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COVID caused 775 million euro drop in song royalty collections in 2020, CISAC confirms
By Chris Cooke | Published on Wednesday 27 October 2021
Royalties collected by the song right collecting societies across the world were down 10.7% last year as a result of the COVID-19 pandemic, which equates to a drop in revenues of 775 million euros. This is according to new stats from CISAC, the global grouping of collecting societies.
The pandemic and resulting lockdowns had a much bigger impact on the songs side of the music rights business than on the recorded music industry, which saw its revenues grow 7.4% in 2020.
That’s partly because songwriters and music publishers earn royalties from live music, a revenue stream that pretty much stopped entirely as lockdown measures shut down tours, venues and festivals. Plus other COVID-hit music right revenue streams – like the royalties that come in from broadcasters, sync and the public performance of recorded music – are all a much bigger deal on the songs side of the business than they are for the record industry.
Prior to the pandemic, royalties from live music and the public performance of recorded music, along with broadcasting, accounted for two thirds of society collections worldwide, and all three were negatively impacted by the pandemic.
Needless to say, live music royalties were hit the hardest, followed by public performance. Combined, those revenues were down 45.2%. Live music accounted for about 60% of that decline. Broadcast revenues, meanwhile, slipped a more modest 4.4%.
Those declines were offset slightly by ongoing growth in digital music. Digital collections were up 16.2% globally, rising to nearly 2.4 billion euros. And, of course, not all digital income is reported in the CISAC stats, because it documents society collections, and some streaming money goes directly to the music publishers via their direct licensing deals, especially with Anglo-American repertoire.
That continued growth in digital helped to ensure that the total slump in song royalty collections caused by COVID was not quite as severe as initially feared a year ago, when revenue declines of up to a third were being anticipated.
Although, it wasn’t just digital growth that helped. For example, broadcast royalties – the biggest revenue stream for the CISAC membership at large – although down, did not take as big a hit as many thought they might. That was in no small part because the advertising industry, despite having a wobble during the first COVID lockdown, pretty much got back to normal later in 2020.
Nevertheless, the 10.7% decline overall is obviously a substantial drop. And the negative impact is more severe in those markets – especially in Europe – where live and public performance income is generally a bigger deal. PRS in the UK announced earlier this year that its 2020 collections were down 19.7%. Meanwhile, in France collections fell by 12.8%, in Spain by 22.2%, in Belgium by 27.8%, and in Italy collections slumped by a massive 35.1%.
And with COVID still impacting on live music in many markets – plus the fact song royalties can take a while to work through the system, meaning writers and publishers will see the impact for a time even once the pandemic is over – there are definitely still challenges ahead in the songs sector.
This all makes capitalising on every digital opportunity – and making sure every streaming royalty is accurately and efficiently collected – all the more important. And – many songwriters would likely argue – it also demonstrates why there needs to be a review of how streaming royalties are split between the song rights and the recording rights, to the former’s advantage.
Commenting on his organisation’s latest stats pack, CISAC Director General Gadi Oron says: “After many years of steady growth, COVID has sent collections sliding downwards. Both mature and developing markets that are dependent on traditional income streams such as concerts, festivals, and exhibitions, suffered significant declines in 2020 that continue well into 2021”.
“Increased digital collections have mitigated the fall in other income sources in many countries”, he adds, “and this is a tribute to the efforts of CISAC societies to change strategy, shift resources and step up digital licensing activity. Without a doubt, the pandemic has been a catalyst for change, accelerating a transition to digital that will not be reversed”.
Meanwhile, the Chair of the organisation’s board, Marcelo Castello Branco, adds: “The figures show that we have been hit by a seismic drop in revenues due to the crisis. But beyond early apocalyptical forecasts, the decline has been mitigated by our critical commitment to exploring new areas of revenue, in particular in the digital sector”.
“As anticipated”, he goes on, “unfortunately, we suffered a drop in revenue from live and public performance, and recovery in these fields will take longer than anticipated. There is still some uncertainty about when we will be able to return to normal, so we have to be cautious about forecasts”.
