PPL’s 2018 Annual General Meeting took place at Kings Place in London today, with the collection society were addressed by their chief executive officer Peter Leathem. In a wide-ranging speech that covered the organisation's international collaborations, its efforts to improve and manage data to aid collection, undertakings to tackle the gender pay gap and its friendly, though tough negotiations with broadcasters, the CEO outlined his vision for a “busy but exciting” year ahead.
He also spoke about the first months of operation for PPL PRS, its joint venture with PRS For Music, which was the subject of a Music Week cover story earlier this year.
Read Peter Leathem's speech in full below.
Good morning, everyone. I am delighted to welcome so many of you today particularly given that we are competing with the annual MIDEM music festival in Cannes as we speak.
My colleagues and I are delighted to be able to report to you the positive set of results that you have been hearing about this morning. I would also like to thank [PPL PRS managing director] Suzanne Smith for her presentation and for taking the time to join us today.
We have always sought to grow our revenue collections in the UK. That ambition remains the same but the way in which we seek to do so has changed. The launch of PPL PRS Ltd earlier this year, to carry out our public performance licensing jointly with PRS for Music, is a major development and an indication of the changes we are committed to taking to maximise revenues for members.
After 84 years of PPL and PRS licensing public performance separately, I would once again like to thank Robert Ashcroft, the CEO of PRS for Music, for his support for PPL and PRS entering into this joint venture together. I would also like to thank in particular Paul Clements, Steve Powell, Pamela Harding, Adrian Lotter and the broader team from PRS for all the collaborative work leading up to the launch of PPL PRS Ltd.
It has been an enormous undertaking for us all over the last two years but we always knew that it would be. However, we also knew it was the right thing to do regardless of the enormity of the task ahead. In committing to the joint venture we were certainly not seeking an easy life as management.
While we know that the joint venture will bring great benefits to licensees and members, we also know that PPL PRS Ltd has a lot of work ahead to complete the transition of all licensees across to TheMusicLicence over the next year, and we will do whatever we can to support Suzanne and her team in Leicester.
I am very pleased that we have continued to maintain very good relationships with the broadcasting community despite the need for us to enter into tough negotiations from time to time. The sound recordings that we license to broadcasters have enormous commercial value but equally the broadcasters have to continue to innovate around the type of programmes they produce and how those programmes are delivered to their listeners and viewers.
We live in an increasingly complex world and we work hard to deliver suitable licensing solutions that enable our broadcast licensees to use as many commercial recordings for as many different uses as we can.
I am sure that we will continue in 2018 to deliver more new licence agreements that work for PPL and its members, as well as for the broadcasters.
During the last 15 years or so, PPL’s operations have become more global. International collections continue to be a revenue growth opportunity moving forward. We have achieved significant growth over the last few years and our international revenue now accounts for almost a quarter of our total revenue. Growing from nothing to almost £50 million in fifteen years is no small achievement.
At the start of 2017, we had 82 agreements in place with our counterparts in territories all over the world; however, as a result of our efforts last year and in the first five months of this year, this number has already grown to 90. We are now collecting income for record companies and performers from as far away as Australia, South Africa, Japan and, following the most recent agreement, Georgia. We will continue to work with international collective management organisations – or CMOs – to understand their requirements and what data they need from us to ensure you get paid. Neighbouring rights is a market that we are well positioned to navigate on your behalf and we are confident of delivering further revenue increases in the years ahead.
We also continue to be at the forefront of global forums that bring together collective management organisations from around the world. As John mentioned in his opening remarks, I have recently been elected to the Board of SCAPR, the international body that brings PPL together with 60 other CMOs from around the world that collect on behalf of performers. Whilst we have been active within SCAPR for some years now, this appointment to the Board takes our standing to a new level.
Under SCAPR, we have been working on the Virtual Recordings Database project - or VRDB - with 44 CMOs now involved. This technology project is focused on delivering a far more efficient exchange of recording and performer data between CMOs. The storage and sharing of that information aims ultimately to increase payments between CMOs for performers.
PPL has played a leading role in the design and governance of VRDB since the initiation of the project and it has made good progress over the last year. It will continue to have our full attention in 2018. While the main benefits of VRDB’s new IT systems and processes will most likely be seen from 2019 onwards, in reality we are already seeing benefits from the greater sharing of knowledge and knowhow around managing repertoire data and everything involved in paying performers.
Given the importance of authoritative repertoire data to PPL’s operations, and due to our expertise in this area, we are also on the board of DDEX. This is a consortium of organisations across the music industry with a mission to standardise the data supply chain, for the most efficient and effective processing and exchange of revenues. We are on the DDEX board alongside companies including Universal, Sony and Warner; CMOs from the authors world, like PRS; other CMOs from the record company and performer world like SoundExchange in the US; and the service providers Apple, Amazon, Google and Spotify.
DDEX develops and maintains data standards, and PPL plays an important role in the development of the relevant standards, seeking to ensure that they enable CMOs like us to get the repertoire data necessary for our business from record companies, and to and from each other and VRDB. This was an important focus for PPL in 2017 and it will remain so in 2018 as the DDEX standards continue to be developed.
Our international services do not focus solely on collecting revenues or taking part in initiatives to develop data or IT in this area. We also provide services to support a range of our fellow CMOs around the world with some aspects of their own activities. At PPL, we have built up sophisticated technology, in-depth neighbouring rights knowledge, and extensive data expertise to manage our own operations. We are happy to share this experience and best practice with others around the world.
This is the basis of what we call our Business Services offering. Using our data and IT systems, we can provide back-office support to other CMOs, such as processing their music usage data, or calculating their distribution payments. In 2017, we supported CMOs in Ireland, Portugal and Latvia with the delivery of their distributions, and provided analysis to a further three CMOs - in Estonia, Lithuania and Switzerland - to support their local processing of distributions.
The more we can work with others to raise data standards and improve the quality of information that flows between CMOs, the better the output will be for you, our members, in terms of what they get paid when their music is played around the world.
Data is at the heart of what we do. This is why we have been working on the initiatives mentioned earlier by [Chief Operating Officer] Christine Geissmar, such as developing our own in-house analytics tools, and trying to link the sound recording information held by PPL to the works data held by PRS for Music.
Together with appropriate investment in technology, and our continued focus on customer service, our drive to keep developing our data is what helps us to deliver positive business change that benefits you, our members, and indeed the wider music industry.
Our collaboration with others goes much wider than just the data-related projects and initiatives I have mentioned. We very much appreciate that we are part of a music industry ecosystem that is reliant on partnerships, working together and supporting one another. It is this appreciation that led PPL to partner with the PRS Foundation in 2017 and to increase our financial contribution this year.
We know how challenging it is for emerging talent. Through the PRS Foundation’s Momentum and International Showcase Funds, we have been proud to be a contributor to the support of more than 150 acts so far and we are excited to see them develop in their careers.
The PRS Foundation does an excellent job and given all our work with PRS for Music they have been a natural partner to work with, providing a means for us to give back to the music industry without having to step back from our core operational role. I would particularly like to thank Vanessa Reed, the CEO of the PRS Foundation, for all of the collaborative working over the last year or so.
We are also working with a number of other organisations, with Music for Youth for example already having been mentioned today, and we are giving the whole area further consideration as we move forward.
Supporting the industry in these sorts of ways is a new area of focus for PPL that we are managing and monitoring carefully but very much hope to continue into the future – it allows us to engage with the next generation of music makers and certainly generates excitement amongst our music-loving employees.
PPL staff never cease to amaze me with their passion for and knowledge of music. After all of their hard work on your behalf during the PPL working day, outside of the office they somehow manage to find the time to be label owners, music bloggers, managers, musicians, publishers, DJs and so much more – and they all want to help the music business continue to succeed.
Such a culture is very important to me. Since I became CEO six years ago, I have striven to create a welcoming environment where people can excel in their chosen field, benefit from learning and development opportunities and feel part of the PPL family. Our people strategy, together with our on-going equality and diversity efforts, strives to ensure that we continue to develop a culture that is fair and considerate to all.
Much has been made of the gender pay gap reports published by a whole range of businesses and organisations earlier this year and I have often been asked how we achieved such an encouraging set of statistics at PPL, compared to various others.
There is no one quick or easy answer, but our focus in recent years has been three-fold: recruitment, training and talent management. Let me stress that it is a work in progress; but is something that my Executive Management Team and I take very seriously. We will continue to invest in all our people.
In the time available today we have sought to summarise some key points about PPL’s performance in 2017. Needless to say, we can only touch on a small part of our overall operations. In our published Annual Review we have set out more information about our achievements last year and I do hope that you will find the time to read it.
I would like to take this opportunity to thank all of the staff at PPL for their hard work on your behalf. Whether it is the staff involved in revenue generation, providing member services and supporting the distribution process; or the various other specialised departments across the business, it all adds up to one overall team delivering the various achievements we have been able to share with you today.
I would also like to thank the PPL Board for the support and guidance that it provides to me and my team. There are representative from the Major record companies, from indie record companies, featured performers, non-featured performers and studio producers. That is quite a mix but they all work incredibly collaboratively when around the PPL Board table to support me and my team, and I very much appreciate that.
You continue to have a very ambitious, hardworking and capable management team who will carry on driving PPL forward, just as we have done in recent years. We see a very busy agenda ahead, as we seek to deliver future growth and further improvements across all of our services to the membership. We have a clear understanding of what you would like us to do and a clear vision of how we would like to develop PPL’s offering still further. It will be a busy but exciting time for all of us at PPL and we are already working hard on what we hope will be another successful year of delivering for the recorded music industry.
Thank you for listening.
* To read Music Week's PPL PRS cover story, click here.