The value of music copyrights – both recordings and compositions – jumped 11% to USD $45.5 billion in 2023, making music 38% larger than the global movie industry.
That’s according to a new report from Will Page, the former Chief Economist at both Spotify and UK collection society PRS for Music, published on Page’s website, Pivotal Economics.
Page notes the $45.5 billion figure is up a “jaw-dropping” 26% since 2021, and it’s nearly double the $25 billion that he calculated for 2014.
“Next year (when we calculate 2024) we may see copyright having doubled within a decade. Make no mistake: it’s boom time,” he writes.
Of that total, $28.5 billion – or 63% – was in the form of recorded music revenues (up 12% YoY), while $12.9 billion was brought in by collective management organizations (CMOs, up 11% YoY) and $4.2 billion was in direct publisher income (up 4% YoY). Thus, compositions brought in 37% of the total.
“CMOs have seen their collections bounce back from the pandemic-hit 2021 by almost 40% — but this year’s slowdown to 11% suggests collections are returning to a steady growth pattern,” Page noted.
With global movie box office revenues coming in at $33.2 billion in 2023, music copyright is now worth 38% more than the cinema business – a complete reversal from just four years earlier. In 2019, cinema was 33% bigger than music copyright ($41.9 billion for cinema versus $31.6 billion for music).
“If you had suggested when I first did this exercise in 2015 that music might overtake cinema, you would have been laughed out of the room. Back then, the silver screen towered over the likes of Spotify and Netflix,” Page writes.
What’s more, box office revenues and music copyright revenues aren’t an apples-to-apples comparison. That’s because the cinemas themselves take around half of the movie ticket price.
If we were to compare the distributor’s share of the box office gross – around $16.6 billion in 2023 – then “the value to the creator in music is about [triple] that in cinema,” Page writes.
“Make no mistake: it’s boom time.”
Will Page, Pivotal Economics
Of course, the revenue reversal between music and cinema isn’t just about music’s growth – it also has to do with cinema’s decline.
Citing numbers from cinema economist Ben Keen, Page notes that cinema still hasn’t recovered from the pandemic bust-out, when cinemas worldwide closed their doors. The 2023 spend on cinema of $33.2 billion was still $8.7 billion below the 2019 peak of $41.9 billion.
Cinema has also been impacted by the rise of home entertainment (large-screen TVs, SurroundSound, etc.), which has shifted screen time to the home – as evidenced by the boom in video streaming. But Page noted this has also had a positive effect on the music business.
“Cinema shares little revenue with music copyright (in the US they share none, although sync revenues are paid upfront). The streamers, on the other hand, must acquire more rights (performing and mechanical plus sync use), face higher tariffs (headline rates are typically double that of cinema) and are now reaching bigger audiences (consumers are investing in their homes more and going out less),” he writes.
“This shift in attention, from a couple of hours in front of the silver screen to those same hours on your sofa, has significant ramifications on the value of music copyright, past present and future.”
Developed vs. emerging markets
Page draws attention to an interesting discrepancy in the data. While market monitor Luminate reported earlier this year that global audio stream volume rose 15.1%, Universal Music Group’s stock price got hit when analysts interpreted its Q2 earnings to mean that the value of those streams grew by only 4%.
“Why the divergence? The answer is the lopsided nature of that growth – explosive volumes of free [ad-supported] streams in emerging regions of the South, yet a deep concentration of value of [paying subscriber] streams in the established regions of the North,” Page writes.
That helps to explain, for instance, how it is that India is on the verge of overtaking the US as the world’s biggest streaming market by volume, while being nowhere near the largest music market by revenue.
The world has a new net exporter of music
Page’s report also examined the state of the music import-export business, and found a world in flux – not surprising in the era of the rise of Latin music, K-pop, and other new international musical phenomena.
One big change is the arrival of a new music exporter: South Korea. Traditionally, there have been three net exporters of musical compositions: The US, UK and Sweden. Now, South Korea has been added to the list, as its songwriting exports slightly exceed its imports.
The top music exporter, the US, exported 2.4 times as much music as it imported in 2023, while second-place Sweden exported 1.8 times as much. The UK exported 1.6 times as much as it imported, while the ratio in South Korea was 1.0, as calculated by revenue flows between CMOs.
However, Page noted a trend of “drying up of trade (or flows of payments between CMOs).”
Sweden’s ratio of 1.8 was considerably higher – 2.7 – as recently as 2019. The UK’s 1.6 ratio was 2.2 back in 2019.
One factor, Page says, is “glocalization” – the trend of local music in the local language becoming more popular, even as streaming services globalize overall music consumption.
“As local music dominates local markets, there’s less demand (or trade) for music from beyond the border,” he writes.
“Secondly, it is not always Korean songwriters… behind K-pop hits. Songwriters around the world have gotten in on the action. Obviously, those canny Swedish songwriters are in on the game, often traveling to Korea to work directly with K-pop artists. Less obvious are Bulgarian artists like Dara, whose song Mr. Rover has been performed by Korean artist Kai – the recording rights stay in Seoul but the songwriter royalties return to Sofia [Bulgaria].”
A boost for emerging markets
The rising popularity of music from emerging markets in developed markets (think Latin music or Afrobeats) also means that music is becoming a beneficial source of income for lower-income countries. This is especially true because the copyright income per song played is higher in higher-income countries.
Because of this difference, Mexican artists’ $350 million in earnings in the US in 2023 was $200 million more than they would have earned on the same streams in Mexico itself. Colombian artists earned $100 million in the US – $78 million more than they would have earned on the same music consumption in Colombia, which was actually more than the total value of recorded music in Colombia ($74 million).
“Music marketers, take note. For labels in Mexico City and Bogotá, there’s a plausible scenario where domestic marketing (at domestic prices) creates export demand (at US prices), resulting in an arbitrage – more bang for their buck (or peso),” Page writes.
Notably, Mexico has overtaken Canada as the second-largest exporter of music to the US, after the UK.
Page also looked at the global music trade from another perspective – that of YouTube subscribers. In a given country, he compared the number of subscribers to YouTube channels outside the country to the number of foreigners subscribed to local YouTube channels, i.e., the ratio of those “looking out” versus those “looking in.”
On that metric, among the major music markets, South Korea is the winner, with 16.7 YouTube subscribers “looking in” for every one “looking out.” For Sweden, the ratio is 7.0; for the US, it’s 2.5; and for the UK, it’s 1.8.
“Indeed, four Korean artists — BlackPink, BTS, Agust D, and Psy – each have more subscribers on YouTube than their own country has people,” Page noted.
On that metric, Puerto Rico is the winner, with 38 artists who have subscriber bases larger than the island’s population.
Better data, please
As the music business globalizes, and emerging markets become more important – both in terms of revenue for rightsholders and as sources of new talent – Page laments the lack of data from many corners of the world.
“Global needs to mean global. The United Nations recognizes 193 counties, whereas the IFPI yearbook reports on just 56,” Page writes.
“Similarly, CISAC’s Global Collections Report isn’t global either. Shain Shapiro, of the Center for Music Ecosystems, calculates that over 42 don’t even have their own CMO.”
Better data will result in better numbers for the industry, Page argues.
“There’s a double tailwind that’ll drive the global value of copyright even higher. First, (re)emerging markets will catch up with rich ones and second, as they do, they’ll get more measurement-attention. More value, and more of it being tracked.”Music Business Worldwide