Exploration Weekly - CISAC Reports Global Music Collections Rose 28% in 2022 / PRS for Music Scores the ‘Largest Single Royalty Payment in Its 109-Year History’ / Spotify Plots Change to Royalties Structure

It is rare for an artist to need or have the means to hire any team members in the first stages of their career. If an artist is beginning to record, play shows, make their name known, and accumulate a small audience, they likely have no issue handling things on their own. However, there comes a point at which the operation outgrows the DIY method and an artist begins searching for a professional team.

There is no right way to build a team—some artists find success with a large team, and some find success with a team of one or two. However, there are several things that artists typically begin to require assistance with when they are ready to develop their career to a more professional level. The team members featured in this guide are those typically hired by artists first.

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In this newsletter:

• CISAC Report Reveals Global Music Collections Rose 28% in 2022
• PRS for Music Scores the ‘Largest Single Royalty Payment in Its 109-Year History’
• Spotify Plots Change to Royalties Structure, With a Minimum Streams per Song Requirement for Payout
• GESAC Welcomes European Parliament Support for Measures Against Buy-Outs
• Brazilian Industry Welcomes Shutdown of Piracy Site FileWarez

CISAC, the global collecting societies body, has reported significant growth in music royalties collected by its members in 2022. Royalties for songwriters and composers reached €10.8 billion, a 28% increase from the previous year and the first time it exceeded €10 billion.

PRS for Music reports a record quarterly royalty distribution — the largest single royalty payment in the organization’s 109-year history — with live music touring and revenues from international markets among the key contributors.

Spotify is set to implement changes to its royalties model in early 2023. The reported changes will impact artists with lower streaming numbers, those accused of fraudulent activity, and creators uploading non-music tracks like white noise or nature sounds.

Now, the details...

Exploration Weekly - October 27, 2023
Compiled by Ana Berberana

CISAC Report Reveals Global Music Collections Rose 28% in 2022

Global collecting societies body CISAC has published its latest annual report, covering 2022, and it reveals strong growth in music royalties collected by its members. Royalties for songwriters and composers grew by 28% to €10.8bn (around $11.4bn at current exchange rates) last year according to the report. It’s the first time this figure has been more than €10bn. That’s important, because CISAC is keen to stress that the annual growth is not simply a bounceback from the hit that its members’ collections took in the first couple of years of the Covid-19 pandemic. The report points out that the 2022 music collections were 21.4% more than those from 2019, the last full year before the pandemic took hold. Another important stat: digital is now the single largest source of royalties collected by CISAC members, accounting for €4.08bn in 2022 – up 33.5% year-on-year, and nearly double the total collected in 2019. 2022 was the first time when digital overtook broadcast – TV and radio – for royalty collections, says CISAC. However, that category also grew in 2022, by 11.4% to €3.56bn. There was also growth for live and background collections (up 68.2% to €2.51bn). Every major region tracked by CISAC showed growth, including Europe (up 28.3%), North America (up 29.9%) and Asia-Pacific (up 16.5%). Latin America showed the fastest growth, up 64.9%, although it only accounted for 5.1% of global music collections in 2022. Africa, meanwhile, saw its collections grow by 10.4%, but only to €0.07bn – 0.7% of the total. CISAC president Björn Ulvaeus highlighted the digital stats in his foreword to the report. “For the first time ever, digital is the biggest source of royalty income. In barely more than a decade, streaming has transformed life for CISAC members and the 5 million creators it works for,” he wrote.

PRS for Music Scores the ‘Largest Single Royalty Payment in Its 109-Year History’

UK-based royalty collection and distribution pillar PRS for Music announces a record quarterly royalty distribution of $288.7 million (£239 million), a 13% increase compared to last October. The largest single royalty payment in PRS for Music’s 109-year history, over 4,000 members received their first royalty payments this month. PRS for Music’s Major Live Concert Service (MLCS) contributed significantly to the record-setting payout. In 2023, artists including WizKid, The Who, Shania Twain, Pulp, Ed Sheeran, Rag N’ Bone Man, Diljit Dosanjh, Bastille, and many others filled concert halls, arenas, and other venues throughout the UK. MLCS sped up live tour royalty payments and helped navigate taxes for those and other PRS members touring at venues with over 5,000 capacity worldwide. In 2020, CEO Andrea Czapary Martin pledged to distribute £1 billion in royalties annually by 2026, while reducing PRS’ cost-to-income ratio. This month’s landmark distribution shows PRS is well on its way to achieving that goal, with its cost-to-income ratio falling to 9.3%, three years ahead of schedule. In 2022, PRS for Music collected £964 million and paid out £836.2 million in royalties — over $1 billion in royalties, and a 23.5% increase from 2021. The return of live music has massively contributed to these royalty payment increases.

Spotify Plots Change to Royalties Structure, With a Minimum Streams per Song Requirement for Payout

Spotify is planning to make changes to its royalties model early next year, Billboard and Music Business Worldwide (MBW) report. The reported plans will impact artists who don’t generate significant streaming numbers, anyone accused of fraudulent activity, and anyone who uploads white noise or nature sounds. The first proposed change to Spotify’s royalties system requires for a song to hit a minimum number of annual streams before it will generate royalties. That threshold, which has not been announced or made clear, will reportedly demonetize songs that received 0.5% of the streamer’s overall royalty pool. According to MBW, that money will be redistributed through Spotify’s Streamshare royalty pot and pay out to more popular songs. Another new change will be financial penalties to music distributors whose uploads are flagged for fraudulent activity. Non-music “noise” tracks—specifically mentioned are white noise and nature sounds—will require longer play times to generate royalties, though the specific length has not been made clear. It also hasn’t been specified how it will be determined if a track falls into that category. When reached about the reported changes being planned, a Spotify spokesperson shared this statement: “We’re always evaluating how we can best serve artists, and regularly discuss with partners ways to further platform integrity. We do not have any news to share at this time.” The United Musicians and Allied Workers union offered a reaction to today’s news. “Artists have solutions to fix streaming but Spotify isn’t listening,” the union shared on social media. “Instead they propose changes that will enrich the top of the pyramid even more, and make it even more impossible for working musicians to benefit from streaming.”

GESAC Welcomes European Parliament Support for Measures Against Buy-Outs

GESAC has welcomed the news that the culture and employment committees of the European Parliament have adopted a report that includes various legislative recommendations on creator rights. For GESAC, which represents the song right collecting societies of Europe, of particular interest is what the report says about buy-outs. That’s where entities that commission songwriters and musicians to create new music seek to own many, or maybe even all, of the rights associated with that music. This means that, while the writer or performer will get an upfront fee, they won’t earn ongoing royalties when their music is used. Buy-outs are more common in Anglo-American markets, with complete buy-outs mainly happening in the US. But commissioning entities seeking more rights is becoming more common and that’s affecting more European music-makers, hence GESAC’s concerns. It explained yesterday that buy-outs “are typically imposed directly by giant non-EU based video-on-demand platforms or through their local producers and deprive composers of soundtracks of series, films or other audiovisual works of appropriate and proportionate remuneration, as well as the exercise of their moral rights, against the provisions of EU and national laws”. The report adopted by committees in the European Parliament yesterday, it added, “calls on the European Commission to propose the necessary measures to address such coercive and harmful practices of global players that try to bypass EU laws through choice of law and jurisdiction clauses”. GESAC is now urging the Parliament at large to back the committees’ position. Its General Manager Véronique Desbrosses says: "An important step has been reached today with this strong call for a European action against buy-outs from the two technical committees of the European Parliament involved in the matter and we are thankful to them”. “The creators' community relies on the European legislator to take the necessary measures to stop the unfairness in the market and ensure that global streamers comply with the EU rules and principles when they operate in Europe”, she goes on. “Retention of copyright and authors right within Europe is essential for the future of European creativity and economy and we look forward to the confirmation of this strong position of the European Parliament in the plenary vote".

Brazilian Industry Welcomes Shutdown of Piracy Site FileWarez

The Brazilian record industry has welcomed the shutdown of a file-sharing service called FileWarez, which has been taken offline following action by the cybercrime unit at the São Paulo prosecutor’s office, which is known as Cyber Gaeco. Global record industry trade organization IFPI worked with the prosecutor’s office and Brazilian anti-piracy body APDIF in targeting FileWarez. It said yesterday that the piracy outfit was “the most established illegal file-sharing forum in Brazil, dedicated to sharing illegal music content. While active, the site had more than 118,000 registered users with at least 24,000 monthly active users”. Welcoming the shutdown, the President of the Brazilian record industry trade group Pro-Música, Paulo Rosa, says: “We are very grateful to the Cyber Gaeco unit of the prosecutor’s office of São Paulo for its continuous and successful work against music piracy”. IFPI’s Director Of Global Content Protection And Enforcement, Melissa Morgia, adds: “We congratulate Cyber Gaeco on their action. The site operated with no regard for the rights of music creators and has undermined the legal marketplace in Brazil. This is an important action in the continuing fight against piracy in the country”.

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