The pandemic isn’t just hurting performers who make money touring — public performance royalties have fallen as stores, clubs and concert venues close for various lengths of time. Among those affected most seriously: film composers.
In nearly every major country except the United States, composers and songwriters whose work is used in movies are paid a “cinema royalty,” a special public performance fee for theatrical showings that can, in some cases, add up to hundreds of thousands of dollars. The fees — collected by performing rights organizations, which in turn pay creators and publishers — are pegged to box-office revenue in most territories. (They’re not collected in the United States because of a 1948 antitrust ruling against ASCAP.) Last year, however, amid pandemic lockdowns, they declined “between 50% and 90%” in Europe, according to Robert Neri, executive vp/head of European business development at Downtown Music Holdings.
Because PROs pay out cinema royalties on an annual basis after the first quarter of each year, the issue is only now starting to affect film composers, and it could last a year or more after theaters reopen. “Performance royalties are a very slow-moving thing for us,” says John Powell, who composed music for the Ice Age and Bourne films, as well as Solo: A Star Wars Story. “You could have a hit today and not see any money from it for a year.”
Video streaming services, which grew in popularity in 2020, also pay composers and songwriters, generally by allocating a percentage of their subscription revenue. Cinema royalties are usually far more lucrative, though. “Apart from the fact that I love the films and the people working on them,” says Powell, “there was definitely a consideration [about] how well the Ice Age films would do abroad versus others I had been offered.”
Consider the music Powell wrote for Ice Age: Dawn of the Dinosaurs, which took in over $690 million in theaters outside the United States, according to Box Office Mojo. Different countries handle payments in different ways, but U.K. theaters allocate up to 1% of box-office revenue for music. Production companies give their cue sheets to the U.K. PRO, PRS for Music, to determine what music plays during the film and for how long. If Powell’s score was, hypothetically, featured in 50% of Dawn of the Dinosaurs, which grossed $56.8 million in U.K. theaters, PRS would collect 50% of 1% of box-office revenue, or $284,000. Most film scores are created under “work for hire” agreements — which means the production company owns the publisher’s share of the copyright while the composer retains the writer’s share — so PRS would then send the writer’s share of that money to either Powell or his PRO. So, in this case, minus the PRO administrative fees, Powell (who is an ASCAP member) would potentially make about $100,000 from this film in the United Kingdom alone.
For the past year, Europeans have only been watching movies at home, of course, and video streaming numbers have skyrocketed. And although streaming services still compensate composers — they pay PROs, which pay creators based on the popularity of the content their music appears in — composer-conductor John Debney, who is known for his music for Elf and the Spider-Man films, calls cinema royalties “the bread and butter” of a composer’s income in the long term.
Streaming services don’t pay as well, and the way music licensing deals are negotiated, as well as the limited amount of information available on the popularity of various programming, means their accounting is less transparent. Some streaming services are also pushing rights buyout deals in which they pay composers more upfront but no royalties later.
“I haven’t done the calculations,” says Powell, “but I’ve talked to lots of people, and we think [the performance royalties from streaming are] just a fraction of royalties we make from cinema.”
Will that money return? Before the pandemic, there were reasons for optimism: Global box-office revenue reached an all-time high in 2019 of $42.5 billion, of which $31.1 billion was generated outside the United States, according to Comscore. But lockdowns have been hard on companies that own theaters: Cineworld, which has locations in the United States, the United Kingdom and Ireland, stopped operating in October. And continental Europe lags behind the United States and the United Kingdom in vaccinations, so theaters there, which provide the lion’s share of cinema royalties worldwide, are in deeper trouble because they’re unlikely to be able to reopen at full capacity until late this year.
When the pandemic does end, however, many people may be eager to go to a movie theater — or, really, anywhere — and plenty of major movies have been delayed until then. “Massive tentpole releases were held back,” says PRS director of strategic partnerships Gavin Larkins, who thinks that will give consumers good reason to get off their couches.
In the long term, theaters aren’t going anywhere soon — but there may be fewer of them in Europe, which is the most important source of these royalties. Although theaters are likely to struggle in 2021 and 2022, according to veteran analyst Eric Wold of B. Riley Financial, he believes the business will recover in 2023. “We remain optimistic,” says Wold, “that moviegoers will return to theaters when permitted to catch the best film slate in years.”
Powell remains optimistic too. “Nobody has a crystal ball, but I think we will be fine,” he says. “Things will just transform.”
This article originally appeared in the May 15, 2020 issue of Billboard.
Source
