Royalties Collection On Rise, Digital Income Catches Up With Physical, Report Says

Royalty collection is on the rise, according to an international confederation of collecting societies, with Europe being the most fruitful market and North America showing the highest growth. Digital income now equals physical revenues from royalties, the report says, and performing rights account for the bulk of collections.

The International Confederation of Societies of Authors and Composers (CISAC) released today its 2015 Global Collections Report [pdf], which describes global royalty collections for 2014.

According to a press release, the royalties collected in 2014 by 230 CISAC member societies, amounted to €7.9 billion, up 2.8 percent from 2013. The rise has been dampened by changes in exchange rates, according to the press release.

Europe Biggest Revenue Pool

Commenting on the report in the release, CISAC Director General Gadi Oron said, “Europe, CISAC’s largest region in terms of royalty collections, grew a solid 4.1%. Canada-USA, CISAC’s second largest region, was up 6.2%, the highest growth rate of any region.”

“Latin America collections grew 2% and Asia-Pacific royalties were again negatively impacted by foreign exchange rates, the second year in a row (-5.3%). BRICS [Brazil, Russia, India, China and South Africa] countries showed a promising increase of 11% year-on-year, following a very strong 2013 when collections were up 30%,” he said in the release.

According to the report, the exploitation of performing rights accounted “for the vast majority (78.6 %) of collections by CISAC societies,” and was worth €6,240 million in 2014. Some 15.7 percent came from reproduction rights, with €1,243 million. The report noted that this figure shows a “significant decline of 9 percent compared to 2013.” The remaining 5.7 percent of royalty collections came from other rights, such as rental, private copying levies and income from the visual artists’ resale right.

Digital Income Equals Physical Revenues

The report noted that for the first time in the music industry, “the share of global recorded music revenue was split equally between physical products (e.g. CD or vinyl) and digital products (e.g. streaming, downloads) in 2014.

The decline of royalties coming from physical products has continually declined over the last decade, “mainly due to the greater levels of global internet penetration, music piracy and the growing popularity of legal offerings,” the report said.

At the same time digital revenues are increasing, with growing music streaming revenue, and streaming “starting to gain the mass market recognition it requires to fill the void left by the declining physical market….”

Streaming: Artists More Outspoken

According to the report, some artists have voiced concerns and preferences about streaming services. For example, Taylor Swift “has been a vocal critic of Spotify,” moving her music to Apple Music. The artist “prefers their approach, insisting users pay to subscribe,” said the report.

Other artists have taken other steps, such as Neil Young who removed his music from streaming services, “believing that they do not deliver a high enough audio quality, and so created and launched his own Pono player.”

“Whilst the current growth of streaming is encouraging, the issue of revenue sharing amongst the various players in the value chain remains,” said the report.

Live Music, Sustainability Issue

According to the report, live music “has prospered over the last decade with demand for festivals and gigs higher than ever.” This increase is expected to serve publishers and songwriters.

However, it is unknown if this interest for live music will go on. “Falling revenues from recorded music means that older bands (known as heritage acts) are more inclined to get back on the road. Whilst this is good for their fans, there is a risk that their availability takes away opportunities for younger bands,” the report said.

There might not be enough young bands breaking through to fill headline slots in the years to come, which indicates that the recorded and live music industries should support new music, the report said.

 

Image Credits: Flickr РMarc Blarn̬s