Simplify payouts to musicians anywhere in the world

The global music market is growing exponentially.  In turn, music royalties are increasing, causing growing challenges and making royalty payments become more complex. Find out how to simplify the process. 

We’ll outline how to:

• Streamline the royalty distribution process
• Distribute music and streaming royalties globally in any currency
• Detect and prevent fraudulent activity

Global music marketplace growth

The music publishing market is expected to exceed $655 billion USD by the end of 2024, growing at a CAGR of 7.1% between 2019 and 2024. 

The market has experienced a compounded annual growth rate of 7.1% since 2019, and is expected to stay constant. This growth can be attributed to an increased demand for digital music services such as streaming and subscription services.

The recorded music market is also experiencing rapid global growth:

• It has grown exponentially on a global scale, with 9 out of the top 10 markets reporting increased revenue
• Between 2017 and 2018, the recorded music market grew by 10%
• This market experienced four consecutive years of growth between 2016 and 2019
• Reported total revenue of $19.1 billion

Music market growth by region

Between 2015 and 2019, Latin America was the fastest-growing region at an exceptional rate of +16.8%, with Brazil and Mexico experiencing +15.4% and +14.7%, respectively, between 2019-2024.

This region was followed closely by the Asia and Australasia regions, with a +11.7% for the same period. South Korea was the fastest-growing Asian country during this period, with a rate of +17.9%.

That said, North America, Europe, and Japan are the leading markets. They are followed closely by the Asia-Pacific (excl. Japan), Latin America, Middle East, and Africa.

China is changing the streaming music market 🇨🇳

In China, streaming services including Tencent Music (QQ Music, KuGou, Kuwo) and NetEase compete with record labels, picking up artists directly. The 2020 Chinese music streaming market amounts to $917 million, and by 2024, market volume is estimated to grow to $1.25 billion. 

Streaming music is leading the charge

In 2018, streaming accounted for almost half of the recorded music revenue. This market grew by 33% from the previous year.

In 2020, the global streaming music revenue was $124.4 billion alone. The US accounted for $4.52 billion, coming in as the region with the most revenue for streaming in that year.

Streaming music is expected to generate 10X more revenue compared to downloading music by 2023.

Growth brings new challenges

For artists who want greater visibility — and greater earnings — digital distribution is a must. With digital distribution, artists can distribute their music directly to online stores, or pay one fee to a central distributor, minimizing their effort and retaining up to 100 percent of their royalties. But the growth of the streaming music market creates new challenges for both artists and distributors. 

The ever-expanding array of available platforms combined with an increase in artists means more data, and more payments, for distributors to manage. These companies now need to track and pay royalties from hundreds of platforms to hundreds of artists, in locations around the world.And, they need to ensure their clients are who they say they are, to prevent potential fraud and money-laundering.

As streaming popularity increases, so does fraudulent activity.

Fraud within the streaming music industry ranges from leaked songs to fake artists and underage platform users. Scammers are creating fake profiles and releasing pirated music on multiple streaming platforms. These illegal uploads are resulting in substantial losses for distribution companies — including tens of thousands in royalty payments. 

Common types of fraud in music royalties include:

• Impersonation
• Leaks
• Fake artists
• Underage users
• Account takeovers
• Fake accounts
• Bootlegs

Growth has increased data and the number of cross-border payments for distributors to manage, increasing the need for identity verification to prevent fraud and money laundering.

Paying royalties to artists around the globe isn’t always easy.  

With so many potential sources and music platforms available, it’s challenging for artists to be able to see exactly where their royalty earnings are coming from — and decide how, and when, to collect them. 

“We know how important it is for musicians to have a trusted payment source. With Payoneer, TuneCore artists have access to the most flexible, reliable payment service in the industry.” — Scott Ackerman, CEO, TuneCore

Even for distribution companies, it can be difficult to sort through the hundreds of stores and platforms to pinpoint exactly where artist revenue originates. Tracking and executing royalty payments can take a significant amount of time, effort, and manual work. Tracking and managing currency conversions and foreign exchange rates takes time. Making sure all payments comply with the relevant regulations for each country takes time. But it’s critical to make sure your artists have a positive experience with receiving their royalties in a timely manner, via the method that works best for them.

This is one clear area where a mass payment platform can provide an immediate measurable return on investment. 

Customer Story: Ditto Music

Ditto Music is a global music distribution and record label services company, supporting more than 200,000 artists worldwide, with 20 offices across the UK, Europe, Australia, Asia, North and Latin America. Founded by musicians, for musicians, Ditto provides distribution, music video, promotional and label services, offering both 100% royalty and commission-based deals.

Independent artists and labels pay Ditto a small fee to release their music on hundreds of the biggest stores and platforms. Artists earn royalties from these platforms for every digital sale or stream they get from listeners. The royalties are calculated by the music platforms and delivered to us. Artists can then withdraw 100% of their royalty earnings.

Ditto has hundreds of thousands of artists, across 100 different countries, as clients. Its royalty payout process required a significant amount of time and involved extensive manual work. 

Payoneer provided the distributor with a flexible way to automate mass payments, eliminating much of the manual work needed previously. This has significantly reduced Ditto’s royalty management workload. Now, the distributor can automatically issue royalty payments to artists no matter where in the world they are located. 

Payoneer has also facilitated additional global growth for Ditto. Prior to implementing Payoneer’s mass payments platform, Ditto was mainly paying out to artists in the UK, North America and Australia, with some artists across other countries. Having Payoneer in place has helped the company to expand further into Latin America, Africa and Asia. 

“Great payment solutions like Payoneer offer every musician worldwide quick and easy access to the money they’ve earned, which means, importantly, that royalties are flowing back efficiently to the people who deserve it most – the artists and creators.”

Matt Parsons, CEO, Ditto

Detect and prevent fraud while streamlining royalty payouts

Simplify cross-border payments to labels, artists and songwriters wherever they are located, while protecting your platform against fraudulent activity. Payoneer’s secure and cost-effective mass payout platform features enhanced fraud & risk capabilities to help you:

• Prevent fake accounts 
• Uncover related accounts
• Block repeat offenders
• Lower risk of account takeovers
• 24×7 risk and fraud support

Payoneer’s strict compliance with KYC, AML, OFAC and other related requirements of the Bank Secrecy Act (BSA) help reduce risk so you can confidently make disbursements to legitimate artists around the world. 

And Payoneer supports payouts in 150+ currencies and 190+ countries and territories, so you can pay artists securely and efficiently no matter where they are located.

“The gap between consumer and artists has never been narrower. Every artist worldwide now has more opportunity than ever to market their music and products directly to their fans. Payment solutions like Payoneer help us facilitate these changes and make it possible to guarantee artists all over the world receive their royalties fast and direct to their account when they request it.”

Matt Parsons, CEO, Ditto