The latest issue of Music & Copyright is now available for subscribers to download. Here are some of the highlights.
Recorded-music trade growth set to eclipse modest rise in revenue for music publishers
With all the world’s major recorded-music markets and one or two other smaller ones having published midyear trade figures, Music & Copyright‘s annual assessment of the results suggests global recorded-music trade earnings from the sale of physical and digital recorded-music and income from music access services will rise at the fastest ever rate. The big bounce-back in sales of physical formats in some markets will provide a major boost to this year’s global total, along with the continued rise in streaming. Adding to the good news, revenue from performance rights and synchronization is expected to return to growth after a tough 2020. Income for music publishers will also register a positive year after the squeeze on the performance sector from the COVID-19 pandemic took the edge off last year’s growth.
Increase in global performance rights distributions, but fall expected for this year
Performance rights distributions to record companies (producers) and performers edged up last year, following on from a fall in 2019 that saw payments slip below the $3bn mark after reaching the milestone for the first time in 2018. Producers’ and performers’ rights have become an important source of income in recent years given the long period of demise of recorded-music trade revenue. The return to growth through increased consumer interest in streaming and subscriptions has somewhat overshadowed the importance of performance rights, but the revenue source remains a key earnings generator. While last year’s modest increase suggests that distributions defied the COVID-19 pandemic, total payments were partly based on receipts from prior year uses and so the impact on distributions to producers and performers has been delayed.
Financial big guns take aim at the catalogs business
The music industry has seen millions of dollars pour into the acquisition of song rights over the past couple of years, and rights management, which was until recently regarded as something of a backroom business, is making global headlines. Big financial players are now making sizable bets on music catalogs, which have now become firmly established as a new asset class, and valuations are on the up. Active asset management will be the key to future success, and owners will need to really sweat those newly acquired rights to achieve decent returns. Furthermore, while mainstream music will surely continue to make up the bulk of such portfolios, investors should look to pick up unexploited rights in new genres.
Italy country report
In addition to the usual set of music industry statistics and news briefs, the latest issue of Music & Copyright includes a detailed Italy music industry report. Prior to the pandemic, Italy’s recorded-music sector had experienced an erratic few years, largely due to the lingering dominance of physical formats. However, digital trade sales overtook physical formats in 2018 with a sharp rise in subscription sales more than offsetting falls in CD album sales and vinyl. The pattern of sales continued into 2019 but the toll on physical formats and performance rights in 2020 resulted in a flat year overall. So far this year, sales have bounced back strongly. UMG remains the clear leader in market share terms, ahead of SME and WMG. However, the largest of the three majors saw its distributor share fall last year with SME and WMG both making gains. Total income for the authors’ society SIAE suffered a sharp fall with collections from live performance and background music taking a tumble. Given that the live sector was effectively shuttered for nine months, total spending on concerts and festivals last year was down to the lowest level for more than 20 years.
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