PPL CEO Peter Leathem on the impact of COVID, emergency measures and a positive future

The following guest blog is from PPL Chief Executive Peter Leathem. It follows the announcement that UK-headquartered licensing company PPL – which works on behalf of labels, artists, and performers – collected GBP £225.7 million for its members in 2020, a 17% decrease on 2019. Leathem argues, however, that whilst revenues are down, the public performance sector is set for strong post-pandemic growth… 

While the past year has been one of the most challenging in PPL’s history, there were moments to be thankful for in 2020, as our industry came together to support those facing financial difficulty because of lockdown and started to work in earnest towards a fairer society.

Despite the pandemic, which saw our revenue drop 17% to £225.7 million, I am pleased to say that PPL still achieved its third highest annual collections total.

International revenue remained strong, with £85.9 million collected, down just 0.9% on the record £86.7 million the year before. Much of our 2020 international revenue relates to activity in 2019 or earlier, before the pandemic hit. However, it also reflects the important technological and operational investments which PPL and the wider industry have made over the last decade to drive up the value of neighbouring rights around the world.

These include improvements to IT and data infrastructure, which has resulted in recording metadata becoming more accurate and, in turn, allowing more royalties to be collected and distributed.

During this time, agreements between collective management organisations (CMOs) have also increased, meaning we can share our best-in-class approach with other markets and help them to better monetise the rights of performers and recording rightsholders.

In 2020, the number of agreements PPL has with CMOs reached 105, while we now represent over 100,000 performers and recording rightsholders internationally, ranging from world-renowned performers and record labels to grassroots musicians.

Over a third of all performer neighbouring rights royalties moving between performer CMOs around the world is for PPL-represented performers.

For our UK collections, broadcast and online revenue held up well last year, declining by only 3.8% to £82.3 million. PPL’s television broadcast revenue grew during the year as a result of existing multi-year deals with broadcasters such as the BBC, Sky and ITV, and many people at home in lockdown turned to TV and radio for comfort, entertainment and information in a way they had not previously done. However, PPL’s commercial radio income fell across 2020 as the fees it receives are based on a percentage of each station’s advertising revenue, which were impacted by COVID-19.

As expected, public performance and dubbing income was the area of our UK business most affected by COVID-19. It declined by 42.2% to £57.5 million, from £99.6 million in 2019. In partnership with PPL PRS Ltd, our joint venture for public performance licensing with PRS for Music, we worked with licensees and their trade bodies to help those facing financial difficulties.

This support included not charging fees for periods when premises were closed, temporarily changing payment policies to allow for deferred payments, and suspending late payment charges.

At a time when other revenue streams were severely impacted, PPL’s quarterly distributions became even more important to our members. Just a few weeks into the first national lockdown last spring we made an advance payment of £23.9 million to more than 15,000 of our members to bridge the gap between our regular March and June distributions.

“Across the whole of last year we paid out a record £260.2 million, with over 135,000 performers and recording rightsholders receiving at least one payment from us during 2020.”

Across the whole of last year we paid out a record £260.2 million, with over 135,000 performers and recording rightsholders receiving at least one payment from us during 2020. It is a sign of the underlying strength of our business that we achieved all this despite facing our own challenges because of the pandemic, with staff having to work from home for much of the year.

We were also part of wider industry efforts to support those whose incomes had been most impacted by the lockdown as a result of the closure of recording studios and live music venues. Over the course of the year we contributed £1.4 million to several hardship funds which had been set up by industry organisations, supporting musicians, freelancers, music managers, live events staff and other music professionals.

The importance of such donations was highlighted in April this year when The Snuts, a band whose managers had received funding from the Music Managers Forum’s Re:Build programme, reached No. 1 in the UK with their debut album.

Another important area of focus for us over this past year has been the issue of equity, diversity and inclusion. Nearly a year on from the first anniversary of Blackout Tuesday, we are making some real progress.

This has included the launch of an internal Diversity Forum made up of over 20 PPL members of staff. Last year we signed up to the UK Music Diversity Taskforce Ten Point Plan, which aims to increase diversity and inclusion at the UK music industry’s trade bodies, including PPL.

We have increased diversity on both the PPL Board and the PPL Performer Board and are fully committed to making the same progress amongst our senior teams. Delivering this will not be an easy or quick fix, but we have put in place a number of initiatives to move this forward.

While it has been a difficult time for everyone, we remain optimistic about the future. As COVID-19 restrictions ease in the UK, we expect our domestic revenues will begin to recover and, over the long term, we remain positive about the growth opportunities in the global neighbouring rights sector.

Between 2009 and 2019, PPL’s annual revenue more than doubled, from £129.6 million to £271.8 million, and we are confident the sector will continue to grow strongly once we have moved beyond the impact of the pandemic.Music Business Worldwide