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| Robert Ashcroft |
A staunch European, French-speaking and Francophile, Robert Ashcroft was also involved in the establishment of ICE, the joint venture between PRS, Germany's GEMA and Sweden's STIM to grant pan-European licenses for the online use of rights from these three copyright societies. PRS also won the tender launched by MCPS, owned by music publishers, to manage mechanical rights in the UK.
PRS for Music is also part of the Elixir project, started by France's SACEM and which also counts American society ASCAP, to develop with IBM's help a system to match International Standard Recording Codes (ISRCs) for recordings and International Standard Work Codes (ISWCs) for compositions to create the prototype of a decentralised database using blockchain.
In this interview with Emmanuel Legrand, he talks about his work at PRS, the challenges ahead for collective management organisations, Europe, and Brexit, among other things.
What kind of society did you inherit ten years ago when you started and what kind of society are you going to leave to your successor?
Robert Ashcroft: I inherited a society that was focused and organised around revenue and revenue only. There were individual managing directors in charge of different revenue streams. They were responsible for their cost/budget and there were very little synergy across the organisation. One of the hardest thing to introduce into these series of fiefdoms was the idea of a matrix organisation with a sort of cross-functional responsibility. It took a long time for the very concept, which is ordinary in management structure, to take root. And I look back now and I see that it is absolutely natural to the organisation, it's how we work. We are still on the journey towards modernising and the digitisation of the company. Of course, we have invested a lot in ICE since, and we've invested in the joint venture with PPL in Leicester. And now, if you look at it, a large part of our business is outsourced in partnership with other organisations. That's a big transformation.
Can the integration with PPL go further?
Well, we had the MCPS-PRS Alliance that worked very well for a while and then as the fortune of the two sets of rights diverged, it created some difficulties we overcame in the way we did. So these things are already quite complex. When you look at the majority of the business that we are doing together through the joint venture, broadcast is outside that and so is international. Their international relations are very different to ours. The neighbouring rights business is in a different place than our side of the business. Is there any value in putting their national blanket licenses for broadcasters – TV stations, radio stations – together with ours? Quite possibly one day. That would essentially take most of PPL's revenues and put them in a joint venture. How do you govern that? I'd leave that for my successor to think about.
These partnerships, are they in place because as a stand-alone society, you are too small to manage the scale of the investments are required or is it because “l'union fait la force”? Or a bit of both?
Funny enough, the two main joint ventures – ICE and the one with PPL – are different sides of that coin. To make licensing easy for businesses, it's just the right thing to do. To have one single license instead of two in understandable and as a service to business, it was incumbent on us to get together and make that work. It took a long time because the processes are different, the tariffs are different, and there are so many challenge sin bringing those two together. That's not so much the question of l'union fait la force as it is just simplifying the licensing business. If music wants to be licensed, we can't complicate things for customers. But that's completely different from dealing with the sheer scale of online processing. Last year we processed 11.2 trillion uses of music. And if you compare that with VISA's global transactions, which are approximately 100 billion per annum, that's much higher in order of magnitude. But then there's another thing and we go back to l'union fait la force: because we are now processing such a large proportion of online usage – Europe is 60% of the global market – that gives us the ability to sit down with the various individual service providers and talk with them about different ways of doing business.
How does that work?
One of the things that I am the most excited about going forward is that instead of receiving separate usage reports from each licensing entity, for each territory, for each month, we now work out some protocols with Spotify, for example, that enables us to begin to consolidate that into single usage reports. So what I expect after seeing this massive increase in usage that we will have new procedures that will bring those reports of usages down. Because in the end, the sad news is that many people are listening to the same song. We are certainly not listening to 11.2 trillion different songs. There is something in the inherent inefficiency in the way the industry operates today that must be resolved. It's a slightly different take on l'union fait la force, it's a negotiating force and also another way to do business if we can get that right.
Is the scale of data one of the biggest challenges that societies like PRS face today? Or are there other challenges?
Well, scale is partly something we bring upon ourselves because with the current way of working: the more customers you have the more you are getting into individual reports. It's just that the more separate entities providing reports, the bigger the challenge we have to overcome. But I do think that going forward, the biggest problem remains identifiers. Getting accurate speedy allocations of ISWCs and tracking them accurately and in real time with ISRCs so that you know what the sound recording is and you know the musical work is, is absolutely vital. If you are going going to have operations on the scale that covers as many countries as there is you just got to get that right. It is inadmissible that there are errors, different ways of identifying music. If we could get at least an authoritative match and disseminate that around the societies' network, it would dramatically improve accuracy. We are working with SACEM and ASCAP on that, to be honest, at SACEM's initiative. We are just about to launch our first prototype, is of enormous importance to the industry.
So you will leave that task to your successor?
I would expect PRS top continue to be active in that field, but I think someone needs to bring the parties together, understand the issue, and devote some time and energy to do it. But it is not necessarily the role of one individual or organisation. PRS is a service company whose role is to get the money in and get the money out, not necessarily devote the time and energy to get the parties together and find solutions. I don't know who's going to do it but it needs to be done.
Do you think that the recent Collective Rights Management Directive or CRM Directive has helped create a more transparent and stronger eco-system for PROs?
I think it absolutely has! I think it is absolutely critical for the credibility of the collective that we have that transparency. I'd like to think that the CRM Directive has been a positive force to re-establish the credibility of collective management. Of course we still have some problems – Greece, or Spain, but Spain has not passed the Directive yet and there's a lot of work done to help SGAE come in line with its obligations. CISAC [International Confederation of Societies of Authors and Composers] has been very supportive in trying to find solutions in Greece. The CISAC that exists now certainly feels its responsibilities it that area, whereas previously, it would have just been silent.
Are there too many PROs in Europe?
I think that in the future we will see a consolidation of back offices, for example. There's the demands of data and the demands for transparency that will make it a necessity [to consolidate]. But copyright is inherently tied to culture, national interests, language, local repertoire, and the identity of a nation. And it is not just a business. To make the business work efficiently and transparently, you have to collaborate with other societies, but you also have to recognise that this is a matter of local law, national interests, language, culture, etc. And you have to find a way to make both of those work. I think that there is an equilibrium that says we share a lot of the costs of the heavy lifting for processing but we still retain our local membership, our local lobbying, of legal action, our local defense of copyright. I think that we'll see the network evolve, but I don't think that we'll see all consolidate into a super-society.
Staying with Europe, will PRS's position in Europe be affected by Brexit?
Obviously we've been very active both with the CRM Directive and subsequently with the Copyright Directive and we had the opportunity to engage with Brussels that might not be afforded to us in the future directly. We won't have the same vote and we won't be involved in the same way but I don't think that we'll totally disappear.
In business terms, do you anticipate roadblocks ahead?
We have obviously studied it as carefully as we can, but we still don't know what Brexit looks like. Generally speaking we trade under the terms of the Berne Convention, so we have our global free trade agreement. Now, the matter for us is what is the equivalent of tariffs – that would be withholding takes and social and cultural deductions. That's not a matter of law or whether we are in Europe or not. My sense is that much of the business will continue uninterrupted.
What will be the impact of the recently-voted Copyright Directive?
Ironically I think that with Facebook taking a license last year for the first time and with YouTube having being long licensed, it is more a debate with those giants about their business models than it is whether they are liable or not for copyright. I think it will give us new opportunities for licensing but to my mind, the debate with YouTube has moved on to the scale of their subscription service versus their free service because we know that subscriptions deliver good returns and that the ad-supported model doesn't. I still think that one of the challenges that YouTube faces is that their brand stands for free. People do not see necessarily why they would pay money to upgrade to a subscription service when they are getting the music anyway through the existing YouTube on their PC, or on their phone.
Which part of the business will you miss the most?
My relationship with all the international societies. You know, Brexit is one of the things that is personally painful to me. I moved to France in 1989 because I believed in Europe, because I was ashamed I only spoke one language. I believe in international relations. You get to work with people with fundamental different points of view and I find it the richest thing in life.
And which part will you not miss at all?
Let's be honest: The governance is challenging in that you have large boards, interested parties and their interests among themselves are not always aligned. At some point it's a zero-sum gain. And that is a challenge to manage. It's not the same thing as running a company with shareholders who only want for the management to succeed. There are other forces at play and understandably so. The good thing about that is that the collective has a responsibility. You are working on behalf of rights holders, but the difficult thing about it is that they are often conflicted about themselves. So it is challenging to manage.
So what's next for you?
I don't know yet. We talked about these problems that the industry has. I would love to find a way to contribute to solving them because I understand them. I also invested in a company 12 years ago that has developed a music neurobiology product where we analyse music according to how it makes you feel rather than whether you like it or not or how it sounds like. It is fantastically successful, and my challenge now is how to bring that to the world and at the same time turn it into a business instead of a project.
And taking on a role at CISAC or at an international organisation?
As part of the portfolio of things to do, absolutely. Contributing to those things I care about the most, I would love to, but obviously you have to see where the opportunities arise. One thing I can absolutely assure you is that I am not going into retirement and you haven't seen the last of me.
