State Champ Radio CISAC
Even amid the streaming-driven spectacular recovery of the music business, rights management organizations are thriving. Music rights collections reached €10.83 billion ($11.4 billion) in 2022, according to CISAC, the trade organization of collective management societies, a historic high that represents 28% growth over 2021 revenue, partly because the live business is recovering so fast.
“It’s an excellent result,” CISAC director general Gadi Oron told Billboard. “It’s record-breaking in terms of collections, since we exceeded €12 billion” — CISAC member societies racked up €12.1 billion ($12.7 billion) in revenue, counting audiovisual, literary and other collections — “and it’s record-breaking in terms of year-on-year growth.”
This arguably undervalues the rights business, because it only counts money that goes through rights management organizations — both collective management societies and private businesses that license the same rights — and not revenue from direct deals with publishers. In the U.S., the world’s biggest market, for example, it counts public performance royalties but not the mechanical royalties handled by the Mechanical Licensing Collective. Add in that money and, although an apples-to-Apple Music accounting would get complicated, the total is almost certainly more than half of the $26.2 billion global recorded music revenue that IFPI reported for the same year. That’s a lot of money flowing through organizations with unpronounceable initials.
At first glance, it looks like revenue from collections is growing much slower than those from recordings — music rights collections are up 31% since 2018, while recording revenue is up nearly 50%. But that may not paint a full picture. Most of the growth in the recording business is tied to streaming — much of its future growth will come from streaming in the developing world. The same is true of collections, except that digital only became the biggest source of revenue this year, representing 38% of the total. Most other sources of collections revenue are growing slower, except for live, which was whipsawed by the pandemic and will only recover fully this year. And since 2018, digital collections grew by150% while global digital revenue grew by just under 100%.
The current pace of growth is unsustainable, since it includes the once-in-a-century recovery of revenue collected from live performance, which grew 185.7%. But digital collections alone grew 33.5%, and that revenue will make up a larger share of total revenue in the coming years, which implies faster growth overall. In five years, “the one thing I’m certain of is that digital will become more than a third of the pie,” Oron says. It could even be half — presumably without much erosion in live revenue and other sources of income.
As in the recorded music business, the larger amount of that money will come from countries that thus far have had small, or even negligible, music industries. The countries that brought in the most revenue in 2022 aren’t so different from the usual — the U.S. in the lead with €2.6 billion ($2.7 billion, up 30.5%), then France with €1.3 billion ($1.3 billion, up 39.3%), the U.K. with €1 billion ($1 billion, up 24.3%), Germany with €903 million ($951 million, up 17.9%) and Japan with €848 million ($893 million, up 10.1% in local currency). That’s similar to the biggest markets for recorded music, only France does better in collections, comparatively, while Japan fares a bit worse. (Europe still accounts for 51% of collections revenue, with another 27% coming from the U.S. and Canada.) “The countries in the top 10 have always been the biggest collectors,” Oron says.
The balance of power will tilt even more toward some of these markets, however, as the biggest and most important European societies — SACEM in France, PRS for the U.K. and GEMA in Germany — sign more affiliates to collect more digital revenue. Those societies now have the repertoire, and thus the leverage, to negotiate better deals with big platforms that cover much of the globe. Some of the growth in collections is fueled by the fact that “many societies renegotiated,” Oron says, and he predicts that “hubs” will become more popular over the next decade.
At the same time, the fastest growth is coming from developing markets that are almost entirely digital: Vietnam, India, Indonesia and Thailand. Collections in Latin America grew almost 65% in 2022. As in recorded music, these markets never accounted for much revenue of any kind, so their emergence is almost entirely pure growth. And since not all of the countries with fast-growing music businesses have collecting societies that function well, rights organizations could face a stark choice: Reform them or work with them in order to collect a range of royalties; or try to license streaming services that operate in those markets from outside the countries to ensure that the fastest-growing stream of revenue will flow more directly to songwriters and publishers?
One of the questions around the future of collections is artificial intelligence, the industry’s favorite savior or bogeyman, depending on the day, and the CISAC report devotes most of two pages to it, in the form of forewords by Oron and CISAC President Björn Ulvaeus. “There is no question that the way we address it now will have a huge bearing on collections in the future,” writes Oron, who calls the technology an “existential issue” that presents both “threats” and “amazing opportunities.”
Ulvaeus takes the same tone. “Fresh from COVID and the economic squeeze, what we now face is a potentially far more serious, existential challenge — that of Artificial intelligence,” he writes. “I think of it as having the power to extend the human mind and potentially create wonderful art. But it brings dangers too, and without hard rules protecting human creators it could also threaten their livelihoods on a huge scale.”
Both Oron and Ulvaeus say CISAC intends to play a leading role in making sure AI helps, rather than hurts, creators. Collecting societies could be an important part of any such solution, given the amount of material that would need to be licensed. Right now, “you don’t know what you’re licensing and to whom,” Oron says. “The most important issue is transparency.”
Global music rights revenue collections reached €10.83 billion ($11.4 billion) in 2022, according to CISAC, the trade organization of collective management societies. That’s a new record that reflects growth of 28% over 2021, as live concert revenue continues to recover from the pandemic and digital income keeps growing.
Income from concerts — the royalties collected from the public performance of songs being played live — was up 185.7% based on a sample of 100 societies, since different organizations account for that revenue differently. And since these numbers are from 2022, when the concert business still hadn’t fully recovered, next year’s numbers will be better still.
The real change is in digital, though, which is now worth €4.08 billion ($4.3 billion), up 33.5% from 2021 and almost double its value from 2019. It now accounts for 37.7% of collections revenue — marking the first time it has been the biggest category — and is likely to be the main engine of growth for years to come. The TV and radio category, traditionally the largest source of revenue, is now No. 2 behind digital with $3.55 billion.
The CISAC Global Collections Report tracks money taken in by collective management organizations for authors’ rights — composers and publishers in the music business, plus audiovisual creators, writers and more. (Neighboring rights revenue for recordings is not included.) More than 90% of the money comes from song rights — specifically, the funds that flow through societies rather than through direct deals.
By any measure, the growth in the CISAC report is remarkable — a record both for the revenue collected and year-on-year growth. And while some of that reflects the unprecedented disappearance and return of the live business, digital growth has been, and will continue to be, steady.
“This is a remarkable return to growth as our whole sector fully recovers from the disastrous three-year pandemic,” said CISAC director general Gadi Oron in the announcement of the results. “While live and public performance have bounced back strongly, the recovery is driven most of all by digital which has now become creators’ largest source of income.”
Much of this growth reflects the changing role of collecting societies in the streaming era. Rather than just represent and license rights in the market in which they operate, societies also compete online. The biggest of the societies — PRS, SACEM and others — now license online rights from writers in most countries.
The growth is worldwide, too. All of the top ten music markets increased collections revenue, with an average growth rate of more than 25%. The biggest market is the United States with €2.616 billion ($2.759) and 30.5% growth; then France, with €1.325 billion ($1.398 billion) and more than 39% growth. Rounding out the top 10 are the United Kingdom, Germany, Japan, Italy, Australia, Canada, Spain and Korea.
Since the end of August, there have been reports that BMI is in advanced talks to sell itself to the private equity firm New Mountain Capital. A deal has yet to be signed but the possibility has raised concerns among songwriters about what it will mean for the collective management sector if one of its largest organizations becomes a business owned by private equity.
Such a move would take BMI in a new direction, away from the traditional model – based on non-profit and transparent operations—of the CISAC community. For CISAC and our global network of 227 Collective Management Organisations (CMOs, or societies), however, it also highlights the strength and value to creators of the global collective rights management system. The collective management model has been successful for over a century, remaining faithful to its core principles, while transforming and adapting to keep pace with the rapidly changing business environment.
BMI will stay connected to this community. In anticipation of the new direction it has taken in the last year, it has moved from being a full CISAC member to a CISAC “client,” a new category that was established in 2020 to accommodate the new types of rights management entities — including SESAC, Soundreef and Nextone – which have emerged.
Clients make up a very small group of “for-profit” entities that differ from the overwhelming majority of CISAC members, which operate on a non-profit basis. Clients are not subject to all of the traditional transparency and business rules that full CISAC members abide by, but still have access to CISAC’s systems and data exchanges that help the global music market function
By accepting for-profit entities as clients, CISAC maintains its inclusiveness and diversity, while not compromising on the core conditions of membership.
It is those core membership conditions which provide the unique value of the global network. Full members, such as ASCAP in the US, PRS for Music in the UK or GEMA in Germany, are required to meet key fundamental rules:
to operate on a non-profit basis or be controlled by their affiliates
to respect CISAC’s global standards of governance and professional rules
to be fully transparent in their financial reporting and share information with the rest of the CISAC members
As a global confederation, CISAC respects individual creators’ decisions on whom they entrust their rights to. It equally respects members and clients’ decisions on how they manage creators’ rights. The global song rights market is changing rapidly, with growing competition between different types of royalty collection bodies at a time when the cost pressures of managing digital collections and distributions has never been greater.
These changes are inevitable and they are good, if they have the end of result of better serving the creators who are at the center of our business.
In this transforming landscape, the vast majority of CISAC’s member societies remain non-profit entities which abide by all CISAC rules. Full CISAC members work only for creators and rightsholders, not shareholders. Their transparency obligations ensure high levels of integrity and best practice across the network. Creators and rightsholders, not financiers and investors, are assured a controlling role in their decision-making. Creators sit on our societies’ Boards of Directors. You’d be hard pressed to find other entities in the music industry which have music creators as their Board members.
The global collective management system gives creators a strong, united voice to lobby for creator-friendly legislation, develop modern systems for data exchange, adopt best practices and maximize collections and distributions. From turning around failing markets such as Greece, Turkey and India, this community continues to play an indispensable role for creators and publishers worldwide.
Our sector remains the only part of the music industry that puts the creator front and centre of everything it does. While more commercial ventures may be tested in our fast-evolving market, the fact remains that the collective management system is the most robust, reliable and fit-for-purpose model in serving creators.
Gadi Oron is the director general of the International Confederation of Societies of Authors and Composers (CISAC), a Paris-based rights organization.
Now that the pandemic is over, “it is anything but ‘business as usual’” at CISAC, the international trade organization for copyright collecting societies, according to director general Gadi Oron in its 2023 annual report.
In a time of change for collecting societies, which bring in a combined 9.6 billion euros a year, CISAC’s priorities include lobbying governments in support of member societies, continuing its campaign to support the ISWC code system to identify works, and navigating the challenges of AI, which Oron calls “our biggest priority now in terms of policy.”
The biggest news in the report about a particular market is the success of Autodia, the Greek collecting society that has become prominent since the 2018 dissolution of AEPI. “In 2018, I gave a presentation to the board [of CISAC and said we must do something,” Oron remembers. AEPI’s collapse was epic, complete with a 2017 police raid and a failure to pay out 42.5 million euros (more than the total amount it distributed some years), according to an audit ordered by the Greek Ministry of Culture. Oron feared the potential collapse of a market that had been worth about 50 million euros a year in the late 1990s, so he asked the CISAC’s board to support a plan to fund and help Autodia, which was then a small nonprofit society that in 2018 collected less than a million euros.
In 2022, Autodia collected 16.2 million euros, and it now collects for all three major publishers, BMG, and many of its sister societies, according to CEO Margarita Panagiotopoulou. “We are growing fast and gaining market share,” Panagiotopoulou says, “and that is on track to continue.”
Autodia now faces competition from EDEM, which mostly represents Greek repertoire and took in about 8 million euros last year.
The first phase of CISAC’s plan was to get Autodia loans from its member societies and send to Athens consultant Declan Rudden, who became interim CEO of Autodia to get the society running. He helped make reciprocal agreements with international societies and court publishers, as well as compete with EYED, a government-controlled entity that was designated as the temporary successor to AEPI. (Some major publishers originally signed with EYED but most of them are now with Autodia.) One day, as Rudden and team were putting together desks in the Autodia office, it was raided by the Greek department of labor and fined for keeping employees after 5pm without notifying them in advance. (This is illegal in Greece, but raids are uncommon.) “They did everything to make our life difficult,” remembers Rudden, who runs the consultancy SaorServices.
Gradually, the local team took over, and Autodia took in more than 4 million euros by 2019, then more than 12 million euros by 2022, as the pandemic subsided. “The contribution of CISAC was very important,” Panagiotopoulou says, in terms of funding, legitimacy and lobbying both the Greek government and songwriters themselves.
Greece is still a contested market. “Market share is a matter of disagreement,” says EDEM COO George Myzalis. (Panagiotopoulou says Autodia has more than 85% market share, but the respective royalty collection numbers imply a lower number.) Along the way, the technology company Orfium, which has some operations based in Athens, almost entered the market as well, but it ultimately withdrew. (The company operates in other sectors and did not respond to a request for comment.) Right now, venues and broadcasters in Greece need licenses from both Autodia and EDEM, especially if they want to play both the international repertoire that Autodia dominates as well as the Greek compositions that EDEM tends to have.
Some big publishers believe that the growing success of Autodia limits the possibilities for the kind of direct licensing model that they see as more efficient. One idea that at least some of them favored was to establsh EDEM as an organization that would offer more optionality by requiring less exclusive grants of rights – and a model for what they believe could be a more efficient future for the publishing business. As Autodia grows, that is becoming less likely – which some publishers see as a wasted opoortunity and other societies and some other publishers and songwriters see as a win for the current structure, which for all of its complexity offers more of a balance of power between big players and small ones.
The only things most executives seem to agree on is that the situation in Greece is far better than it was under AEPI and that it is getting better, even if it’s not where it should be. “AEPI was a disaster,” says Peermusic European president Nigel Elderton. “Autodia have their act together and they’re paying royalties through and they’re starting to grow.”
At a time when the traditional collecting society model is being challenged by direct licensing and a growing number of for-profit royalty organizations, both the other societies that supported Autodia and the publishers that favored another model agree that the implications of the society’s success go beyond Greece. Now that CISAC has showed it can help turn around a society in a market that’s perceived to be dysfunctional, it could potentially do so again.
“This was 10 times harder than I could have imagined,” Oron says. “But we’ve proven to ourselves that we can do it. Whether we can do it in other countries depends, but we have proof that we can do it.”
In 2021, collections began to rise again after their all-time low the year before due to COVID-19 and its restrictions on travel and live music, according to the International Confederation of Authors and Composers Societies (CISAC). Still, in its annual report for 2021, CISAC has found music collections for its worldwide membership are still down 5.1% from pre-pandemic levels as live and public performance income struggles to regain footing. For 2021, collections totaled €9.58 billion ($11.33 billion) compared to €9.32 billion ($10.64 billion) in 2020.
However, there is reason to be optimistic for future reports: CISAC has found that concerts and festivals appear to be faring well in 2022 so far, and the tourism industry is eyeing 2023-2024 as a target for a return to normal collections. Japan in particular has become a thought leader in pandemic recovery, offering its citizens discounts, coupons and subsidies for domestic travel to stimulate the economy. This, CISAC says, helped the return of large scale festivals like Fuji Rock and Summer Sonic. In South America, major festivals and tours like Rock in Rio and Lollapalooza are also expected to have a strong impact on 2022’s forthcoming numbers for live music in its region.
Though in-person events were reported as off to a slow start for 2021, streaming and digital music income is “exceeding expectations” with a 27.5% increase in collections from €2.40 billion ($2.74 billion) in 2020 to €3.06 billion ($3.62 billion) in 2021. This makes digital income an unprecedented high 36.1% share of the total music collections for 2021. Futuresource, the company which provides the data for CISAC’s report, anticipates further grow with double digit hikes in music subscriptions year over year and that there will be over 1 billion music subscribers by 2026.
Subscription numbers for streaming video on demand (SVOD) are expected to falter amid inflation, recession and what they call the “cost of living crisis,” but subscriptions for music are expected to be more impermeable because users only need to pay for one service to receive a rapidly growing catalog of songs rather than paying for multiple services, each with exclusive, smaller libraries.
As Marcelo Castello Branco, CISAC chair of the board and CEO of Brazilian collection management organization União Brasileira de Compositores, wrote in his foreword for his report, “subscription prices are already undervalued and need to be raised.” His comments come just after Apple Music announced that it was raising its subscription price, as did YouTube for the price of its family plan earlier this month. More price hikes for music streaming subscriptions are expected in the coming months with some eyeing Spotify’s long awaited hifi tier as a way to up its price.
When speaking to Billboard about the report, Branco said, “as streaming services move into a more mature phase, it is the right time to review pricing policies for the future…We also need to keep the share of revenue paid to the songwriter constantly under review. This is a fundamental concern.”
Another concern flagged by CISAC leadership: data management or “metadata.” As digital becomes a more and more pivotal piece of rights holders’ income for mechanical and performance royalties, CISAC president and ABBA member Björn Ulvaeus says he estimates “hundreds of millions of dollars… is left on the table” when the data needed to identify and remunerate creators is incomplete or missing.
This can stem from ignorance on the part of composers, honest mistakes and typos, or incomplete information for songs that are released before samples and interpolations are properly cleared. Issues with metadata are expected to continue to rise if left unchecked as more and more artists and songwriters hold out on signing deals with companies who can handle these headaches for them, opting for the DIY route. Not to mention the sheer volume of songs being released has risen significantly in the past decade.
This year, Universal Music Group (UMG) CEO Lucian Grainge told a crowd at Music Matters, a conference in Singapore, that 100,000 new songs are added to streaming platforms each day, most of which are likely from do-it-yourself newcomers. While Ulvaeus notes that work to upgrade ISWC, the identifier for musical works, and educational initiatives like “Credits Due” are helping alleviate this problem, there is still a long way to go.
Certain collection societies are independently working on solutions to this issue. The newfound Mechanical Licensing Collective (MLC), which is not a member of CISAC, is attempting to match unclaimed mechanical royalties in the U.S. to their rightful owners. In Japan, rights society JASRAC has founded KENDRIX, a data exchange platform to protect authors from “impersonation and other abuses,” says its president Kazumasa Izawa.
Some countries, like South Korea, were greatly affected by systemic changes — some positive, some negative. KOMCA, the country’s collection society, proved to have a success story this year as changes in its digital collection rules led to increased promotion of music subscriptions by the major music platforms. However, in Bulgaria, authors are faced with continued “poor enforcement” of copyright ownership from its authorities, and in Argentina and Brazil, fluctuations in currency exchange rates left its composers and publishers negatively affected.
Brazil’s collection society found that half of the country’s musicians had lost all of their income due to lockdown restrictions over the last few years, and half of the musicians have been forced to find another professional activity.
Live income for 2021, CISAC found, grossed €1.49 billion ($1.76 billion), only up 0.1% from the €1.49 billion ($1.70 billion) made in 2020. Compared to 2019 levels, which Billboard reported as €$3.04 billion, the aftermath of a global pandemic remains stark.
Television and radio, also known as broadcast, income remains the highest revenue source for music publishing, bringing in €3.19 billion ($3.78 billion) for 2021, but its lead fell by 1.8% from 2020, giving way as users ditched their cable boxes and car radios in favor of on-demand listening and viewing options. This is the fifth successive year of steady decline for this category and weaker advertising rates in some markets have now translated into lower usage fees; still, it accounted for 38% of global collections. Digital only lags two percentage points behind it now.
Systemic shifts also led to two major bright spots in the steadily waning sector of broadcast income. Mexico’s broadcast collections rose by 47.8% after a judicial process concluded in the order for satellite broadcaster, SKY, to pay significant royalties in back payment to musicians. Spain’s broadcast income also rose 47.6% due to agreements signed with the main private TV networks in the country. Unlike many other regions, Spain’s advertising revenues were up in 2021 (though still well-below pre-pandemic levels).
CISAC President Björn Ulvaeus: “Digital royalties collected by CISAC societies are growing impressively, but the streaming world is still unfinished business when it comes to ensuring a fair environment to earn a living.” Read the Global Collections Reporthttps://t.co/rI6rB2PRFn pic.twitter.com/42hcnGcAeJ
— CISACNews (@CISACNews) October 27, 2022
CDs, video and vinyl experienced gains this year, up 3.1% from 2020’s €348 million ($397.21 million) to 2021’s €359 million ($424.66 million). Though it’s only 4.2% of total music collections, this small but gaining subset of the business is expected to grow as the vinyl boom continues. As Billboard recently reported, Nashville, Tennessee is ramping up production on new, higher capacity vinyl pressing plants to meet consumer demand after superstars like Adele and Taylor Swift sell massive swathes of vinyl to mostly American and European consumers.
CISAC also included a number of more minor forms of income for mechanical and performing royalties for the music business in its 2021 report as well:
Private Copying Assessment: this category rose an impressive 15.3% for 2021, from $283.0 million in 2020 to $338.31 million in 2021. This represents just 3.4% of the total CISAC society music collections for the year.
Sync: this is up 6.9% this year, from $30 million in 2020 to $33.12 million in 2021. This represents just 0.3% of the total CISAC society music collections for the year.
Rental and Public Lending: collections are down 16.4% this year, from $14 million in 2020 to $33.12 million in 2021. This represents just 0.1% of the total CISAC society music collections for the year.
Publication: collections are up 6.2% this year, from $6.45 million in 2020 to $7.10 million in 2021. This represents just 0.1% of the total CISAC society music collections for the year.
Repography: collections are up 38% this year, from $2.48 million in 2020 to $3.55 million in 2021. This represents less than 0.01% of the total CISAC society music collections for the year.
Looking at the largest countries by music collection size, the U.S. ranked No. 1 again for 2021 with a 23.6% market share, down from 2020’s 27% market share. It has grown collections by 3.5% and increased collections to €2.004 billion from €2.21 billion in 2020.
France, ranked No. 2 with a 11.2% market share, grew 5.4% to €951 million from €902 million in 2019
Japan, ranked No. 3 with a 9.6% market share, declined 2.8% to €818 million from €842 million in 2020.
The U.K., ranked No. 4 with a 9.6% market share, grew a whopping 33.1% to €813 million from €611 million in 2019
Germany, ranked No. 5 with a 9% market share, grew 4% to €766 million from €736 million in 2020
Italy, ranked No. 6 with a 3.6% market share went down -0.2% to €308 million from €310 million in 2020. That year the report showed Italy had fallen a precipitous 35.1% from €477.66 million in 2019
Canada, which switched with Australia to rise to No. 7 with a 3.2% market share, rose 14.0% to €268 from €242 million in 2020
Australia, which swapped with Canada to fall to No. 8 with a 3.1% market share, rose 9.1% to €264 million from €235 million in 2020
South Korea, which from No. 10 to No. 9 this year with a 2.4% market share, grew by 16% to €201 million up from €173 million in 2020
Spain, which rose to No. 10 with a 2.3% market share, rose 26.6% to €199 million from €184 million in 2020
A notable gain below the top ten countries is Scandinavia. Denmark, ranked No. 12, grew by 10.2%, Sweden, ranked No. 13, grew by 21.5%; Norway, ranked No. 18, grew by 33.5%; and Finland, ranked No. 19, grew by 9.4% for 2021. CISAC attributes this to the region’s high share of digital income compared to other countries which helped them weather the continued pandemic effects.
Below features a list of additional emerging markets that gained double digit growth in 2021. Though CISAC does not explain why each of these nations have experienced such success in the last year, the report does include that Indonesia, Thailand, and India’s growth can thank digital and streaming gains and that Mexico benefitted from the aforementioned settlement with broadcaster SKY.
Mexico, ranked no. 17, which gained 10% to achieve a 1.1% marketshare for 2021
China, ranked No. 22, rose a significant 12.3% to hold 0.6% marketshare for 2021
Czech Republic, ranked No. 24, grew 19.1% to achieve 0.5% marketshare for 2021
South Africa, ranked No. 26, grew 10.1% to hold 0.4% marketshare for 2021
India, ranked No. 28, grew a whopping 73.8% to hold 0.4% marketshare for 2021
Chile, ranked 32, grew 23.8% to hold 0.3% marketshare for 2021
Turkey, ranked No. 33, gained 37.1% to hold 0.3% marketshare for 2021
Malaysia, ranked No. 38, grew 31.3% to hold 0.2% marketshare for 2021
Thailand, ranked No. 39 grew 68.8% to hold 0.1% marketshare for 2021
Greece, ranked No. 43, grew 46% to hold 0.1% marketshare for 2021
Indonesia, ranked No. 46, grew 59.4% to also hold 0.1% marketshare for 2021
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