Global royalty collections for creators hit a record high in 2023, propelled by strong growth in live and public performances, CISAC revealed in its latest Global Collection Report.
In all, CISAC’s 227 member CMOs worldwide reported EUR €13.1 billion in collections for 2023, up 7.6% YoY, the organization said in its report released on Thursday (October 24).
That equals USD $14.2 billion at the average exchange rate for 2023.
The vast majority came from music collections, with publisher and songwriter royalties collected by their societies accounting for €11.75 billion ($12.72 billion) of the total, also up 7.6% YoY.
That marks a slowdown from 2022, when songwriters and publishers saw a 28% YoY increase in collections. Nonetheless, total music collections were 31.6% above their level of 2019, the last full year that was unaffected by the pandemic.
The standout segment in 2023 was live and public performance collections, which grew 22% YoY to €3.28 billion ($3.55 billion), as live events continued to recover from the pandemic-era slump.
In fact, live events have now fully recovered, with 2023 collections exceeding 2019 by 12.7%.
Digital collections were up 9.6% YoY to €4.62 billion ($5.0 billion), considerably softer than the 33.5% YoY growth recorded the year before, when digital became the largest source of collections worldwide for the first time.
Between 2019 and 2023, digital represented 87.2% of the growth in royalties, the CISAC report said. The only segment not to record growth during this period was radio/TV, whose contribution to growth was -1% in terms of music royalties.
However, CISAC flagged a number of concerns about digital revenue, including an apparent slowdown in growth, and unsatisfactory revenues for all but the most successful creators.
“Despite the growth in royalties coming from digital platforms, the vast majority of creators say that streaming income cannot support a career or livelihood,” the report stated.
“This is especially true for those outside the small coterie of highly successful artists, and those who cannot rely on other income streams, such as performing live, to build their career.”
CISAC said it’s seeing signs that the digital subscription market is beginning to mature “in larger territories.”
“Both video and music streaming markets are set for continued growth in the years ahead, but there are challenges on the horizon,” James Duvall, Principal Analyst, Futuresource Consulting, wrote in the report.
“Growth will begin to soften as services start to reach saturation point within their core developed markets… Various pressures are affecting the landscape. The cost of producing content has increased, there’s a need to fill local video quotas, and competition is intensifying as more services enter the content arena. As a result, established players need to explore new revenue streams to shore up their profits.”
“Established players need to explore new revenue streams to shore up their profits.”
James Duvall, Futuresource Consulting
To that end, streaming services and record companies have focused on better monetization of superfans, that segment of the music audience willing to pay more for greater access to their favorite artists, exclusive content, and other benefits. Digital providers have also begun raising their subscription prices.
However, Duvall warned that there may be a limit to how far those price increases can go.
“Futuresource research shows that more than 33% of users canceled a service during the previous year due to it being too expensive and/or they weren’t able to afford it,” he wrote.
“What’s more, over a third of canceled subscribers would resubscribe if a cheaper tier was available. Promotional offerings, such as 50% off or six months for the price of three, would encourage one in five consumers to resubscribe.”
Broken down by geography, the US remained the largest source of music collections for CISAC members, with €2.8 billion ($3.03 billion) in 2023, up 8.1% YoY. CISAC members in the US include AMRA and ASCAP.
The second-largest market was France (SACEM), with €1.4 billion ($1.51 billion) in collections, up 5.1% YoY, followed by the UK (PRS for Music) at €1.1 billion ($1.2 billion), up 7.1% YoY.
The fastest-growing region was Latin America, which saw music collections jump by 26.2% YoY, to €694 million ($751 million), followed by Eastern Europe, up 10.4% YoY to €399 million ($432 million).
Europe remained the largest source of music collections, accounting for 51.1% of the total, followed by the US and Canada at 27.1%.
AI a growing concern
In a foreword to the report, CISAC President Björn Ulvaeus identified the need for coherent policies to address AI’s growing role in music.
“I am a user and a big fan of AI tools. I have always believed we can only ever embrace new technology, not try and stop it – but there is a rock-solid caveat: this must never be at the cost of compromising copyright and human rights,” Ulvaeus wrote.
“The recent studies estimating what this could cost to creators in lost income, from France, Germany, Australia and New Zealand, are an alarm call to us all. I believe that a badly regulated AI environment could wipe out many artists’ careers. That could be the next Paul McCartney or Taylor Swift.”
“I believe that a badly regulated AI environment could wipe out many artists’ careers. That could be the next Paul McCartney or Taylor Swift.”
Björn Ulvaeus, CISAC
Among the reports that Ulvaeus referenced was one carried out by France’s SACEM and Germany’s GEMA, which suggested that 27% of creators’ revenue is at risk in the medium term due to AI.
“There is no question that decisions made by policymakers in the near future will have a huge influence on the future for creators and of our culture,” CISAC Director General Gadi Oron wrote in his own foreword to the report.
Oron also noted that the currently booming live segment may be at risk due to widespread venue closures in some markets.
“The sector is fragmented and in many areas, fragile… Support from governments to protect the live sector has never been more important.”
