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Global Music Publishing Collections Grew Last Year, But a Big Pandemic Drop Is Coming for 2020 and 2021

Björn Ulvaeus
TT News Agency, Zap PR

Björn Ulvaeus

Global music publishing grew to €8.96 billion ($10.04 billion) in 2019, up 8.4% from the year prior among CISAC members, the international collection society trade group announced Wednesday (Oct. 28). Driving that increase was a nearly 27.2% surge in digital revenue, growing to €2.05 billion ($2.3 billion) from €1.61 billion in 2018.

CISAC executives hope that digital can sustain that pace this year, because economic ravages from the ongoing COVID-19 pandemic will result in what they predict will be a precipitous 20-35% decrease in global collections for 2020. That means, in a worst case scenario, global collection could see a €3.1 billion ($3.65 billion) drop to about €5.7 billion ($6.71 billion) in total collections, which would set music collections back to 2015 levels, wiping out the nearly 25% growth that has occurred in the intervening years. This shows the extent of the damage that the music publishing sector is facing, CISAC director general Gadi Oron tells Billboard.

“The future of our sector has been reset by the COVID-19 crisis,” CISAC chair of the board Marcelo Castello Branco said in his comments published in this year’s CISAC annual year report, which measures collections for 2019 from the trade group’s 232 member collections societies and performance rights organizations in 120 countries and territories around the globe. “The coronavirus pandemic has thrown into reverse our global growth, and its effects will be felt throughout 2021 and 2022.”

The pandemic’s impact is most pronounced on the live music sector and background music played in retail stores, bars, restaurants and hotels, which collectively normally provide almost one-third of global music publishing collections. While some background music channels are rebounding, it’s unclear when live music will begin to rebound, even though some tentative steps in staging live shows are now occurring.

That’s why Oron says CISAC is hoping "digital will continue to grow and increase even more this year and next." It won’t make up for the total drop in other sources of income, he notes, but it could offset some of the decline suffered in live and from the advertising drops at radio and television. He further notes that the societies that are more dependent on digital collections -- like the ones in Mexico, Sweden, South Korea and Australia, which each can count digital at over 40% of collections -- are likely to fare better this year and the remainder of the pandemic's economic impact.

Across CISAC members, here's how the €8.96 billion in global protections in 2019 breaks down:

— €3.32 billion ($3.72 billion) from television and radio collections, a 4.5% increase over €3.2 billion in 2018.

— €2.623 billion ($2.94 billion) from concerts and background music, a 5.6% increase over €2.5 billion in 2018.

— €2.05 billion ($2.3 billion) from digital, a 27.2% increase over €1.61 billion in 2018.

— €647 million ($725 million) from CD and video, a 1.1% decrease from €654.2 million in 2018.

— €221 million ($247.5 million) from private copying assessments, a 11% decrease from €248.3 million in 2018.

— €104 million ($116.5 million) from other revenue streams, such as royalties from sync, rental and public lending, and publication, a 12.2% increase from €92.8 million in 2018.

In terms of market share, here are each category’s contributions to the total 2019 global publishing collections:

— Television and radio at 37.1%.

— Concerts and background music at 29.3%.

— Digital at 22.8%.

— CDs and video at 7.2%.

— Private copying assessments at 2.5%.

— Other revenue streams at 1.2%.

Here's how 2019 publishing collections break down by geographic region:

— Europe earned 50.4% of the overall global publishing collections, totaling €4.52 billion ($5.06 billion) in 2020 -- growing 6.7% over €4.24 billion in 2018. The report also notes that Central Europe, which tallied €365 million, is growing 11.2% faster than overall continent overall.

— North America earned 27.4% of the overall global publishing collections, totaling €2.45 billion ($2.75 billion) -- growing 13% over €2.17 billion in 2018.

— The Asia-Pacific region earned 16.4% of the overall global publishing collections, totaling €1.47 billion ($1.65 billion) -- growing 10.6% over €1.33 billion in 2018.

— South and Latin America earned 5% of the overall publishing collections, totaling €448 million ($502 million) -- decreasing 2.8% from €461 million in 2018.

— Africa earned 0.8% of the overall global publishing collections, totaling €73 million -- up 1.1% from €72.2 million in 2018.

Ranking individual countries' collections, here are the top performers:

1. The U.S. collected €2.194 billion ($2.46 billion), ranking first with 24.5% of the marketplace. The U.S. also posted the largest percentage increase by collection volume of the top six countries, growing 13.6% from its 2018 total of €1.93 billion.

2. France earned €1.04 billion ($1.16 billion) for a 11.6% global market share, showing a 2.8% increase from the €1.01 billion collected in 2018.

3. Japan earned €884 million ($992.2 million) for a 9.9% global market share, showing a 7.9% increase from €819 million collected in 2018.

4. Germany earned €816 million ($914 million) for a 9.1% global market share, showing a 7.6% increase from €758.4 million collected in 2018.

5. The U.K. earned €753 million ($843.5 million) for a 8.4% global market share, showing a 12.3% increase from €670.5 million collected in 2018.

6. Italy earned €476 million ($533 million) for a 5.3% market share, showing a 5.7% increase from €450.3 million collected in 2018.

Other countries with lesser amounts in collections nevertheless showed impressive percentage gains. Among them were:

— China grew 28.2% increase to €48 million ($53.8 million) from €37.4 million in 2018.

— Hong Kong grew by 42.1% to €38 million euros ($42.6 million) from €26.7 million in 2018.

— Turkey grew by 47.1% to €20 million ($22.4 million) from €13.6 million in 2018.

— India surged by 251% to €20 million ($22.4 million) from €5.7 million in 2018.

Spain collections are absent from the report, since the country's collection society, the General Society of Authors and Editors (SGAE), was expelled from CISAC in May 2019 after a series of investigations and controversies over SGAE’s collection and management of royalties. The new SGAE leadership is said to be making strides in winning back the confidence of the music publishing sector.

With SGAE only missing from the 2019 report, its collections from 2018 have also been subtracted from last year’s numbers. As a result, in order to keep a direct comparison, last year’s global collection numbers are restated, and thus different from what was published then. This story uses a currency exchange translation for 2019 of €1 to $1.120129. Also all numbers are rounded, while most of the 2018 restated numbers for types of music uses are based on Billboard calculations, using the percentage change information provided in the report.

CISAC’s 232 member collection organizations operate in artistic areas beyond music, and thus also include collection organizations that also gather royalties for creators in the literary area, audiovisual, dramatic and visual arts. Those other areas collections' totaled €10.1 billion ($11.3 billion) in 2019, up 7.8% from €9.4 billion the year before. In addition to the €8.96 billion from music in 2018, those collections from audio-visual creations contributed €597 million euros ($669 million), €197 million ($220 million) came from literature, and €6 million ($6.7 million) from visual arts.

Despite all the good news from 2019, the immediate future is promising a hard road, as all collections organizations, regardless of the creative sector they serve, have been—and will continue to be—impacted by the pandemic. “The massive decreases in income will not be fully felt until next year, when the authors' societies carry out the distributions to their members for 2020,” according to a comment from Germany’s GEMA CEO Harald Heker supplied to Billboard by CISAC. “The already precarious situation of many creators will thus come to a head in 2021. We therefore call on the political decision makers to start already now with further targeted support measures for the cultural and creative industries, in particular concrete assistance for the solo self-employed.”

But CISAC president Björn Ulvaeus reminded in his forward note on the CISAC data that while the report “reflects a sector in the middle of a desperate crisis ... it also highlights creators’ tremendous resilience and provides insights on the way forward.”

He acknowledges that resilience, entrepreneurship and solidarity are not enough. “To build a long path out of this crisis, we have to turn to governments, Ulvaeus said in a statement. “This is not just for emergency funds, however welcome those have been. Policymakers also need to tackle the problems in front of them: the deep flaws that have skewed the playing field for creators for many years.”

He urged legislatures to stay faithful and implement without delay the European copyright directive, adopted in 2019 and which does more than any other legislation to bring fairness for creators in the digital world. And he quoted a U.S. government report on copyright safe harbors, which noted the “massive imbalance between the power and wealth of the giants and the rights and remuneration of the creator.”