Revenues collected by the music industry’s song right collecting societies worldwide increased by 7.2% to 8.48 billion euros last year, following a COVID-caused dip in 2020. However, with live music still very much restricted in 2021, total collections were 5.1% down compared to pre-pandemic levels. This is all according to the latest stats pack from global collecting society grouping CISAC.
Of course, while the copyright side of the music industry was not affected by the COVID pandemic on anything like the scale of the live side of the business, some copyright revenue streams were negatively impacted. And, crucially, the copyright revenues that did take a hit are generally more important to songwriters and music publishers than artists and record labels.
It’s the songwriters and publishers that CISAC member societies represent, and its annual ‘Global Collections Report’ gathers together data from all those societies around the world. Last year’s edition of the report confirmed that, in 2020, the COVID shutdowns caused a 10.7% decline in society revenues (or, actually, 11.5% if this year’s methodology is employed).
That was actually less bad than some had initially feared early on in the pandemic, but still meant that total collections in 2020 were down 775 million euros compared to 2019.
A key reason why songwriters and publishers were more affected by COVID than artists and labels is that they earn royalties from the live sector whenever songs they wrote or published are performed. And, obviously, with the live sector shut down for big chunks of 2020, those royalties slumped.
Other copyright revenue streams that were hit by COVID included public performance - ie where recorded music is played in pubs, clubs, bars, cafes, shops etc - and broadcast. Many of the businesses that play recorded music were shut during the lockdowns, while broadcasters saw their ad revenues decline at the start of the pandemic. In 2020, live and public performance revenues were down 45.2%, while broadcast income dipped 4.4%.
So what about 2021? Obviously, there were further lockdowns last year and, while live music did start to return, especially in the latter part of 2021, restrictions were still in place in many countries. Plus 2020 actually had a couple of months of business as usual before the lockdowns first went into force. As a result total live income for CISAC societies in 2021 was down even on 2020.
That said, things differed greatly around the world in this domain, partly due to differences from country to country regarding when live music was able to resume without social distancing. Plus income from public performance generally went into recovery mode sooner, with businesses that use music often opening up before venues and shows.
As a result global income for live and public performance, which CISAC groups together in its stats, was basically flat in 2021, with the increases in public performance compensating for the further declines in live. In fact, the 1.49 billion euros in performance revenues was slightly ahead of the 1.48 billion recorded in 2020, though still way down from the 2.62 billion collected in 2019.
Broadcast revenues, which didn’t slump as much in 2020 as some initially feared, saw another slight decline in 2021, down 1.8% to 3.19 billion euro. CISAC says that was mainly due to advertising rates being weaker in some markets, resulting in a decline in what broadcasters pay into the music industry.
With key revenue streams like live performance, public performance and broadcast more or less flat in 2021, the overall growth of revenues year-on-year was very much powered by increases in digital. Continued growth of subscription music services, plus increased income from user-generated content platforms, meant that digital collections were up 27.5% worldwide.
Such has been the growth of digital income in recent years that, in 29 countries, digital royalties are the biggest revenue generator for CISAC’s member societies. On a global basis broadcast still brings in slightly more revenue, though only just. 36.1% of collections last year came from digital services, while TV and radio royalties accounted for 37.7%.
It’s hoped, of course, that live and public performance income will return to pre-pandemic levels relatively soon - next year if not this year - and then go back into growth. And optimists hope further growth can be achieved within the broadcast domain as well.
However, digital revenues will also continue to increase in the years ahead, meaning digital income seems certain to exceed live and public performance income even once the negative impact of COVID on the latter is over, and could well start to out-perform broadcast income too.
And it’s also worth remembering that CISAC data only includes revenue that is collected by its member societies. In the digital domain, some music publishers license some of their repertoire, especially their Anglo-American repertoire, through direct deals.
For complicated reasons, some of that money still follows through the collecting societies, but not all of it. Meanwhile, in US, the all new mechanical rights collecting society MLC is not a CISAC member, so that income is not included in the CISAC stats.
There is also some TV income that doesn’t flow through the collecting societies, where music publishers negotiate sync deals directly with TV producers and broadcasters. Though traditionally that was mainly in the US, and it seems likely significantly more digital income sits outside of CISAC’s stats. Which means overall, digital is probably the bigger revenue stream for the songs business.
Nevertheless, many songwriters and publishers continue to argue that digital growth should be delivering an even bigger pay day to that songs business, but it’s not because the song rights are still being undervalued.
Currently with streaming, the record industry gets the biggest cut of the pie, followed by the streaming services, with the songs usually getting no more than 15% of total revenues. The song share has generally increased over the years, but plenty of writers and publishers want a further re-slicing of the digital pie.
Many on the songs side of the business - and indeed across the music community at large - also reckon the pie itself should be bigger. That could be achieved both by increasing the prices of subscription streaming services, and by having user-generated content platforms allocate a bigger cut of their ad income to the music industry.
And, of course, there is also the issue of incomplete or inaccurate music rights data increasing the costs of administrating digital royalties on the songs side, and sometimes stopping songwriters getting paid at all.
CISAC’s reps - while happy that revenues were up in 2021 following the COVID-caused dip in 2020 - nevertheless hone in on those issues and debates in their official statements about the new ‘Global Collections Report’.
CISAC Director General Gadi Oron says: “After the fall experienced in 2020, our societies’ return to growth last year is an impressive achievement. Bearing in mind that income from live concerts and public venues was largely non-existent, the acceleration of digital licensing by many of our members to offset the decline in other areas is a real success story. The recovery is only half done, though. There is, without a doubt, much more room for growth, and to achieve that, we need to bring more value to creative works in the digital market and promote a fairer ecosystem for creators”.
CISAC President Bjorn Ulvaeus adds: “Digital royalties collected by CISAC societies are growing impressively, but the streaming world is still unfinished business when it comes to ensuring a fair environment to earn a living. Too much of the data needed to identify and remunerate creators is incomplete or missing when works are ingested on streaming services. The result is a lot of money that is left on the table when it should be going into creators’ pockets”.
And CISAC Board Chair Marcelo Castello Branco states: “We need to see this year not just as a return to normality, but as a bridge to the next phase. In the near term, we face the prospect of economic slowdown ahead and the risks that come with the unusual combination of inflation and recession. Subscription prices are already undervalued and need to be raised, with prices having barely changed since the early days of the streaming model. Fair value and fair terms are essential so as not to compromise the remuneration of rightsholders”.
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