Music publishing is experiencing strong growth and the future looks even brighter. Find out what’s driving this upswing in rising music publishing revenues and what it means for the industry.
Increase in sales at music publishers: MIDiA examines industry growth
from Mark Mulligan of the MIDiA music industry blog
Hot on the heels of our report on the future of songwriting, MIDiA is pleased to announce the release of our latest report on music publishing predictions. Here are some highlights.
So far, the 2020s have been a good decade for the music publishing industry. Revenues have continued to grow, streaming royalties have improved and institutional investment has flowed into publishing catalogues, even after rising interest rates. The Covid lockdowns were a drag, decimating the live and background components of performance licensing, but the effect was temporary, with the post-Covid recovery of live music being particularly strong.
In the early stages of the streaming era, publishing was a secondary concern, with the agenda set by labels and DSPs. This was reflected in the relatively small share of revenues spent on publishing licensing. But as the market matured, publishing rights became more important. Favorable decisions by the U.S. tax authorities, active lobbying, and an increasingly effective licensing strategy by CMOs and publishers have combined to increase publishing’s share of the streaming economy—and it’s expected to improve further. The dispute between publishers and Spotify over the interpretation of bundling rules in the U.S. is an important and contentious issue. But the publishing industry’s response reflects its newfound confidence.
Publishers have also carved out a favorable position for themselves in the new, emerging areas of the streaming economy. The “non-DSP” contracts with platforms such as TikTok, Meta and Snap ensure that publishers receive a higher share of the royalties than with traditional DSP contracts. In the 2010s, publishers had a reputation – rightly or wrongly – for slowing down innovation. Now they are at the forefront of this development.
Global music publishing revenues rose strongly again in 2023, up 12.0% to $10.1 billion. This was offset by record label revenue growth of 9.1% in 2023. Music publishing revenues continue to grow faster than labels. Warner Chappell had the fastest-growing revenues in 2023, up 16.6% from 2022 to $1.1 billion, while Sony Music Publishing remained the largest publisher, although Universal Music Group gained ground, growing 10.5% to $2.1 billion. Independent publishers, meanwhile, grew 12.7%.
Part of the reason music publishing can grow faster than the recorded music market is that publishers can pull different levers than labels. Examples include the post-Covid rise in live sales and non-DSP streaming (where publishing typically captures a significantly larger share of royalties than DSP streaming). At the same time, the continued rise of Subscription Video On Demand (SVOD) is providing much-needed stimulus to TV/video performance royalties. These factors will drive future market growth.
Not everything will grow unchecked. Royalties from public performances will be hit by changing lifestyles (further high street closures, more home working, etc.); live music revenues will peak due to market saturation and ticket price inflation; and royalties from traditional mechanical music will decline as the physical music boom ends.
However, these factors will be more than offset by the growth sectors, of which the streaming sector will be the most important. The music publishing business is now a streaming industry, with streaming revenues having exceeded 50 percent in 2022 and set to almost double between 2023 and 2031. This strong streaming growth will help the music publishing business’s total revenues reach $16.8 billion by 2031, an increase of almost two-thirds from 2023 levels.
This is just a small preview of the contents of the final report, which includes revenue by streaming, other digital media, total digital media, performance, synchronization and other media, as well as country-level forecasts for 39 markets, regional breakdowns for revenue categories and publisher market shares. MIDiA clients can access the full report and dataset here. To learn more about becoming a MIDiA client and accessing this report, email [email protected]
