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Wider music copyright market grew by 7% to $31.6 billion in 2019

By | Published on Tuesday 23 March 2021

Will Page

Ahead of the publication later today of the latest ‘Global Music Report’ from the International Federation Of The Phonographic Industry – presenting revenue stats for the record industry in 2020 – economist Will Page has published his latest complete picture review of the wider music copyright market. According to his study, in 2019 that wider market was worth $31.6 billion, up $2.1 billion – or 7% – on 2018.

Assessing the worth and monitoring the growth of the wider music rights market requires some effort. The big two reports on music right revenues are the aforementioned IFPI stats pack, which does a pretty good job of documenting revenues that flow through record labels, music distributors and the record industry’s collecting societies, and the big annual CISAC report, which gathers data for all the monies collected by song right collecting societies.

However, there are plenty of revenues that sit outside those reports. Although collective licensing is widely used on the songs side of the music rights business, there are revenues that flow directly to music publishers that don’t appear in CISAC’s figures.

That includes initial fees generated by most sync deals outside of TV and – for at least Anglo-American repertoire – an increasingly significant portion of digital income. Not all production music income flows through the societies these days either. And even on the recordings side, not all direct-to-fan income that is generated by the exploitation of recorded music is necessarily counted in the official figures.

Page has endeavoured to capture as much of that missing revenue as possible in his annual study, which he began when he was Chief Economist at Spotify, and which he has continued since departing the streaming firm. This year he has published his study on the website that supports his upcoming new book ‘Tarzan Economics’.

As well as the top level stats – and a good explanation of how he goes about getting a complete picture view of the music copyright industry – Page also discusses the increased value of music copyrights, the ever increasing dominance of streaming revenues, the relative performance of songs versus recordings, and where future growth may come from.

Whereas in 2019 streaming started to account for more than half of recorded music revenues, that hasn’t quite happened in the wider market yet, although only just. According to Page’s stats, streaming accounted for 47% of overall revenues. “With strong signs that 2020 will be another record-breaking year, we can expect that streaming will make up the majority of copyright’s value” in his next study, he predicts, noting that’s “an important watermark”.

The increased dominance of streaming across the board helps explain another trend that Page records, which is that recordings are accounting for a bigger portion of the overall market today compared to when he first did this study in 2014.

The split today is recordings 62%, songs 38%. In 2014 it was recordings 55% and songs 45%. Which might further the argument on the songwriter side that the current slicing of the digital pie means they are not properly benefiting from the streaming boom. Although Page also points out that 2014 was the global record industry’s lowest ebb after fifteen years of decline.

“One can look at this two ways”, Page writes about the recordings versus songs split. “[Songwriters] and publishers might feel aggrieved by labels getting the lion’s share of the revenues from streaming, whereas labels may point to 2014 as the lowest-point in their volatile two decades of digital disruption”.

As for future growth, Page considers what opportunities remain in more mature music markets – where conventional streaming is arguably approaching market saturation – as well as the role of emerging markets in further boosting revenues on a global basis.

In the former domain, he notes that the challenge now is to generate income from those consumers less keen to spend money on accessing content. He illustrates this by making a distinction between the average iOS user and the average Android user.

“iOS was built for commerce and its high price drives self-selection, capturing those smartphone users who are willing to pay for content”, he writes. “Android is more of a mixed bag with many more low-end users who are far less inclined to pay”.

Referencing an earlier analogy in his report to drilling for oil – and how you reach a point when more oil has been drilled than there is left to drill for – he goes on: “[If we apply that analogy] to the challenge of subscriber acquisition, the iPhone is Saudi Arabia, Android is Southern Siberia – both have oil, but the latter is harder to extract”.

“This means the next decade will be very different from the last”, he concludes. “It will be about acquiring subscribers on Android to get the next cohort of 100 million US subscribers paying a recurring fee for music. That’s not going to be easy, so buckle up”.

You can access Page’s full report here.