The PRS For Music AGM took place earlier today (Wednesday, May 24) at the British Library in London, with Brexit, the upcoming general election and a record-breaking 2016 performance for the society dominating proceedings.
In an afternoon that also saw a number of new board director appointments, the AGM saw several PRS For Music executives take to the stage to celebrate their success and identify the key areas the business needs to target in order to ensure yet further growth over the coming months and years.
Last month, PRS revealed that the total amount of royalties paid out to songwriters, composers and music publishers reached £527.6 million. Furthermore, its revenues for the year rose 10.1% year-on-year to £621.5m, while 33% more music creators received royalty payments.
The company’s stellar year saw a data volume hike of a whopping 80% as some 4.3 trillion performances of music were reported worldwide. This resulted in payments being made on a record-high 4.2m works – up 45% on 2015.
However, in his opening speech, chief executive Robert Ashcroft was keen to point out that PRS would not be resting on its laurels as the business enters a period of significant change.
“If PRS changed in 2016, then so too did the world around us. The Americans and French made outsiders their Presidents. More fundamentally, we voted to leave the European Union.
“In two weeks’ time we go to the polls again, the third time in as many years and if the last two years in politics have taught us anything, it is that predicting the outcome of elections is a fool’s endeavour.
“What is certain, however, is that Brexit is Brexit and whatever the outcome on June 8, it will begin a period of profound and rapid change that will affect us all. Leaving the European Union, which since 1973 has set common rules governing some of our biggest markets, will bring challenges.
“We must limit, wherever possible, barriers to licensing and the free flow of royalties and defend against cultural and trade protectionism.”
Meanwhile, PRS chairman Nigel Elderton highlighted that “PRS has been a pioneering organisation during this great period of change; this could be a watershed year for the industry and the stakes are very high”, while the society’s COO, Craig Nunn, stated that “just working harder is not going to be enough, we need to work smarter.”
Ashcroft also drew attention to the organisation’s partnership with ICE and its joint venture with fellow collection society PPL.
“2016 was another landmark year, but we are not yet done,” he said. “We have just launched our new website, and begun our digital transformation; we expanded the scope of ICE, but are just now engaging in a major upgrade; we have invested heavily in upgrading our legacy infrastructure, but still have further to go and we must both launch, and ensure the successful operation of, our joint venture with PPL.
Elsewhere, the AGM saw a number of new appointments to the PRS board of directors. In the writer directory category, Imogen Heap and John Truelove were elected, alongside Jo Smith, Stuart Hornall and Roberto Neri, who were appointed publisher directors.
Speaking to Music Week at the AGM, Heap commented: “I’m very happy to have been chosen a writer director. I’ve been a PRS member for over 20 years and they are a flagship organisation that is here to set the standards for the rest of the world in terms of collections. I’m very much looking forward to being part of the team and bringing some fresh ideas and having lots of discourse and discussions.”
You can read Ashcroft’s AGM speech in full below:
Good afternoon everyone. Welcome to the PRS AGM and thank you for the introduction Nigel.
May I extend a very warm welcome to you in your new role as Chairman. As a board member since 1992, you bring a great deal of expertise and experience, which will be invaluable to us as we face the challenges of the years ahead.
Last year, as I stood on this stage and said that 2015 had been a landmark year, little did any of us know what the next twelve months would bring.
It was a year of change - within the organisation, within the industry, and in politics
Most importantly for the members, at least in the context of this AGM, it was a year of significant growth for PRS.
We collected more money than ever before - up 10% on a constant currency basis - and we distributed more money than ever before - up over 11%, to pass the half billion mark for the first time in PRS’ history.
This growth is not an accident. It is the result of the rigorous application of a strategy we embarked upon in the summer of 2010: we wanted to lead in Online licensing; we wanted to preserve, and invest in, the so-called Option 3 framework for the digital single market; we wanted to collaborate actively with overseas societies and we wanted to sell the value of music to our customers here in the UK.
We also wanted to share investments where possible with others in our industry, rather than go it alone, and we set our sights on collaborating much more closely with PPL.
These are the initiatives that have driven, and will continue to drive, our growth.
But strategy without application is no more than a PowerPoint and I would like, on behalf of the board, to thank the entire PRS staff for their contribution, without which none of this would have been possible. Their commitment and ambition is critical to our success.
I would particularly like to mention everyone who works in Public Performance Sales; they worked incredibly hard to grow the business, despite having been told in April that many of their jobs would be transferred to our new joint venture with PPL, to be based in Leicester.
But it’s not just PPS. Across the business we face increasingly disruptive change and I would like to thank all our staff members for embracing it and making PRS a better and stronger society.
As you will undoubtedly be aware, following the dissolution of The Alliance with MCPS in 2013, we entered a three-year service agreement to manage the two sets of rights alongside each other.
In 2016, MCPS decided to go out to tender and we soon found ourselves facing stiff competition from both traditional, and private equity funded, societies for this business.
I am pleased to report, however, that after what I can only describe as a rigorous process, conducted over sixteen months, we have now signed a new, five-year agreement with MCPS with the aim of maximising the value of both rights.
In this year of change, however, just as we risked losing one long-standing partnership, we embarked upon another.
Driven by the inexorable logic of making it easy for our customers to obtain the licences they need by licensing the rights they need, together, we decided last year to enter a full joint venture with PPL.
When we announced the JV last year, it came with the support of the boards and members of both companies, politicians and licensees alike.
“Why can’t we have just a single joint music licence?” We would explain that they are different rights; that they belong to different people; that many performing artists may record a song but that it is written only once … all of which is true, but it is our responsibility to manage the complexity, not that of our customers.
We are not the first to join forces between the management of copyright and master rights, but this will be the largest joint venture of its kind in the world and is the result of three years of collaboration.
It began with a joint project to replace our IT systems, though it soon became clear that only a full joint venture would enable us to extract maximum benefit for members and licensees alike. Plus - it was simply the right thing to do.
I have already thanked our staff for their dedication in the face of this disruption, but the joint venture would not have been possible without the spirit of true partnership and shared endeavour of Peter Leathem, CEO of PPL, and his colleagues, as well as of Paul Clements and his team at PRS.
So thank you, all of you, and also welcome Suzanne Smith as the new MD of the JV, to your first PRS AGM.
From a joint venture that will start later this year, let me move onto a joint venture that expanded last year from copyright operations, to the licensing and processing of Online rights and which is transforming not only PRS, but also the entire industry: ICE.
ICE’s expansion, having grown to incorporate what are now the databases of seven, soon to be eight, societies, has enabled us to dig deeper into the long tail of digital distribution, so we can pay more money to more members, more accurately, on the exploitation of more works.
Europe accounts for around 60% of the global online market and 55% of it is processed through ICE, on a single, authoritative copyright database, so ICE is a real step forward in delivering our vision of Global Repertoire Database, an essential requirement of the industry for so long.
But it is not just a question of future promise: already, thanks to ICE, 42% of the total global market for online revenues is free of disputes between members, and we were able to process our online usage 57% faster than the previous year.
The percentage of works matched automatically to sound recordings has risen significantly, too, reaching a record 97.3% on Apple Music.
The pace of technological change, though, is accelerating; investments cannot be made once and then forgotten and the true value of collaboration across societies will be seen as we continue to invest in the ICE platform, sharing costs with others and providing ever better service to our members.
Our determination to extract the benefit of collaboration does not end with ICE though, and we recently announced two data-linking initiatives: one with SACEM, ASCAP and IBM, and the other with PPL and APRA AMCOS, both with the aim of establishing authoritative links between works and sound recordings, exploring the application of advanced technologies, including Blockchain and Artificial Intelligence to this long-standing industry challenge.
However, we really should not be making these links after the fact, and my long term hope is that in future both musical works and sound recordings will enter the digital value chain accurately linked and already registered.
This is the only way in which we will be able to ensure in the future that we extract value for our members from trillions of micro-usages of their works.
As recorded music returns to growth, it has attracted both venture capital and private equity investors. Music properties, companies servicing, or owning musical assets and rights, are once again fashionable acquisition targets.
This will not divert us from our true purpose, which is ensuring maximum value at all times for our members’ works. We are proudly competitive but not-for-profit. We believe in both collective management and governance by members. We must, however, continue to invest and we must continue to collaborate, for it is the quality of service that we provide to our members that will determine our success; being not for profit allows us to collaborate where for-profit entities are obliged to compete and this means we can capture opportunities they can not.
Better data and more accurate matching are the fruit of collaboration rather than competition and data should not be part of an arms race.
Sharing intelligence and making sure the right people are paid the right money as fast, and as accurately as possible, at the lowest possible cost, is in the best interest of both writers and publishers: there is a reason we are not for profit.
If PRS changed in 2016, then so too did the world around us.
The Americans and French made outsiders their Presidents. More fundamentally, we voted to leave the European Union.
In two weeks’ time we go to the polls again, the third time in as many years and if the last two years in politics have taught us anything, it is that predicting the outcome of elections is a fools’ endeavour.
What is certain, however, is that Brexit is Brexit and whatever the outcome on June 8, it will begin a period of profound and rapid change that will affect us all.
Leaving the European Union, which since 1973 has set common rules governing some of our biggest markets, will bring challenges.
We must limit, wherever possible, barriers to licensing and the free flow of royalties and defend against cultural and trade protectionism.
We must also defend the interests of the 11% of our staff who come from outside the UK: we conduct our business in 13 different languages and the relationships we have developed around the world are a cornerstone of the value we provide to our members.
Nor should we forget that the EU established a common 70 years term of protection, the exclusive assignment of rights and multi-territory licensing. It has also enacted strong copyright laws, too often despite, rather than because of, the policies of our own government.
Last year I described PRS’ role in initiating the campaign to raise awareness of, and suggest solutions for, the ‘transfer of value’, the result of the unintended extension of the hosting defence in the eCommerce Directive, to platforms that have a role in curating and making available entertainment content rather than merely offering Cloud-based storage.
I am pleased to say that as a result of significant time and effort by PRS and other organisations across the creative industries, the European Commission has since put forward some carefully crafted proposals, which we wholly endorse.
These proposals would require platforms that actively host entertainment content to obtain a licence and to report the use of content to the rights holders.
If the European Parliament, and Council of Ministers, accept the Commission’s recommendations, it would be a major step forward in developing a fair market for copyright works on the Internet.
This is still just an opportunity, and in the coming months we must re-double our efforts in the European Parliament and Council to secure the right outcome. Then we must, as will increasingly be the case since the Referendum, make our case to carry over the gains we have made in Europe into UK law.
My thanks to members who have engaged with us in Brussels. Your voices are louder than ours and will continue to be critically important - both in Brussels and here in London.
The next few years will, of course, bring many opportunities too, not least the opportunity for trade deals with important markets such as the US, Japan and emerging markets such as China, India and Brazil.
There are real opportunities to secure meaningful copyright reform and to reinforce the value of our rights. As always, PRS will be in the forefront: our aim is to ensure that copyright remains fit for purpose both now and well into the future.
Promoting the value of copyright around the world has long been a strategic objective of PRS, both directly and indirectly through the international CISAC community.
In some markets copyright, fair remuneration and the enforcement of rights are still in their infancy, so we must, and we will, continue to share our knowledge and our expertise, to drive greater accuracy, more transparency, better processes and efficient working across the globe.
The whole world listens to your music and you deserve to be paid correctly wherever your music is played or performed.
So 2016 was another landmark year, but we are not yet done. We have just launched our new website, but just begun our digital transformation; we expanded the scope of ICE, but are just now engaging in a major upgrade; we have invested heavily in upgrading our legacy infrastructure, but still have further to go and we must both launch, and ensure the successful operation of, our joint venture with PPL.
The industry and the world are changing rapidly around us, but PRS is changing too and I promise that we will continue to maximise the value of your rights in the years to come.