Sync is the growth line

Recorded music revenue is dominated by streaming and streaming grows slowly, because it grows with subscriber counts in markets that are already largely subscribed. The line moving faster is much smaller and considerably more interesting.

Industry reporting on the first half of this year put synchronisation revenue up sharply against the same period last year, growing at a rate the rest of the recorded business does not approach.

Synchronisation is the licence to attach a recording to a moving image: a scene, a trailer, an advertisement, a game. It is negotiated per use rather than paid per play, and the two economics have almost nothing in common.

That difference is the whole reason the category matters at a scale its revenue does not suggest. A stream pays a fraction of a cent. A national advertising campaign negotiates a fee, and for a catalogue owner one placement can exceed years of streaming for the same recording.

The fees vary enormously, which is the second structural fact. A placement in an independent film and a placement in a global campaign are the same legal instrument at completely different prices, and the spread is wider than in any other part of the business.

Games have become the growth inside the growth. Budgets at the top of that industry now compete with studio films, the soundtrack is a design decision rather than a garnish, and the licences run longer because the product is played for years rather than watched once.

The practical consequence for rights holders is administrative rather than creative. A sync deal requires clearing both the composition and the recording, sometimes from different owners, on a timetable set by a production that decided last week.

Catalogues that can answer that request quickly get used. Owners describe the competitive advantage as metadata and authority to say yes: knowing who controls what and being able to license it inside a few days rather than a few weeks.

That is why sync sits close to the centre of the catalogue acquisition case even though it is a small share of revenue. A buyer is purchasing an income stream and an option on placements, and the second is worth more when the paperwork is clean.

For artists without a catalogue behind them, the route runs through libraries, which supply the majority of placements and pay considerably less per use than a negotiated deal. That is the trade: access to the market in exchange for most of the value in it.

Both things are true. Sync is the healthiest line in recorded music and it is not large enough to change the shape of the business, which continues to be decided by how many people pay a monthly subscription.