PRS For Music has reported a £3.8 million year-on-year increase in its July royalty distribution to members – but there are warnings about future revenue.
PRS for Music today confirmed the increase in royalties paid out to members and sister societies in its July distribution, compared to the same period in 2019. The £132.4m payment represents a 3% increase year-on-year.
July’s distribution follows a record-breaking April distribution earlier this year. But some revenue decreases are starting to emerge following the initial impact of Covid-19.
In a bid to mitigate the financial impact faced by some members, PRS has increased processing of online revenue data to ensure the time from stream to payment is minimised wherever possible. July’s distribution includes the largest ever distribution for YouTube User Generated Content.
Music played overseas continues to drive royalty payments for PRS members, with international payments totalling £37.4m in July’s distribution, up 3% against the same period in 2019. This sum has been achieved through a global network of agreements with partner societies, revenues from PRS managed territories, direct licensing, and digital exploitation.
International collections have not seen an immediate impact from Covid-19 due to the lag in the flow of revenues from international markets, but a downturn is expected later this year and into 2021.
Revenue from music used across video-on-demand offerings including Apple, Netflix and Amazon Prime saw an increase year-on-year, with distributions up £3.1m on 2019. Overall, payments from traditional broadcast platforms – TV and radio – increased by 22% year-on-year. However, the early impact of Covid-19 can be seen across analogue radio revenue distributions, down 5% due to a decline in commercial radio advertising revenue compared to the same period in 2019.
With the fall-off of music played in shops, cafes, restaurants, jukeboxes, fitness classes, cinemas and general business due to lockdown in late March, public performance revenue has seen a slight 2% decline compared to the same period last year. But it remains one of the highest revenue streams for PRS members in this payment, with £22.8m distributed in July.
As the cancellation of live music events has not yet affected PRS royalty distributions, public performance revenue is predicted to be one of the most heavily impacted revenue streams from October 2020 onwards.
Andrea C Martin, CEO, PRS for Music, said: “As this distribution covers revenue collected mostly prior to Covid-19, we are only just starting to see the impact of the pandemic on royalty payments in July’s distribution. This will mean a further reduction in the royalties usually seen from Live, Public Performance, Commercial Radio, and International from October 2020 onwards.
“We are doing everything we can to maximise return and minimise risk to future distributions for all of our members through this period of significant disruption. We have taken immediate action to make considerable cost savings including a recruitment freeze, reduced hours and salary reduction for some employees throughout the pandemic, cancellation of employee bonuses related to 2020 performance, and have cut back on all non-people costs wherever possible. Our PRS Emergency Relief Fund, in collaboration with our charity partners PRS Foundation and PRS Members’ Fund, also raised over £2.1m to help those members most in need throughout the crisis.
“With over 3,600 new members joining PRS for Music so far this year, an increase of 18% on the first half of 2019, talent, creativity and productivity amongst songwriters and composers is thriving. We continue to work hard to ensure that we are distributing accurate and timely royalties, from every revenue stream, as quickly as possible. We are incredibly proud to have paid out over £368m in the first half of this year, up 13% on 2019, and thankful to our dedicated teams and experts working tirelessly to make this happen.”
PRS for Music continues to assess the financial impact of Covid-19 on the music industry and will be communicating more on this to members in the coming weeks.