Sacem, the French licensing and collection society, estimates that royalty collections last year remained stable despite a challenging economic environment and the lack of the appropriate remuneration from music activity on the Internet.
At a press conference at MIDEM, Bernard Miyet, CEO of SACEM, reported that while music royalties remained stable, growing an estimated 1% last year to €763.5 million ($1.08 billion) up 1% from the prior year's revenue of €755.8 million ($1.07 billion), it was largely due to growth in performance revenues, which are offsetting large declines in mechanical royalties.
At the press conference, Miyet showed a slide where mechanicals from CD and other physical formats including video had slid to 12% of the society's collection, down from the 21% that category accounted for in 2003.
Meanwhile, the rapid decline in mechanical revenues are certainly not being made up by digital and other multimedia rights uses as those categories still only comprise 1% of Sacem's revenue. Yet, despite the meager royalties from digital sales, Sacem has to make a considerable investment in the technology to accurately track royalty payments for each nano-transaction, Miyet said, according to the translator.
He said radio and TV performance royalties grew to 36% of revenue and general rights like concerts, and public venues that play music grew to 34% respectively from 33% and 30% in 2003.
Miyet said that live music had been a bright spot but that was mainly thanks to the country's large heritage acts and big shows from touring superstars from other countries. On the other hand, he foresees a problem for younger acts, if CD sales keep slipping. If you are not selling records, it is hard to build up a fan base to draw crowds to concerts, he said.
That's why the music industry is preparing for a digital future. But he added that he was disappointed by the Zelnick Commission, which he labeled a missed opportunity for songwriters and publishers.
According to the Sacem Web site, the organization's authors, composers and publishers are disappointed in the "creation and Internet mission, also referred to as the Zelnick mission." Musical authors, composers and publishers express their profound disappointment at the conclusions of the "Creation and the Internet" Mission, to the Minister of Culture and Communication, the Sacem Web site says.
Moving onto the European's Commission's goal to make music licensing easier for digital service providers instead of the country-by-country licensing that they are forced to do now, Miyat noted that Sacem is being urged on in two different directions. On the one hand, the European Commission wants to see competition between all the difference societies, while on the other they appear to be pushing for collective management of rights to provide one-stop shopping for digital service providers.
Getting back to the Internet, Miyet said he realizes that young artists' need the Internet to market music, which is why the organization agreed four years ago to allow the artists to put their songs on their Web sites without having to compensate publishers.
Another problem, according to Miyet is that while music use in films and TV is growing, it is mainly in the area of production music because song use in programs is on the decline.