The US music publishing business generated $4.7bn final 12 months – however the file business grew twice as quick

There are monetary statistics within the music enterprise that, on the floor of issues, don’t inform us an excessive amount of. They could be huge and spectacular, however they offer little away about developments affecting the broader enterprise.

Right here is a type of numbers: Based on the Nationwide Music Publishers’ Affiliation, the US music publishing business generated USD $4.70 billion within the calendar 12 months of 2021.

That determine, revealed by NMPA boss David Israelite on the trade org’s annual meeting in New York in June, was up by just below $700 million versus the equal quantity from 2020 ($4.08bn).

It was additionally greater than double the dimensions of the annual revenues of music publishers within the States as just lately as 2014 ($2.15bn), in response to beforehand introduced NMPA information.

Music publishing’s development within the US in 2021, nonetheless, was nothing in comparison with how the recorded music business ballooned in the identical 12 months.

The place the NMPA determine will get actually fascinating – particularly within the context of ongoing music business debates – is while you examine it to the equal determine from the US file business.

The aforementioned 2021 determine for annual US music publishing revenues ($4.70bn) was estimated utilizing a survey of NMPA members.

As such, it’s a reflection of complete wholesale revenues obtained by music publishers within the interval.

There may be an equal wholesale annual quantity on the recorded music aspect of the music enterprise within the US, offered by the RIAA (Recording Business Affiliation of America).

That determine stood at $9.8 billion in 2021, as confirmed by the RIAA again in March.

That $9.8 billion wholesale determine for 2021 was up by $1.8 billion year-on-year, in comparison with the $8.0 billion income obtained by file labels/distributors within the US in 2020.

To summarize the purpose: Music publishers noticed their wholesale US revenues rise by $700 million in 2021, in response to business (NMPA) information; however file corporations (and distributors) noticed their wholesale US revenues rise by greater than double this determine: $1.8 billion.

Common MBW readers will know that the distinction between these two numbers is certain to fireplace up sure figures inside immediately’s music biz, who argue the recorded music business is producing an inequitable amount of cash versus the music publishing (and songwriting) house.

One such determine is Hipgnosis founder Merck Mercuriadis, who final 12 months wrote an op/ed for MBW by which he argued: “[2021] would be the most profitable 12 months ever seen for the recorded music business by roughly 90% of the individuals working inside it – and the money is flooding in.

“But songwriters, who’re finally liable for this success, usually are not getting their truthful and equitable share.”

That being stated, there are indicators that 2022 might be a uniquely bumper 12 months for the expansion of the music publishing (and songwriting) enterprise.

One key indicator behind that suggestion: the spectacular world efficiency of main music publishers in H1 2022.

For instance, Sony‘s world music publishing revenues were up by 14.0% YoY in calendar Q1 2022 (at US dollar-based fixed forex), and were up by 13.2% YoY in calendar Q2 2022.

Universal Music Group‘s music publishing revenues, in the meantime, were up by a whopping 42.1% YoY at fixed forex within the first half of 2022, though this dramatic enhance was partly pushed by UMG now recognizing assortment society income in another way than it did in 2021.

One other vital contributing issue to music publishers’ development in 2022: A tough-fought windfall from the likes of Spotify and Amazon Music.

In July, the US Copyright Royalty Board announced a final ruling relating to the authorized showdown often called ‘Phonorecords III’.

That ruling centered on a rise within the total proportion of on-demand music streaming companies’ US revenues that legally need to be paid by the likes of Spotify to songwriters.

The CRB dominated that this proportion determine ought to have moved up from 10.5% to 15.1% throughout the 5 years between 2018 and 2022.

Consequently, streaming companies at the moment are having to fork over retrospectively-owed cash to music publishers.

How a lot cash are we speaking about?

There was a clue in Warner Music Group‘s newest monetary outcomes (for the quarter ending June 2022).

In these outcomes, WMG announced that Warner Chappell Music (WCM) – its personal publishing firm – had obtained a one-time $17 million profit within the quarter “ensuing from the July 1 remand ruling by the CRB within the Phonorecords III proceedings”.

Music & Copyright estimates that WCM’s world market share of the music publishing business was 11.8% in 2021.

WCM’s market share may clearly be larger than that determine if we’re particularly speaking concerning the US alone. But it surely strongly signifies that WCM’s $17 million bonus from the ‘Phonorecords III’ consequence needs to be multiplied many instances over if we’re seeking to estimate how a lot one-time cash the total US music publishing business can be receiving from Phonorecords III.

On that matter, the music publishing business is now gearing up for an additional main authorized battle with the on-demand streaming companies in ‘Phonorecords IV’ – the brand new, yet-to-begin CRB proceedings that can decide what songwriters within the US receives a commission from streaming companies within the years between 2023 and 2027.

Talking to NMPA members on the org’s annual meeting in June, David Israelite stated: “We now know [via NMPA estimates] that [on-demand streaming] companies paid file labels $5.7 billion in 2021, 58.6% of the income pool – considerably larger than the 52% that’s usually reported.

“To be clear, songwriters being paid correctly doesn’t imply artists and file labels have to be paid much less.

“It’s unconscionable that digital supply companies take 3 times the quantity they pay the songwriters to make their companies potential.”Music Enterprise Worldwide