So far in 2022, synch revenue is up — way up. According to the RIAA’s midyear report released last week, U.S. synchronization recorded music revenues reached $178 million in the first six months of the year — a 29.9% increase year over year. That’s more than any other sector on a percentage basis, easily beating improvements in limited-tier paid subscriptions (up 16.6%); ad-supported, on-demand streaming (up 16.4%); and vinyl records (up 22.2%).
It was, in fact, an uncharacteristically large gain. While during the depths of the music industry’s downturn during the late 2000s and early 2010s, many in the business optimistically viewed synch revenue from uses of master recordings in audio-visual works such as TV, film and advertisements as a potential growth sector, it has hardly grown for years. As streaming revenues instead exploded over the past decade, recorded music synch revenues remained relatively flat from 2009 ($201.2 million) to 2015 ($202.9 million) and rose only modestly by 5.9% in 2016 ($214.8 million) and 8.1% in 2017 ($232.1 million). Then in 2018, synch revenues spiked 23% ($285.5 million) before falling in both 2019 ($281.1 million) and 2020 ($265.2 million).
Some executives chalk up the recent gains to the industry’s recovery from the COVID-19 pandemic in 2020 that disrupted film and TV productions and slowed brands’ advertising spending. The two-year stumble in 2019 and 2020 reversed itself in 2021 as COVID-19 restrictions were lifted and brands’ ad spending rebounded: At the mid-year mark, recorded music synch revenues had risen 6.4% to $137 million. By the end of the year, they had grown 14.2% to $302.9 million.
“Brand content studios are becoming more sophisticated,” says Jennifer Freed, founder and CEO of Trevanna Tracks, an online licensing platform. Advertisers are increasingly using music in campaigns. And this has all contributed to the growth of the synch licensing industry.”
Film and TV deserve most of the credit for synch’s recent upswing, though. And as the streaming wars between Netflix, HBO Max, Disney+, Peacock, Paramount+, Hulu caused a boom in original content with shows like Stranger Things, Euphoria, The Bear, Pam and Tommy, She Hulk, Atlanta, Severance and hundreds more, music is emerging a winner.
“As the film and TV industries have not only recovered from COVID disruptions and production delays, but also thrived in an era where consumption has grown significantly, the music industry has also benefitted from this upswing,” says Golnar Khosrowshahi, CEO of Reservoir Media, whose publishing synch revenue grew 70% in the second quarter of 2022 (and up 900% on the recorded music side due to its acquisition of Tommy Boy Music in 2021).
“These services are spending money on synch alongside all this new content they're creating to attract new subscribers,” adds Christine Barnum, chief revenue officer at CD Baby/Soundrop, Downtown Music Holdings.
What labels are earning from synch could be even greater than what the RIAA reported. A source familiar with how these revenue streams are classified says artist performances on Roblox don't count toward synch revenues but licensing revenues for games like Grand Theft Auto do. Regardless of how they are officially classified, licensing music to games and metaverse platforms like Roblox and Sandbox “is a great way for gamers to discover new music as well as for fans to experience and hear music differently than just playing in the background in their home,” says, Vickie Nauman, CEO and founder of CrossBorder Works, a consultancy with clients in this space. “I anticipate this category continuing to grow over time.”
