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Music earnings hit sweet note

Published:Thursday | April 5, 2012 | 12:00 AM

Correction & Clarification

In this article, the quote: "Within the Central American and Caribbean region, these newer collecting societies have continued to consolidate and break into their markets, and so it is expected that going foward there will be an increase in performance royalties generated within the region", should have attributed to JAMMS and not IFPI. We regret the error.

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Steven Jackson,
Business Reporter

Jamaica's earnings from music sales and royalties increased by 41 per cent last year despite the US$1.5 million dip in regional music earnings to US$7.3 million, according to data released late March by the International Federation of the Phonographic Industry (IFPI).

Jamaica Music Society (JAMMS) which collects local data for IFPI's annual report titled 'Recording Industry in Numbers 2012' said that the local earnings were buttressed by an increase in performance royalties. This includes payment of fees to play music from radio stations, mobile players, sound systems, stage show promoters and bars.

JAMMS, however, declined to state the nominal earnings made by Jamaica. It said the rise in collections grew from a small base.

The increase in earning signifies a fairly new revenue stream for the indigenous forms of reggae and dancehall music, one of the few net earners of foreign exchange within the context of Jamaica's trade deficit.

"The steady increase in collection of airplay and public performance royalty from the market, is attributable to a number of factors, but mainly due to one; a continued consolidation of our operations into the local market, through strategic licensing activities which results in an increasing number of music users being brought into compliance, and two; given our relatively recent commencement of operations, we are in fact still breaking into a very large market and so it will take some time before we have full concentration in the market," said Evon Mullings, an economist and general manager at JAMMS.

The society was formed in 2006 but started distributing royalties in 2009.

Big challenge

JAMMS said it still faces a "big challenge" getting to high levels of voluntary compliance but still expects royalties to grow this year.

"We are projecting that for 2012, we will be able to also double the total pool of funds available for distribution to our members, when compared to 2011," Mullings said.

JAMMS administers rights on behalf of approximately 400 local record producers and, secondly, international record producers, and also the rights held by several thousand international labels, through direct mandates, and through reciprocal arrangements with overseas collecting bodies.

Fourth decline

However, its the fourth decline in five years for the Central America and the Caribbean region which includes the countries of Barbados, Costa Rica, Dominican Republic, El Salvador, Guatemala, Jamaica, and Panama. The IFPI represents the recording industry worldwide with some 1,400 members in 66 countries and affiliated industry associations in 45 countries. However, the industry benefited from increased digital music sales although not strong enough to compensate for the fall in physical sales.

IFPI said that each country in the region had its own anomalies: Jamaica up 41 per cent "continues its rapid consolidation process"; Dominican Republic, up seven per cent, was recovering from an agreement with the hotel industry last year; Barbados, down 14 per cent, was "punished by the low economic activity".

Costa Rica, down 17 per cent, was impacted by legislative and governmental decisions against rights owners; Panama's performance undisclosed continues to expect the materialisation of agreements with the main groups of users; and El Salvador closed its first year of consolidation with its newly organised collecting body. Previous annual report have blamed piracy and the global downturn for the decline in worldwide music sales

"Within the Central American and Caribbean region, these newer collecting societies have continued to consolidate and break into their markets, and so it is expected that going forward there will be an increase in performance royalties generated within the region," said the IFPI, whose comments were forwarded to the Financial Gleaner by JAMMS.

Regional digital music sales in 2011 accounted for 53 per cent of total music sales from only nine per cent the 2008. The total sales throughout Central America and the Caribbean comprised digital sales at US$3.9 million, physical CD sales at US$3.1 million and performance rights earnings at US$300,000.

The region ranked 47th in the world based on its earnings.

business@gleanerjm.com