The 2019 AGM took place at 30 Euston Square on 21 May 2019. It was attended by members, guests from the media, partner organisations and other collecting societies from around the world.
Tom Gray, Crispin Hunt and Philip Pope were newly appointed as Writer Directors, with Barry Blue, Michelle Escoffery and Steve Levine being reappointed to the Board.
Antony Bebawi was appointed as a new Publisher Director. He joins Jackie Alway, Simon Anderson, Chris Butler and Richard King who were all reappointed.
For more information on all of the new Board members, please view our press release.
Below you can watch video highlights from the meeting, including the speeches, Q&A session and the Formal Business. You can also download the Formal Notice, Directors' Ballot booklet and our financial review for 2018.
We've also included the promotional videos from PRS Foundation and the PRS Members' Fund which were shown at the meeting.
Nigel, thank you for the introduction and for your chairmanship over the past two years. It has been a pleasure to work with you during the last ten years.
I announced at the end of last year my intention to stand down as Chief Executive in December this year after a decade in the role, so this is my final AGM and my last opportunity to address you.
As you will recall, my speech last year began with an acknowledgement of some historic distribution issues, and I said that there was no higher priority, either for me, or for the organisation, than to prevent any future re-occurence.
Ahead of the July distribution last year therefore, and immediately after the AGM, we reorganised those parts of the company involved in the distribution process and developed new tools and processes to address the problems we had experienced.
These changes bring into force a ‘three lines of defence’ strategy, in line with best practice in the Financial Services Sector.
I am also proud to say, not only that we are the first collecting society in the world to achieve IS0 20000 certification across our operations, but also that our knowledge transfer process has been cited by the International Standards Organisation as representing best practice.
I promised that we would fix this, and we have.
I am confident that our members can now rely upon their distributions and would like to extend my thanks to my management team, especially to Rachael Naylor, who was appointed as Director of Operations and Distributions last year, to our members for their constructive feedback and to our staff across the company, for their efforts in this most important endeavour.
Over the last 12 months we have welcomed many new faces to the business. Sami Valkonen joined us from Google to lead our International team. Claire Jarvis is your new Membership Director, having spent 12 years at Sky, and formerly the BBC. Barney Hooper rejoined the business after five years in the live sector at AEG. We also welcomed Mark Krajewski as interim Chief Information Officer, to lead our IT team and Neil Whitaker as interim Director of Transformation. We now have one of the strongest management teams in the 10 years I have been in office and I would like to welcome them all and thank them for the positive change they have made.
We also said goodbye this year to our Executive Director of Membership, International and Licensing, Paul Clements, who left to take up the position of CEO of the MPA Group.
We are fortunate that Paul remains within the business and I know he will work tirelessly on behalf of the MPA’s publisher members. In the meantime, I would like to recognise his extraordinary contribution to PRS for Music throughout my tenure: achieving synergies with MCPS, putting our Public Performance business firmly on the path to growth, dramatically improving our relationship with industry bodies from cinemas to cruise lines and the live performance sector, modernising our Live Popular Tariff and protecting our members’ interests in Broadcast licensing in times of great turmoil.
Thank you, Paul. They made a wise choice.
This past year has been a year of delivery and we have launched a range of new products and services, with more to come. We’ve piloted online statements and received excellent feedback ahead of our full launch in the summer.
Identity Access Management, or IAM, began a programmed rollout at the end of March to provide those who manage the accounts of multiple songwriters with the ability to switch between them effortlessly.
IAM is the building block for our future product launches, including full online statement capability, our new mobile app, improvements to the Set List Hub and other applications due for launch in the summer.
We have improved the communications around our distributions, with greater transparency via our live distribution page. We always aim to get the maximum amount of money distributed on time, but there are often reasons outside our control, where this cannot be done. We may have received incorrect or incomplete data from a licensee, there may be a dispute regarding the licence, or the money might not have been received as planned. Our commitment is to pay accurately and quickly, and where we cannot pay quickly to explain why, and let you know when you will receive this money.
We operate in an increasingly competitive environment and must continue to invest in our offering to members and licensees to remain a growing force, delivering more revenue year-on-year, better services, and ultimately more money to you.
Steve Powell, our Chief Financial Officer, will take you through a full assessment of our finances shortly. Despite the headwinds we knew we faced going into 2018: the delay to the new Live Popular Tariff and the delay to the launch of our joint venture with PPL in Leicester, 2018 was another positive year, with 4.4% growth in our revenues on a constant currency basis.
We collected almost three quarters of a billion pounds last year, a record amount for the society. As planned and budgeted for, costs rose to allow us to invest to deliver this growth, to improve our services and to establish and support our joint venture with PPL for public performance licensing.
Looking at the 12 months from January to December 2018, we distributed £603m, slightly down on the prior year, the reason being a delay in the invoicing and payments from our Leicester joint venture and from ICE, who experienced another dramatic increase in volumes up to 11.2 tn performances.
Importantly, however, from the £746m will collected in 2018, after costs and other income, our net distributable income is £648.4m. This is a more accurate picture of the money that has been - and will - be paid to members.
The growth in royalty income we achieved again in 2018 didn’t happen by accident; it was the result of a carefully crafted and executed strategy.
Implemented in my first year and refined over the years to keep pace with change - we have focused on online licensing, on international growth and on upselling the value of music to UK businesses. We identified the importance of collaborating with overseas societies; we focused our lobbying efforts on the need to secure a fair rate for the use of our members’ works online and we invested for growth in public performance licensing.
I am confident, based on our financial results this year to date and our full 2019 forecast, that in my time we shall have increased our royalty revenue by over 80%.
We have also shaped the industry, from simplifying the licensing environment for hundreds of thousands of UK businesses, to shaping the Collective Rights Management Directive of 2014 (which provides for transparency and good governance across the European collective rights sector), to the most recent, and indeed the most significant change in copyright law in nearly twenty years: the passage into law on 15 April of the EU Copyright Directive.
This started as a proposal for exceptions to copyright and ended with the giant Internet platforms being made liable for it: a complete volte-face and a massive victory.
This was the most controversial legislation ever to go before the European Parliament and the lobbying campaign was unprecedented, but it was PRS who shaped the argument, putting the Transfer of Value on the European Commission’s agenda back in February 2015.
The successful vote last month was a victory for creators, for our combined lobbying efforts as an industry and for everyone at PRS for Music.
Special thanks, though, to John Mottram, our Head of Public Affairs, and his team, for the skillful way they lobbied and worked with the industry to maintain a common position and to Jenny Goodwin, without whose editorial support George Barker’s and my economics paper, published in September 2014, which first identified the Transfer of Value, would never have seen the light of day.
As I look back over the past ten years, to the strategy we set, to the initiatives we have undertaken and to the results we have delivered, I believe we took the right course.
It is clear to me that PRS for Music is at its best, and delivers its best, when leading the industry; when it is outward looking, proactive, engaged with its membership, and prepared to fight for copyright at all levels.
We do not operate alone in this market; gone are the days of slow-moving, inward looking national monopolies. Competition is good and forces change.
A clear vision, a defined purpose and a strategy that delivers growth is where PRS excels. If we do not lead, others will, and our relevance and attractiveness to our members, will diminish. There will always be those waiting in the wings if we rest on our laurels and focus only on ourselves.
My successor was announced last week. I would like to offer a warm welcome to Andrea C Martin and congratulate her on her appointment.
I believe the Board have made an excellent choice and I look forward to working alongside her during our handover.
It is a challenging and extraordinarily complex role, and at times not for the faint hearted. However, Andrea joins an organisation at the heart of a changing music industry and will be working with some of the best people in the business. I know they will offer her the support and guidance afforded to me when I joined nearly ten years ago.
Andrea, I wish you the very best of luck, and I hope you enjoy your tenure as much as I have.
It has been an honour to serve as your Chief Executive for the last decade. Positions such as these, where you can help shape an industry, while providing a vital revenue stream that allows the creation of the music that so enriches our lives, are few and far between. I have been fortunate to occupy this role for a decade and it has been a true pleasure to work on your behalf.
I wish all our members every success and I thank the team at PRS for Music and our Board members for everything they have done for you and for me, during these past 10 years.
I'd now like to pass you over to our Chief Financial Officer, Steve Powell
Hello again everyone. It’s good to see you here today and I really appreciate you taking the time to attend our AGM. I have always emphasised that this is YOUR society and that we are fully committed to making sure that your interests lie at the heart of everything we do. As PRS Chairman it is always a pleasure to meet with you and have an opportunity to explain the progress we are making on your behalf.
Firstly, I would like to report back on the efforts we have made over the last year to increase the diversity of our Board. This is an issue that you raised at last year’s AGM and it is something that my fellow board members and I have been working hard to improve. We have a balanced board with 11 writers and 11 publishers, two external directors and the chief executive, but IT IS VITAL that our board comprises of many voices … voices that best represent the real-life business experiences of our members, and that offer fresh perspectives. This is something that I will continue to strive to achieve during my term as Chairman. Understandably members are focused on building their own businesses and their own careers and I do appreciate how difficult it is to take time out of your busy daily lives. It is a huge request to ask of any member, but it is very important that we do and help anyone who is interested to come forward.
To that end, we have increased the frequency of our communications in the lead up to the AGM, to explain the work of the Board and to ask principal voting members to consider coming forward as potential candidates. I have been working with the PRS Foundation and consulting with numerous organisations such as the MOBOs to raise the profile of the Board and the work that being a Director entails. I’m delighted to say that our approach has increased the number of candidates this year - over 30% on the previous year in fact. I would like to say thanks to all those candidates who stood this year and of course a huge thank you to our current board members for their time and commitment to PRS throughout the year. This is hugely appreciated.
Robert and Steve have reported on the improvements to the distribution process. I would like to personally thank them for acting swiftly to deal with the problems of last year, putting Rachael Naylor in place to oversee the process and giving her the resources and team to deliver robust new systems. Our current accuracy levels are excellent thanks to the Distribution and Operations team and the wider staff’s efforts. This has been a project that each of the business units have focused upon. There is no higher priority than guaranteeing the accuracy of your distributions. Following the safeguards that have been put in place, I am confident that the errors that were experienced last year will not reoccur.
The very best way of ensuring that we are delivering the highest quality service to you is by listening, striving to better understand the challenges you face and then turning that insight into actions in order that we can offer continual improvements and enhancements. You heard earlier from Robert and Steve that we have made several other significant changes to the business throughout 2018 to better serve you in the form of investments, new members joining the executive team and the introduction of new products and services. As a result, I believe that we are in great shape for the future. As we know change can often be daunting, but these are exciting - if frequently challenging - times.
Which brings me to a further extremely important transformation which is due to take place at PRS when we say goodbye to our CEO Robert Ashcroft after ten extremely successful years guiding the organisation. As this will be Robert’s last AGM I would like to take this opportunity on behalf of the board and the PRS membership to thank him for his vision, energy and absolute commitment to supporting our composer, songwriter and publisher members in obtaining the very best value for their works.
Working with the board Robert has set the agenda on copyright reform - it is a huge achievement that the EU Copyright Directive was approved this year -and our ICE joint venture is the standard bearer for our hubs strategy, a model that the industry can build upon to better serve creators and licensees around the world.
Robert … it has been a pleasure to work alongside you this past ten years and particularly during my term as Chairman of the Board. The contribution you have made to PRS has been exceptional and you are leaving us with very firm foundations for the future….
Please join me in thanking Robert.
As Robert has already mentioned, we have appointed Andrea C Martin as our new Chief Executive. She will take up the position on the 17th of June. On behalf of the PRS Board and all our members, I would like to welcome Andrea to the business.
She is an exceptional business leader with experience gained from many different sectors and from many different countries. I know she will continue the work Robert has done in modernising and shaping our business, improving the service that members receive and transforming PRS into the world’s leading rights management organisation that it needs to be.
The board is very much looking forward to working alongside Andrea and seeing the impact that I know she will have.
In this increasingly competitive world, it is reassuring that the collective is strong and that PRS still exists solely to represent songwriters, composers and publishers. This is particularly important as other entities focus on representing the interests of venture capitalists, big tech giants or other corporations, we focus on delivering the very best service for our members.
The fragmentation of rights has necessitated innovation in the marketplace, we have risen to this challenge by restructuring the way we do business. Our initiatives such as ICE are reshaping the industry and giving reality to the hubs strategy - but with fragmentation come new tanks on the lawn …. They come in the shape of a range of new for-profit entities offering bespoke services for niche sectors of the market. Your PRS, however, enables collective bargaining power at much greater scale and all negotiations are undertaken so that best value is delivered to you, our members. It is your boards task to ensure that PRS retains its competitive edge and remains a market leader.
Finally, I would like to thank the Board and my two deputy chairmen Simon Darlow and Chris Butler for their dedication and tireless effort in serving PRS members. My thanks also to Simon Platz who has recently taken over from Chris as publisher deputy chairman.
Our heartfelt thanks also to William Booth who is stepping down from the board after a period of service that spans across 15 years and of course Mitch Murray who has remarkably served the board for over half century; this is an outstanding achievement that is unlikely to ever be surpassed.
Sadly, this will also be Jenny Goodwin’s last AGM as she leaves PRS for pastures new this year. Jenny has been a diligent and extremely gracious Head of Secretariat and we wish her every success for the future.
Finally, I would like to thank you - the members - Year on year you continue to deliver world beating music and remind us daily why it’s important that PRS continues to fight on your behalf for a fairer and more transparent system.
Before we move on I would now like to remember and pay our respects to the members who have passed away in the last 12 months.
They will be sadly missed.
Thank you for coming and thank you for listening.
Thanks Robert, and good afternoon everyone. It’s great to see so many of you here 12 months ago, I outlined a set of commitments that I promised we’d deliver to you,our members.in 2018.
Number 1: To ensure accuracy in our distributions, and to address the issues that arose last year
Number 2: To deliver those distributions at the optimum speed - Getting the money to you as quickly as we can while maintaining accuracy.
Number 3: To deliver our strategy of collaborating with key industry partners
And number 4: To improve the service PRS delivers, through targeted strategic investments.
So, How have we got on?
Well, on the number one priority, and echoing Robert, we’ve worked hard as a team over the past year to improve accuracy in our distributions and to address the related issues. I am confident the improvements we have made, and in particular the efforts around the distribution assurance process, will put us in a good position for the future.. helping regain your confidence in our operational capability and our ability to provide the service you deserve as members.
For the remainder of the points, and the numbers themselves, I’ll cover these through reviewing the financials over the last 12 months, talking about our investments and our close work with our joint venture partners, and also touching on our financial plan for the future.
At the start of 2018, the global outlook was turning gloomy, there were fears over Brexit, currencies were increasingly volatile and the woes on the UK high street were well reported. With everything that was going on, could we really replicate the exceptional performance we had delivered in 2017?
Well, PRS has done it again!! and our revenue is now within touching distance of three-quarters of a billion pounds - A record for us, and particularly impressive given the challenges we faced.
Using a constant-currency-basis as always for transparency, that’s a 4.4% increase on 2017 and in money terms, £31 million more.
Over a slightly longer timeline, this is close to a 40%increase over the three years since 2015. An achievement of which we are all incredibly proud.
Likewise, NDR, income after costs have been taken into account, has also risen, and across 2018 this too, hit a record high, reaching £648 million .
But what about, the actual money-in-your-pocket, the all-important distributions?
Well, these, as Robert mentioned, are broadly flat when compared to 2017 and obviously lower than we would have liked or you expected so why were we not able to distribute more?
Put simply, we have experienced two main delays and the combined effect meant we couldn’t distribute everything we wanted to, in 2018. Fortunately, the new distributions checks we put in place are not the cause of these delays, that process is working well. The issues were linked to our newly-formed joint-venture, PPL PRS Ltd, and also ICE.
The former, struggled with invoicing and cash collections following the delay in launch. With ICE, it is the growth in streaming that has led to increased volumes of data, which alongside the complexities of the deals, caused a backlog.
The money from both of these joint ventures is coming though, and I’d like to thank you for your patience while we work through these temporary backlogs.
Let’s now go into a bit more detail….firstly on how the £746 million of revenue breaks down, starting with international
Here we see a continuation of the strong upward trend which, over the last three years, has seen our international revenues rise by more than 40%. In 2018, the growth on a constant currency basis was 9.1% - which is similar to the previous year’s, and translates to revenues of over £280 million.
Internationally, we lead the way. Whether this is collaborating with other societies so they reduce the social and cultural deductions they take from our revenue, or renegotiating our reciprocal agreements, or promoting the benefits of our expertise in maximising members’ earnings from major live concert tours…. The strength of our International team, and our clear growth strategy, sets us apart from other societies, and points to a very, healthy, future.
Turning to public performance and our joint venture with PPL - an ambitious and ground-breaking achievement, although at times quite challenging! However, despite launching this joint venture later than planned, despite the delays in the implementation of the new enhanced live tariff and despite the economic volatility that is impacting the retail sector, revenues themselves were only slightly down on 2017 and came in at £192 million.
Within this, the revenue earned from Live performances is a particularly good story. It grew 12.8% on the previous year, in spite of pressure at grass roots level and as mentioned, the delay to the launch of the live tariff. High-selling tours from the Rolling Stones, Ed Sheeran and many others, alongside an increase in the number of major festivals, helped minimise the impact of Glastonbury’s absence! Live has been a great success story for the UK Music industry, and of course for our members.
So, offering joint-licensing in the form of The Music Licence was the right thing to do…And those who know me, know I am not a great one for predictions, …yet I am confident that our focus, alongside that of our joint-venture partner PPL, will result in growth in 2019.
Onto Broadcast, where, after stripping out the one-off ITV settlement in 2017, and acknowledging the decline of 4% in viewing-figures, our underlying revenue in 2018 was broadly-in-line with the prior year at £128m. Importantly, we also concluded a new deal with our biggest customer, the BBC…and I can’t overstate the efforts required from both sides to make this deal happen. We are pleased with the result knowing that the value of your rights has been protected.
Finally, let’s turn to online revenue, where we collected an impressive £146 million, meaning overall growth of around 19% in 2018.
Streaming continues to grow, and was boosted by both new business and renewed-licences with-improved-terms . Yes, mandates will continue to move, and certain digital service providers will continue to push for licence values below the market rate as Robert has referenced, but collectively we continue to fight hard to increase the value of your rights so that you benefit from the growth of this market.
Overall, on the Online licensing side, ICE are doing great work, and their operations - as I’ve previously touched on - continue to improve. We get how important it is that this additional revenue passes through to you at the right speed Rest assured, we are on this.
So how much extra did we need to invest to deliver this growth?
In short, it cost us an additional £6million in 2018 to bring you over £31m extra revenue. That is a healthy return, but rightly you challenge us to do more, for less.
So what are the headlines here, and where did we need to spend the money?
- We launched our joint-venture with PPL - the single biggest venture of its type in the world.
- We delivered Identity Access Management, the first step in improving your digital experience with us
- Online statements have been tested, are working, and will be rolled out to everyone this summer
- We invested in an organisational-wide restructure, that will help deliver considerable savings over the next five years
- We’ve moved additional staff from King’s Cross to the more cost-effective Streatham office
- And, as you’d expect, we’ve invested in accuracy. In assuring our distributions to you, improving our processes and developing our systems.
These things do cost money, but are delivering results and will continue to deliver results.
Last year, we talked about the 35 million of historical distribution issues which sit on our balance sheet. You will know by now, we’ve brought forward our plan to clear this…You told us you wanted these issues addressed, and we have listened to your feedback.
Subsequently, we had to make the difficult decision to raise the administration rates on royalties collected when your music is publicly performed, used overseas or through broadcast channels. You’ll know the changes, so I won’t dwell on them here, but just to reiterate, most of the rises are currently projected to last for five years and our progress will be reviewed annually.
It’s always hard to tell you things have got more expensive, and I understand these changes hurt you as individuals and businesses, but please keep in mind we are consistently delivering increased revenue, meaning that despite these changes, going forward, we will continue to deliver more money in your pocket!
So, going back to that question we had at the beginning of 2018 - Could we really replicate the exceptional performance of 2017.Well overall…Yes!!
2018 was a positive year, We did build on the record growth of 2017, and we set ourselves up for the future.
Financially, I know PRS is in a good place…The historical balance sheet issues are being addressed, there is a razor-sharp focus on costs, and we are continually striving for growth.
My simple aim as your Chief Financial Officer, is to ensure PRS is on the best financial footing to enable us to deliver our vision to be the leading music rights organization in the world.
Thank you …for your continued support.. and input throughout the year. Here’s to the next twelve months and all that it brings, and in particular, here’s to collecting and distributing your royalties for the music you create.
I will now hand you back to Barney