“At $45.5BM in 2023, Music Copyright Now Worth More Globally Than Cinema, New Report Finds”: https://t.ly/yDfV5

The devil is in the details.

My inbox has been blowing up with the above story, it makes a good headline, but what you’ve got to know is…

Recorded music revenues eclipsed those of the movies in the seventies. The Warner Cable system? That was built on the back of Warner Music. That’s one reason Mo Ostin was so handsomely compensated.

So, we’ve got a long way to go until we return to those days.

However, there are many lessons in this study.

One, never sell your copyrights.

Music is like the stock market. Over time it only goes up. Sure, there are dips here and there, but in the long term…

Here’s the money quote:

“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.”

The bottom line is they keep finding new ways to monetize music. As for those decrying the advent of AI, don’t. With every innovation there are winners and losers, but the pie always grows overall. Like with the drum machine… Sure, it may have put some studio drummers out of business (some replaced by programmers), but the drum machine allowed people to make music cheaply, sometimes at home, and with a computer, costs can be really low.

Which is one of the reasons that cinema has been decimated.

The movie business missed the memo. The era of the blockbuster is over. I’m not saying we no longer have hit movies, I’m just saying that by leaving all the rest of the genres aside, other than superhero/tent pole movies, the cinema world has actually decreased its overall share of dollars. Because it turns out that given options…not everybody wants the same thing. Not everybody even wants the blockbusters. You had to see “Jaws” in ’75 and “Star Wars” in ’77. You don’t have to see “Wicked” or the umpteenth Marvel movie today, you don’t have to listen to Taylor Swift, Beyoncé or Kendrick Lamar, you can be satiated with a plethora of other work.

That’s the story in the music business, the broadening of offerings. Sure, there are zillions of people posting music to streaming services who can’t stop complaining that they’re not making a living, but the truth is more people are making more money from music than ever before. There used to be a clear dividing line, you were either in the game or you were not, and most were not, they didn’t have label deals and couldn’t afford recording and were locked out of distribution. Today you need no label, can record cheaply and distribution is available to all. However, the road from nobody to superstar is slower than ever before, and most people never make it. Superstars tend to be two-dimensional, built by committee, and there’s a market for that, but it keeps shrinking. Not only does the public want more music in more genres, it wants more authenticity, more credibility, something lacking from almost every blockbuster movie and much hit music. These industries are tooled for an old model from an old world.

As for selling your copyrights… If they’re giving you 20x and you’re going to live ten years, maybe. Or possibly for estate planning, I’ll leave you to your lawyer (who hopefully isn’t getting a share, and therefore improperly incentivized). But revenues keep going up. And up.

If you’re not going to die imminently…

“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.”

Nine years, double. Two years, one quarter more. That’s positively STAGGERING!

Of course not all boats are lifted equally, but…

You know music and the financiers know money. They are not stupid, they would not be giving you all this money unless they anticipated making a whole hell of a lot of money themselves. Never mind you’re selling your songs FOREVER!

But the dirty little secret that’s not referenced in this headline is all the money in television streaming, which many of the producers of films are involved in, licensing and in some cases owning their own outlets. And the success of streaming is based on a plethora of product. You’d be stunned how few people watch the supposed big streaming hits. This is not the days of “Laugh-In” or JR being shot or… Netflix played for the future and won. In a world the film companies couldn’t even foresee. Every fat cat producer was satisfied making millions, not realizing they could make BILLIONS! But that would require being innovative, possibly leaving the company and becoming an entrepreneur. When the brass has little skin in the game, you usually get little innovation.

But music parallels Netflix, and everybody complains about this. Everybody thinks they want the old, controlled model. I will say that under that system some acts were supported by the label, but most never got deals and even household names never got royalties.

Today you can make and distribute all by yourself and retain all the revenues. Furthermore, you can use the internet to promote for free, monetize on the internet and drive people to your shows.

Once again, NOT EVERYBODY CAN MAKE A LIVING!

The truth is there are a zillion independent movies. Just check the schedule of any film festival. But very few get distribution. Music is cheaper and more easily consumed. At this point the big streamers don’t want to buy most of the indie films, and Amazon changed its policy of making them all available for rent. The world keeps getting smaller for indie cinema.

So a comparison of revenues between copyright and cinema is a lame construct of what is really going on. Filmed entertainment, i.e. movies and TV, is bigger than ever before, music has a long way to go before it equals movie revenues like only recordings did in the seventies.

But in the seventies music was everything. You had to buy the record to know which way the wind blew. It started with the Beatles, and then there was FM and branch distribution and money came pouring in.

In the eighties revenues were high because of MTV exhibition, but fewer acts broke through yet they did so worldwide and CDs rained down a ton of revenue.

And the story today is a worldwide one. They’ve been freaking out in the U.K., their share of the overall music market keeps decreasing. Part of this is Brexit. Touring the Continent has become much more difficult and expensive. As for the reduction in clubs… Did you read that Google’s overall share of search keeps going down? First it was decimated by Amazon, and now TikTok. What you think is forever never is. And the government is always one step behind.

You’d think that the labels would be preparing for the future, but they believe that they can hoover up anything that shows evidence of success. But the numbers keep on improving for pure indies. And the labels have fewer tools than they ever did before.

And no one working at the big three has skin in the game, everybody’s on salary with a bonus. You expect them to take a risk?

So, the future ain’t so bright that you’ve got to wear shades, but it is bright.

Adjustments have already been made… With streaming television and indie music. The only question is to what degree legacy players will triumph in the future.

Am I telling you to get in the music game?

I tell everybody to stay out, because the road is just too hard. You’ve got to be one-minded and sacrifice almost everything in pursuit of your career and you still might not make it. Does a fine artist expect to make beaucoup bucks with their paintings and sculpture? Definitely not. They want it, but they know odds are extremely low, many give up. But in music where creation is cheap and talk is even cheaper everybody believes they should get paid. And this is patently delusional.

But if you do have success…

The streams of revenue keep increasing in number and volume and that is a good thing. No, that is a GREAT thing!