Record distributions to songwriters and composers in 2020
However sharp drop in revenue prompts warning of difficulties to come
PRS for Music, the organisation that represents the rights of over 155,000 songwriters, composers and music publishers, distributed a record £699.4m to its members in 2020, a year-on-year increase of 2% (£13.4m).
In a year that saw devastating impacts across most parts of the music industry, music creators relied on royalties more than ever for financial support. Through bolstering data processing to pay out royalties as quickly as possible and setting strong operational foundations in 2019, PRS for Music was able to react quickly and robustly when Covid-19 struck in late March 2020, helping to achieve this record result in distributions to its members. The society also reduced its net costs excluding charitable donations and subsidies by £12.1m, or 13.8%.
While distributions in 2020 were positive overall, many of the royalties paid out last year were collected before the first lockdown, meaning that the sharp decline in income will be felt by music creators through 2021 and beyond, with distributions expected to fall by at least 10%.
Overall, revenues collected from music being played in the UK and worldwide shrank by 19.7% (£159.9m) compared to 2019 to £650.5m, eradicating years of record growth.
Revenue generated from live performances of music represented the greatest percentage decline in 2020, falling by 79.1% (£42.7m) from £54m in 2019, to just £11.3m in 2020.
The majority of live music events were either cancelled or postponed due to Covid-19 restrictions, including hundreds of high-profile festivals such as Glastonbury and arena tours from the likes of Harry Styles and Stormzy, as well as thousands of gigs at independent venues across the UK and grassroot events featuring predominantly emerging talent. Of the £11.3m collected, most related to live music events staged towards the end of 2019 and in the first quarter of 2020, including concerts from The 1975, Stereophonics, Mabel and Madonna’s UK tour, where PRS members’ repertoire featured prominently.
‘Public performance’ revenue overall, which, as well as live music events, includes music used in business premises, shops, cinemas, pubs, clubs, hotels and restaurants, saw a significant 61.2% (£136m) downturn in revenue collected year-on-year, to £86.2m in 2020, again due to business closure.
This downturn is due to PRS for Music’s policy to only charge businesses for when they have been open and able to play music. ‘Payment holidays’ and pauses on invoicing for those impacted by enforced closures provided much needed relief to customers, particularly small businesses.
While most public performance sectors were adversely impacted, revenues from hospitality and nightlife industries were amongst the worst affected. Negative impact on revenue collected from retail was slightly eased by essential elements of the sector permitted to remain open by the government, such as supermarkets. Additionally, a rise in demand for online shopping and click-and-collect services, in turn led to increased demand for warehouse and storage facilities, many of which play music for employees.
International royalty income continues to be the largest revenue stream for PRS for Music members, underlining the enduring popularity of British music globally, but still saw a 10.7% (£29.7m) decline compared to 2019 on a constant currency basis. A total of £248.6m was collected through reciprocal agreements with societies around the world. One factor in this decline in international revenue, was the closure of the tourism industry; for example, with cruise ships not operating last year, royalty collections in this market reduced by 75%, from £7.2m to £1.8m in 2020.
With the exception of commercial radio, overall revenue from UK broadcasters remained relatively stable over the 12-month period, seeing a 2.6% decline from £130.8m in 2019 to £127.4m in 2020. A reduction in commercial radio advertising meant radio royalties fell by 9.2% (£4.6m) year-on-year to £45.2m, only partially offset by a small increase (1.5%) in income from TV, which totalled £82.2m.
Revenue generated from music played online was the only area to see growth in 2020, rising to £188.3m, a 5.1% (£9.1m) uplift compared to 2019. As well as increased revenues collected, distributions from online also saw the biggest uplift at 63.2% versus 2019.
Within online, revenue generated from music used across TV and film on-demand platforms like Netflix and Amazon Prime, saw the most notable uplift at 29.4% year-on-year. This was primarily due to a rise in subscriptions and film rentals taking place during national lockdowns.
Music played on streaming platforms like Spotify also contributed to the rise in overall online revenue. PRS for Music members featured on many of the most streamed hits of the year including Don’t Start Now by Dua Lipa and Head & Heart by Joel Corry ft. MNEK; two of the highest performing songs in the official UK charts last year.
Last year’s increase in online income contributed to the exponential growth in this market in recent years, having grown by 344%, from 2015 (£42.4m) to (£188.3m) in 2020. As the online market continues to evolve and new platforms emerge, so too do opportunities for music creators to have their music played. In 2020, PRS for Music licensed over 30 new online platforms including TikTok, a service with over 800 million active users, and Triller, with royalties expected to start flowing through to music creators for the first-time next year. A sharp rise in the popularity of livestreamed concerts and growth in online gaming platforms, will also create new revenue streams in 2021.
This online growth is also reflected in the rapid increase and vast volumes of data processed by PRS for Music, both in-house and through its joint venture partners, with 22.4 trillion ‘performances’ of music processed in 2020. This figure includes music broadcast on TV and radio, played in business premises and played live around the globe, but is predominantly due to the increase in music being played online, and represents a 796% increase in music processed by the society since 2015.
The healthy increase in online royalties’ income and distributions, will not offset the loss of income for many music creators. For example, distributions to members from ‘public performance’ fell by 35.1% or £50.4m in 2020.
Research from charity Help Musicians found that 9 out of 10 people who work in the music industry are in crisis, facing mental wellbeing challenges amidst concerns around their future livelihoods. To support members, PRS for Music, in collaboration with its charity partners PRS Members’ Fund and PRS Foundation, launched the PRS Emergency Relief Fund, and has since paid out over £2.2m across 5,500 grants to songwriters and composers facing severe financial hardship because of the coronavirus pandemic.
Composers and songwriters have relied more than ever on their PRS royalties in 2020. The increased distributions announced today, set against the most challenging of years, represents a significant achievement for PRS for Music.
The increase, driven by growth in online revenues, cannot alone negate the immense loss of income and harm on the whole music industry, and the livelihoods of those within it, in 2020. This year will be similarly challenging, as the dramatic fall in revenues during the last year will be reflected in declining distributions throughout 2021.
As we look forward, reopening of the live sector must be a priority, while the repercussions of Brexit will become clearer through new limitations on touring outside of the UK.
Music has played an invaluable role for many of us throughout periods of isolation, providing entertainment, escapism, and connection. We must not overlook the talented writers and composers behind the music we turn to. I am immensely proud of the PRS Emergency Relief Fund, paying out £2.2m in grants to members experiencing severe financial hardship because of the pandemic, and we will continue to do as much as we possibly can to support them.
NB: Total revenue figure, overall international revenue and overall online revenue presented on a constant currency basis.
About PRS for Music
PRS for Music is a world-leading music collective management organisation representing the rights of more than 165,000 talented songwriters, composers and music publishers around the globe. Headquartered in the UK, it works diligently on behalf of its members to grow and protect the value of their rights. With a focus on innovation and integrity, PRS for Music is redefining the global standard for music royalties to ensure creators are paid whenever their musical compositions and songs are streamed, downloaded, broadcast, performed and played in public. In 2022, PRS for Music collected £964m and paid out £836.2m in royalties. prsformusic.com