Growth in music exports reflects the industry's changing revenue models
Music Finland's latest study, Financial Survey of the Music Industry in 2018, shows that the total value of the domestic music industry and Finnish music exports continues to grow.
Streaming music has generated growth for Finnish recording-industry businesses, while revenue models based on copyrights and direct agreements between actors have been gaining importance on the international stage. The heady growth of startup companies is clearly evidenced in the value of music exports. In 2018, the total value of the Finnish music industry amounted to 945 million euros, representing a 1.5 per cent increase year-on-year. Live music continued to account for around half of the industry's value, while royalties totalled 96 million euros. However, the most robust growth was seen in sales of recordings, up 11 per cent year-on-year, and amounting to 81 million euros in 2018. The Finnish recordings market witnessed its fourth straight year of growth, owing particularly to gains made in streaming. Streaming services now account for 85 per cent of the recordings market.
Copyrights and services on the rise in music exports
In 2018, the market value of Finnish music exports amounted to 78.5 million euros, representing a one-third increase as compared to the previous year. These gains were especially driven by powerful growth in the field of technology, and reflected in the ”other goods and services” sector (EUR 49.7 million) of music exports, which includes the exporting of audio technology and equipment as well as export revenue from startups utilising music technology and expertise.
Live music, recordings, copyrights and other related revenue comprise the key sectors of music exports. In terms of value, live music exports continued to be the largest sector, totalling EUR 12.8 million. The greatest growth (22 per cent) was witnessed in copyright-related revenue, converted via Finnish copyright organisations, or paid directly to music-industry businesses. Copyright-related revenue from foreign countries equalled 5.7 million euros, with the value of exported recordings coming to 6.5 million euros.
Appreciable growth was also witnessed in other types of export revenue received by Finnish music exporters, including such items as songwriting and production fees, sales of sheet music, advertising contracts, and merchandise. These amounted to EUR 3.8 million. The key sectors saw growth of a little over five per cent year-on-year. Pop-music songwriting exports also enjoyed an uptick, with foreign artists releasing a total of 76 songs written by Finnish songwriters in 2018.
New revenue models driving exports
The growth in music exports reflects the changes in the music industry's business models as well as the transition from physical, saleable products towards services and rights. In addition to the rise of streaming and startup companies, this can be witnessed in increased copyright-related and other music-industry revenues. The strength of the key sectors ensures that Finland's music exports stay on a steady upward trajectory in spite of changes.
”Finnish music export is defined by great scope, with growth potential found in many fields such as songwriting. This provides an excellent springboard for new international success stories. In order to achieve an even better marriage between premium Finnish content and services, we need more dialogue and innovation between the various sectors,” says Kaisa Rönkkö, Executive Director of Music Finland.
The data for the Financial Survey of the Music Industry in 2018, published today, was collected by Research Manager Merja Hottinen of Music Finland and by researcher Tuomas Ilmavirta. Merja Hottinen compiled the report.
The survey is based on music business practices in these core categories: live music, recordings, copyrights, other export revenue, and other goods and services. The latest figures for pop-music songwriting exports were published in conjunction with the report.