Economists have long debated whether free trade effectively enables less developed markets to bridge the economic gap with wealthier countries by opening new opportunities and fostering specialisation.
Spotify’s former Chief Economist Will Page’s latest analysis highlights how this principle is evident in today’s music copyright industry. Artists and songwriters from countries like Colombia, Mexico, and South Korea are achieving significant financial gains thanks to their strong streaming performance in developed markets such as the U.S., driven particularly by higher revenue per stream generated in these markets.
At ANote Music, we simplify the complexity of the music industry, making it accessible not only to insiders but also to those exploring music as an asset class. Through our platform, you can start earning royalties from established global hits and gain exposure to the growing opportunities presented by the global music copyright market.
Read this article to discover how cross-border streaming is impacting earnings for labels, artists, publishers, and songwriters, and explore what this means for the future of music as an investment opportunity.
An increasingly globalised and interconnected music streaming industry is creating tangible opportunities for artists and songwriters coming from emerging markets, which have seen several benefits in their earnings from cross-border streaming performance, especially thanks to higher revenue per stream in more developed markets.
The United States represents a straightforward case of these effects, with nearly a third of all streams now featuring non-American artists in 2023. While the UK remains the largest music exporter to the US, recent trends reveal Mexico and Colombia as new-challengers:
The significant difference arises because music rights owners earn more royalties per stream in the U.S. than in their home countries, and this is due to music streaming platforms charging higher subscription fees in developed markets like the US, compared to developing markets like Colombia. Specifically, Spotify's monthly fee is approximately $3.50 in Colombia but $11.99 in the U.S; and this disparity leads to higher royalties per stream from U.S. listeners, in application of the pro-rata royalty distribution model used by streaming platforms.
Will Page refers to this additional income as a ‘trade boost’, and it's particularly relevant for Colombia. According to his analysis, for Colombia, the trade boost - the extra earnings from US streams compared to domestic streams - amounted to $78 million and it exceeded alone the total revenues of Colombia’s domestic recorded music industry in 2023 ($74 million).
This phenomenon extends beyond performers to songwriters as well. Historically, the US, UK, and Sweden have been the main net exporters of music publishing income. Now, South Korea has joined their ranks, pushed by the global popularity of K-Pop. However, the success of K-Pop is not solely a local achievement. Songwriters from Sweden and Bulgaria, for instance, are increasingly collaborating with Korean artists, blending international talent with K-Pop's massive global reach.
The ANote Music platform offers a clear example of this increasingly globalised market for songwriters with the Andreas Öberg Catalogue, giving you access to songwriter and publishing royalties from the Swedish songwriter of several K-Pop and J-Pop hits throughout the world.
Globalisation in the music industry presents a multifaceted scenario with seemingly opposing trends. On one hand, as we have explored, artists and songwriters from emerging markets like Colombia and Mexico are significantly benefiting from higher streaming revenues in developed markets such as the U.S., a phenomenon Will Page refers to as the ‘trade boost’. This suggests that global platforms are levelling the playing field, allowing talent from less developed markets to bridge economic gaps and access new opportunities.
On the other hand, Will Page's recent paper “‘Glocalisation’ of Music Streaming within and across Europe” also highlights the rise of "glocalisation", a phenomena where local artists and music dominate their domestic charts despite the global reach of streaming platforms. Contrary to concerns that globalisation would homogenise music and erode local cultures, we see that in many countries, local music is strengthening its position. The International Federation of the Phonographic Industry's (IFPI) 2023 Global Music Report supports this, noting an acceleration in the popularity of local repertoire as streaming has grown.
These two trends might appear contradictory but are, in fact, complementary facets of the modern music landscape. Global platforms empower local artists to thrive within their own markets while also providing avenues to reach international audiences. For artists and songwriters, this dual dynamic offers both a strong domestic foundation and the potential for global exposure. For consumers, it enriches their experience by providing access to a diverse range of music that resonates culturally while also introducing them to international sounds.