Fans Still Buy Music, As Both Music Publishers and Labels Report Record Revenues

Fans buy Glen Campbell's catalog following his passing, while Sony/ATV and Warner Music Group post gains in both publishing and recorded music.
August 11, 2017

Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney.

Glen Campbell’s Digital Music Sales Rise Over 13,000% (Forbes)

Benom’s Take: The press has developed a habit of reporting on sales and streaming spikes of recently deceased artists. As if it’s not obvious that when a beloved artist dies, there naturally will be a short-term spike in activity around his/her work. The sad news of Glen Campbell’s passing is no different.

But in this case, the reported numbers are interesting because it shows that the public continues to buy music. The Forbes article reports that digital album sales spiked 13,665%, and that his “Greatest Hits” albums contributed to about 70% of all sales. The article also reports that single song downloads rose over 6,000% and streaming by over 900%.

Yes, it’s true online streaming is the future. But the royalty income on album/single sales is still there--and it can be significant. More importantly, I hope the posthumous royalty income can help Mr. Campbell’s family and contribute to maintaining his legacy.

Music Publisher Q2 Numbers Keep Sony/ATV On Top (Billboard)

Benom’s Take: As usual, the top three music publishers are the majors. Every quarter, Billboard analyzes the top 100 radio songs to see which music publishers control the market. Sony/ATV continues to hold top market share (for five years now) with 23%, while Universal Music is close behind at 21%. Warner/Chappell rounds out the top three with 17% and independent “majors,” Kobalt and BMG, round out the top five with approximately 8% market share. Bruno Mars’ “That’s What I Like” was the hit song giving Universal and other publishers a Q2 boost.

The boost in radio play will also boost the public performance royalties. In most cases, a music publisher will see their performance royalties about 9 months after the performance date. Even better, if a song reaches certain performance criteria, a PRO might give a “BONUS” for having a hit song. For example, if our hit song earned $20,000 in performance royalties, it might also have an additional $10,000 hit song “bonus” added to that $20k. Royalties on top of royalties, I like it!

Warner Music Group Posts Biggest Revenues in 14 Years (Music Business Worldwide)

Benom’s Take: For emphasis, these Warner Music Group numbers include both the recording and publishing divisions. The article reports that WMG posted $917 million in revenue and $360 million of that came from sound recording streaming income, up 59% from last year! This is positive news on a macro level: Industry-wide, we are seeing consistent royalty growth, especially from recorded music streaming.

However, on a micro level... for WMG, the good news is overshadowed by the actual company financials. Once you read to the end of the article, you’ll notice that WMG has a total company debt of $2.8 billion and a cash balance of $567 million. Just check out WMG’s Total Debt to Equity Ratio. That’s a heavy debt burden to carry around. Maybe those royalties will keep going up 59% year-on-year? WMG’s gonna need it with almost $3 billion in debt!  

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