Global Pub Figs Show Modest Growth

NEW YORK-Although overall worldwide music publishing revenues in 1997 increased modestly in the midst of a decline in sales of recordings, this growth is threatened by the maturation of major markets and a continuing climate of uncertainty in the developing markets of Eastern Europe, Southeast Asia, and Latin America.
In a survey of 53 markets, the eighth annual report gathered by the National Music Publishers' Assn. (NMPA) finds that total publishing revenues increased 1.1%, to $6.29 billion in 1997, over 1996 (BillboardBulletin, July 19).
Due to currency fluctuations around the world, the NMPA also calculated global publishing revenues on a flat exchange rate. When calculated on the flat rate, global publishing revenues rose 3.36% to $6.7 billion in 1997 over 1996.
The NMPA report, revealed at its annual membership meeting July 19 in New York, cites previously reported figures from the International Federation of the Phonographic Industry (IFPI) that show there was a 2.2% decrease in worldwide recorded music sales from $39.5 billion in 1996 to $38.6 billion in 1997. According to the report, since music publishing revenues are usually collected later than sound-carrier sales, it is possible that music publishing revenues will be lower for 1998. However, the report notes that IFPI recorded a slight increase in worldwide recorded music sales in 1998.
A positive note was sounded by Ed Murphy, NMPA president/CEO, in the area of mechanical royalties, the collection of which is done by the NMPA's Harry Fox Agency.
"The best news came from the [mechanical] based revenue sector, which totaled $2.74 billion, an increase in revenue of 3.1% from 1996. This rise was due mainly to an increase in synchronization collections, which rose 30.9% to $864.17 million-a trend that is likely to continue as we move forward into the new millennium." The report says that global performance-based income in 1997 increased by 1.1% to $2.65 billion.
For last year, which is not subject to the report, Murphy tells Billboard that in terms of mechanical collections, "the front part of 1998 was flat, but the back part changed substantially [for the better]. We're now running 15% ahead of last year, which also reflects the last quarter of 1998."
On a worldwide basis, the NMPA report notes a widening gap in favor of mechanical collections over performance fees, although in the U.S., performance fees collected by ASCAP, BMI, and SESAC-the main performance collecting groups-outstrip mechanical collections.
Globally, mechanical income accounts for 44% of revenues, while performance royalties account for 42%, with the remaining 14% divided by distribution-based income (10%), interest investment income (3%), and miscellaneous income (1%).
Print music sales worldwide were flat in 1997 at $580.58 million, with the U.S. ($208 million) and Germany ($125 million) accounting for 57% of worldwide revenues.
Overall, Murphy says in the report, "the 1.1% increase from the total revenue figure of the 1996 [survey] underscores the maturation of the music publishing market in the traditional revenue leaders-the major industrialized territories like the United States, Japan, and Western Europe-where copyright laws and their enforcement have historically been the strongest."
The publishing revenues of the top five territories-the U.S., Germany, U.K., Japan, and France-represent 69.9% of the overall total, up from 68.6% in 1996, the report says. This gain ends a downward trend that began in 1995, when the top five fell from 1994's 71% to 69% in 1995. However, the report continues, "when looking at the top 10 territories, the downward trend continues: from 88% in 1994, to 87% in 1995, to 86% in 1996, and to 85.7 in 1997."
Murphy says there is little compensation from the developing markets in light of the maturation of leading markets. "While gains in copyright protection are continuing to made [in the developing markets], the monies being collected are not yet enough to compensate for the slowdown in the major markets. At the same time, the Asian financial crisis has been felt keenly both in Southeast Asia and Latin America, thereby further slowing growth in those areas."
Among the developing markets, Murphy reports that Latin America showed the "most impressive" increase of the three regions. Revenues rose in Latin America by 25% to $213.55 million.
But, Murphy cautions, "due to the collapse of the Brazilian economy in late 1998-which itself was caused in some part by the Asian economic crisis-similar growth cannot be expected for 1998. Due partly to the language difference between Portuguese-speaking Brazil and the remainder of the region, Brazil's woes will probably not drastically affect the rest of Latin America."