According to the latest annual industry statistics from economists, the value of global music copyrights will reach US$45.5 billion in 2023, an increase of 11% over the same period last year. Will Page. When Page first calculated the value of various music rights-related revenue streams in 2014, the figure was $25 billion, meaning the value of music rights could double within a decade.
Record companies account for the largest share of global music copyrights and will reach $28.5 billion in 2023, a 21% increase from 2022. Physical revenue performed better, growing 13.4%, while vinyl record sales grew 15.4%. Page said that globally, vinyl record sales will “soon” surpass CD sales. CD sales are still high in Japan and across Asia, but Page noted that vinyl records are being sold in larger quantities and at higher prices. “This will easily become a $3 billion business by the next period [summer] “The Olympics will be held in 2028,” he said.
Revenue from collecting societies, which collect royalties on behalf of songwriters and publishers, was $12.9 billion, up 11% from the previous year. In a sign of changing economic clout, live performances now pay CMOs more than a general license for public performances. Additionally, CMOs’ digital collections exceed broadcast and broadcast revenue, reflecting the extent to which streaming has usurped the power of traditional media. Ten years ago, digital collections accounted for only 5% of the collection, while broadcasts accounted for half.
Another shift in industry power dynamics is that publishers are generating more revenue from direct licensing than from CMOs. Page said the royalties were a combination of “substantial and broadly stable revenue from sync and major rights, as well as rapidly growing digital revenue.” “Publishers prefer direct licensing because it means they can get more funding faster,” he explains. For example, a song that skyrocketed in mid-March took 201 days to pay the artist and 383 days to pay the songwriter. “What’s more,” he added, “one-third of [songwriter] Revenue may be lost in transaction costs in the form of management fees charged by various CMOs.
Although some parts of music rights, namely public performance revenue, have suffered during the pandemic, music rights have grown significantly since 2020, surpassing the physical film business. In 2023, music will be 38% larger than movies. That marks a dramatic shift from pre-pandemic 2019, when movies were 33% larger than music. Over the past four years, music has grown by 44%, while movies have shrunk by 21%. The real difference between music and movies is even bigger: Page’s music rights amount accounts for the copyright owner’s and creator’s trade revenue. The movie numbers in his comparison represent consumer spending. One analyst estimates that movie box office revenue will reach $33.2 billion by 2023, with only half of that going to distribution.
Page’s report covers total revenue generated from master recordings and musical compositions. He eliminates double counting—for example, record labels and music publishers both count mechanical royalties as revenue—and fills in gaps in the more focused industry lists of IFPI, CISAC, and the International Federation of Music Publishers.
“For example, anyone trying to attract the attention of policymakers who is unaware of the threats posed by artificial intelligence may find it convenient to use large numbers to show what is at stake,” he wrote in the report.
For large Western music companies, the globalization of music has opened up new markets for their repertoire. Page’s report looks at the opposite effect: the value of developed streaming markets to artists in less affluent countries. North America and Europe, two regions dominated by subscription revenue, contributed 80% of the growth value of streaming media, but only accounted for 48% of the growth of streaming media playback volume. By comparison, streaming platforms in Latin America and Asia (excluding Japan) generate much less revenue per listener, but account for 12% of growth in streaming value and 5% of streaming activity revenue. The contribution rate is 46%.
For artists from Latin America and Asia, fans in markets where streaming royalties are higher can be lucrative. For example, Colombian artists such as J. Balvin and Shakira generated nearly $100 million in streaming revenue in the United States, which is six times what those streams are worth in their home countries. The value of this “trade promotion” of $78 million exceeds the value of the entire Columbia recording industry of $74 million. Likewise, streaming by Mexican artists within the United States will be worth $350 million by 2023, $200 million more than streaming from Mexico.
“Let’s remember that Mexico and Colombia are just two examples of exporting to one market,” Page said. Musical terms coined in native languages for local markets, topping local charts on global streaming platforms. “There’s a lot more of this music out there in South and Central America, and the world is listening to these new ‘glocals.'”
