC chair of the board and CEO of Brazilian collection society União Brasileira de Compositores, wrote in his foreword for his report, “subscription prices are already undervalued and need to be raised.” His comments come just after Apple Music announced that it was raising its subscription price, as did YouTube for the price of its family plan earlier this month. More price hikes for music streaming subscriptions are expected in the coming months with some eyeing Spotify’s possibly forthcoming HiFi tier as a way to finally raise prices. 

“As streaming services move into a more mature phase, it is the right time to review pricing policies for the future,” Branco tells Billboard. “We also need to keep the share of revenue paid to the songwriter constantly under review. This is a fundamental concern.”

Another concern flagged by CISAC leadership: song “metadata.” As digital sources become a more important part of rightsholder mechanical and performance royalties, CISAC president and ABBA member Björn Ulvaeus says he estimates “hundreds of millions of dollars… is left on the table” when the data needed to identify and remunerate creators is incomplete or missing. 

This can stem from ignorance on the part of composers, honest mistakes and typos, or incomplete information for songs that are released before samples and interpolations are properly cleared. Issues with metadata are expected to continue to increase if left unchecked as more and more artists and songwriters hold out on signing deals with companies who can handle these headaches for them.

This year, Universal Music Group (UMG) CEO Lucian Grainge told a crowd at Music Matters, a conference in Singapore, that 100,000 new songs are added to streaming platforms each day. Due to this scale, most of these songs are likely from do-it-yourself newcomers. While Ulvaeus notes that work to upgrade ISWC, the identifier for musical works, and educational initiatives like “Credits Due” are helping alleviate this problem, there is still a long way to go.

Certain collection societies are independently working on solutions to this issue. The newfound Mechanical Licensing Collective (MLC), which is not a member of CISAC, is attempting to match unclaimed mechanical royalties in the U.S. to their rightful owners. In Japan, rights society JASRAC has founded KENDRIX, a data exchange platform to protect authors from “impersonation and other abuses,” says president Kazumasa Izawa

Some countries, like South Korea, were greatly affected by systemic changes — some positive, some negative. KOMCA, the country’s collection society, proved to have a success story this year as changes in its digital collection rules led to increased promotion of music subscriptions by the major music platforms. Other countries faced problems as well. In Bulgaria, creators are faced with continued “poor enforcement” of copyright law, while in Argentina and Brazil, currency fluctuations hurt both composers and publishers.

According to a January 2022 survey led by UBC, along with cRio and ESPM, half of Brazil’s musicians had lost all of their income due to lockdown restrictions over the last few years, and half of them have been forced to find another professional activity. 

Publishing income from live music for 2021 grossed 1.49 billion euros ($1.76 billion) this year, CISAC found, only up 0.1% from last year’s 1.49 billion Euros ($1.70 billion) made in 2020. Compared to 2019 levels, which Billboard reported as $3.04 billion, the aftermath of a global pandemic remains stark. 

Television and radio, collectively known as broadcast income, remains the highest revenue source for performance royalties, bringing in 3.19 billion euros ($3.78 billion) for 2021, but its total fell by 1.8% from 2020’s 3.25 billion euros ($3.71 billion), giving way as users ditched their cable boxes and car radios in favor of on-demand streaming and viewing options. This is the fifth year of steady decline in a row for this category and weaker advertising rates in some markets have now translated into lower usage fees; still, it accounted for 37.7% of global collections. Digital only lags two percentage points behind it now. 

Systemic shifts led to two major bright spots in the steadily waning sector of broadcast income: Mexico’s broadcast collections rose by 47.8% after a judicial process concluded in the order for satellite broadcaster, SKY, to pay significant royalties in back payment to musicians. Spain’s broadcast income also rose 47.6% due to agreements signed with the main private TV networks in the country. Unlike many other regions, Spain’s advertising revenues were up in 2021 (though still well below pre-pandemic levels). 

CDs, video and vinyl experienced gains this year, up 3.1% from 2020’s 348.21 million euros ($397.45 million) to 2021’s 359 million euros ($424.66 million). Though it’s only 4.2% of total music collections, this small but gaining subset of the business is expected to grow as the vinyl boom continues. As Billboard recently reported, Nashville, Tennessee is ramping up production on new, higher capacity vinyl pressing plants to meet consumer demand after superstars like Adele and Taylor Swift sell massive swathes of vinyl to mostly American and European consumers. 

CISAC also included a number of more minor forms of income for mechanical and performing royalties for the music business in its 2021 report:

  • Private Copying Assessment revenue rose an impressive 15.3% for 2021, from $283.13 million in 2020 to $338.31 million in 2021. This represents just 3.4% of the total CISAC society music collections for the year. 
  • Synch income is up 6.9% this year, from $30.0 million in 2020 to $33.12 million in 2021. This represents just 0.3% of the total CISAC society music collections for the year. 
  • Rental and Public Lending collections fell 16.4% this year, from $13.7 million in 2020 to $11.83 million in 2021. This represents just 0.1% of the total CISAC society music collections for the year. 
  • Publication collections are up 6.2% this year, from $6.45 million in 2020 to $7.10 million in 2021. This represents just 0.1% of the total CISAC society music collections for the year. 

Looking at the largest countries by music collection size, the U.S. ranked No. 1 again for 2021 with a 23.6% market share, down from 2020’s 27% market share. It has grown collections by 3.5% and increased collections to EUR 2.004 billion from EUR 2.21 billion in 2020. 

  • France, ranked No. 2 with a 11.2% market share, grew 5.4% to 951 million euros from 902 million euros in 2020
  • Japan, ranked No. 3 with a 9.6% market share, declined 2.8% to 818 million euros from 842 million euros in 2020
  • The U.K., ranked No. 4 with a 9.6% market share, grew a whopping 33.1% to 813 million euros from 611 million euros in 2020
  • Germany, ranked No. 5 with a 9% market share, grew 4% to 766 million euros from 736 million euros in 2020
  • Italy, ranked No. 6 with a 3.6% market share, declined 0.2% to 308 million euros from 310 million euros in 2020. That year the report showed Italy had fallen a precipitous 35.1% from 477.66 million euros in 2019
  • Canada, which switched with Australia to rise to No. 7 with a 3.2% market share, rose 14.0% to 268 euros from 242 million euros in 2020
  • Australia, which swapped with Canada to fall to No. 8 with a 3.1% market share, rose 9.1% to 264 million euros from 235 million euros in 2020
  • South Korea, which from No. 10 to No. 9 this year with a 2.4% market share, grew by 16% to 201 million euros up from 173 million euros in 2020
  • Spain, which rose to No. 10 with a 2.3% market share, rose 26.6% to 199 million euros from 184 million euros in 2020

Some notable gains below the top 10 came from Scandinavia: Denmark, ranked No. 12, grew by 10.2%, Sweden, ranked No. 13, grew by 21.5%, Norway, ranked No. 18, grew by 33.5%; and Finland, ranked No. 19, grew by 9.4% for 2021. CISAC attributes this to the region’s high share of digital income compared to other countries which helped them weather the continued pandemic effects. 

Below features a list of additional markets that experienced double digit growth in 2021. Though CISAC does not explain why each of these nations have seen collections increase, the report does mention that much of the growth in Indonesia, Thailand and India came from digital and streaming gains and that Mexico benefited from the aforementioned settlement with broadcaster SKY. 

  • Mexico, ranked no. 17, which gained 10% to achieve a 1.1% market share for 2021
  • China, ranked No. 22, rose a significant 12.3% to hold 0.6% market share for 2021
  • Czech Republic, ranked No. 24, grew 19.1% to achieve 0.5% market share for 2021
  • South Africa, ranked No. 26, grew 10.1% to hold 0.4% market share for 2021
  • India, ranked No. 28, grew a whopping 73.8% to hold 0.4% market share for 2021
  • Chile, ranked 32, grew 23.8% to hold 0.3% market share for 2021
  • Turkey, ranked No. 33, gained 37.1% to hold 0.3% market share for 2021
  • Malaysia, ranked No. 38, grew 31.3% to hold 0.2% market share for 2021
  • Thailand, ranked No. 39 grew 68.8% to hold 0.1% market share for 2021
  • Greece, ranked No. 43, grew 46% to hold 0.1% market share for 2021
  • Indonesia, ranked No. 46, grew 59.4% to also hold 0.1% market share for 2021

Editor’s note: Collections revenue numbers from 2020 may not reflect the numbers Billboard reported last year due to CISAC updating collections results as late data came in to the various collection societies that were in turn passed onto CISAC. This story used an exchange rate of 1 to $1.1829 for 2021 and 1 to $1.141417 for 2020. 




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