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The Resilience of Copyrights

The experts at CONSOR have integrated data from the most reputable sources in the intellectual property industry to bring together four decades of royalty rate metrics. The accompanying graph combines sources such as Royalty Stat, Licensing Executives Society, Licensing International, Licensing Economics Review, and CONSOR’s own proprietary database to serve as a reliable and informative resource for all.

In general, copyrights’ royalty rates have shown remarkable stability throughout the last 40 years. With an increase in the licensing of art, music, fashion, and publishing, has come more leveraging opportunities for the owners of copyrighted material. Though reporting relatively similar median levels over several decades, copyrights today are showing an increase in activity thanks to record-setting licensing programs in nearly all areas of copyright. Art in particular has experienced some of the most prolific increases in activity. Copyrighted works owned by estates and living artists have seen a strong rise in deals, which in turn has positively affected the licensing industry for copyrights as a whole. But there are segments within copyrights that have been taken over by turmoil during the last several decades.

Music licensing has seen perhaps the most dramatic transformation over the last 40 years. In the 1980s, music was sold only as physical copies on discs or cassettes. Until relatively recently, artists received royalties on each copy of a song or album sold, typically only purchased once by each customer. This fee structure is much different from today; virtually no one purchases music as a physical copy. Essentially, the fee-structure for music copyrights has been reinvented due to the development of digital technologies. Platforms such as Spotify, Pandora, or YouTube, have made music copyrights profitable not by the number of copies sold, but by the number of streams each song receives. Consumers now pay a subscription fee each month to companies such as Spotify, who then pay artists on a per-stream basis for each song. As additional platforms come to life in this constantly evolving digital age, copyright licensing deals will only become increasingly more complex.

Proof of this last statement can be found in the rise of NFTs (non-fungible tokens) as mediums for music and art copyright licensing. Though having been around for several years, the true popularity of NFT’s started just last year and it is only growing stronger with each new entrant. Recent deals made by electric music producer Justin Blau and rock band Kings of Leon make it clearer than ever that the music industry is taking shapes never seen before. Blau (better known as 3lau) sold a token, containing a unique song and a few pieces of digital artwork, at his live auction in late February for a record-setting $3.6 million. Kings of Leon started selling their newest album ‘When You See Yourself’ as an NFT, and have generated over $2 million thus far from NFT sales alone. No one could have imagined copyright licensing structures like this that would create such incredible opportunities for artists, right? Well, someone must have, and it seems the only way to invent the future is to imagine the unimaginable; so, what will the next 40 years hold for copyright licensing?