Business News Digital Labels & Publishers

Spotify economics chief collates figures to estimate value of music rights in 2014: $25.28 billion

By | Published on Friday 11 December 2015


Spotify’s economics man Will Page has estimated that the music rights sector was worth just over $25 billion in 2014, a figure that includes the revenues generated by songs as well as recordings.

Although the International Federation Of The Phonographic Industry puts out an annual pack of stats for the record industry, that only includes revenues generated by record companies by exploiting sound recording copyrights.

It is harder to get figures for the worldwide music publishing sector, though the annual figures from CISAC – which brings together most of the publishing sector’s collecting societies – go some of the way to doing just that. But there are gaps, in particular sync deals done directly by the publishers and not reported to the collecting societies.

Even when you can fill those gaps – which Page has endeavoured to do by taking figures from song rights societies not reporting to CISAC and a report by MIDIA Consulting that referenced publishing revenues from direct rather than collective licensing – there is still one other issue to tackle.

Although the IFPI report only covers record company income, the labels collect the publisher’s cut on physical music sales and some digital (mainly downloads in the US) from the retailer and then pass it on to the publishing sector – these are the ‘mechanical royalties’. This money is included in both the IFPI’s figures, and again in the CISAC report, so Page ensured this money was only counted once.

He ends up with a figure of $25.28 billion, of which 44.8% comes from song rights and the rest from sound recordings.

Speaking to Music Business Worldwide about this stat, Page said: “Whereas the IFPI publishes the ‘Recording Industry In Numbers’ [annual report], the music publishing and songwriter side of the industry has not had a similar document to serve the industry​ and its analysts​. I wanted to plug the knowledge gap, as industry analysts and professionals often don’t appreciate ​the ​sheer ​value of musical works that songwriters and publishers create”.

On the make up of the wider music rights sector, he added: “The David and Goliath generalisation that is often used to describe publishing and recording is misleading when you stack up the numbers, as they are actually a lot more even. For instance, some rough math shows the 2014 value of musical works – $11.3 billion – far exceeds the value of ‘ownership’ revenues from physical and downloads to the labels – $9.4 billion – in the same year. Go back a decade, and all we thought the industry was about was ownership – these new numbers are a sign of the times”.