Streaming Revenue outperforms Radio

License fees collected from all digital providers, including services like YouTube, Spotify and iTunes, are now greater than traditional radio broadcasting, which generated $45.3m in the last fiscal year.

APRA AMCOS’ annual Year in Review also reported domestic performing right revenue was up to $70m for the last financial year, marking a 6.8% rise from its 142,000 licensed businesses across ANZ. APRA AMCOS notes it performed well above the global benchmark of 3.8% growth.

The Year in Review showed that for the first time ever, the number of works from songwriters reached over 1 million. This meant over 248,000 songwriters, composers and publishers were paid more than $294.6m (across APRA and AMCOS).

APRA AMCOS Chief Executive Brett Cottle used the report’s release to shed light on one of the music industry’s biggest battles, the safe harbour legislation. It allows UGC (user generated content) services to avoid paying certain licenses to rights holders as they hide behind pre-digital era laws.

“At a time when copyright is working in practice as it should, and just when the culturally-rich and economically vital business of music is getting back on its feet, it’s difficult to fathom why measures such as those relating to Safe Harbour expansion or so-called ‘fair use’ should be contemplated by government,” Cottle said.

Dean Ormston, Head of the Member Services Group for APRA AMCOS said that despite increased revenue from streaming and the number of users on streaming services, there is serious concern in the industry about the ‘value gap’.

“Should the government act on the recommendations to water down copyright arrangements by introducing Fair Use and changes to Safe Harbour provisions, it will undermine existing and future commercial arrangements and have a detrimental effect on the livelihoods of creators of all content.”

Speaking to TMN, Ormston said: “The growth in revenue from digital streaming services belies an underlying value gap caused primarily by competing ad-funded services, including Spotify and YouTube, where the per-play rates for music are derisory at best,” he said.

“There’s a massive mismatch between the consumption of music and the revenues returned to songwriters and artists. Simply put – ad-funded services are no friends of music creators. The solution? More paying subscribers!”

As discussed in an op-ed by ARIA CEO Dan Rosen in June, one way to combat the ‘value gap’ handicap presented to local artists, is to ensure music playlists on streaming’s biggest competitors feature Australian artists.

Ormston told TMN APRA AMCOS is currently analysing the percentage of ‘local content’ played on digital services. “We estimate a range of 8% to 20%, depending on the digital service,” he said.

Ormston said strong partnerships between digital services and the industry should counter the bias local acts face when the most followed and influential playlists are curated overseas.

“Quotas (similar to the 25% rule handed down to radio broadcasters) is certainly one option – but strong, collaborative and mutually beneficial partnerships between DSPs and the music industry is our preference.

“While it’s important to have Australian branded playlists, it’s arguably more important to have Australian works well represented generally in curated playlists. Curated playlists are incredibly important for Australian artists in being ‘heard’, both locally and internationally. If digital services are genuinely keen to support Australian artists we need to see 25% Australian content.”

 Other key highlights from APRA AMCOS’ Year in Review:

• Record rate of revenue growth as well as a record revenue figure for APRA as a stand-alone entity: revenue grew by more than 12% to $258m.
• Record revenue figure for AMCOS $75m representing 7% lift.
• Broadcast division saw growth in revenue from subscription television reach $24m (up 13%).
• Licensing operations in New Zealand contributed approximately A$40m, or circa 13.6% to the APRA AMCOS domestic revenue figure of $294m.
• Data from the Australian Securities and Investment Commission (ASIC) shows that of the 44 Australian companies registered with ASIC in 1926, only nine remain registered today, including APRA.

The report follows figures announced by APRA AMCOS showing digital royalties grew across Spotify and YouTube in 2015. It reported a 178% increase in earnings from Spotify and 91% increase in earnings from YouTube in Q3 2015 alone.