PRS for Music sees record £746m revenue in 2018, but costs top £97m

UK music licensing company PRS for Music collected a record £746m on behalf of its members in 2018.

This represents a year-on-year increase of 4.4%, or £31.6m on a constant currency basis, and after costs and other income, results in net distributable revenue of £648.4m.

With the cost to income ratio of 13% taken into account (see below), the organization distributed a total of £603.6m to its songwriter, composer and music publisher members.

Although 2018 saw the second largest distribution in PRS for Music’s history, that £603.6m was actually a decrease of 0.2% on 2017, with this slight reduction blamed on “processing delays at [its] joint venture partners”.

The topline costs at PRS for Music in 2018 grew by 8.8% year-on-year to £93.8m – which according to PRS were “mainly due to planned strategic spend relating to restructuring the organization and additional commission linked to the uplift in Online revenue”.

Royalties from digital services grew by 17% to £145.7m (on a constant currency basis).

The organization’s spend on “People” was down 12.8% to £38.3m in 2018 with it’s charitable donations seeing no change during the year at £3.2m.

Overall costs in 2018 grew by 8.5%, topping £97m, which PRS says was due to “investment and transition costs” related to the launch of the PPL PRS Ltd joint venture.

PRS also says that it invested in the improvement of its digital services in 2018.

International royalty income continues to be the largest revenue stream for PRS for Music members, with a total of £280.6m collected through agreements with collecting societies from 81 countries, an increase of 9.1% (£23.4m) on 2017, and a 43% growth rate over the last three years.

Global chart successes and major live world tours from PRS members including Ed Sheeran, Roger Waters, U2 and The Rolling Stones contributed to this growth.

Income from broadcasters including the BBC, Sky and Global Radio, totalled £127.7m, down 5.1% on 2017.

TV royalties fell 9.3% to £76.9m, while PRS Radio royalties increased by 2% to top £50.8m, due to commercial radio growth.

PRS says that the overall reduction in broadcast royalties in 2018 is “due to a one-off payment related to the ITV Copyright Tribunal settlement in 2017 for prior periods”.

Also slightly down on 2017, at £192m, was royalty income from general business usage, including shops (down 9.3%) and pubs (down 9.8%), which PRS attributes to pressure on the pub sector and UK High-Street.

Two areas of growth for public performance royalties however were the live sector and cinemas.

The live music business experienced 12.8% growth, climbing to £38.9m in 2018, while cinemas saw a year-on-year growth of 12.9% to top £9.6m by the end of the year.

June 2018 saw the implementation of a new live tariff, which sees PRS receive 4% of the ticket price for live concerts as well as most other music events – a 1% increase on the previous tariff of 3%.

Robert Ashcroft, Chief Executive of PRS for Music, (pictured) said: “It is testament to the creative talent of our 135,000 members that royalty revenues from their music have continued to grow, and I am proud we collected almost three quarters of a billion pounds on their behalf.

“Royalties from international digital continue to underpin our growth, areas in which we have invested systematically over the past ten years.

“The way in which we all consume music has changed dramatically over this period, switching from ownership to access, but the popularity of UK music endures; long may it continue.”

“It is testament to the creative talent of our 135,000 members that royalty revenues from their music have continued to grow, and I am proud we collected almost three quarters of a billion pounds on their behalf.”

Robert Ashcroft, PRS for Music

Added Ashcroft: “Owned by and working on behalf of its members, PRS for Music enables UK music creators to keep creating. We provide industry leading solutions to the management of music copyright and lead the fight for fair remuneration for creators in an increasingly tech-dominated world.

“Our most recent success in this regard was to initiate the debate over the ‘Transfer of Value’, which resulted, after a four-year, industry-wide campaign, in the passage of the European Copyright Directive.

“This is the most significant change in copyright law in nearly twenty years and clarifies the liability of key technology platforms to pay for their use of copyright material.”

Ashcroft steps down as Chief Executive of PRS for Music at the end of December 2019.Music Business Worldwide

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