The U.S. music publishing industry is facing new challenges, with Spotify unexpectedly reducing its mechanical royalty payments. But despite these and other challenges, the songwriting and music publishing business remains strong.
This is the verdict from david israelPresident and CEO national music publishers associationU.S. music publishing revenue for 2023 was announced on Wednesday (June 12).
This year’s income is $6.21 billionup 10.74% The Israeli told the audience at the NMPA annual meeting about the previous year.
“We are living in turbulent times in the music industry, and while we face many challenges, I’m happy to report that the songwriting and music publishing industries are in very strong shape,” Israel said.
this Annual increase of 10.74% Growth rate – represents growth approx. $600 million In raw dollars – just over half of the previous year’s growth, when the U.S. music publishing industry grew Annual increase of 19.25% Increase or grow approx. US$900 million.
The substantial growth in 2022 is attributed to a number of factors, not the least of which is the reopening of many venues as the Covid-19 pandemic recedes, resulting in a surge in publishers’ royalties from pubs, clubs, restaurants, shops and more. increase.
Publishers also benefited from the Copyright Royalty Board’s (CRB) decision to increase the mechanical royalty rates paid to publishers by music streaming services for 2018-2022, which resulted in an increase in song rights holders.
It’s worth noting that in percentage terms, music publishing revenue has grown about half as much as recorded music revenue.
The revenue data reported by NMPA are wholesale data (i.e. trade revenue reported by its members), so apples-to-apples comparisons mean looking at Wholesalenot retailrevenue from recorded music — the amount that ends up in the pockets of publishers, labels and artists, rather than retail data, which reflects what consumers pay to streaming services, record stores and the like.
according to Recording Industry Association of America (Recording Industry Association of America), U.S. wholesale recorded music revenue is $11 billion By 2023, there will be an increase 7% annual increase.
In raw U.S. dollars, U.S. wholesale recorded music revenue grew by approx. US$700 million year-on-yearwith an increase of approximately $600 million Music Publishing Revenue – The publishing side performed strongly as recorded music revenue is approximately twice the size of publishing revenue.
Publishing revenues are unlikely to be as strong in 2023 as in 2022, but they will still benefit from continued growth in paying music subscribers (e.g. 15% annual increase Spotify’s paid subscriptions will increase in 2023).
In addition, publishing revenue benefited from price increases on many major music streaming services, including Spotify, Apple Music, Amazon Music and YouTube Music.
In many cases, this is the first time these streaming services have raised prices — but judging from Spotify’s second U.S. price increase in less than a year, it’s unlikely they will be the last, a fact that matters for 2024. That bodes well for income this year.
Overall, U.S. music publishing revenue has grown significantly over the past decade, with revenue in 2023 nearly triple 2014 revenue and nearly double 2018 revenue.
However, the future of U.S. music publishing revenue faces a huge uncertainty: Spotify has decided to reclassify its premium music subscription tiers as “bundled” services, since these tiers include 15 hours of audiobook time per month.
Under CRB rules, streaming services can pay less for bundles than standalone music subscriptions, which Israelite estimates will cost songwriters US$150 million Lost revenue next year, “and even more to come.”
NMPA takes this issue so seriously that Israelis dominated the annual meeting.
“This year we’re going to do something different and focus on a single issue: Spotify’s war on songwriters.”
David Israel, National Medical Products Administration
“Based on a flawed interpretation of the law, Spotify converted all $44 million into [US] Subscribers turned into bundled subscribers,” the head of the State Food and Drug Administration told the audience.
“Spotify now claims that nearly half of the revenue these subscribers pay is no longer for music. They claim that almost half of the revenue now goes to audiobooks. This feature is given away for free. This feature does not increase the subscription price. We I suspect most subscribers have never used this feature.
Israelite revealed in the presentation that the NMPA has filed a formal complaint with the Federal Trade Commission regarding “Spotify’s alleged illegal conduct.” The NMPA claimed that “Spotify is harming millions of consumers and the music market.”
“Spotify deceived consumers by converting millions of subscribers from music-only subscriptions to ‘bundled’ audiobook and music subscriptions without their consent, publicly announcing price increases for these subscriptions, and failing to provide subscribers with a way to restore their music. options.
It’s just one of many moves taken by the NMPA and other groups representing publishers since Spotify notified rights holders in March of changes to how it pays mechanical royalties.
this Machinery Licensing Collective (MLC) sued Spotify over the move, arguing that Spotify’s new “bundle” does not actually qualify as a bundle under U.S. copyright rules because the added 15 hours of audiobook time does not add “more than nominal value.” .
The NMPA also issued a warning to Spotify, accusing the streaming service of providing users with unlicensed lyrics as well as podcasts and videos containing unlicensed music.
In other words, this is full-scale pressure from American music publishing companies on Spotify.
“We are facing one of our greatest challenges yet,” the Israeli said. “This year we’re going to do something different and focus on a single issue: Spotify’s war on songwriters.”global music business
