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Digital surged, but COVID effect still impacted on PRS income in 2021 - Complete Music Update

PRS For Music

PRS For Music
UK song rights collecting society PRS saw its income from the live and public performance of music increase 59.6% last year, though that impressive stat tells you more about how bad the COVID effect was in 2020 than anything else. Performance income was still down 38.1% on 2019. This is all according to a new annual report published by the society this morning.
The songwriters and music publishers that make up the PRS membership were more hit by COVID than the record industry, because the music copyright revenue streams most affected by the pandemic are a much bigger deal for songs than recordings. And, in particular, that includes the royalties paid when music is performed live or recorded music is played in public.
Those revenues slumped 61.2% in 2020 as a result of the initial COVID lockdowns. Of course, the pandemic continued to impact on live music - and the businesses that play recorded music - throughout 2021 as well, although not to the same degree. So, year-on-year, performance income rose 59.6% last year to £137.6 million. However, that was still down 38.1% compared to pre-pandemic.
Counterbalancing all that was digital, which has continued to grow throughout the pandemic. And while the song rights generally earn less from streaming than the recording rights, the songs side of the business nevertheless still feels the benefit of that growth, and said growth was pretty significant for PRS last year.
Now, the digital monies reported by PRS are slightly more confusing to analyse, given that not all streaming income passes through the collective licensing system, with some of the cash being paid directly to the music publishers.
And even where that’s not the case, the mechanical right royalties due on streams don’t flow through PRS. Plus, PRS directly licenses streaming services in some countries, while it relies on other societies to license in other countries. So there are plenty of complications.
Either way, the figures that sit under the digital header in PRS’s annual report were all showing healthy growth. Digital income at large was up 45.6% year-on-year to £267.8 million.
Most of that comes from the main music streaming services and user-generated content platforms, though for PRS there are also royalties to collect from video streaming services like Netflix, Disney+ and Apple TV.
The use of music on more conventional TV and radio services is also an important money-maker for PRS members and that was another revenue stream hit by the pandemic in 2020, with commercial broadcasters seeing their ad income dip during the original lockdown. However, the decline in the music industry’s broadcast income caused by COVID was never as severe as initially feared, and this revenue stream also started to recover in 2021, up 1.5% to £129.3 million.
The COVID impact on performance and broadcast also impacts on the monies PRS receives from its partner collecting societies around the world. And with international income, there was actually another dip of 2.5% in 2021, following a 10.7% decline in 2020.
Though international income was always likely to take longer to recover from the COVID-caused declines. Partly because COVID restrictions have stayed in force for longer in some other countries. And partly because it takes longer for this money to flow through the system, so the uplift caused by a post-COVID bounce back will be seen later.
Currency fluctuations also impact on international income in particular, and PRS was keen to note in its report that “on a constant currency basis, adjusting for changes in currency values over the year, [international] revenues actually increased by 2.1% compared to 2020”.
With all those numbers crunched together, total PRS revenues for 2021 were £777.1 million, up 22.4% compared to 2020 but still down compared to 2019.
Also, because of the time lag on collective licensing, the 2020 income declines impacted on 2021 payments to writers and publishers, although PRS reckons that its “commitment to maximising and accelerating distributions has ensured the expected impacts of the pandemic’s disruptions have been minimised for the music creator community”.
Commenting on all that, PRS boss Andrea Czapary Martin says: “2021 was a successful year that further cements PRS For Music’s place as a world-leading, innovative rights management organisation. In exceptional circumstances, and still with a recovering marketplace, we recorded a 22.4% year-on-year growth in revenue to £777.1 million”.
“The 45.6% growth in online meant we collected £267.8 million - an extra £83.9 million on 2020”, she added. “The 59.6% uplift in public performance is encouraging as it reflects a marketplace, like the economy, that is getting back to business. Significantly, it underlines the organisation’s ability to adapt to all market sectors to fully monetise and protect the value of the music rights entrusted to us”.
Noting that much of her time at PRS - which she joined in June 2019 - has been dominated by the impact of the pandemic, Martin goes on: “COVID-19 has overshadowed my two full financial years as CEO of PRS For Music, but has given me and the whole PRS team the opportunity to really focus on the importance and value of the work PRS does on behalf of its members and how we can better serve them in all areas of what they do”.
“For all businesses, these have been unprecedented and challenging times”, she adds. “However, I believe we grasped that opportunity, and the entire organisation has embraced the chance to adapt and innovate. It will be from these solid foundations that we can meet our vision of becoming a billion-pound society in royalties paid out, while further strengthening our systems and partnerships, all with a cost-to-income ratio of below 10%”.
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