The value of global music copyright surged to $45.5 billion in 2023, marking an 11% increase from the previous year.
This reflects the growing economic strength of music rights, which were valued at $25 billion in 2014. If current trends continue, music copyright could double in value over a decade.
Record Labels And Streaming: Key Drivers Of Growth
According to economist Will Page's annual industry report (via Billboard), record labels accounted for the largest share of the music copyright market, generating $28.5 billion in 2023—a 21% year-over-year increase.
Streaming continued to dominate revenue sources, with a 10.4% growth rate. Physical music sales also performed strongly, as vinyl sales rose 15.4%, outpacing CDs in many regions. Page predicted vinyl could become a $3 billion industry by 2028, driven by higher unit prices and global demand.
Major publicly traded record labels such as Universal Music Group NV (OTC:UMGNF), Warner Music Group Corp (NASDAQ:WMG), and Sony Group Corp's (NYSE:SONY) Sony Music Entertainment were among the primary beneficiaries of these trends.
UMG, for instance, reported $3.2 billion in Q3 2024 revenue, showing strong performance fueled by streaming and physical sales.
Shifting Dynamics In Songwriter Royalties
Moreover, collective management organizations (CMOs), which collect royalties on behalf of songwriters and publishers, saw revenues rise by 11% to $12.9 billion in 2023. Digital collections from CMOs have now surpassed those from broadcast and radio, reflecting the dominance of streaming platforms over traditional media.
However, publishers are increasingly turning to direct licensing agreements, bypassing CMOs to avoid administrative delays and fees.
"A song that spikes in mid-March, for example, takes 201 days to pay the artist and 383 days to pay the songwriter," Page explained. These delays can erode a third of songwriter revenue due to transaction costs.
Music Surpasses Cinema
The music industry's recovery following the pandemic has enabled it to overtake cinema in terms of economic output. In 2023, music was 38% larger than cinema, a stark contrast to 2019 when cinema led by 33%.
Music copyright figures reflect trade revenue that benefits rights holders, while cinema's $33.2 billion box office revenues are divided between distribution and production.
Companies like Live Nation Entertainment (NYSE:LYV), which operate in recorded music and live performance sectors, have capitalized on this momentum.
Streaming's Global Trade Advantage
Streaming platforms have created new opportunities for artists from regions with lower royalty rates. North America and Europe, which account for 80% of streaming revenue growth, provide significantly higher payouts compared to Latin America and Asia.
For example, Colombian artists like J. Balvin and Shakira earned nearly $100 million from U.S. streams in 2023, six times what they would have generated in their home country.
Publicly traded streaming platforms such as Spotify Technology SA (NYSE:SPOT) and Tencent Music Entertainment (NYSE:TME) play a crucial role in this dynamic. Spotify benefits from premium subscription revenues in high-value markets, while Tencent Music caters to large audiences in Asia with a range of streaming and social entertainment services.
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Cover image made using artificial intelligence via Dall-E.
