Top executives have spoken to Music Week about the impact of the Covid-19 pandemic on the royalties business.
In a special report in this week's issue, we investigate the management of royalties with the help of a number of the sector's major players.
PRS for Music collected a record £810.8m on behalf of its members in 2019, a year-on-year increase of 8.7% (£65m). But with the loss of concerts for the majority of 2020 and an uncertain future, CEO Andrea C Martin (pictured) said it was expected to take at least three years to return to previous heights.
"Future distributions will inevitably be impacted, despite significant cost-reduction efforts across the business," she said. "We are not yet in a position to fully understand the lasting impacts of this crisis on our industry or the wider economy, but our current best guess is that we will see total 2020 revenue down in the region of 15% to 25% on 2019, not returning to 2019 levels until 2022 at best.”
We are currently expecting a decline in UK public performance revenue of 30% on 2019
Peter Leathem, PPL
PPL chief Peter Leathem said there would be a "significant impact" on licensing revenues as a result of Covid-19."In 2020, we are currently expecting a decline in UK public performance revenue of 30% on 2019," he said. "International collections and distributions are likely to remain strong in 2020. From 2021, we expect a decline as other CMOs’ reduced public performance income in 2020 works its way through the system.”
Luke Montague, royalty manager, Sentric Music Group that, with an average nine-month delay between usage and royalty receipt, the company was yet to feel any significant effects from the crisis. "However, that’s not to say that we aren’t anticipating a significant drop in live and public performance income royalties," he said.
Tom Allen, founder and MD of Curve Royalty System, added: “In terms of business, it’s had a minimal effect because royalties need to be produced."
Indeed, Pieter van Rijn, CEO of Amsterdam-based global distribution and services company Fuga, said business was now comfortably exceeding pre-Covid levels. "The recorded part of the industry has reestablished itself very fast and Fuga has performed in that same pattern," he said. "Obviously, I do feel concerned about the live part of the industry, but Covid did not have had a massive impact on the digital part of the industry. If anything, it has brought some additional opportunities here and there.”
Subscribers can read the full special report here.