How Music Can Boost Our GDP

In our parts of the world the fact that music is often seen as an “intangible” commodity has made it difficult to influence the thinking that it has value and, as such, has to be “paid for” by the user.

Today, with the fast-paced growth of the digital world, this divide and misunderstanding is even greater. The economic value of the likes of recordings appears to have withered, if only in the eyes of the user. At the click of a button, “free” music can be downloaded. However, unknown to the user this “free” commodity must be paid for by someone, either the site’s host (as in the case of C&W, Deezer and Digicel’s RDIO) or by the user through a “pay for play” or “pay for download” system. If there is no system of payment in place, then the music, this intangible commodity, is being stolen.

There are real opportunities in the creation of music, not just for the creators but for the country as a whole which stands to benefit both intellectually and financially.

The value of music and the importance to economies like ours is clearly illustrated in the recently released “CISAC Global Collections Report 2015”. CISAC – the International Confederation of Societies of Authors and Composers – was founded in Paris, France in 1926.

The report shows that the total royalties collected in 2013 on behalf of creators worldwide remained constant at 7.8bn Euros with Latin America and the Caribbean 6.6% of that total, which is up by 16.9%.

“In 2013, CISAC member societies proved once again the importance of collective management of rights for creators around the world. Despite challenging economic conditions in many markets, total royalties collected by CISAC members remained stable,” Gadi Oron, director general of CISAC, said. “Performing rights collections grew 2.4%, breaking the 6bn Euros mark for the first time.”

Interestingly, the report revealed that in the area of “Collections per head of population,” Saint Lucia ranked 37 in the world, 11 places below the USA. The report also lists the countries where royalties are reflected in the GDP, with Demark topping the list with just over 0.05%. Saint Lucia is ranked at 14 (three places below the UK) with royalties collection forming 0.03% of the island’s GDP. The United States did not register, ranking below world average. The USA and Canada combined is at 0.009% of GDP.

While this spells good news for Saint Lucia, the head of ECCO (the organization which represents the island’s royalties collection) says we still have a long way to go.

“While we continue to punch above our weight and outperform a vast number of developed and developing countries in the world in terms of collections and awareness, we continue to operate in a hostile environment where there is a high level of non-compliance. This puts a heavy strain on operating expenditure which is also worsened by the high cost of doing business in the OECS,” General Manager of the Organization, Steve Etienne says.

In 2013 ECCO collections rose to just over EC$1million. Of that amount EC$600,000 or 60% was spent on administrative and operating costs. Of the remainder just over 10% was paid out to “local” ECCO members while the balance had to be remitted to international societies. Interestingly too, government benefits tremendously from ECCO’s collections, first by way of the withholding tax on the earnings of members and on the VAT on collections of revenue.

The Eastern Caribbean Collective Organization for Music Rights Inc. (ECCO) is a not-for-profit society of writers and publishers of music. Through reciprocal agreements with Collective Management Organizations (CMOs) throughout the world (also called ‘societies’), ECCO represents and can license virtually the whole worldwide repertoire of copyright music for public performance, broadcast, cable transmission, online and mobile use.

And while the imbalance of payment has stirred a debate here for an increase in airplay for local music which some claim may redound to an increase in royalties for local creators, Etienne says ECCO cannot front any advocacy for such, as it represents songwriters and composers globally.

“What I would say to our songwriters and composers and by extension the performers, is to make music that is marketable around the world and to seek opportunities for your works beyond just radio airplay,” Etienne says. He pointed to the growing trend in the online streaming of music and online radio which puts the music in the hands of millions all over the world instantly.

The CISAC report also points to opportunities in the digital market, capturing the global trends. According to the report, sixty million people worldwide are now using Spotify a “pay for play” commercial music streaming service that provides digital rights management. There was also growth in the “live” music market as well as digital TV and radio advertising, desktop internet and smartphones.

“In the same way that growing internet penetration brings new opportunities for content, growing penetration of smartphones makes it easier for creators to reach new audiences,” the reports says.

In order for creators – composers, writers as well as publishers and performers – to gain a greater share of that pie, then all concerned must see the bigger picture. And that includes the average user at home, government and commercial entities and promoters. The laws governing copyright must not only be strengthened but greater power must be given to those whose business it is to enact and enforce such. The way forward now is for greater dialogue and sensitization on the subject which, in the end, if approached correctly, can offer an additional stream of revenue to ailing economies like ours.

To download the CISAC report go to:

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