A resurgence in performing rights and a heightened demand for physical products propelled the global music copyright value to a record-breaking $41.5 billion in 2022, marking the first time it crossed the $40 billion milestone, according to report released on Monday (Nov. 6) by Billboard.
The report written by Will Page which calculates the global value of music copyright by consolidating three separate industry analysis: IFPI’s Global Music Report, CISAC’s annual Global Collections Report, and Music & Copyright’s analysis of music publishing, showed that there was a $5 billion annual increase that was “equally distributed” between recorded music and music publishing, even though record labels dominated the global market.
Consulting firm IDG said in the report that,“It’s nuts to think that this ‘c’ with a circle around it – copyright – is now worth forty billion. For years music was ridiculed as the sick man of ‘media verticals.’ Now music copyright can stand tall. Some rough maths suggests spend on music is now more than twice global cinema worldwide box office, and just under half of the online video streaming market (but still a fraction of the gaming industry.”
The 2022 figure represented a 16% growth when adjusted for constant currency, with currency fluctuations playing a pivotal role. Page recalibrated the global music copyright value in 2021 from $36.9 billion to $39.6 billion due to updated foreign exchange rates. Of the nearly $3 billion restatement, almost $2 billion came from IFPI’s global recorded music revenues, while approximately $1 billion was attributed to music publishing.
Record labels accounted for $26 billion of the $41.5 billion total, representing a 62.7% share, which was slightly lower than the shares in both 2021 (64.6%) and 2020 (63.5%). Since 2020, the decline in digital revenue for labels has been offset by more than $1 billion in growth, primarily driven by the increasing demand for CDs in Asia and an insatiable desire for vinyl records in Europe and the United States. Page anticipates that this trend will continue unabated.
Music publishers increased their share of the global total to 37.3%. Page attributes this outperformance to a “lag effect,” where labels tend to license to new streaming platforms before publishers. Another potential factor contributing to the publishers’ improvement is early accruals resulting from the royalty increase in the United States by the Copyright Royalty Board, which Page expects to fully crystallize when the 2023 figures are calculated.
While publishers’ direct revenue increased from $3.7 billion to $4.1 billion, it accounted for a slightly smaller 9.9% share of the total revenue, down from 10.2% in 2021. Songwriter Collective Management Organizations (CMOs) rebounded with a 27.5% share of total revenue, amounting to $11.4 billion, a significant improvement from the 25.3% share worth $9.2 billion in 2021 and the 27.2% share worth $8.5 billion in 2020. Page credits CMOs’ resurgence to music’s return to live performances after the pandemic, leading to increased public performance royalties.
Additionally, Page notes that “inflation is embedded into blanket licenses,” which means higher prices lead to increased collections when royalties are calculated as a percentage of revenue. Lastly, CMOs have enhanced collections through a combination of content identification and improved licensing terms, a strategy that has been effective.
There is a possibility that Page’s $41.5 billion estimate might be conservative. The estimate incorporates global recording revenue reported by the trade group IFPI. However, as Page points out in his report, MIDiA Research has conducted extensive research on segments that IFPI’s various members might have undercounted, including do-it-yourself artists accounting for 10% of global streams, indie labels, and the South Korean market. According to MIDiA Research, the value of global recorded music in 2022 is estimated at $18.9 billion, about 8% higher than IFPI’s figure of $17.5 billion.
If MIDiA’s methodology is accurate, Page suggests that the value of global copyright could be closer to $45 billion than $40 billion and may reach $50 billion sooner than expected. When the music industry achieves this milestone, it will have doubled in value since Page’s 2014 report, which estimated the global value of music copyright at $25 billion.
