Despite climbing digital sales, songwriters made 15% less money from CD sales in the first six months of the year as consumers chose to download music from the internet, figures have revealed.
The MCPS-PRS Alliance mid-year results show £74.7 million was made from sales of physical formats, such as CDs and DVDs, down from £82.3 million in the same period last year.
Revenues from all physical products, however, were ahead of budget in the first half of 2008 due to effective licensing of other physical formats including DVDs, pre-loaded USB sticks and musical novelties.
And income “from broadcasting and online sources continues to out-perform that of recorded physical product. Online royalties, although still a small proportion of the overall whole (at £7m), grew significantly by over 40% year-on-year, largely due to the continued growth in the licensed online music market led by iTunes,” the Alliance explained.
Overall, income from broadcasters and internet sites climbed 13% to £82.3 million. The number of transactions processed by the Alliance continues to rise exponentially due in part to the millions of music tracks included on new licensed services such as YouTube. In spite of this, the cost of processing the money collected and of distributing it was pegged at just over 10% of total revenues – one of the lowest in the world.
In the first half of 2008, the Alliance collected over £286million for music creators from its customers, including broadcasters, online service providers, record companies and a wide range of other businesses that play music.
Chief Executive of the Alliance, Steve Porter, said, ‘We continue to improve our licensing effectiveness in both established areas and in new and emerging business models in order to ensure that all uses of music are accurately and fairly licensed for the benefit of music creators everywhere.
‘We are making inroads into the online market with our groundbreaking licensing deals with iTunes, YouTube and Bebo, with further gains anticipated in the year.”