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I’m interested to hear what you guys think will happen to the library music business from the global response to the pandemic.
Production on films and TV shows has stopped, most likely delaying the release of those. Post production is probably slowed down as well on projects already in the can. There might be a crazy push to get all these projects released once the peak of the virus curve seems past us (maybe in two months?)On the other hand, advertising often INCREASES during a recession, as businesses do whatever they can to juice sales.
I also wonder what this will mean for libraries and composers – will it hurt newcomers more than established ones that already have residual revenue streams? (After all, people will still watch TV).
How about royalty free? Will a quiet couple of months for the RF sites mean it speeds up the transition to a subscription based model?
Hey Mark – I don’t have any predictions about the music library business but what I do know is this isn’t the first and it won’t be the last disruption. Being well-rounded and adaptable is the best arsenal. Hey, we had DJs, pay to play, Napster, PROs demoting vocal background to background instrumental, subscription models, and more to come that we don’t know about ) and yet, we still make a good living with music.
I’ve always liked this quote as a reminder that remaining optimistic, even when it’s difficult to do so, is the mindset for being able to spot opportunity.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
Winston Churchill“Skate where the puck is going”
Indeed new shows are not in production and live sports broadcasts are history. These are negatives.The positives will be re-runs. Those of us who have music on shows produced in the past few years will see re-runs. And yes, advertising and youtube messaging will change and all corporations will start advertising “during these difficult times….our corporation is ensuring that we will do…. blank, blank, and blank…so you feel confident and safe………..etc” .
The big dip has occurred in March because the news cycle is so negative, fearful, and shocking, but starting in April media producers will have to produce messages of “how to cope and adapt” and “how companies are implementing safety policies”….etc. So media will still get produced. All editors (our clients) will be editing from home.
The performance royalties we will get paid reflect the past 6 to 18 months ago so this will help sustain our earnings in 2020 a bit. I suppose we will see declines on Q4 2020 through Q3 2021 PRO statements. Olympics will be cancelled which means all the media that was supposed to get produced and broadcast for the summer games is out the window.
Bars, restaurants, retail stores, theme parks, hotels….hmmm ( all these extra sources of revenue for PRO’s) I really wonder about that. These businesses are closed so one has to wonder if they will even pay their annual license fees to ASCAP, BMI, and SESAC in 2020.
Key numbers to keep an eye on are what the pros will collect and distribute in 2020 compared to 2019
https://variety.com/2019/music/news/ascap-distributes-a-record-1-1-billion-in-royalties-1203202183/
If I were to take a guess at it, perhaps PRO’s will see a 20% to 30% decrease in revenue collected in 2020.
We will not know for 1 year.ASCAP collected 1.27 Billion in 2018. I suppose they will report their 2019 revenue in 2 months or so.
BMI already warned about 2020 revenue in their March distribution. So performance royalties earned in 2021 will be lower I predict. All PRO’s around the globe will see their revenue decline. EVERYONE in the world except Amazon, Wal Mart, Costco, grocery stores, health care, drug companies will see their revenue decline.
It will be interesting to see if real estate prices crash down. I certainly hope University tuition crashes hard too.
I was thinking recently (perhaps optimistically) there is going to be more demand for content than ever because everyone’s at home. I have noticed plenty of plays recently on lots of best moments/greatest game/top 100 type sports shows, (presumably editors can work remotely and put these programmes together) and as Music1234 says there will be plenty of repeats on TV – hopefully they will be repeats of shows with our music! Most of us who are a one person operation can continue to work as normal. I for one am very grateful for that. I think those of us who have been doing this for a long time – who are self-sufficient and are making a living – will survive it. Anybody attempting to break into this business right now – well it was already harder than ever before and I really feel for them, but my message to anyone would be the same as it always is – if you can, keep on keeping on.
ASCAP is already notifying members of a decrease in revenue to them and therefore a decrease in royalties to us:
Q: “Will I still get royalty distributions from ASCAP?
A: Even while ASCAP offices are closed, ASCAP is still very much up and running and working for you. Our domestic publisher royalty distributions went out on March 20th, and we are working hard to get our domestic writer distributions out in April. Please understand that our U.S. licensee customers and foreign partners have experienced immediate and material challenges in their businesses. As a result, revenue to ASCAP will decrease during this time and, therefore, your royalty distributions will decrease as well. While we cannot put a figure on this right now, we will keep you updated as events unfold.”
I’m much more worried about other aspects of the business as opposed to a virus based impact. As mentioned, viewership of shows is UP!! As for streaming royalties, PRO moving funds where they like, PRO NON transparency in accounting, subscription models gaining traction, networks feeling that they want to go direct license, production companies trying to take all the publishing of music they didn’t even commission, etc…..that’s what I’m concerned with.
Michael, can you send a link to the ASCAP communications? It would seem to me that payments to us will drop in 6 to 9 months and not on the next two distributions because that revenue should already have been collected and slated for payment in April and July 2020. It will be interesting if they start slashing royalty distributions now. It’s my understanding that we are getting paid for 2019 performance royalties on this distribution and the next distribution. Even the foreign distributions for 2019 and 2018 should pay out normally for the remainder of this year. The October 2020 and January 2021 distributions should show declines. We’ll see what they do soon enough. BMI did not slash 2019 royalties, that’s for sure.
On the ASCAP website home page, click on the “FAQ on the Government’s Coronavirus Relief Package” link.
Well, sorry for not sharing the somewhat optimism of the topic participants, but I already see the effects of the pandemic on my future incomes.
I’m mainly a library music writer and I earn my life with TV placements all over the worlds on tv shows llike those kitchen things, tv shows, science shows, documentaries or those police documentaries. Well basically everything that is on TV which’s not original music commissioned to a composer.
I don’t have any library used in commercials or TV series (those use original music which I rarely do) so the fact that people are staying at home has literally not a god damn positive effect on me.
For now, TV Channels dont seem to repeat older TV shows (repeat: i’m not talking about TV series or TV movies, i’m talking about shows that use massive amount of library music )
on the contrary they seem to air.a lot more movies and animated children series (kids stay at home…)So to summarize, not a lot of repeat of older shows/doc for now, new TV shows (not talking about TV series or movies again) are not being made or with a lot of difficulties. Those daily shows are being produced on a daily basis, even if an editor could work remotely, he or she would still have to edit pictures that need to be shoot and this can’t be done.
The closing of life must end very very soon and life has to restart again, or 2021 will be a pretty weak year for library music composers. Also for original music composers who had films or tv shows planned that are being delayed at best, and cancelled at worst.
I’m earning $250k a year normally with just library music, but if TV channels line-up dont go back to normal, I’ll be going as low as $40k a year. Catastrophic.
To be frank, I would still have a great life in 2021. But losing more than 100 % of your last year income, is still psychologically difficult.
Overall I think library music earnings will be hurt substantially by these events. Although I think trailer music will be hurt the most, because cinemas are out of action, movies are being delayed etc. It’s very hard to imagine a piece of trailer music being licensed right now.
I have also heard rumors that some PROs are saying they will be unable to process royalty payments normally, due to staff being away. I don’t know if this is true but obviously this wiould have a very negative impact. Then there’s the need for cue sheets to be filed correctly, which I think is also less likely in this environment.
Besides these points, it is also very hard to see advertising syncs going anywhere but down, if we enter a deeper recession. And I have already received ntoice from one RF library that their earnings are about 50% down one month to the next.
As of this week, I’ve begun to feel the reductions bite. It’s a pretty bleak time right now for me in library music.
I think the reduction in payment of royalties will be immediate. While we are paid in arrears by two quarters (at least for BMI), the PRO’s are experiencing the reduction of revenue now. I anticipate that there will be new formulas created where the royalty payments for 2019 4th quarter and maybe 2020 1st quarter will go down dramatically. (We generally have no control how much the PRO pays us per performance)
The temporary closing of the economy is going to have dramatic effect for a very long time. Even if it reopens in May, its going to take several years to recover. So many small businesses are being forced to close their doors. In many cases, the closures will be permanent.
Our music is used primarily for entertainment purposes – whether it is for sports, movies, TV, or video games. Also, in much of the entertainment, music is optional. As we learned in the TV/Film strike in the 1980’s, music is expendable in production.
Until people can get back to work and pay all their arrearages on mortgages and other obligations, entertainment is going to be low on their list. So, entertainment type business will be slow to recover and get back to full production. Since music is not a necessary item, less will be used. The use of music will climb somewhat more slowly than the entertainment companies themselves as they continue to try to cut costs.
It’s going to be a long road back.
You made a great point regarding how PROs are going to handle the crisis even on very close royalty payments..
We will need to be very attentive.
IMO, we will start to see declines in next payment in april / may / june. Depending on which PRO you’re in.
I’m talking here about a very known european PRO and I’m 100% sure payment will decrease from June/July.Simply because as a result of home-working, employees of the PROs will be less efficient.Figures will go down probably even for airings that happened in 2019. This is clearly not fair, but it’s the way PROs get the money. each TV channels have to pay before the royalty payment, and you can be sure that a lot of tv channels are suddenly going to have cash flow problems and use covid19 as an excuse.
For 2020 airings, as you said, some of the cue sheets from TV channels are going to be delayed, those same TV channels will use the lockdown excuse to not fill the necessary cue sheets in time for the royalty payments.
As a side-effect, PROs will fix that in 2021 royalty payments by not asking for the late cue sheets because it would take too much time to include in their data system and make the subsequent royalty payments delayed so I guess in 2021 we’ll get a part of the payments based not on the veracity of the airings but on some general guessing. Some composers will win, some will lose.
PROs are like swiss watch, well organised. But, a small little unfortunate event and they get disorganised for 2 years.So, be careful regarding your very next royalty payments, compare the figures with last year statements, be very precise because by experience I strongly feel we’ll get screwed
We probably should stop giving ideas to PRO’s as to how they will reduce payments to TV composers. The loss in Revenue will mainly be theme parks, hotels, restaurants, live concerts, stadiums, bars, retail.
TV writers should NOT (in theory) be that grossly impacted. Yes, live sports is gone, but 24 hour news and tv spots still march forward. Re-runs still march forward. YOUTUBE videos will still march forward. My TUNESAT detections are not slowing up much and to my surprise, the direct licensing markets still remain OK so far….3 to 4 weeks into this crisis.
The musicians that will be hit should be those focusing on pop songs that play in bars, restaurants, theme pars, retail…and then they perform live at concert venues and log their set lists at PRO’s.
When you follow the money, the money starts with advertisers who buy ads on TV networks. TV Networks collect all their money by selling ad time. Everyone is watching TV these days because everyone is home. The TV is literally on from wake up to bed time in my home. I am still seeing lots of re-runs and ads and of course talk shows and live news. These TV networks still have to pay our PRO’s a percentage of the advertising revenue they collect. Then our PRO’s pay TV writers from that pool of money. So if we are fortunate enough to have music on reality reruns, etc….In theory, the performance royalties should hold up.
If the pool of money the PRO’s collect becomes “democratized” and distributed to those who are not performing live in concert…well then that is a problem. I just landed a Raisin Bran cereal ad that has 500 air dates in just 3 days, I really would not be happy if I get short changed due to “democratization” of royalty distributions. Because everyone is at home eating, food ads are going to really pick up in April. Food, soap, TP, medicine, insurance and financial services are the only game in town. Airlines, Hotels, Vacations, Cruise Ships, Apparel are essentially out of business.
@Music1234- What will be interesting over the next few months is how the PRO’s will calculate the royalty payments. I would not be surprised that for 20 performances that paid $20 six months ago, the same 20 performances will pay less moving forward. I don’t think it is so much “democratization”, it’s just the reality that the PRO’s have less revenue today than they did six months ago. The royalties will be adjusted to match current revenue streams.
Where I am going is whether the royalty paid is based upon the revenue received for the past performance, or is it based upon another criteria. In other words, is payment based upon an immovable percentage, or do they have discretion in adjusting the percentage after the fact. That’s something I don’t know. However, I suspect the latter.
I spoke to my rep at ASCAP, and she told me to expect to receive this month’s distribution by April 26th. She also emphasized “full payout” this month; no change.
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