If You Think Publishing Is Safe, Read This

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There’s a myth that all the bleeding is happening over there, on the recording side.

But publishers are battling a number of complicated and intertwined issues, and a huge part of their revenue is tied to the CD.  “2011 will again be a difficult year and I fear that CD sales are now going into accelerating decline,” PRS for Music chief Robert Ashcroft recently told members. “I suspect that the hard winter delivered a shock that combined with other circumstances to create a turning point.  Our market has held up relatively well in the UK when compared to many others, but we must now plan our business on the basis of a future that looks very different to our experience of years gone by.”

The UK-based PRS is focused on performance and mechanical publishing royalties, a role spread amongst different agencies in the US.  And when it comes to recording commonalities, a major shared stream comes from the mechanical, a penny (or pence) rate attached to every CD and various other physical, digital, and mobile formats as well.  So, fewer CDs means fewer mechanical royalties, once a strong, reliable source of income.

Why else would a publisher care so much about Susan Boyle discs?  “2010 was a tough year for the music industry, though it had begun strongly enough, with recorded media holding up well, at least partly due to Susan Boyle’s remarkable success with her album I Dreamed a Dream,” Ashcroft continued.  In the end, global CD sales dropped 11 percent last year, according to the IFPI, while ringtones tanked 56 percent.  That pushed PRS mechanical revenues southward by 8.8 percent, according to the agency.

But performance rights fared a bit better.  Live performance rights revenues notched upward 0.5 percent to 151 million pounds ($249 million), while broadcast and online revenues gained 0.3 percent to 173.2 million pounds ($285 million).  Overall, PRS revenues dipped by 1.1 percent, hardly a free-fall.

Sadly, that’s probably good news.  “Flat is the new up,” Bug Music CEO John Rudolph expressed last year, and sources to Digital Music News are pointing to some potentially serious downturns ahead.  Huge lags in royalty accounting systems could be masking a far greater problem, according to several sources, and stateside, the feeling is that performance rights groups like ASCAP may have already toasted their greatest years.