Global royalty collections increase 1%, to US$10.9 billion in 2008; little growth expected in 2009

New research published by Music & Copyright has revealed that royalty collections from the world’s authors’ and mechanical-rights collection societies increased 1% at constant-currency exchange rates in 2008, to US$10.91 billion, from US$10.81 billion in 2007. The rise was lower than the previous year. Music & Copyright has also stated that the increase in 2009 will be just 0.1%, to US$10.92 billion. Total distributions in 2008 were US$9.31 billion, and a marginal increase is expected in 2009.

Although the estimated rises in royalty collections and distributions are small, they do provide the music industry with a rare bit of good news, particularly as recorded-music sales are expected to fall again in 2009. In 2008 recorded-music accounted for 71.8% of the combined total, with authors’ royalties taking the remaining 28.2%. But this share is steadily rising; in 2007 authors’ rights had a share of 26.2%, up from 24.1% in 2006. For 2009, the continued demise of recorded-music could push the authors’ share to 30%.

However, as is customary with all music industry good news, there is a down side. Some collection societies have forecast that total collections will be lower in 2009 than 2008. Those societies that collect both authors’ and mechanical reproduction royalties have achieved growth through higher broadcasting and performance royalties, compensating for the fall in mechanicals. But the global financial crisis and its effects on advertising revenues and live performance events will limit broadcast and performance-related collection growth. This means they are less likely to be able to counter the mechanicals’ decline, which is caused by the decrease in recorded-music sales. Music & Copyright has calculated that total mechanical collections were down 9.1%, to US$2.37 billion, in 2008, from US$2.61 billion in 2007.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media