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CISAC Reports Nearly $11 Billion in Royalties, Slams YouTube Over ‘Distortion’ of Digital Market

Global royalties collections for creators of music, audiovisual, visual arts, drama and literature rose to a record high of €9.6 billion in 2017 (nearly $11 billion), up 6.2% on the previous year, according to the 2018 Global Collections Report published today by CISAC, the International Confederation of Societies of Authors and Composers.

Royalties from digital income are reported over the €1 billion mark ($1.14 billion) for the first time after a 24.0% increase in 2017. Digital collections have nearly tripled (up 166%) in the last five years, boosted by the streaming boom and, lately, by surging consumer uptake of video streaming services, according to the announcement.

Music royalties have grown to €8.3 billion, up 6.0%, with digital also reported over €1 billion for the first time. Despite digital’s rise for all repertoires to €1.27 billion, revenues from digital uses remain far below collections from broadcast, live and background uses. The CISAC report reads, “Only 13% of creators’ royalties come from digital sources (up from 11%), a reflection of the gross mismatch between the volume of creative work being made available via digital channels and the amounts being returned to creators,” a clear reference to the “value gap” frequently cited by rights holders with regard to the low royalty rates paid by YouTube, the world’s most-popular platform for streaming music, compared with other streamliner services.

“Digital collections are held back by a fundamental market flaw,” the report reads. “A 2018 study commissioned by CISAC – ‘Economic Analysis of Safe Harbor Provisions’ by Professor Stan Liebowitz – shows how copyright safe harbor regimes are distorting the digital market globally. Subscription services like Spotify and Apple Music are at a disadvantage, generating lower revenues and with a reduced user base, due to user-upload content services like YouTube exploiting safe harbor legislation.”

It is the fifth consecutive year of global growth for creators, and the first to see increases in all repertoires. The report also notes that growth in TV and radio collections suggests that surging digital revenues are not currently cannibalizing more traditional markets. In 16 of the top 20 digital collecting countries, broadcast royalties saw growth.

Founded in 1926, CISAC is the world’s largest network of authors’ societies, with 239 member societies in 121 countries. It represents over four million creators from all geographic regions and artistic repertoires including music, audiovisual, drama, literature and visual arts.

“This impressive performance proves that authors’ societies are delivering value to the millions of creators they represent around the world,” said CISAC Director General Gadi Oron. “They have responded to rapidly changing technology, licensing digital services in new flexible ways and handling trillions of data transactions. And they are fighting for the best licensing terms and the highest royalties possible in a world where powerful users are determined to avoid, or minimize, paying a fair return for their work.”

CISAC president and veteran electronic musician Jean-Michel Jarre (pictured above) said, “CISAC is at the heart of a battle for the future of over 4 million creators worldwide. I am passionately involved in this struggle. Europe has now recognized that it is time for change: it is not acceptable for the law to shield large tech monopolies and sustain a systemic injustice for creators. There is now a message to get to the rest of the world: it is time for other governments to sit up and follow.”

Other highlights from the report include:

  • Music collections increase 6.0% to €8.34 billion
  • Audiovisual collections rise 6.8% to €611 million
  • Literature collections climb 5.2% to €227 million
  • Visual arts royalties jump 19.0% to €208 million
  • Dramatic repertoire collections grow 3.7%
  • TV and radio continue to be the top use category at €3.89 billion, followed by live and background at €2.74 billion CISAC’s global network of 239 societies licenses content and collects royalties on behalf of 4 million creators for uses including TV, radio, live, background, digital and private copying.

 

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