PRS for Music distributions up 2% in 2020 but collections down 20% to £650.5 million

By Emmanuel Legrand

British rights society PRS for Music distributed a record £699.4 million (€803.94m) in music royalties in 2020, up 2% year-on-year, but collections dropped 19.7% year-on-year to £650.5m.

  The positive difference between distribution and collection is due to the acceleration of income distributed, ahead of normal distribution schedules.

  PRS for Music said the drop in collections has "eradicating years of record growth." PRS for Music explained that the decline in revenue generated in 2020 was due to "the significant drop in music being commissioned and played in the UK and worldwide." The most affected stream of revenue was Live performances, falling by 79.1% from £54m in 2019, to £11.3m in 2020, a sum that was mostly related to the first quarter.

Continued decline in 2021

  "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%," noted PRS for Music in a statement.

  The drop in royalties generated from live performance is also going to affect PRS for Music's 2021 revenues since live events have yet to resume in the UK, although a return to normal is expected by the summer. PRS for Music CEO Andrea Czapary Martin warned that there could be long-term harm done to the sector steps were not taken immediately "to bring the music industry back to full health."

  Martin said the increased distributions represented "a significant achievement for PRS for Music." She elaborated: "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."

Good performance from streaming video

  For Martin, 2021 will be "similarly challenging, as the dramatic fall in revenues during the last year will be reflected in declining distributions throughout 2021."

  Revenue generated from music played online was the only area to see growth in 2020, up 5.1% to £188.3m compared to 2019. Distributions from online use of music also grew 63.2% versus 2019.

  Breaking down the various sources of online revenues, PRS said that revenue generated from music used across TV and film on-demand platforms like Netflix and Amazon Prime, experienced  a 29.4% uplift year-on-year, due to a rise in subscriptions and film rentals taking place during national lockdowns.  

Drop in public performances

  Revenues from music played on streaming platforms like Spotify also "contributed to the rise in overall online revenue," but PRS did not give more specific figures. 

  International royalty income continued to be the largest revenue stream for PRS for Music members, but experienced a 10.7% decline compared to 2019 on a constant currency basis, with a total of £248.6m collected from societies around the world. PRS said one of the factors in the decline in international revenue was linked to the closure of the tourism industry. For example, royalty collections from the use of music on cruise ships fell by 75%, from £7.2m to £1.8m in 2020.    

  Revenues from public performance of music by UK broadcasters remained "relatively stable" over the year, with an overall 2.6% decline from £130.8m in 2019 to £127.4m in 2020. However, while TV revenues remained strong, revenues form UK commercial radio fell by 9.2% year-on-year to £45.2m, due to a drop in advertising revenues. TV income was up by 1.5% at £82.2m.

New revenues streams

  PRS also expects that a sharp rise in the popularity of livestreamed concerts, combined with the growth in online gaming platforms, will create new revenue streams in 2021.

  Other key figures supplied by PRS for Music include:

  > Paying £2.2 million through the PRS Emergency Relief Fund created to support music creators facing severe financial hardship.

  > Processing 22.4 trillion "performances" of music in 2020, including streams, downloads, radio and TV broadcasts, music played in business premises and live music played in the UK and across the globe – a 796% increase in music processed by the society since 2015.  

  > Licensing 30 new online platforms in 2020, including TikTok and Triller, with royalties from these platforms expected to start flowing through for the first-time in 2022.

  > Reducing net costs (excluding charitable donations and subsidies) by £12.1m, or 13.8%.