Despite significant challenges such as the transfer of value, the world's collective management societies managed to increase their total revenues in 2016 by 6 percent from the previous year to 9,2 billion euros, or approximately 90 billion Norwegian kroner. This is evident from CISAC's "Global collections report 2017", which is published today.
/ 15/11/2017 / Willy MartinsenCISAC is the umbrella organization of artists' management companies worldwide, an organization TONO has been a member of since 1929. In CISAC's «Global Collections Report 2017» The financial results of member organizations in 123 territories are compiled and analyzed, showing that the companies overall managed to increase their revenues from 2015 to 2016, despite major challenges.
“The report shows that the system of collective management of artists’ rights is robust, successful and suitable for further growth. The major traditional revenue streams, led by broadcasting and concerts, remain stable and strong. Digital royalties continue to grow, and in some markets have surpassed other traditional and important revenue areas. CISAC societies continue to generate revenue growth while working hard on further streamlining and innovation,” says CISAC Director, Gadi Oron.
Digital revenues tripled in five years
The report shows that global royalties rose by 6 percent to €9,2 billion (approximately NOK 88 billion), confirming that collective management organisations constitute an important sector in the global economy. The result means that global royalties have increased for three consecutive years, and are now 18 percent higher than in 2012. Within the music sector, royalties increased by 7 percent to €8 billion (approximately NOK 76 billion).
Revenue from digital music usage has almost tripled since 2012, growing by 51,4 percent in 2016. Overall, digital revenue ended at just under 1 billion euros, or approximately 9,5 billion Norwegian kroner. This represents the strongest year-on-year growth in the past five years. It is worth noting, however, that overall digital revenue is far lower than a number of other revenue areas.
Globally, revenues from digital services account for a quarter of broadcasting revenues, and constitute only 10 percent of total fee revenues.
The United States stands out as the largest market in the world with 1,76 billion euros (approximately 16,8 billion kroner) in fee revenues, with an increase in the digital market of 80 percent from the previous year, particularly driven by growth in streaming.
Concert and background music revenues are increasing globally, reflecting the generally healthy performance of live markets in particular. In Europe, revenues from these areas have exceeded broadcast revenues for the first time. Globally, radio and television continue to be the largest sources of revenue, although results showed a slight decline in 2016, reflecting broadcasters pushing down music prices.
Big challenges
Despite a rapidly growing streaming economy, the report confirms that management companies are missing out on billions in revenue from the digital space. Outdated legislation contributes greatly to giving user-generated content platforms enormous revenues from uploading and sharing protected music and other artistic expressions without the services sharing the revenues with those who created and own the content.
The report also shows that there is a huge untapped revenue potential in several areas. In the potentially huge Chinese market, royalty income in 2016 was only 23 million euros (approximately 219 million kroner). Here, only 105 of more than 2000 radio and TV channels pay royalties. In Africa, a survey among CISAC companies in 22 countries shows that no more than 42 percent of radio stations are licensed and therefore do not pay royalties to composers, songwriters, lyricists and music publishers for their use of music.
– The whole world is now looking to the EU and how they will solve the Transfer of Value problem, says Jean Michel Jarre, president of CISAC.
Four areas that require special measures
CISAC now identifies four main areas where measures are needed to improve the finances for artists:
1. Transfer of value
Streaming is a rapidly growing economy, without creators being adequately and fairly compensated. Existing legislation must be changed to hold services accountable and require them to pay fair compensation to copyright holders of protected music.
2. Legislation must be put in place that provides fair rights to screenwriters and film directors
In most countries around the world, screenwriters and directors are not paid when their works are reused by broadcasters and online services. A right to remuneration must be established in this area.
3. A universal resale right must be established to provide fair conditions for visual artists
A scheme must be established that ensures that visual artists and other visual artists are paid when their art is resold.
4. Fairer licensing rates are needed, especially in developing countries
Creative and artistic works contribute astronomical revenues to commercial enterprises. Yet in many countries, especially in Africa and Asia, royalties are very low or non-existent.
– Platforms like YouTube, the world's largest streaming service, only pay crumbs to creators. Our most important demand from world governments is to solve the "transfer of value" problem. The whole world is now looking to the EU, and how they will solve this most important issue, says President of CISAC, Jean Michel Jarre.
CISAC (The International Confereration of Societies of Authors and Composers) is a global umbrella organization with 239 collective management societies from 123 countries and five territories as members. These member organizations represent more than four million creators active in five different major repertoire areas: audiovisual, drama, literature, music and visual arts. The organization's president is the French composer and synth pioneer Jean Michel Jarre. The organization is headquartered in Paris. Visit http://www.cisac.org.
For further information:
Willy Martinsen, communications manager at TONO: mobile 909 65 254, email: willy.martinsen@tono.no
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