SWOT Analysis Of Music Publishing – 2017

Background

• Music publishers represent songwriters and composers of musical works. The main roles of music publishers are to promote those songwriters and their songs, and to protect their copyright.
• Music publishers play a vital role in the music industry; developing music, helping to protect it, and negotiating a value for it in the market place.
• The Australasian Music Publishers’ Association Limited (AMPAL) is the industry association for Australian and New Zealand music publishers and works on behalf of its music publisher members and their songwriter and composer partners to promote the importance and value of music and music publishing in Australia and New Zealand – both culturally and economically. Formed in 1956, by a handful of publishers, we’re now a trade association with over 60 publisher members representing over 90% of the economic value of the Australian and New Zealand publishing sector.
• Each year, AMPAL conducts a survey of its members to report on the revenue of the local music publishing industry.
• The 2016 survey of AMPAL members valued the Australian and New Zealand music publishing industry at just over AUD$235 million for the year. The survey includes royalty data from the industry collective management society APRA AMCOS for performing and mechanical rights, but only in relation to royalties flowing through to music publishing companies and not including money paid directly to songwriters and composers.
• This result is up from around $215 million in 2015, and $200 million in 2014, and broadly reflects the overall industry experience of growing digital music royalties, through streaming music services in particular.

Some of the strengths, weaknesses, opportunities and threats for the Australian music publishing sector are:

Strengths

1. The composition of a musical work is the primary element in the musical creative process and music publishers derive income from a diversity of royalty streams including recorded music sales (digital and physical formats ie mechanical royalties), performing income (where a musical work is publicly performed or communicated), synchronisation income (where music is used in TV, films etc), and sheet music income.
2. Musical works are currently well protected by copyright law in developed countries
3. It’s a sector of the music business that has a history of working collectively through well-organised collecting societies internationally. In Australia, the collecting society for performing rights and mechanical rights in musical works is APRA AMCOS
4. Music publishing is the primary right that needs to be cleared for any synchronisation – the song can always be re-recorded but not re-written
5. Synchronisation is a business-to-business activity and therefore not subject to piracy
6. Music publishers have well developed and flexible licensing practices that enable them to efficiently serve the market.
7. Representation of Australian music publishers is strengthened by the operations of their industry organisation, the Australasian Music Publishers’ Association.
8. Total industry revenues to music publishers have been increasing steadily over the past few years, attributable mainly to increasing royalties from digital music including especially streaming.

Weaknesses

• Music publishing is subject to variations in copyright law in different jurisdictions. This creates a complex international legal landscape for music licensing.
• Little or no copyright law enforced in many developing countries
• Subject to high levels of piracy through sharing and downloading of digital music files, as well as the increasing prevalence of ‘stream ripping’
• Music publishing involves a lot of administration, and with the increasing consumption of music via digital sources, huge amounts of data are now required to be processed by collecting societies and music publishers.
• The decline in physical sales (ie CDs) has significantly affected the mechanical income of music publishers

Opportunities

1. The increasing consumption of music through music streaming services is seeing current growth in the industry globally, though it is in its early stages
2. Increasing need for music as part of content creation. In the digital age, huge amounts of content contain music and need to be correctly licensed
3. New platforms for dissemination of content including music e.g. Netflix and other video on demand services
4. New and emerging markets such as India, China and the rest of Asia
5. Improvements in technology is enabling easier creation and distribution of music
6. New music business models are constantly emerging in the digital market
7. The increasing recognition of Australia songwriters and composers in key overseas markets, seeing growing international revenue
8. The opportunity to educate new generations of music fans on the importance of supporting local creative content and the harm that copyright infringement causes to musicians, to encourage consumption of music via legitimate sources

Threats

• The culture of ‘free’ and ‘shared’ content leading to a reduction in the perceived value of music
• Continued online infringement in its various forms
• Technology makes music creation easier, leading to an oversupply
• Increasing supply of music leads to price reductions
• A weakened music market leads to fewer and less varied music publishers
• Ongoing data issues of the music industry pose a potential threat to its development in the digital age
• Inexperienced firms entering the marketplace purporting to offer music publishing services through multiple rights service models
• Some giant global technology firms lobbying strongly for changes to copyright law which will be to the detriment of all creators including songwriters and their music publisher partners and could discourage the creation of new content

Author

Mark Callaghan Submitted 2 September 2008.
Updated by Matthew O’Sullivan, CEO, Australasian Music Publishers’ Association Ltd on 17 August 2017.