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Annual revenues generated by music copyright have grown to $41.5bn globally on the back of continued growth in streaming and a post-pandemic resurgence in public licensing in concerts and hospitality.
A report by Will Page, a former chief economist at Spotify, analysed revenue streams from various sources and found that they grew by about a sixth in 2022, with record labels and their artists accounting for about two-thirds of this money, a share that has increased from about half in 2014.
The growth in streaming platforms such as Spotify — which helped tackle the widespread piracy during the early years of digital music — has enabled labels to take a greater share of overall revenue.
The remainder of this money was earned by publishers and songwriters, with performing rights staging a resurgence as restaurants, shops and concerts bounced back strongly following worldwide lockdowns.
The value of music copyrights to labels, the artists and the streaming services can vary, with consumers paying for music as well as commercial enterprises such as TV shows and restaurants.
Companies have in recent years attempted to turn music rights into tradable investments, buying up large portfolios of music catalogues in the hope of seeing both capital value appreciation as well as income from revenues such as streaming.
But one of the groups at the vanguard of this push — the UK-listed Hipgnosis Songs Fund — has been hit by a series of issues as the value of music rights has stalled. Interest rates have made other investments more attractive, sparking questions over the market for music rights.
Page said the question on rights holders’ lips — and even more so the investors’ paying record multiples for acquiring music catalogues — will be if the rebound in performing rights in particular was “a blip or a trend”.
He said this growth should continue given the popularity of live music and inflation embedded into music licences.
But labels’ digital income growth showed signs of slowing, Page added, especially in more mature western markets.
This slowdown was, however, being partly offset by the resurgence in income from physical copies of music, which has increased by $1bn since 2020 owing to accelerating demand for compact discs in Asia and vinyl in Europe and America.
Revenues from physical music formats in the UK overtook that of Germany, Page said, as the British started buying more vinyl while Germans bought fewer CDs.
Page is the author of the book Tarzan Economics, which was published in paperback under the title Pivot, and is a fellow of the London School of Economics. The annual study uses data from groups representing record labels, artists and publishers.
