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Creators' royalties shift to digital as CISAC global collections hit record €9.7 billion



Digital revenues up 29%, video on demand and “champion” markets help growth


Worldwide royalty collections for creators of music, audiovisual, visual arts, drama and literature reached a record €9.65 billion in 2018, according to the 2019 Global Collections Report published today by CISAC (International Confederation of Societies of Authors and Composers).

Royalties from digital sources jumped 29% to €1.64 billion, thanks to rapid global expansion of music and subscription video on-demand (SVOD) services. In the last 5 years, creators’ digital income has nearly tripled, now accounting for 17% of collections compared to 7.5% in 2014. 

The increase in major markets’ digital collections - notably the United States, France and Japan - are the biggest drivers of global growth. This growth is helped by new and extended licensing deals between societies and digital platforms, from dedicated content services like Spotify to social media platforms such as Facebook and video on demand platforms such as Netflix and Amazon.

Global collections for music repertoire, accounting for the majority of the total, rose 1.8% to €8.5 billion, driven by a 29.6% growth in digital income and the continuing surge in subscription streaming revenues.

 

Total collections up 1% in 2018
Total collections in 2018, for all repertoires, grew 0.9%, the fifth consecutive year of growth. Over the five years since 2014, global collections by CISAC societies are up 25.4%. Digital growth, combined with resilience in the two other major uses (TV/radio and live/background), are continuing to offset declining income from physical media.

TV and radio, the largest collections source, declined 2.4% in 2018, while live and background revenue grew 0.5%. Combined, these two sectors have substantially grown since 2014, adding €653 million in revenue.

CISAC Director General Gadi Oron said: “This Report provides many reasons for optimism about our sector. Digital revenues show an impressive increase, have nearly tripled in the last five years and have enormous potential for further growth. More markets are seeing digital income taking the top position of all revenue streams, which is an extremely positive sign. In a landscape of fragmenting income sources, the role of authors societies in generating monetary value for millions of creators has never been more vital.”

Digital shows its growth potential
The Report shows other key indicators of the shift to digital: Asia-Pacific is a digital leader, with an online share of 26.3%, twice that of Europe at 13.3%; and Australasia, Sweden, South Korea, Mexico and China are in a growing group of “digital champions” where online revenues are now the top collections source.

However, the Report also highlights the need for legislative action to bring fair creators’ remuneration, calling on governments to follow the example of the landmark EU Copyright Directive, adopted in April 2019.

Jean-Michel Jarre, CISAC President, said: “Digital is our future and revenues to creators are rising fast, but there is a dark side to digital, and it is caused by a fundamental flaw in the legal environment that continues to devalue creators and their works. That is why the European Copyright Directive is so momentous for creators everywhere. The Directive has sent an amazing, positive signal around the world, building a fairer balance between creators and the tech platforms”.

 

Fastest digital growth among top 20 markets over 5 years

BRAZIL

1800%

MEXICO

1220%

FRANCE

510%

CHINA

480%

UNITED STATES

310%

 

Other key highlights of the 2019 Report include:

  • Global collections broken down by repertoire, type of use and region
  • Ten individual market case studies (Canada, Chile, China, Denmark, India, Italy, Malawi, Mexico, Poland, Senegal)
  • Analysis of key legislative developments affecting creators’ remuneration in music, audiovisual visual arts, drama and literature


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GLOBAL COLLECTIONS REPORT 2019. MUSIC REPERTOIRE BACKGROUNDER

Fifth consecutive year of growth, with global music collections hitting a new record of €8.5 billion, up 1.8% on the previous year.  Over the last five years music collections have risen 26.8%.  Digital growth, combined with resilience in the two other major uses (TV/radio and live/background), are continuing to offset declining income from physical media.

Digital music drives growth.  Music royalties from digital sources jumped 30% to €1.64 billion, thanks to rapid global expansion of music and subscription video on-demand (SVOD) services. In the last 5 years, creators’ digital income has nearly tripled to €1.6 billion, now accounting for 19% of collections compared to 15% in 2017. 

Key drivers of digital growth:

  1. Major territories: The increase in major markets’ digital collections - notably the United States, France and Japan - are the biggest drivers of global growth. 
  1. New and extended licensing deals between societies and digital platforms, from dedicated content services like Spotify to social media platforms such as Facebook and video on demand platforms such as Netflix and Amazon.
  1. Digital “champions” – three years ago there no top 20 markets with digital as the primary music collections source. In 2018 there were five, topped by Mexico where digital accounts for nearly half the market

Music Collections

Digital music share

       5-year growth

MEXICO

48.9%

+1,221.0%

SWEDEN

42.8%

+83.1%

AUSTRALASIA

36.6%

+191.9%

SOUTH KOREA

34.8%

+101.5%

CANADA

30.9%

+138.9%

  1. Subscription video on demand.  Many societies are seeing sharply increased collections from SVOD platforms such as Netflix and Amazon. These include APRA AMCO (SVOD up 41.8%); JASRAC IN Japan (up 60%); STIM in Sweden (VOD revenue doubled) and GEMA in Germany where VOD helped propel online collections.
  1. Digital growth in major markets: the biggest growth in value was France (+€122m), the US (+€77m), Germany (+€33m), Japan (+€31m), Mexico (+€12m) and Canada (+€11m).

 

Traditional income streams stay resilient, with some migration from traditional broadcast. TV and radio, still substantially the largest music collections sources, declined 3.1% in 2018, reflecting the rapid changes in TV viewing and migration to subscription video.  Live and background revenue grew 0.8%. Combined, these two “traditional” sectors have substantially grown since 2014, adding more than €551 million to the global total.

Asia/Pacific is a digital leader.  Asia is a fascinating indicator the potential for further digital collections increases.  The rapid growth of digital income in Asia, combined with the relative weakness of traditional uses such as broadcast, means that the region’s digital share is now substantial higher than Canada-USA (20.8%) and nearly double that of Europe (15.8%).  An equivalent share in Europe would add more than €1.5 billion in collections.


Key drivers in top 5 music markets

UNITED STATES: Digital +24.4% continues to expand as streaming is well established and US CMOs continue licensing new DSPs for their own repertoire worldwide.

FRANCE: Digital +146%. new global deals with digital platforms covering international and national repertoire managed by SACEM. Healthy Live & background sector (+4.4%)

JAPAN: Digital is booming (+20% in 2018) while CD & video is only slowly declining (-13% over 5 years)

GERMANY: A major back payment in 2017 for private copying had artificially boosted growth, hence the corresponding decline in 2018. Apart from those uses, strong growth in digital (+45%) and traditional sectors maintain a good growth.

UNITED KINGDOM: Decrease in Live & background due to delays in implementing the joint venture PPL-PRS Ltd, decrease in TV & radio due to declining audiences and a back payment from ITV in 2017. Digital growth could barely compensate for these declines.
 

Strong Euro depressed 2018 growth. The 1.8% increase in global collections is measured according to a floating currency rate. Using constant € the global music growth rate would have been 5.3%.

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