Digital Revenue Drives Royalty Payments to Record High, Study Finds

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Courtesy of Spotify

Worldwide collections top $10.6 billion as money from digital sources jumps nearly 30 percent, according to a report from CISAC.

Royalty payments for creators of music, film, TV, literature and the visual arts hit record levels last year, topping $10.6 billion worldwide, thanks to a surge in revenue from online platforms, according to a report published Thursday by the collections group CISAC, the International Confederation of Societies of Authors and Composers (Confédération Internationale des Sociétés d’Auteurs et Compositeurs).

While the figure for global royalties collected by authors’ societies around the world showed a slim 1 percent rise, royalties from digital sources such as Spotify and Netflix jumped 29 percent to $1.81 billion.

Over the past five years, creators’ digital income has nearly tripled and now accounts for 17 percent of all collections, compared to just 7.5 percent in 2014, the report found.

In the U.S., there has been a 300 percent increase in digital revenues in the past five years. But the Asia-Pacific region is the global digital leader, with online revenues making up 26.3 percent of total collections, twice that of Europe at 13.3 percent. In South Korea, more than a third of total royalty collections come from digital. The only country in Europe to match that is tech-savvy Sweden, home of Spotify, where digital revenues account for 39.8 percent of the total.

Music royalties account for the bulk of overall revenue — some $9.4 billion worldwide — thanks largely to more robust and harmonized laws for the protection and renumeration of musical artists and composers. For film and TV rights in many countries, lump-sum buyout deals are still the norm.

“The audiovisual industry could learn a lot from the music industry and lobby collectively for better laws,” says CISAC director general Gadi Oron. “That's what we've been doing and we've seen success in, for example in new laws protecting artists' rights in Chile and Colombia.”

Oron also points to the European Union's Copyright Directive, a broad piece of legislation enacted by the European Union in June.

“The European Copyright Directive is so momentous for creators everywhere. The Directive has sent an amazing, positive signal around the world, building a fairer balance between creators and the tech platform,” says CISAC president Jean-Michel Jarre. He called on countries worldwide to adopt similar laws protecting artists' rights to avoid “the dark side of digital” in which, with a stable legal framework, the online world “continues to devalue creators and their works.”

Paris-based CISAC has 239 member societies, which represent more than four million creators in 123 countries.