Top Publisher Predicts ‘Most Challenging Environment’ Ahead

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Mechanicals are getting battered by sinking CDs.

Smaller budgets are cramping sync licensing revenues.  And even performance royalties are under pressure.

Does this sound like the stable publishing industry we know and love?  Suddenly, publishing is getting tugged by recordings and the broader economy, and that spells serious challenges ahead.   “I do think 2010 might be the most challenging environment we’ve ever been in,” Universal Music Group Publishing global chairman and CEO David Renzer recently told Music Week. “Not only do we have the continued downward trend on mechanical income but we’ve got to hope that the impact the recession has had on sync licenses turns around, particularly in the commercial area.”

And the performance part?  “Again it’s recession-related when you’ve got advertising impacting on the radio industry,” Renzer relayed.  “Their overall blanket deals are up and they’re coming in and it’s difficult to get those licenses to increase or be on a par to where they were before.”

The pressure on publishing starts to debunk the theory that sinking revenues are merely a recording issue.  Instead, components of the music industry are more interrelated, as evidenced by problematic mechanical royalties.  Elsewhere, the live performance sector is also suffering, though an improved economy could perk attendance figures.