Why Music Publishing May Grow Faster in the Future

Music publishing is a vital component of the global music industry, with the potential to spark remarkable growth. Explore the essence of music publishing and the factors that will steer its future expansion, setting the stage for broader industry success.

 

Music publishing is one of the five major components of the global music industry. The potential growth in music publishing may help to fuel overall industry growth. What is music publishing? What may drive future growth of this industry segment?

 

What Is Music Publishing

Music publishing is the business of the promotion and monetization of musical compositions. Music publishers ensure that songwriters receive royalties for their compositions. They also work to generate opportunities for those compositions to be performed and reproduced.

Functions that the music publishing company may be responsible for include:

• Making deals with songwriters
• Secure commercially released recordings of the songs it controls
• Promoting the songs for advertising or promotional campaigns
• Issuing licenses for the songs that they manage
• Collecting licensing and royalty fees on the songwriter’s behalf
• Providing guidance, support, and feedback to songwriters

Music publishing companies get a percentage of the royalty fees of the songwriters they represent.

 

What May Drive Faster Growth in the Music Publishing Industry?

Goldman Sachs predicts the global music industry will grow 8.2% in 2023 to $8.8 billion over 2022’s level and reach $14.7 billion by 2030, representing a compound annual growth rate (CAGR) of 7.6%.[1]

Fueling the potential growth in music publishing increased royalty payments paid by streaming services to publishers from 11.4% to 15.1%.  Although the rate was decided in 2018, streaming companies spent years arguing the decision.  However, the rate was affirmed in 2022 and officially became effective in 2023.  That rate is expected to rise to 15.35% in 2027.[2]

Also helping is the estimated strong growth in the performance and synch revenue, of which publishing derives a large share of its revenue.

 

Structure of the Music Publishing Industry

The three largest music publishing companies control nearly 60% of the industry.  Sony Music Publishing, the largest, commands a 25% market share.  Universal Music Publishing and Warner follow with a 23% and 12% share, respectively.[3] 

Independent publishing companies command a 25% share of the global market.

 

Major Players in the Publishing Industry

Sony Music Group is the largest music publishing company in the world.  They feature top artists, including Doja Cat, Mariah Carey, and Corey Kent.

Universal Music Publishing is the next largest, with artists including Taylor Swift, Elton John, Bad Bunny, and The Weekend.

Rounding out the top three is Warner Chappell, with artists including David Byrne, Larzz, and the Eagles.

 

Consider MUSQ for Exposure to the Global Music Industry and Music Publishing Companies.

The MUSQ Global Music Industry ETF (MUSQ)

The MUSQ Global Music Industry ETF (MUSQ) seeks to provide investment results that, before fees and expenses, correspond to the total return performance of the MUSQ Global Music Industry Index (MUSQIX).  The MUSQIX Index is designed to provide exposure to global, publicly traded companies and royalty funds with a core business interest in the global music industry.

MUSQ may provide individuals with an attractive vehicle to gain exposure to the global music industry.

 

For a complete listing of MUSQ holdings, please click here.

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[1] Yang, Lisa, et al, Music in the Air, Goldman Sachs Equity Research, 6/28/23
[2] Aswad, Jen, Copyright Royalty Board Confirms Streaming Royalty Raise for Publishers and Songwriters, Variety, 7/1/22
[3] Smith, Dylan, Independents Command a Combined 27.1% Share of the Global Publishing Market, Report Shows — More Than Sony Music Publishing, Digital Music News, 4/21/23