CISAC predicts a 35% decrease in collections in 2020 due to the pandemic

By Emmanuel Legrand

The impact of the coronavirus pandemic will be felt thought 2021 and beyond by creators who rely on the collective management system to receive royalties for the use of their works. According to the latest annual Global Collections Report published by CISAC (International Confederation of Societies of Authors and Composers), worldwide royalty collections for creators of music, audiovisual works, visual arts, drama and literature will drop this year by a minimum of 20% and up to 35%, or €3.5 billion in lost income. 

  Music income for songwriters and composers makes up the majority of the total and is set to fall between €1.8 and €3.1 billion in 2020, also a decline of 20-35%. 

  While the report, titled 'COVID-19: Crisis, Resilience, Recovery', would have normally celebrated record collection in 2019 of €10.1bn, up 7.8% year-on-year, the Confederation, which regroups 232 societies in 120 countries, has instead decided to focus on the impact of the Covid-19 crisis on creators, as the loss in revenues is likely to erase the past six years of growth of the collective management sector. CISAC Board Chair Marcelo Castello Branco said the "perfect storm" created by the coronavirus pandemic "has thrown into reverse our global growth, and its effects will be felt throughout 2021 and 2022."

 

  For CISAC, the impact of the pandemic "is expected to remain long into 2021 and beyond. Across all repertoires, collections in 2021 will remain below the level of those in 2019, with users continuing to face payment difficulties and bankruptcies."

 

  “Today, uncertainty about the future for creators is even worse than it was when the pandemic first emerged. Millions of creators are losing their livelihood. We were the first industry to be impacted and we will be the last to return to health," commented CISAC President Björn Ulvaeus (pictured, below), in the foreword to the report. 



  Ulvaeus called upon governments to act, by not just providing relief but also to address what he believes are some systemic market imbalances. "Policy-makers also need to tackle the problems in front of them: the deep flaws that have skewed the playing field for creators for many years. Covid-19 did not create this skewed level playing field. But it has sure aggravated and exacerbated it. This is the time for governments to show they take creative industries seriously.  It is time for policymakers to wake up and act."

  “Looking ahead, this Report reflects extraordinary resilience across our sector, but not yet recovery," added CISAC Director General Gadi Oron. "Things will get worse for creators before they get better, with loss of collections in 2020 translating into reduced distributions in 2021. In this crisis, CISAC’s member societies have acted to defend their creators with all means available. While the current crisis is exposing the deep fragility of the collective management system, it is at the same time showing the vital importance of its work for creators."   

  Data highlights from the report include:
  > The musical repertoire is the one that generated the most collections in 2019, with €8.962bn, up 8.5% compared to 2018, ahead of audiovisual, literary, dramatic and visual arts.

  > Europe is the largest region for collections with 54.4% of the total, followed by Canada/USA, Australasia, Latin America and Africa.

  > The United States remains the biggest single market for rights collections, with a 21.8% global share, almost 100% from music collections France, Germany, Japan and the United Kingdom make the rest of the Top 5.

 

  > Taking into account collections as a percentage of GDP, France's come first, with 0.056%, followed by Denmark (0.047), and Finland (0.46%). European countries make up the top 13 countries by percentage of GDP. Canada comes in at 33 with 0.017% and the USA at 43 with 0.012%.The world average of 0.014%.

  > Digital revenue continued to rise sharply in 2019, which CISAC attributes to "increased streaming subscriptions and the strengthening of licensing agreements with digital platforms." It accounted for 20.5% of total collections, at €2.07bn. Digital has outpaced growth in other income streams, rising 27.5% in 2019 and a cumulative 187% in the last five years. CISAC predicts that digital "will remain resilient in 2020, helped by  increased subscription streaming but remuneration of digital uses of creators' works is still undervalued, representing only one fifth of all collections globally."

  > Broadcast and live and background are creators' largest income sources, at 65% of total collections. TV and radio remained the largest source of revenue at 37.3% (€3.76bn), followed by Live & Background (27.7% or €2.79bn). "In 2019, a healthy concert and festival economy bolstered the live & background sector, but income from these sources will collapse in 2020," wrote CISAC.

 

  > Earnings from physical formats (CD and DVD) have stabilised in 2019 thanks to a small but devoted niche audience, said CISAC.

  > Collections in the music sector have increased by 24.7% over the past five years. Income from music is expected to decrease in 2020 to between €1.8 and €3.1bn in 2020, a decrease of 20 to 35%. More than half of global collections (54.4%, or €5.49bn) were generated in Europe in 2019. The Canada/United States region now weighs 24.3% to €2.4bn. Asia-Pacific is the third region in the world, weighing 15.5% (€1.56bn), while in the Latin America and the Caribbean region accounts for 4.9% (€495m), and Africa 0.8% (€80m).

  > For the musical repertoire, Europe represented 50.4% of global collections (€4.52bn) in 2019, followed by the Canada/United States region with 24.3% of collections (€2.45bn), Asia-Pacific with 16.4% (€1.47bn), Latin America and the Caribbean with 5.0% (€450m), and Africa with 0.8% (€70m). The top ten contributing countries to music rights are the United States, France, Japan, Germany, the United Kingdom, Italy, Canada, Australasia, the Netherlands and Brazil.

  > Revenues from public performance rights on radio and TV for music works reached €3.32bn, or 37.1% of the total, followed by direct (live & background, with €2.62bn or 29.3% of the total). These two sources of income are the most affected by the health crisis.

  > Online music-generated revenue increased 27.2% in 2019 to €2.04bn and represents 22.8% of the total music rights collected by CISAC members. Most of these rights are generated by subscription music services. CISAC notes, however, that digital technology generated more than a third of revenues in around 20 countries in 2019. In China, this share amounts to 58%, to 54% in Mexico, 43.6% in Sweden, 41.8% in South Korea, among others.

  > With 7.2% of total musical rights (€647m), revenues from physical media (CDs and DVDs) remained stable.

  > Rights from concerts, theaters and performances in public spaces have been the most impacted by the pandemic and forecasts point to a fall of between 60 and 80% in 2020.

  > With €220m, private copying remains a source of income "modest but important, with great potential for growth", according to CISAC. At present, only 74 countries recognize private copying in their legislation. In 2019, only 31 of them generated income for this type of use.

[Methodology: The CISAC Global Collections Report is based on domestic collections reported to CISAC by its member societies.These are revenues collected by each society for the use of the repertoires it represents within its own country, or on a multi-territorial basis in certain cases (e.g. digital licensing in Europe). The figures in this report exclude revenues received from sister societies to avoid duplication. Collections are gross collections before deductions for administrative, cultural or social purposes. This year's report excluded the collections from Spain's SGAE, which had been suspended by CISAC. Previous years have been restated to provide like-for-like comparison.]