'Spotify subscriptions are a big engine': CEO Robert Ashcroft breaks down PRS' record results

'Spotify subscriptions are a big engine': CEO Robert Ashcroft breaks down PRS' record results

PRS For Music CEO Robert Ashcroft has told Music Week the collection society has had a “fantastic success” in its latest set of results. It marks the final set of annual figures overseen by Ashcroft, who’s stepping down later this year after a decade in charge.

PRS collected a record £746 million in 2018 on behalf of its members – 135,000 songwriters, composers and publishers in the UK and 2m worldwide. The figure represents a year-on-year increase of 4.4% on a constant currency basis, but distributions of £603.6m were down by 0.2%.

The reduction was attributed to processing delays at joint venture partners and increased costs from the new PPL PRS Ltd licensing organisation. It still represents the second largest distribution in PRS for Music’s history.

Ashcroft told Music Week that PRS had to overcome various hurdles in the 2018 results, including a delay in the implementation of the live tariff and a later launch than planned for the JV with PPL.

“We’re really pleased with the revenue result,” he said. “We’re really pleased to have had as strong a year as we did. It’s not been the growth rates we’ve had over the previous three years, but to overcome those setbacks I’m really proud of the work the guys did, it was a fantastic success.”

International and online revenue were the drivers of growth for PRS in 2018. International revenue was up 9.1% on a constant currency basis to £280.6m. Increased revenue in Europe of 9.2% to £175.3m was powered by growth in TV and major concerts.

“We’re fortunate to work with very talented members, that always drives the revenue,” said Ashcroft. “But it doesn’t just come in naturally. Over the 10 years I’ve been here, we’ve really invested in our international team and our data and our methods and our relationships with foreign societies.

“It’s that constant effort to work with societies around the world that enables us to drive this growth in international. We’ve done very well in Germany this year, very well in France. Continental Europe is very important to us.”

We’ve got our base of live touring members who still fill stadiums around the world

Richard Ashcroft

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

“We’ve got our base of live touring members who still fill stadiums around the world,” said Ashcroft. “We’ve had a succession of very successful songwriters from Adele, Mumford & Sons and Ed Sheeran, and you’re backed up by others who might not be quite as well known but still generate a lot of revenue from overseas markets.”

North America was the second biggest international territory with revenues of £65.9m, up 4.6%.

“It’s a big market, it’s unfortunate for such an important source of creative content that their tariffs are so low and that it’s not as fruitful as the European markets,” Ashcroft told Music Week.

Ashcroft visited Peru last week to discuss reciprocal arrangements with a local society, and he noted the strong revenue growth of 7.5% - albeit from a low base - in Latin America to £10m.

“Brazil, Argentina, Mexico are particularly strong for us,” he said. “Colombia has been up and coming.”

Online is the star performer for PRS For Music members, as the streaming boom continues and the ICE joint venture continues its growth trajectory. Online revenues increased by 18.6% year-on-year to £145.7m.

Streaming royalties increased by 22.4% to £126.9m, while revenues from downloads slumped by 46.3% year-on-year to £2.9m.

“The big one is Spotify and their continued success with driving subscriptions is obviously a big engine,” said Ashcroft.

In 2018, Mixcloud, Instagram and Facebook were licensed by PRS for the first time.

Public performance revenue was down slightly (3.1%) to £192m. The figures were impacted by costs from the first year of the PPL PRS JV and economic pressure on the pub and retail sectors (revenue from each was down over 9%).

But there was strong growth of 12.8% in the live sector, as a result of the new tariff, a rise in festivals and successful UK tours from The Rolling Stones, Ed Sheeran, Taylor Swift, Foo Fighters, Eminem, Jay-Z & Beyonce and Paul McCartney.

“Live was a challenge for us last year in that we had that delay in getting the new tariff approved,” said Ashcroft. “But it continues to be a high performance market and we’ve now got that new tariff in it, one that was negotiated with and welcomed by the industry.”

Income from broadcasters totalled £127.7m, down 5.1% on 2017. The decrease was the result of a reduction in linear TV viewing and the effect of a large one-off payment from ITV in 2017.

PRS for Music – both in-house and through its joint venture partners – processed 11.2 trillion music performances across multiple channels in 2018, up 70% on the previous year.

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