With digital recorded-music sales still several years away from fully compensating for the decline in physical recorded-music sales in almost all developed markets, record companies are continuing to place greater emphasis on revenue streams from other sources. Performance-rights is one of those “other” sources that has seen growth in the majority of countries, even though so many of the music users required to pay performance-rights have suffered because of the aftereffects of the global financial crisis.
In our annual survey of the performance-rights sector, Music & Copyright can reveal that total performance-rights distributions were up 8.9% in 2010, to US$1.59 billion, a big increase on the 0.6% growth in 2009 (see table below). Excluding the effects of exchange-rate fluctuations last year compared with 2009, total distributions were up 9.1%.
Music & Copyright can also reveal that performance-rights distributions to record companies totaled US$868 million, up 9.2% compared with US$794.6 million in 2009. At constant currency-exchange rates, distributions to record companies last year increased 9.4%. For performers, total distributions last year stood at US$721.5 million, up 8.5% compared with US$664.9 million in 2009. At constant currency-exchange rates, total distributions to performers rose 8.8%.
Rapid growth in the US despite no AM/FM agreement
The position and status in the world of the US regarding performance rights can only be described as unique. There remains no resolution to the dispute over the country’s copyright legislation, which exempts AM/FM radio broadcasters from paying this type of right. But this has not stopped the US from becoming the biggest country for performance-rights payments and SoundExchange taking the crown for the biggest single performance-rights collection society. Total distributions made by SoundExchange last year stood at US$249.2 million, up from US$155.5 million in 2009. SoundExchange’s position as the global leader is unlikely to be challenged this year, since collections were up 94% in 1H11 compared with 1H10.
As always when we assess the performance-rights sector on a global level, we like to point out that comparing one performance-rights society against another is a little unreliable because of the many territorial and operational differences. Also, a number of collection societies registered strong growth in collections and distributions last year compared with 2009, whereas others have been affected by circumstances related to developments confined to their country of operation only.
A dominant Europe
UK performance-rights body PPL has firmly put the Copyright Tribunal decision regarding rates charged to the hospitality sector behind it. Distributions by PPL last year totaled £133.7 million (US$206.7 million), up from £102.2 million in 2009. The sharp rise in PPL’s distributions saw it overtake GVL of Germany to become the largest performance-rights society in Europe.
Of the top 10 performance rights societies, six were European. This contributed to Europe accounting for 62.1% of the global distribution total last year with North America second with an 18.1% share.
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