Worldwide royalty collections for creators of music, audiovisual works, visual arts, drama and literature are likely to decline this year by up to 35% – €3.5 billion (£3.2bn) in lost income.
The figures are published in the annual Global Collections Report published by CISAC (International Confederation of Societies of Authors and Composers). The report shows how creators have been impacted by the pandemic and analyses the continuing effects on their income well into 2021, as well as action taken by CISAC members including PRS For Music.
CISAC President Björn Ulvaeussaid: “Today, uncertainty about the future for creators is even worse than it was when the pandemic first emerged. Millions of creators are losing their livelihood. We were the first industry to be impacted and we will be the last to return to health.
“Creators are innovative, entrepreneurial, and resilient, but to build a long path out of this crisis, we have to turn to governments. 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. Covid-19 did not create this skewed level playing field. But it has sure aggravated and exacerbated it. This is the time for governments to show they take creative industries seriously. It is time for policymakers to wake up and act.”
PRS for Music CEO Andrea C Martin said: “The findings of the CISAC Global Collections Report 2020 clearly illustrate the severe impact the pandemic has had on our industry. Though it is encouraging to see that global collections continued to rise in 2019, the devastating effect of coronavirus on the live sector and beyond mean that we must now adapt and innovate on behalf of music creators globally, to protect the value of their rights. Collectively we must embrace the challenges and opportunities of these times.”
Music collections for creators grew to almost €8.96bn (£8.1bn) in 2019 – but a 20-35% decline is expected for 2020.
A healthy live/background sector and increased licensing of users helped drive year-on-year growth of 8.4% in 2019. However, lockdown measures and cuts in advertising revenues due to the Covid-19 crisis will lead to an estimated €1.8-€3.1bn (£1.6-£2.8bn) in collections losses in 2020.
The UK was No.5 for collections in 2019 with an 8.4% market share. With year-on-year growth in collections of 12.3%, the UK outperformed the global market.
“We saw very strong collections in the UK,” Gadi Oron, CISAC director general, told Music Week. “It’s the UK talent, it’s the fact that collections around the world are improving and more royalties are repatriated. PRS continues to invest in its own systems and network and collections abroad, and that’s reflected in the results.”
There’s huge potential to increase digital collections in both China and India
A few major markets helped drive global growth in 2019, but all of those will see declines in 2020. Societies in major markets report widely varying decline forecasts, ranging from minus 11% in Canada (SOCAN) to minus 46% in Italy (SIAE). The Netherlands entered the Top 10 collecting territories in 2019, replacing Spain following the suspension of SGAE from CISAC membership.
The US remains No1 (24.5% market share), followed by France, Japan, Germany and the UK. More than half the world’s collections were generated in Europe in 2019.
But while streaming is helping to drive growth in major markets, digital represents only 22.5% of global collections – far lower than recorded music’s 50%-plus digital share. The IMPF and Ivors Academy have raised concerns about how creators are faring in the streaming market, while in the UK MPs are set to investigate the impact of DSPs.
“For us and the publishing side, digital is significantly less than the recording industry in terms of the share of the overall income,” said Oron. “But we saw another year of very impressive growth in digital. I think that’s also part of the impressive growth you see in the individual countries – the US and UK are among the more advanced digital markets.”
Digital music collections hit €2bn (£1.81bn) in 2019. The increase in music subscriptions and strengthening of licensing deals with platforms boosted growth in 2019 and will help mitigate collections declines in 2020.
Digital streaming surged in lockdown and collections are forecast to grow by up to 15% in 2020.
Oron said CISAC would continue to lobby on the value gap. He also noted that societies that are advanced in terms of digital collections will be “more resilient” during the pandemic.
“There’s nothing better to illustrate the importance of digital than the last couple of months,” he said.
Asked about the Ivors Academy campaign to ‘fix streaming’, Oron commented: “I think that a lot can be improved but the challenges are still in making sure that the digital pie continues to grow. There’s still a lot of potential [for growth], even in Europe – when we see the [Copyright] Directive implemented, I think that will lead to a bigger digital pie.”
Oron also urged collection societies to focus on global opportunities for digital.
“Outside Europe, there’s a lot of potential,” he said. “We are looking at markets like China and India to increase collections for digital. They are the ones with the most potential, this is where we are concentrating our efforts to help the societies themselves grow, help them acquire the tools and capacity to process data and to also help them in licensing to conclude more deals with digital services in those countries. There’s huge potential to increase collections in both China and India.”
Live and background accounted for 29% of all music collections in 2019 but will be the most hit by the pandemic. Cancellation of events and social distancing measures are expected to lead to a 60-80% decline in 2020. This follows an increase of 5.6% in 2019.
Collections from broadcast, radio and cable are expected to decline by 10-20% in 2020 due to advertising cutbacks. This is the largest music collections source, accounting for 37% of collections in 2019. TV and radio collections grew 5.6% globally in 2019.
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