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PRS for Music 2012 Financial Results Briefing Paper

PRS for Music 2012 Financial Results Briefing Paper PRS for Music headline results Royalty revenue collected,

PRS for Music headline results

Royalty revenue collected, costs and distributions to members

 

£

Million

2011

2012

%

Revenue - royalties

630.8

641.8

1.7%

Interest and other income

4.5

4.6

2.2%

Total revenue

635.3

646.4

1.7%

 

Costs

76.5

73.0

-4.6%

Charitable donations

1.5

1.5

-

Distributions to members

557.3

571.9

2.6%

Royalty revenue collected by source

 
 

£

Million

2011

2012

%

Broadcast

148.4

153

3.1

Online

39.1

51.7

32.2

International

187.7

180.1

-4.0

Public Performance

131.4

135.4

3.0

 

Live

22.5

19.3

-14.2

Recorded Media

101.7

102.3

0.6

Total

630.8

641.8

1.7%

2012 highlights

A record £641.8m collected for songwriter, composer and music publisher members, equating to a 1.7% rise on 2011.

A focus on efficiency resulted in a £3.6m reduction in overall costs, equivalent to 4.6%.

An increase in monies collected and a reduction in costs meant a total of £571.9m was paid to members (up 2.6% on 2011).

Royalties from online and digital services topped £51m for the first time, up 32.2% on 2011. Royalties from online services now provide a larger income stream for music creators than radio, live or the pub sector.

Royalties collected from live music fell by 14.2% to £19.3m as fewer live events occurred in 2012.

PRS for Music 04 April 2013

Royalties from international music use

£ Million

2011

2012

%

Europe

117.7

109.7

-6.8

The Americas

42.0

41.7

-0.7

Asia/Australasia

19.9

20.3

2.0

Africa/Middle East

2.3

2.2

-4.3

PRS for Music Agencies

5.8

6.2

6.9

Total

187.7

180.1

-4.0%

International royalties remain the single largest source of income for UK music creators, despite a decline of 4.1% to £180.1m.

Exchange rate losses, particularly with the Euro, and also a difficult economic climate in many markets, led to the decline.

2012 was still a very strong year for UK songwriting with a record number of writers (Calvin Harris, Ed Sheeran, Adele, Mumford and Sons) reaching impressive chart positions in Europe, Australia and the US.

Live and Cable & Satellite in particular continue to be growing sources of revenue for UK music creators.

Excluding exchange rates, international collections are down £1.3m on

2011.

Royalties from broadcast

£ Million

2011

2012

%

TV

101.6

106.0

4.3

Radio

46.8

47.0

0.4

Total

148.4

153

3.1%

Broadcast revenues from TV and radio reached £153m, a rise of 3.1% on

2011.

The television market rose by 4.3% to £106m, remaining resilient and a strong platform for UK songwriters.

2012 saw the renewal of licences for Channel 4, MTV and BBC Worldwide and new deals with KidsCo, Loaded TV and the Chinese Channel.

Future revenue opportunities exist from general entertainment platforms and new services such as Netflix and LoveFilm.

PRS for Music 04 April 2013

Royalties from online services

£ Million

2011

2012

%

Online

39.1

51.7

32.2

Total

39.1

51.7

32.2%

Includes subscription services, downloads, advertiser-funded streaming, mobile services and ringtones

Royalties from online services broke the £51m mark, driven by the continued shift to wide variety of newer digital offerings such as streaming, subscription and cloud-based services as well as more traditional download providers.

PRS for Music negotiated new licensing agreements with Google Play, Microsoft Xbox, Rhapsody and Vevo amongst others in 2012.

Online revenues now account for over 8% of total royalty collections.

Royalties from public performance and live

£ Million

2011

2012

%

Pubs and clubs

36.3

35.5

-2.2

Live

22.5

19.3

-14.2

Hotels and restaurants

19.3

19.8

2.6

Shops

18.8

18.5

-1.6

Industrial premises

16.8

17.1

1.8

Cinemas

7.0

7.5

7.1

Other

33.2

37.0

11.4

Total

153.9

154.7

0.5%

Despite revenues from the live sector declining 14.2% in 2012, the underlying live music market remains buoyant and is predicted to return to growth. (Note: 2011 benefited from large Take That tour and Glastonbury festival whereas 2012 saw a reduction in live music events, including the absence of Glastonbury).

A 7.1% growth in royalties from music used in cinemas to £7.5m was due to a strong film release schedule and increased attendances.

The pub and club sector continues to face challenging times with the volume of pubs licensed falling by 3%. As a result, revenue from this sector declined 2.2% to £35.5m despite some growth from corporate pub companies and nightclub chains.

Revenues categorised as ‘other’ included licensing the Olympic Games and associated events. Growth in music licensing in education, transport, health and beauty and holiday centres also helped this area increase royalty revenues 11.4% to £37m.

PRS for Music 04 April 2013

Royalties from recorded media

£ Million

2011

 

2012

%

Audio products (CDs)

76.0

80.0

5.3

General entertainment/DVD

13.4

10.9

-18.7

Covermounts

1.4

0.9

-35.7

Other

10.9

10.5

-3.7

Total

101.7

 

102.3

0.6%

The underlying decline in the recorded media or physical market was masked by winning new royalty processing work such as the EMI European CD sales contract.

Overall PRS for Music achieved a 0.6% rise in royalty revenues from this sector to £102.3m.

The recorded media market continues to contract with UK-only CD sales, DVDs, covermounts and other physical formats all showing decline.

Any impact from the reduction in CD sales due to the closure of HMV branches would be included in 2013 figures.

For further information

Olivia Chapman Media Relations Manager olivia.chapman@prsformusic.com

www.prsformusic.com

www.m-magazine.co.uk

PRS for Music 04 April 2013