Andrea C Martin: 'PRS for Music will be a billion pound business in the next five years'

Andrea Czapary Martin will celebrate in June her two years at the helm of PRS for Music, one of the world's largest music rights societies. Coming from a non-music background (Royal Mail), Martin took over from Robert Ashcroft, who ran the organisation for 10 years. Her brief was to accelerate the technological transformation of PRS in order to deal with the increasing amount of digital transactions processed by the society. 

  And not even a year into her job, PRS, like the rest of the British economy, had to adapt to the national lockdown due to the Covid pandemic. She oversaw the migration of the employees from the offices in London's King's Cross to working from home, and ensure that the society's main functions continued to be performed. 

  Another key project that Martin got involved with was the most radical governance changes PRS had witnessed in recent history, with the creation of a distinct Member's Council, which defines the main strategic options, and a board which is charged with the executive decisions related to the management of the society.

  A couple of weeks ago, PRS announced that it had distributed almost £700 million to its members with collections in the region of £650m.

  Creative Industries Newsletter caught up with Martin in a zoom discussion from her London home, to talk about the society's performances in times of Covid, and the challenges facing the organisation.

  [N.B.: This interview took place before PRS announced the new controversial tariffs for online concerts (story below).]

How would you characterise 2021? An unusual year?
Andrea C Martin: To say the least! It was a tough year, it was a difficult year for all of us, and especially for our members – authors, composers and publishers. It was a year where our revenues went down 20%. Income from live went down 80%. But I am very proud of what we did because despite being down in public performance, we managed to have a record year in royalties paid out to our members. Not a lot – two percent – but we had a huge year in 2019 so to be able to be on a record year was an achievement. We did three things. When we went into lockdown we pivoted very quickly and we had what we called “a Covid plan”, and the Covid plan was easy: make sure that we have money in and we made sure we had double the amount of licenses in 2020. We made sure that money was paid out to our members, and that we took care of our members. The livelihood of our members was really really important. Hence one month into Covid, we launched the Emergency Relief Fund, and we awarded 5,500 grants, that added up to 2.2 million pounds. Even though it was a tough year I am very proud of what we did. But it is going to be a tougher year this year.

How can you distribute 699 million when you collect 650 million?
Andrea C Martin: Because, as you know, in our business, there's a lag by the time we get the income in, by the time we get the data in, and by the time we get the money out. At PRS we used to be at the PRO average, which is 10 months, and we are now down to six. So there is a six-moth lag. The second thing that we did was a lot of audits to see if internationally there was money that was die to us that wasn't paid, and we found money. We really focused a lot on ICE[the digital licensing hub set up in partnership with Germany's GEMAand Sweden's STIM] to make sure they'd process as quickly as possible and make sure they really pushed the DSPs to make sure they wend us the data. If you look at our distribution, we were up 63% with distribution coming from multi-territory online, despite the fact that distributions coming from public performances and live were down 35%.

How do you switch an organisation the size of PRS, that usually works from one site, actually two if you count PPL PRS Ltd in Leicester, to working from remote when you have huge systems in place? How do you pivot?
Andrea C Martin: Because I transformed different companies around the world in different industries, that's kind of my specialty with big data and tech. There are three things I focus on – I call it PPE: internal people, external people and execution. When I was interviewed for this job I had to do a 100 day-plan, and it was quite easy because I've done it quite a few times already and every time I try to improve it. The first 100 days was about building a strong team, changing the culture, becoming quicker, more tech-driven, implementing more systems, being more efficient. By the time March [2020] came, all that foundation was almost there. And so we pivoted really quickly. And the other thing that underpins the external people-internal people is communications. So every week I was talking to employees. It was called Q&A with Andrea. And every Thursday morning, for the first 13 months – now I do it every 15 days because we are more stable – I would talk to the employees, I would tell them what was happening, what we needed. When we had the Covid plan, I presented it to them. And we talked about the livelihoods of the employees too, not just the livelihood of our members, because if our employees are not healthy, if they are not mentally well and they are not efficient at their work, they cannot serve our members. That's what we did, with a lot of focus on motivating the staff, getting them as part of the solution. When I came in we had 126 strategic objectives, and we got 35 now, and we got the employees involved. We created Team 60 with 60 of our leaders around the company, and when I got there, we went for two days to a retreat and asked what are our strategic objectives and our strategic imperatives, and we all rallied around that with our values. It's not just what we do but how we do it. Our values are customer-focused, pioneering, integrity, innovation, and inclusion.

Are you planning to bring people back into the office?
Andrea C Martin: Yes we are and we will be following the UK government guidelines. As of the 29 of March, employees could go back, but only if they absolutely need it to. We did have some people who had to go in. We started opening up and actually we are very lucky and we are moving out of King's Cross, because Astra Zaneca took our lease, and we will be announcing soon where we are going to have our new offices. We are going to save money there, and we will allow people to still work from home, so we are only going to take 55% of the square footage that we currently have, and we are not going to call it an office but a hub to collaborate and work together. Covid certainly has changed our company and it will change the industry, right? This digital acceleration means that we will not go back to where we were. 

It looks like 2020 was the year when digital really started to pick up and become a significant source of revenues for PROs like you and others. What do you attribute that growth to?
Andrea C Martin: Simply because we started to put more focus on it. When you look at our numbers, that are quite big in digital, and you compare our figures with others CMOs, there are some countries in Europe that should be much higher. And I think there is more a catch-up of what it should have been. In a lot of digital activities – online shopping, invoicing, etc – a lot of European countries are lagging behind. 

What also seems to have accelerated is the number of companies or platforms that you sign licensing deals with, and they have all sorts of business models with one common thread – they all use music. 
Andrea C Martin: Absolutely, but it does concern me because we have a piracy division, and if you Google music, you will find that there are so many platforms out there that pop up that don't have licenses. With TikTok, we finally got what we were due, but there are so many out there. That said, it is a great opportunity for us but it has to be regulated. Stream-ripping has to be regulated and platforms popping up using music that has not been licensed is not acceptable.

Some platforms like TikTok, or Triller, are starting to get licensed. But Twitter is an issue, Twitch too...
Andrea C Martin: ...we are negotiating with them. We are getting there. 

Have you noticed any changes in the marketplace when it come to licensing? Are there new interesting business models coming up?
Andrea C Martin: Well, look at TikTok. Who could have thought that TikTok would become so popular so fast. There is more and more diversity in the market and there's going to be business models that we would have never thought of. Look at the online live concert business. That concept will not go away after Covid. It allows someone like Dua Lipa to do a show that can be transmitted around the world. For the Emergency Relief Fund, we did a 24-hour gig virtually and there were people in 68 countries listening to our artists for the fundraising we did. It allows artists to reach out to the world and parts of the world they would have never gone to. There are going to be more and more platforms in this field and one of the things that we want to do is to grow that business. Our aspiration is to be in five to seven years a billion pound business and to be able to pay out a billion pounds a year. We are looking at the video game sector. The video game industry is huge. It's bigger than Hollywood and there's a lot of music. So that's one thing we are tackling, and get more done in negotiating and licensing on that side. There are much more business models and at PRS we are much more commercial-driven now.

There was a sort of hiccup with the livestreaming rates a few months ago.
Andrea C Martin: We had many healthy debates and disagreements around the low-cost licenses. There may be one place where we got it wrong but we rectified it. What I said to my team is that when you are pioneering and doing something quickly, you can make some errors. So we readjusted, and we went out and did three round tables with major writers' reps and artists and also composers – you have to remember that more than 60% of our writers and composers are not artists. And we all agreed that the composers and the writers have to be paid properly. We also reached out to get opinions with a questionnaire. We got almost 2,000 responses to that survey. So there's a healthy debate but we also have to make sure that we protect the value of our members. We also need to get this out. We cannot wait for two years because it is now that our members need it.

More licensing and more platforms means more usage and therefore more data to digest. How are you dealing with that at the moment?
Andrea C Martin: 2021 is going to be one of the most important year for PRS when it comes to tech and digital, because believe it or not but we still have our distribution systems on hardware, and ICE too is on old systems, so when you crunch 22 trillion lines, it's a lot! So one of our key project this year is to bring our data into the could, and that's going to happen around this summer. Overall we have a lot of IT projects. When I arrived, we were functioning with a lot of old clunky systems, and we are focusing a lot on data. We have a data strategy project that we kicked off last year. We are using much more AI and machine learning. There is still a lot to do with data. 

During the pandemic, you also made significant changes to your governance. What motivated these changes?
Andrea C Martin: Well, it took us years to make decisions. It was very complex. We had an executive board and we had a board, so when the executive board used to make a decision, it had to go up to the board, and the board would change it and it would go back to the executive board, so it took for ever to make decisions. It wasn't fluid and in today's world, things are happening so quickly – and we saw it with Covid – that we need to have flexibility, we need to have good governance. A well-run company has to have good governance. That was a big change. It was not easy, I can tell you, but I am very proud that it went through. Of course, because there were already people who were voted to the board it will take us three years to make the changes. We have a Members' Council, responsible for the strategy and the budget, and if we really deviate in a major way we would have to go up to them, but now, it's the board that is making the decisions. The Members' Council meets only three times a year and is smaller.

How do you see 2021 and 2022 shaping up?
Andrea C Martin: The UK was locked down almost four months this year, so we predict that the distributions paid out this year will be down about ten percent. Revenues will come back, although probably not to the levels of 2019, but close. Assuming that everything goes in a positive direction, we think that by 2022, we will be back to 2019. 

You will also feel the knock-on effect of lower royalties from international for the next couple of years.
Andrea C Martin: Yes, the drop in 10% in 2021 takes into account lower international revenues and we will certainly have a little bit of that in 2022 too. This year is going to be a tough year, but digital numbers will be good. Music streaming will continue to be strong, and so is video streaming, which was up 29% for us in 2020 compared to 2019. I am convinced that in the end music will prevail. 

You've now been at PRS for almost two years. How has it been so far?
Andrea C Martin: I am enjoying the ride. I am quite competitive and I like big challenges. I am not a status quo person. This job is certainly a big challenge for me. I am learning a lot on the music industry and at the same time, I can apply it here what I've learned in my career over the past 35 years: big data, transformation, focus on people, customers and members. I am learning a lot and I am enjoying it.