CISAC Music Royalty Collections Grow to $8.4 Billion, Even With YouTube & Others ‘Driving Down the Value of Our Works’

CISAC, the International Confederation of Societies of Authors and Composers, which collects data from 239 collection management organizations in 123 countries, reports that music publishing revenue grew to 8.006 billion euros ($8.435 billion) from 7.497 million euros ($7.9 billion), an increase of 6.8 percent.

Overall revenue reported by CISAC totaled 9.156 billion euros ($9.65 billion), up 5.95 percent from 8.642 billion euros ($9.1 billion). Besides music, that 2016 total includes collections of 578 million euros ($609 million) for audio visual; 208 million euros ($219.1 million) for literary works; 190 million euros ($200.2 million) for dramatic works and 174 million euros ($183.32 million) for visual arts.

Breaking out overall revenue by continent, Europe accounted for 5.201 billion euros ($5.29 billion), North America for 1.98 billion euros ($2.086 billion), Asia Pacific, 1.351 billion euros ($1.423.4 million), South America 557 million euros ($586.8 million) and Africa 67 million euros ($70.6 million). All revenue cited for regions only include collections made in that country and excludes foreign payments paid to local societies.

Getting back to music, of the 8.006 billion euros in performance and mechanical royalties in 2016, television and radio accounted for 3.4 billion euros ($3.58 billion), or 42.5 percent, which revenue-wise was down 2 percent from 3.471 billion euros ($3.67 billion) in 2015. Live performances in concert halls and clubs and background music at retail stores, hotels and other locations, the second largest category, totaled 2.520 billion euros ($2.66 billion), or 31.5 percent of revenue, up 2.6 percent from 2.458 euros ($2.59 million) in the prior year.

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Digital royalties presented the strongest percentage increase, growing 51.9 percent to 945 million euros ($995.6 million), or 11.8 percent or revenue, as compared with the prior year when the category produced 622 million euros ($655.3 million).

But the report points out that despite its percentage increase, its overall piece of the pie is held back by poor returns from user-generated content video streaming platforms. 

Despite the overall global revenue growth for CISAC member organizations, “collections are nowhere near the level they should be. Large industries that use creative content are driving down the value of our works,” CISAC president and electronic music creator Jean-Michel Jarre said in a statement. “A simple illustration of this is the ‘transfer of value’ in the digital market where platforms such as YouTube are paying mere crumbs to authors. There is no greater priority that we ask from governments today than a solution to the transfer of value.”

Finishing up the music revenue breakout, CDs and videos grew 732 million euros ($771.21 million), or 9.1 percent of music revenue, and that represents a 9.4 percent lift, from 613 million euros ($645.83 million) in 2015. Finally, private copying assessments from equipment manufacturers grew to 272 million euros ($286.6 million), or 3.4 percent of total revenue that represented a 35.7 percent increase from 200 million euros ($210.7 million) in the prior year; while other royalties totaled 136 million euros ($143.3 million), or 1.7 percent of the pie up 1.5 percent from 134 million euros ($141.2 million).

“This year’s report shows the system of collective management of creators’ rights is robust, successful and ready for more growth,” CISAC director general Gadi Oron said in a statement. “The big traditional revenue streams, led by broadcast and live performance, remain stable and strong. Digital royalties continue to surge and in some markets already overtake other forms of income. The figures we’re releasing today reflect our societies’ relentless effort to be more efficient and innovative, and drive income growth.”

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Looking at music by region, Europe grew to 4.224 billion euros ($4.45 billion), up 2 percent from 4.080 billion euros ($4.3 billion) in 2015. The report points out that live and background music, which accounted for 1.633 billion euros ($1.72 billion), or 38.7 percent of European music revenue, supplanted television and radio royalties as the largest provider of royalties as the latter category, at 1.575 billion euros ($1.66 billion), comprised 37.3 percent of revenue.

Within Europe, CISAC highlighted Sweden, showing that it had overall revenue of 1.082 billion kronas ($110.02 million) for all creative areas, not just music. Of note in Sweden, while digital revenue globally is about 10 percent, in that country, where Spotify started, digital totaled almost as much as TV and radio, with 352.7 million kronas ($38.8 million) for the latter, versus 354.9 million kronas ($39.04 million). Both categories are just under 33 percent each of total revenue there.

Moving over to North America, its 1.974 billion euros ($2.08 billion) total breaks out to TV and radio at 1.147 billion euros ($1.21 billion), or 58.1 percent of revenue; live and background at 327 million euros ($344.5 million), or 16.6 percent; digital 278 million euros ($292.9 million), or 14.1 percent; CDs and videos 211 million euros ($222.3 million), or 10.7 percent; with other income streams totaling 12 million euros ($12.64 million). Compared to the prior year, TV/radio was down almost 2 percent, while most other income streams showed growth, the increase in CD and video revenue was mainly due to the inclusion of data from the Harry Fox Agency, which hadn’t reported in 2015.

While Asia-Pacific showed 11 percent growth to 1.257 billion euros ($1.324 billion) from 2015’s total of 1.132 billion euros ($1.193 billion), that’s still less than the 1.352 billion euros ($1.424 billion) posted in 2012. Revenue breakout in this territory is similar to the global breakout, though CD, video and digital are a little stronger, while TV, radio and live are a little smaller. In looking specifically at China, CISAC highlighted the digital category as the largest contributor of revenue. Of the 167 million yuan ($24 million) in revenue produced in China, digital accounted for 38.4 percent, or 64.1 million yuan ($9.22 million) of the total.

In South America, revenue grew 2.8 percent to 491 million euros ($517.3 million) from 478 million ($503.6 million). Here, CISAC highlighted Mexico where revenue increased to 1.367 million pesos ($65.6 million), up 38.2 percent from 990 million pesos ($47.84 million); and found that digital, with 501 million pesos ($24.2 million), was slightly behind TV and radio, which generated 538.6 million pesos ($26.03 million), or 39.4 percent to 36.6 percent of total revenue, respectively, for that country.

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Finally, Africa saw music royalties grow to 59 million euros ($69.2 million), an 11 percent increase from 53 million euros ($55.84 million). CISAC and its Creators Councils says it works with African societies and international bodies to help address the challenging conditions for music licensing in that continent. One big problem they hope to have an impact on, less than 40 percent of radio stations in Africa are licensed to broadcast music.

The top countries for music collections are the U.S., with 1.756 billion euros ($1.85 billion), up 14.1 percent from 1.539 billion euros ($1.62 billion), with Japan the second largest, with 858 million euros ($904 million), up 12 percent from 766.1 million euros ($807.1 million). Germany saw collections of 844 million euros, up 16.4 percent from 725.1 million euros; France 805 million euros ($889.2 million), up 2.9 percent from 782.3 million euros ($824.2 million); U.K. rang up 653 million euros ($688 million), up 1.8 percent 641 million euros ($675.3 million); Canada, 219 million euros ($230.7 million), up 1.6 percent from 215.6 million euros ($227.15 million); and Brazil at 196 million euros $206.5 million), up 5.2 percent from 186.3 million euros ($196.3 million).

Looking at revenue collection by population, Sweden was tops, ringing up 28.5 euros ($30.03) per head, while Denmark was second, as 23.4 euros ($24.65) per head annually, and France, third with 15.9 euros ($16.75). Other key countries include the U.K. and Germany, both at 10.9 euros ($11.48) per head, Japan at 6.8 euros ($7.16) per head and the U.S. at 5.5 euros ($5.79) per head, with the global average 1.48 euros ($1.56) per head.

And then switching it up and looking at revenues as a percentage of GDP (gross domestic product), Hungary was the top country with collection revenue comprising slightly over half of 1 percent (0.55 percent) of revenue with France right behind it at the half percent, or 0.50 percent; the U.K. at 0.30 percent; and Japan at 0.19 percent, with the U.S. and Canada at a combined 0.11 percent, the smallest of the developed countries, and below the world average of 0.14 percent.