Global performance-rights defy the global recession

New research published by Music & Copyright reveals that total distributions of performance-rights collections increased to US$1.46 million last year. However, the volatility of the currency markets greatly affected the year-on-year comparison. Excluding these exchange-rate fluctuations, global performance-rights distributions were up 6.3%.

With much of the focus on how the recorded-music industry has fared from year to year centered on the sale of music, the contribution to both record companies and performers from performance-rights collections is often overlooked. Recent years have seen performance-rights collections rise, in complete contrast to the falls in recorded-music sales.

Music & Copyright has calculated that performance-rights distributions to record producers totaled US$794.6 million, up 2.2% from US$777.4 million in 2008. But at constant currency exchange rates, distributions increased 8.2% last year. For performers, distributions last year stood at US$664.9 million, down 1.2% from US$672.7 million in 2008. At constant currency rates, distributions to performers rose 4.1%.

Europe is the largest region for performance rights. In 2009 it accounted for 64.8% of the global distribution total, down from 70.7% in 2008. Distributions in Europe decreased 7.8%, to US$945.5 million. At constant currency rates, distributions in Europe were flat. Several unconnected factors conspired to exaggerate the decline in European collections. The largest performance-rights society in the world in terms of representation, the UK’s Phonographic Performance (PPL), was hit by a ruling late last year by the UK Copyright Tribunal regarding the rates payable by pubs, bars, restaurants, offices and factories, which meant distributions to performers and producers were down. Problems with the Italian performers’ society IMAIE meant distributions were affected. IMAIE went into liquidation in July last year, and therefore royalties collected for performers have not been paid.

In terms of potential for growth, low collection rates in the less developed regions of the world suggest that countries in Eastern Europe, Latin America and Asia Pacific should be the main targets. However, the US still offers the greatest prospects, particularly in light of the continuing strong performance of digital-performance-rights society SoundExchange.

A resolution to the performance-rights issue in the US still seems a long way off. US copyright legislation exempts AM/FM-radio broadcasters from this type of rights, and the passage of new legislation to change this is making slow progress. The Performance Rights Bill (PRB) has been considered in committee and is awaiting approval in Congress and the Senate. Few estimates exist as to what the potential payments from terrestrial broadcasters could be if the bill is passed. However, SoundExchange has offered a glimpse of the revenues that might be possible. In 2009 it distributed US$155.5 million to producers and performers, up from US$100 million in 2008.

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

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