AGM 2021 recap
AGM 2021 recap
On 19 May we hosted our 2021 AGM. The entire event was held virtually, and we introduced online live voting for the first time.
For each of the resolutions, there were on average 4,600 votes cast including those by nominated proxies.
Members’ Council Ballot
Fiona Bevan, Julian Nott and Pete Woodroffe were newly appointed as Writer Council Members. Simon Platz was re-appointed as a Publisher Council Member. Janet Andersen, BMG, was newly appointed as Designated Publisher Council Member.
Erica Ingham also joins the Members’ Council as an Independent Non-Executive Council Member, alongside Stephen Davidson who was re-confirmed in post.
For more information on all of the new Council 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.
We've also included the promotional videos from PRS Foundation and the PRS Members' Fund which were shown at the meeting.
To take a look back on all candidates who stood in the 2021 Members' Council Ballot, you can download a copy of the Ballot Booklet below.
Good afternoon, everyone, and a very warm welcome to the 2021 PRS AGM. A big thank you to Celeste, Gary, Yas, Bowen, Anna and Chris for opening today’s AGM and taking the time to share their experience and advice with us. While restrictions are starting to lift, we are still, sadly, unable to meet together in person. So, once again, we welcome you to our AGM as an online event. Last year’s virtual event attracted a record number of votes and attendees and we are certainly intending to build on that success and experience of last year making it even more interactive and engaging. You may have noticed that we are beginning a little later this year. We’ve moved this year’s start time so members in different time zones have more opportunity to join us.
While in a virtual event we are spared the explanation of fire exits and directions to the restrooms, there are still a few matters of housekeeping that I need to deal with. As with last year, we have pre recorded some of the speeches, including this one. This helps make the event as seamless as possible. We will of course be live for the formal business and the questions and answer sessions. If you are a voting member or voting on behalf of a member, please make sure you are watching via the Civica election website. If not, you won’t be able to vote during the formal business. Here’s what it looks like. If you’re in the wrong place then refer to the instructions in your email or letter with your AGM formal notice to find out how to access the voting site. If you have any problems, please contact Civica for more info using the details on the screen. We won’t be casting votes for another hour, so there’s plenty of time if you’re struggling with access.
With housekeeping out of the way, let me now turn to the business of the day. As we’re all very well aware, the past year has been unprecedented in terms of the disruption to our lives and our businesses, not just here in the UK but on a global scale. I know how extraordinarily difficult it has been for many, not just from a financial perspective but also on a personal and social level. Our thoughts today go out to those of you who have lost family, friends and colleagues during the pandemic. At the beginning of last year, few had heard of COVID and discussion on pandemics was generally limited to the medical community. The idea that we would be required to lock ourselves in our homes for months on end would have seemed an impossibility back then. What followed, of course, has impacted us all and none more so than those of you who derive the majority of your living from performing in live venues or having your music played in restaurants, bars and concert halls across the world.
Over the past 12 months, we have witnessed the complete decimation of the live sector with all festivals cancelled and venues closed. A near 80% decline in 2020 live royalties collected reflects the massive impact on this hugely important part of our industry. While the live sector has rightly been the subject of enormous attention, it is part of a wider story of our industry last year, one which also saw commissions for new classical compositions and operas decline significantly, while the pause in TV and radio productions heavily impacted the opportunities for our media composers. Your Members Council, PRS Board and management have worked tirelessly to ensure that royalties speed through our systems. This resulted in our distributions actually growing year on year despite the decline in licensing revenue.
As Chairman, I’m extremely proud of the way that management, staff and directors pulled together to get our distributions out on time despite everyone having to work remotely from their homes. This demonstrates that your PRS is built on strong foundations and we have the ability to adapt quickly and efficiently even when in a crisis of the magnitude of COVID. Despite the last 12 months being overshadowed by the global pandemic, it has not blown us off course. You’ll hear more throughout the day how your society came together to support you over the last year and set clear goals for our future, to sharpen our focus around maximising the income of your works, and to enhance and support the services for members and customers while collaborating with our partners at home and around the world.
As the Chair of the Members Council, my focus over the preceding months has been on delivering efficiencies, cost savings and implementing many of the governance changes overwhelmingly approved by members at last year’s AGM. We have established the Members Council, begun to reduce the size of our committees and will gradually see a reduction in the number of members on the Council over the next two or three years resulting in cost savings and a more nimble and effective structure. I would like to congratulate Michelle Escoffery on her historic appointment as President of the Members Council. She will play a fundamental role in ensuring the Council can best reflect the views of the membership. You’ll be hearing from Michelle later. My congratulations also to Dru Masters on his appointment as Deputy Chair of the Members Council. I look forward to working closely with Dru in the coming months to deliver the Council’s ambitious agenda.
To our outgoing deputy chairs, Simon Darlow and Simon Platz, my sincere thanks and appreciation for all of your hard work, advice and support over the years. Your contribution to PRS has been invaluable and is greatly appreciated by your Board colleagues and our members. This year, we are also losing long serving directors, John Minch and Professor Eddie Gregson. Eddie has given outstanding service to the Board for over 25 years, and we shall miss his advice, particularly with regard to the classical sector of which he is so passionate and knowledgeable. John has equally made a great contribution to the Board debates over the years and his business acumen and intellectual heft will be greatly missed.
Finally, I would also like to extend my gratitude to Mark Poole and Steve Cooke, two of our longstanding independent non exec directors. As members of the PRS for Music Board and more recently the Members Council, alongside chairing the Distribution and Audit Committees, we thank them for their objectivity and perspective and, in particular, in the development of the revised governance regime. Looking forward, I’m delighted to see so many candidates standing to be council members this year, particularly amongst the writers. Thank you for putting yourselves forward. The Members Council will only ever be as strong and relevant as its members. It’s also my pleasure to propose to the members the appointment of Erica Ingham as our new independent non exec director. Erica has a wealth of experience as Chief Finance Officer in large media companies. I know that her knowledge and expertise will be a significant asset to PRS.
So, as we start together on the road to recovery out of the pandemic, it is always worth reminding ourselves of the power of music, of the songs and compositions created by you, our members, which has given such comfort and solace to so many over the past year. Your music continues to help shape our lives and define the rich diverse nature of our culture in this country. The world in which we live never stands still and, in this digital age, the shift to evermore technological change is a constant. It is therefore no accident that many digital businesses proudly label themselves as disruptors. Even as we began 2020, few would have predicted the popularity of new tech allowing us to use and enjoy music despite the lockdown, with Peloton live streaming home exercise classes, virtual concepts embedded in games such as Fortnite and Roblox, and online concepts that can be viewed around the world selling hundreds of thousands of tickets. Of course, none of these events could take place without your music and, as such, we continue to ensure that we license every shop, cinema, venue and online gym class that use your repertoire to help drive and enhance their businesses.
At a time of change and uncertainty, we remain determined to protect and grow the value of your works. Many of you will know that the past few months have been dominated again by discussions on streaming and the value of the rights within a stream. Some of you may have watched the evidence presented at the DCMS Committee inquiry. The challenges of the online market are multi levelled and the solutions are rarely simple. As a community of songwriters, composers and publishers, we must stand shoulder to shoulder. We must ensure that the true value of the song and the composition, the foundations of the entire music industry ecosystem, is reflected in the royalties paid.
I can reassure you that the Members Council, Board and management continue in our determination to negotiate the best deals we can on your behalf with digital service providers, broadcasters and with our partners, PPL. Government and regulators clearly have a role to play in helping us to defend and enforce your rights. We can only ever be as strong as the mechanisms we have to protect them. That said, our whole industry also has a role to play in identifying solutions and finding a way to come together to deliver them.
It is my honour as Chair, at each AGM, to pay respects, and remember the members who have passed in the last year. This is always a solemn moment as, like many of you, I have worked with and enjoyed the company of a number of those we have lost, but it is also a moment when we can reflect and celebrate their incredible talents and the indelible mark that their music has left.
They will be greatly missed. So, let me close by again thanking you for joining us today and we look forward to taking your questions later. In the meantime, I’m delighted to hand you over to the President of the Members Council, Michelle Escoffery. Thank you. Michelle.
Wow. What an honour to be appointed President of PRS Members Council back in January this year. While I’ve only been in the role for five months, I’ve learnt so much. This role was created to encourage more synergy between PRS members and the Members council and to be a voice and ambassador for both writer and publisher members across all genres and levels of experience. I’ve spent this time so far in listening mode, meeting with many of you virtually, for now, understanding your hopes, your concerns and how you want PRS for music to support you and evolve in the coming months and years. I’ve been moved and inspired by the conversations I’ve had with you so far. I’m a songwriter and creator first and foremost, so I’m right here with you on this journey.
So, what does the role of President mean to me? I said in an interview recently with M magazine that I would feel really accomplished if, 1) we address some of the inequalities that are happening within the organisation, that we’re committed to having more representation across the board in terms of membership, recognising and seeking out and celebrating different genres and intersectionality, 2) develop more engagement with our membership and bring in more relevance and value to emerging writers, 3) building a strong sense of community for writers and composers and publishers. If I can somehow affect change and progress in these areas, I would feel like I’ve done something really great and we’ve made a strong start.
The first membership event that I was privileged to lead is one that I’m incredibly proud of. Its aim was to educate women about what we need to know to stand as a PRS director. I’m currently one of four female directors on the Members Council, the only black person and the only female writer director. This event was about breaking down barriers, sharing knowledge and creating equal opportunity and access to information. As a result, I’m delighted to say we had more women put themselves forward as a candidate, which is so exciting to me – history in the making – progress. In fact, what’s even more encouraging is, from prompting these conversations to happen, we had a record number of candidates from ethnically diverse backgrounds put themselves forward to. This, for me, already shows real impact. Offering this information in a more accessible relatable way has increased engagement and interest in the role broadening the pool of candidates that members can vote for to represent them. This is why we’ve also seen the highest number of votes for candidates and hope this will diversify year on year to reflect the rich knowledge, expertise and creativity of membership.
Women, however, still only makeup 18 % of PRS’s membership. This means that, 107 years on from the formation of PRS for Music, men are still making up 82% of all professional songwriters and composers. That is a major imbalance. As we know, there are many incredibly talented women creators that we want to not only support and develop but celebrate as much as we can. There’s still work to be done. You may have noticed, this year, we’ve been inviting you to participate in roundtables with us and take part in surveys. We launched our first ever membership diversity survey to get to know you better, to understand more about you, so that we can ensure we’re offering members the kind of service you really want. It is not just about race or gender. We ask about genre, regionality, and how you’d like to learn and engage with us. We asked members to complete a diversity and inclusion survey, not as a box ticking exercise but to more easily target our services to support your needs.
I believe, in order to make lasting change, we can’t just talk. We must act. If you haven’t filled out the survey yet, please, please do so. The deadline is 4 June. Your input will help to influence the future of PRS for Music as we move forward together. I am also an advocate for technology, and we would really love for us to start being on the leading edge of technology. As we all know very well, so much of our lives and how we interact and keep up with the world is through our phones. For our members to be able to have that technology in their hands and for it to be streamlined and really easy for them to connect and access information is a must.
I would like to take a moment to thank the whole team at PRS for Music for their energy and enthusiasm over the last year. I’ve been completely blown away by their dedication, knowledge, expertise and especially their passion for music. My particular thanks to all the membership team who I’ve gotten to know a little bit better in the past five months. Member queries rose sharply last year by nearly 30%, and I know that they’ve worked hard under difficult circumstances to continue to provide help and advice to members.
Last year, nearly 8,000 new songwriters joined PRS for Music. That’s 22 every single day and over five million songs and compositions were registered. Part of my role is to increase awareness of PRS in the music making world. If you know someone who doesn’t know about us or doesn’t understand what we do, ask them to contact us. We have an amazing team here ready to help. There are also regional membership experts in the UK, further afield in overseas territories too, and genre specialists in media, classical, dance and South Asian music. We’re proud to represent members all over the world writing and composing music in many styles and languages.
In these first few months, I’ve virtually met with members based in the USA, Wales, Scotland and Northern Ireland to hear about and understand their unique passions, concerns and ideas for growth that are specific to their regions. The desire to conserve local languages and dialects that are becoming less frequently spoken through song and celebrating the mother tongue was something that really resonated with me. In celebrating these differences, a common theme that came out of all of these sessions was a desire to feel more connected. Many members said that they would like PRS to be a community for songwriters and composers, a hub to exchange ideas and acknowledge, a space to collaborate, skill swap and share a network. Music creation can often be very solitary and I heard the need to connect more with your peers. So, this is something that we’re working towards and we’ll be looking into how we can facilitate and possibly partner with other organisations to enrich your experiences.
Part of PRS’s evolution and its future success is placing members at the centre of everything we do. The role of President is really about connecting with you. I will be regularly reporting back to the Members Council, so I do want to hear from you so that we can find ways to implement your feedback and bring your ideas to life. My dad, who was my first singing coach, mentor and my first manager, used to say to me, ‘It doesn’t matter what sex you are. You’ve just got to be excellent,’ so I’ve always been striving to be better. There’s always something to learn. He was my biggest advocate in that his thing was, ‘You never stop learning and you can always be better.’ So, now, I’m here as your advocate, learning and striving to do better.
I would like to introduce two videos from our charity partners, the PRS Members Fund and PRS Foundation, both of which we are incredibly proud. The PRS Members Fund has provided support to members facing hardship for nearly 90 years now. It played a particularly crucial role last year in launching the PRS Emergency Relief Fund in response to the profound financial impact the coronavirus pandemic has had on the music industry and PRS members. You’ll also see a video from PRS Foundation, the UK’s leading charitable funder of new music and talent development across all genres. I’m very proud to sit on the Board of Trustees for PRS Foundation as they continue to do incredibly meaningful and important work to fund PRS for Music members at the early stages and tipping points of their career, helping you get the support and resources you need to break through and smash those glass ceilings.
Andrea Czapary Martin
Chief Executive Officer
Thank you, Michelle. It was a pleasure to hear from Celeste, Gary, Chris, Bowen and Yas at the beginning of today’s event. Thanks to all of them. Their words reinforced how COVID has dominated every aspect of our lives over the last 12 months, how it has shifted our understanding of ourselves, our lives, and significantly altered the world in which we live. It has been a time of profound loss for many. I myself have lost a close family member over the last year. To everyone who has also lost loved ones or friends, my thoughts and indeed all our thoughts are with you.
Over the last year, music has been a shining light in our darkest moments, providing comfort, relief and entertainment in an uncertain world. Where and when and how we listen to our music may have changed, but its power remains. When music has arguably never been more important to fans, I can only express my wholehearted admiration at the way in which members adapted and remained so creative. In times of change and uncertainty, the communities around us become more important than ever. With this in mind, I must personally thank the Members Council and, in particular, Nigel and Stephen as Chairs for their collective foresight, counsel and support.
My sincere gratitude also to the whole PRS team for their dedication and commitment to the company and members. They turned adversity of the last year into a catalyst for positive change. That we were able to announce record royalty payments for 2020, the most difficult of years, is due to the team’s collective diligence, efficiency and flexibility. I, first hand, saw their determination to protect the livelihoods of members. My thanks to all of them. We know how important those payments have been over the last year, so, with that in mind, it is the perfect time for me to invite our Chief Finance Officer, Steve Powell, to set our financial results from last year.
Chief Financial Officer
Thank you, Andrea. Today is a rare outing for me and certainly a welcome change of scenery from the shed at the bottom of my garden where I seem to spend most of my working life these days. As with the rest of the world, the last year has been a year like no other for our members, for PRS and for me personally. COVID changed all the rules and had a significant negative impact on some of the results I will be presenting to you today. It hasn’t all been bad news though, and, as we go through the results, I will also provide more detail on the record close to £700 million we distributed this year along with providing some early thoughts on 2021.
Let’s launch straight into the financial results and look at revenue, which undeniably reflects how hard 2020 was. At £650 million, revenue is around £160 million down compared to 2019, which puts it pretty much in the middle of the 15% to 25% decline that we predicted at last year’s AGM. This is at the lower end of the wider industry estimate of a 20% to 30% decline but still eradicates years of record growth as revenues fall back towards the 2016 level. The overall result does inevitably include some ups and downs across the different revenue streams, which I’ll look at in more detail under what I have termed the key challenges, the stable areas and those that are thriving.
So, starting with the key challenges, the two main revenue streams in this category are public performance and international. At last year’s AGM, I set out how the decimation of the live sector and public performance more generally would have a profound impact on members income in 2020. As much as I like being right, this time, I wish I wasn’t. In 2020, public performance came in just over 60% down at £86 million. What was our second largest area of growth in 2019 has seen the biggest decline in 2020, a low point I have never seen before. Within this, we saw significant reductions in live revenue, which was down almost 80%. These declines reflect the most difficult of years for many of our customers, especially the cinemas, pubs, clubs, hotels and music venues forced to close their doors throughout most of last year. I’m proud that we moved quickly with our partners at PPL PRS Ltd to introduce payment holidays to support customers, although the impact of this resulted in revenues being down around 70% in all of these areas. We hope that, as the high street and hospitality sectors restart, these businesses will be better placed to reopen and continue to use new music long into the future.
International royalties also suffered for similar reasons to UK public performance. However, due to the usual time lag in distributions from certain societies, only part of the impact was felt in 2020 when international revenue fell by just over 10% to £249 million. So, it’s important that we stress there will be further reductions in international royalties through 2021 as the remaining distributions from last year are received from overseas. Moving onto the stable areas where, despite initial concerns around the impact of the pandemic on advertising revenues, coupled with the ongoing move to on demand television, the overall broadcast revenue stream held up well through 2020. While radio royalties saw a downturn of 9.2% due to the reduction of commercial radio advertising, revenue generated from TV and radio broadcast combined finished the year less than 3% down at £127 million with TV itself slightly up on 2019.
Talk of broadcast brings us seamlessly onto the areas that thrived during 2020 – video on demand and the wider streaming market. While online as a whole is only around £9 million up overall at £188 million, this does mask an underlying growth rate of circa 10% and some impressive progress in the key areas. With the rise and rise of Netflix and Amazon Prime, combined with the impact of the new entrants to the market, royalties from video on demand services continued to accelerate during lockdown with an average increase of just under 30% in 2020. Underlying streaming revenue also increased during 2020 and, despite this being slightly offset by some one off impacts, this again demonstrates how important this area is to the wider industry. Coronavirus has accelerated the move to digital and PRS is perfectly placed to maximise our income from existing and new revenue streams and capitalise on this shift for our members.
I’ve spoken a lot about the inevitable downturn in revenue in the last year due to factors beyond any of our control. What’s key in such a crisis though is how you manage the things that you can control. On entering into lockdown and supported by our colleagues across the whole organisation, we implemented a severe short term cost reduction programme, one which touched every part of the business – the PRS team, our offices, our marketing activity and our public performance joint venture, PPL PRS Ltd, to name but a few. These efforts resulted in our net costs, after offsetting the MCPS service charge and excluding donations and subsidies, reducing by around £12 million or 13.8% from an already low 2019 base to just over £75 million. Taken in context, this meant that, despite the massive reduction in revenue, we were still able to maintain a cost to income ratio, excluding charitable donations, of 11%, which is only slightly up on the 10.7% reported in 2019 and still expected to be amongst the lowest of the larger societies in the world.
We will not stop here though and, in 2021, although some of the more variable costs will go back up again as revenue does, there will be further key cost reduction initiatives to help mitigate this across people, property and processes. Over and above all of this, though, our greatest achievement in 2020 has to be the level of our royalty distributions. Despite an overnight move to full working from home, despite falling revenues and despite data volumes that continue to grow exponentially, we managed to distribute close to £700 million to you, a PRS record, and 2% up on 2019.
So, how did we achieve this? We built on the strong foundations we had put in place and clearly focused on money in, money out and member support. In 2020, we concluded more than double the combined number of broadcast and online contracts than in 2019 bringing more money in. We collaborated strongly with our joint venture partners, especially ICE, and continued to ensure, where opportunities exist to distribute moneys, we made the most of them paying more money out. We had an unstinting determination across PRS to do all we could to try and help members through what was an awful year, all whilst never forgetting our core principles of transparency, accuracy and efficiency.
I do recognise that this increase will not have been felt equally by all of our members and that certain sectors of our membership will have been hit harder by the reduction in public performance distributions and not fully compensated by the surge in online. Despite this, I can only applaud everyone who was involved in this phenomenal effort. Unfortunately, though, it is an unpleasant reality that things will not continue at this level through 2021. Inevitably, the additional lockdowns both in the UK and internationally will take their toll, meaning another tough year for our industry. Distributions this year are likely to be over 10%, own on 2019 and 2020 with the delayed impact from international also meaning that we will not be back to our normal levels in 2022 either.
On the revenue side, the news is more positive. We expect significant improvements on the 2020 numbers in 2021, although it is unlikely we will be back to 2019 levels until 2022 at best. Of course, this is all heavily reliant on the UK sticking to the current reopening plan and seeing pubs, clubs, hospitality, festivals and major concerts, to name but a few, all firmly reinstated as the major part of the British summer they should be.
2020 was hard, almost unimaginably so for many, and 2021 is not going to see an immediate bounce back to normality. However, there are definite shoots of recovery and, like many others, I have tentatively bought tickets for future events and can’t wait to go to Pub in the Park in September, Fat Boy Slim on Bonfire Night and more generally to support my local pubs and venues. As you would expect, PRS will be working hard with our partners and joint ventures to ensure we are in pole position to make the most of every opportunity that we can find for you, our members. Thank you. I would now like to hand you back to Andrea.
Andrea Czapary Martin
Thank you, Steve. I certainly echo your remarks about the razor sharp focus on royalty payments and our costs over the last year. In this context, we will very shortly conclude the renewal of the service agreement with MCPS. Therefore, PRS for Music will continue to support MCPS in the management of its members’ mechanical rights. My thanks to everyone at MCPS for their continued commitment to our shared vision.
Next month will mark two years since I joined PRS. It has certainly been very different from what I expected. I would have had wanted to spend more time in person meeting members and customers and hearing your views on PRS and its future ambitions. Despite the changing circumstances, my dedication in ensuring PRS delivers is core functions to the highest standards have been unaltered, what I call being brilliant at the basics. This means processing your royalties as quickly, accurately and as efficiently as possible, delivering members’ services and support, which ensures you get the best from your membership, and, of course, maximising the value of your works wherever and whenever and however they are used and played by innovative licensing solutions. We have made significant progress in all these areas.
Being brilliant at the basics at PRS for Music also includes being brilliant at data. My background is in big data. I know full well its value and importance to the future of your society. Last year, we processed more than 22 trillion performances of music. To put that in context, that is around three times the total searches on Google last year, which is why we must be pioneers constantly rethinking how we work, exploring the opportunities which emerging technologies, whether artificial intelligence or machine learning, can and will offer. This is what drives our ICE Cube project. The whole industry has long recognised the necessity of an authoritative database of works and the need for it to be flexible and integrate large volumes of data. The journey towards this is difficult at times, but the destination is as essential as ever and rest assured that this is a major priority for me and one which I am dedicating my time and energies because it is our shared future.
At this point, I would like to invite our Chief Information Officer, Mark Krajewski to present our recent developments in data management and technology and how investing in digital is driving our future plans.
Chief Information Officer
Thank you, Andrea. Data is our future. As we’ve just heard, the volumes that we manage and process each year continues to grow on a massive scale and surpassed 22 trillion performances last year. To give some further context, just ten years ago, we only processed 126 billion processes. Naturally, we need to evolve and adapt the way in which we manage our data to meet this continued growth and, in 2020, we launched our data strategy programme. Designed to improve our data governance, management, and exploitation of data in order to reduce our costs and improve our efficiency, improve our member and customer engagement, whilst increasing our revenues.
To make these changes for how we manage our data for the future, we’ll need PRS to create not only a strong technology foundation and platform, but also create an innovative culture to explore new opportunities – to dig deeper as to how we can gain and better utilise greater visibility on our data. As part of the data strategy programme, we have already explored a number of proof of values or POVs. These POVs have allowed PRS to experiment with new technologies and concepts to assess their suitability prior to making any costly investment. One of the POVs was to explore how we can investigate machine learning techniques to manage the continual growth in music reporting and specifically to look at how we could reduce our future processing costs.
This involves successfully matching licensee usage data such as radio, TV cues, and live performance, with works data. We were able to show that machine learning demonstrated the capability to increase automated processing and reduce manual intervention. What this means is that we expect to be able to use machine learning in the future to help support our increased data volumes and we will be building upon the success later on in our program.
Our data strategy programme is continuing into 2021 with the aim of exploiting our data for the benefit of PRS members and we’re aiming to do this in a number of ways, such as commercial opportunities to increase licensing revenue, providing further world-class data insight services to our members, and organising our data assets, will also provide greater visibility and access to our data.
As well as our data strategy program, we continue to make significant investments in our programme portfolio, which includes a number of technology programmes within PRS. These range from how we handle member queries right through to how we manage our distributions. At the end of 2020, we successfully launched the first phase of our new Customer Relationship Management, or CRM, system. A best-in-class cloud-based platform based upon Salesforce. This will make it even easier for the PRS for Music team to source information and collaborate in supporting our members and answering their queries efficiently. The launch of our new CRM system was a vital step for PRS helping us in our goal to deliver great tools and services to our members, powered by a slick digital process, and secure and accurate data. Our new CRM system will allow us to ensure compliance with the strict regulations that govern how we protect your data and how to maintain more complete and accurate data about our members to help our teams deliver more effective support when you need our help.
As part of our phase two, which is now underway, we are now using the CRM platform to build additional digital services such as tools for members to access support and raise cases online, and for prospective members to join the society.
Finally, we are now in the midst of a programme to migrate our existing distributions platforms to a flexible, scalable and sustainable environment in the cloud. As you can imagine, this is an incredibly complex programme that will also help to ensure that we are well positioned to cover our current and estimated data growth requirements over the next five years and beyond as we look to further strengthen our technology and automating processes where it’s feasible and cost effective to do so.
So, in summary, it’s a very exciting time at PRS and we have made, and continue to make, significant investments in both our data and technology to help PRS improve the products and services we provide to our members. Thank you, and back to you, Andrea.
Andrea Czapary Martin
Thank you, Mark. The data strategy programme, alongside our investments in cloud-based technology and digital, are critical to the future of PRS. Delivering excellent core services while driving ambitious transformation programmes is a challenge for any business. It requires a strong and empowered team, a culture of creativity, innovation, efficiencies and high-performance. All characteristics strengthened by diversity of thought.
The way we perceive issues and tackle hurdles in our personal and professional lives differ. Ultimately, more diverse companies are more successful and new people bring with them new ideas and experiences. They challenge the old established assumptions and bring new perspectives and skills. This is our shared future. I’m personally delighted that members with such broad backgrounds and experiences have put themselves forward for election to the Members’ Council this year.
Unfortunately, not all this year’s candidates can be appointed, but of course, we hope that they will stand again and will continue to share their experiences and ideas with us. It was with this desire to build stronger relationships and dialogue with members that motivated the decision to create our President’s role, and I have enjoyed the opportunity to work closely with Michelle in this role over the last six months. PRS is hugely strengthened by her appointment.
In addition, I’m excited to begin working with Erica Ingham as our new independent non-executive director. She brings invaluable knowledge and expertise and, as we begin to fill the independent director vacancy, we will again be seeking candidates who bring both expertise and different voice to the council. These are all important steps to embedding new perspectives and voices.
I spoke about the importance of diversity and inclusion at last year’s AGM and, as I said then, I am proud of the part that PRS played in music industry initiatives such as Black Lives Matter and The Show Must Be Paused. Across our diversity and inclusion groups, we have identified and challenged the social barriers to success. While recent listening circles with members and the PRS team have helped set clear, successful criteria and actions against which we will be judged.
It is because our people strategy and diversity inclusion agenda are so important that I have asked Suzanne Hughes, our Chief People and Transformation Officer, to present our priorities to you today.
Chief People and Transformation Officer’s Report
Chief People and Transformation Officer
Thank you, Andrea. I joined PRS for Music last year just as the pandemic hit and today is the first time that I’ve met some of my colleagues in person. As Andrea has said, I would like to take a moment to talk about diversity and inclusion, and why it is so important in PRS for Music’s future.
2020 was a monumental year in so many ways and one which will define our lives and cultures long into the future. In a year which many will be glad to see the back of, the renewed focus on racism stands out as a real positive. The death of black men and women in America through 2020, most notably the murder of George Floyd by a Minneapolis police officer, created a lightning rod for a global debate on racism and propelled the Black Lives Matter movement. And while much of the focus in the last 12 months has been on the US, we must never forget that the UK itself is not free of prejudices. Through Blackout Tuesday and The Show Must Be Paused, the music industry created its own moment to reflect on racism. Not only in wider society but in our own community.
Many of the PRS for Music team told me how important this was for them to have time to stop, to listen, and to learn from those around them, and while there has inevitably been a spotlight on race, the need to progress on ensuring equality across the board – also including gender, disability, sexuality, and socio-economic mobility, is more pressing than ever. For example, UK Music recently reported that one in five people with a disability in the music industry feel that they experienced discrimination in the workplace and, although the number of women in leadership positions in the FTSE 350 has increased to 29%, there is still a long way to go to reach equality.
While there’s a compelling case to improve diversity and inclusion in the UK, because it is the right thing to do, there’s also another critical reason why we must focus on it which is that diverse organisations are more successful. The McKinsey 2020 diversity report showed that organisations in the top quartile for gender and ethnic diversity in their senior teams were at least 25% more likely to outperform their peers. The evidence is clear. Diverse organisations with true cognitive diversity are more likely to have better results and be more successful.
Before I joined PRS for Music, I could see that the company had strong foundations in its principles and its values, and what has become very clear to me over the last year, is how passionate and energised the entire PRS for Music team are about challenging barriers and prejudice in our organisation, in our industry, and in society as a whole. Their energy has been a driving force for much of what we have achieved over the last 12 months and I will take a moment to present some of the activities we’ve already delivered and our plans for the future. So what are the outcomes that we are looking for through these actions and what have we achieved so far?
Firstly, we have made real changes to provide fairness of opportunity in how we recruit, develop, and promote our people, so we’ve made sure the language across our recruitment processes is inclusive. We’ve developed consistent interview questions, trained hiring managers to reduce bias, and expanded where we advertise roles and source applicants to attract a more diverse range of candidates, especially for more senior roles. This is about embedding sustained improvements and avoiding tokenism.
Secondly, it’s about creating a sense of belonging and inclusion for all employees where everyone feels that they can bring their whole self to work. We’ve captured the enthusiasm shown by colleagues with around 40 employees joining our Diversity Task Force and work streams. Recent examples of activities they have led include a discussion panel on International Women’s Day and a highly attended event on Stephen Lawrence Day. We’ve also delivered respect and inclusion training to every employee and to the Members’ Council.
Thirdly, we want to represent our members and communities across the organisation. As I hope all members are aware, earlier this year we launched our first members diversity survey. It’s essential that we better understand our members – their ethnicity, gender, their sexuality, and those who identify as having a disability. Only then can we start to properly tailor our actions and support while, importantly, tracking progress. We’ve had over 2,000 responses and I’d like to thank everyone who’s taken the time to complete the survey, but the survey is open until 4 June, so if you’ve not completed it yet, please do so. It’s only with your help can we really evolve your society and your industry.
We must show that our actions deliver measurable results because what gets measured, gets done. That’s why we made the commitment last year to UK Music’s Ten-Point Plan developed by the UK Music Diversity Task Force, which aligns evidence and metrics to strategic actions to help increase diversity and boost inclusion. We are working to make progress in all areas of the plan, for example, by embedding senior accountability for improving diversity, stopping use of words like ‘BAME’ and ‘urban’, and increasing our employee diversity data in order to set targets. And we are currently completing our first Ethnic Pay Gap Report.
We are confident that the actions we’re taking will be effective, but they are not an overnight fix. We know that we will need to be resilient and doggedly determined in the coming months and years to make change happen.
Let me move, now, to some of our priorities for the coming year which sit alongside our broad commitment for greater and more targeted engagement and education. Internally, we will continue to implement more inclusive recruitment, development, and career progression support. This includes greater provision of mentoring, coaching, work placement, and apprenticeship schemes targeted at underrepresented groups. We are focusing on ensuring diverse shortlists and developing talent pipelines for director, executive leadership team, and senior roles within PRS providing both opportunities and support for career progression.
In terms of the membership, we will continue to be led by the views of our members. We will obviously be steered by the preferences expressed in the survey and are holding further listening circles in the coming months which will refine the key priorities in our action plan. We are delighted to have been able to work with organisations like Girls I Rate, Women in Control, Women Connect, Come Play With Me, Brighter Sound, Attitude is Everything, Black Lives in Music, Gospel Music Alliance and, of course, the PRS Foundation over the last 12 months and we’ll be building on these relationships in the months and years to come.
Like many, PRS is on a journey. A journey of learning and listening and, of course, change. But of course, the purpose of a journey is to arrive somewhere different from where you started. Whether where we arrive is better, will be determined by how many of you we can bring with us along the way in the PRS team, the membership, and the industry. In this, we are determined to be a positive influence for change. Thank you, and now back to Andrea.
Andrea Czapary Martin
Thanks, Suzanne. I do want to reiterate your comments about the necessity for measurable results and our determination to deliver against our own commitments as well as those in the UK Music Ten-Point Plan. The coming weeks and months offer a renewed sense of optimism. The buzz of anticipation is tangible. Many of our customers, the shops, bars, cinemas, and gyms can begin to fully open their doors.
We appreciate the difficulties many customers have faced in the last year. My thanks to the whole team at PPL PRS Ltd for their incredible effort in both supporting our customers during the pandemic, but in how quickly and efficiently they have restarted licensing. Test events, including most recently the BRIT Awards, have shown that reopening venues and concert halls is certainly possible, and this is most definitely demanded by the industry and fans alike.
We are grateful for the support the government has provided to our industry in the last year. It has undoubtedly provided a lifeline for many within the live music sector. We urge the Government, ‘Do not leave the job half done.’ We stand together with UK Music in calling for insurances – guarantees for the live sector and, of course, we need solutions – not more words, on touring in Europe post-Brexit. The phrase ‘new normal’ is a reflection of what we are undoubtedly leaving behind, but also of the opportunity to redefine and change.
At PRS we will grasp this opportunity and fundamentally evolve the way we work and execute on your behalf, which is why I am delighted to present today a newly defined purpose for PRS underpinned by a very ambitious vision of transformation over the next five years. Naturally, at the heart of our new purpose is you – our members, and the works which you entrust to us, and to grow and protect the value of those rights. Just because we have existed for over 100 years doesn’t mean we have some divine right to go on doing so. Every day, we must consistently earn the right and privilege to represent your works by negotiating the best commercial terms, vigorously protecting your rights, paying royalties with transparency and efficiency, and ensuring more money is returned to you through our financial discipline.
To secure our renewed purpose, we need a new vision. A vision to be more than simply a collecting society. We will cement PRS for Music’s place as a world leading rights organisation. This requires ambition which is why we have set ourselves the target of becoming a billion-pound organisation by 2026. Not in revenues, but in royalties paid. That is over 40% increase compared to 2020. This requires tackling head on the challenges of the digital and tech market. To oppose those who seek to weaken your rights. To challenge services which built their businesses on giving your works away for free. To secure a market where the full value of the song and composition is properly respected and paid. To demand the highest standard of reporting from users.
No longer can poor data be an excuse for poor royalties where users do not willingly pay their part and the government can and must act. This needs consensus. To come together with others across our industry, the wider creative sector – not just in the UK, but around the world. When we stand together, we are stronger. We grow together.
Our drive to dramatically increase payments will be matched by our commitment to reduce our cost. You already have heard today that our cost to income ratio is reducing, but our aspirations are still greater. We want to be below 10%. To be the most efficient rights management organisation in the world. The Chair and CEO of IBM, Arvind Krishna, recently said – and I quote, ‘Everywhere you look the forces of digital technologies are turning our economies on their head. As the world recovers, there’s no going back. We’ll reflect on this past year as the moment when the world entered the digital century in full force.’
I’m determined PRS will embrace this digital and technological century and through our efforts and actions provide the tools through which members can embrace and succeed in this future – the new normal. A community which members are proud and want to be part of. A community of successes. Thank you. Our Chair, Nigel, will now commence the formal business of the AGM.