Music Ally

What was that about a music industry crisis? PRS for Music has announced that its annual revenues ROSE 2.6% to £623 million in 2009. What’s more, growth in online revenues more than made up for the decline in CD and DVD sales revenues for PRS’ members. Online revenues were up 72.7% to £30.4 million, while recorded media revenues were down £8.7 million.

“This growth reflects in particular our increased efforts to license those benefiting from the use of British music overseas, our continued pursuit of legitimate alternatives to online piracy and, as always, the creative talent of our authors, composers and publishers,” says CEO Robert Ashcroft

“2009 was the first year in which the growth in revenues from the legal digital market compensated for the decline in revenues from traditional CDs and DVDs, though we remain cautious as to whether this represents a true turning point. The next decade does however promise further growth in earnings from the legal digital market as well as the use of British music overseas.”

PRS for Music has announced that former Sony exec Robert Ashcroft is its new CEO, and will take over from acting boss Jeremy Fabinyi on 25 January.

Ashcroft headed Sony’s network services division in Europe, and its mobile products arm in the US. He has also worked at Walt Disney, Convergys Corporation, and most recently digital media investment consultancy Hudson Morris Associates.

PRS for Music is hoping he’ll be able to negotiate the changing music industry waters, including the various opportunities and challenges presented by digital.

2009 has seen the rise of streaming services Spotify and Pandora (and the fall of several of their rivals); governments grappling with anti-piracy legislation; The Pirate Bay trial – and then its tragicomic sale saga; and hundreds of bright-eyed music start-ups and thousands of iPhone apps. And STILL no Yellow Submarine iPod.

We rounded up the key trends from the year for our final Music Ally Report of 2009, and the article is republished below in full. If you’re interested in our service in 2010, with its daily bulletin and fortnightly analytical report, click here for a free trial.

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Last night saw a joint presentation by Spotify and PRS for Music in Edinburgh, which included a stack of stats on how the streaming music service is doing here.

Want some figures? Back in July, Spotify already had 2.7 million users in the UK, with more males than females. Half of them are over 30, but the biggest single age group is 20-29 year-olds, who accounted for 1.1 million (40.7%).

In the six months to the end of July this year, more than four million tracks were available to stream in the UK, of which three million were accessed, generating more than one billion streams in total. Light relief came with a question on whether the male bias means Spotify could help stem the population explosion. “As long as they don’t play Barry White,” replied director of content Niklas Ivarsson.

We’ll have a full report on the presentation later this morning, so stand by.

Spotify plans to take the wrappers off some of its usage data tonight, at an event in Edinburgh hosted by the Scottish Society of Computing and Law.

Director of content Niklas Ivarsson will take the stage with Will Page of PRS for Music to dish data on who is using Spotify in the UK broken down by age and gender, as well as how they are using it – demand curves for Spotify tracks contrasted with Page’s work on how music consumption patterns fit into Chris Anderson’s Long Tail theory.

The demographics part should be interesting – it may dispel (or confirm) rumours that Spotify has been attracting so-called 50 Quid Man, and thus cannibalising CD sales. Or, more positively, Ivarsson may produce stats to show that the opposite is the case, and Spotify is putting a dent into illegal P2P use.

Premium music videos are coming back to YouTube’s UK website, after a licensing deal was finally struck between Google and PRS for Music. The two fell out earlier this year when Google pulled music videos from the site in protest at PRS’ licensing demands.

Google has confirmed to Music Ally that the new deal is a lump sum just like the last one – Google is paying an up-front payment but NOT a per-stream minima. This is good news, as it shows PRS and the publishers it represents are being flexible in their approach to licensing. Songwriters and composers will be keen to hear the finer details of the deal though, in terms of what tracking will be used to equitably share out the cash.

The deal is backdated to 9th January when the previous deal expired, and runs until June 2012. Neither Google nor PRS for Music is saying how much the upfront payment is, naturally.

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PRS for Music has announced unaudited results for the first half of 2009, with its revenues for that period totalling £282 million. That’s down from the £290 million it collected during the first half of 2008. However, the body says it’s paid out £199 million to its members, which is an 8.2% rise compared to the £181 million distributed in the first half of last year.

PRS says its Broadcast and Online revenues are behind expectations, although it says this is due to “phasing of revenues”, and hopes to make up ground in the next six months. However, for 2009 as a whole, it expects these revenues to be slightly below last year’s, due to 2008’s figures being inflated by catch-up revenues from new licensing agreements.

PRS doesn’t say what impact its dispute with YouTube has had on revenues for the first half of this year, however. The two remain in negotiations to restore premium music videos to YouTube’s UK website – a source of income that PRS has previously trumpeted as significant.

Meanwhile, PRS is predicting a decline of 13% in recorded media revenues for the year. “The economic outlook for the second half of the year remains challenging,” says acting CEO Jeremy Fabinyi. “However, we will continue to work hard to ensure a fair deal for our 60,000 songwriter, composer and music publisher members by delivering maximum revenue at minimum cost.”

PRS for Music has announced that its chief executive Steve Porter is standing down this Friday. Although the wording of the announcement makes it sound like he’s been stood down: “The Boards feel that as the business faces new challenges, a new set of skills is required to take PRS for Music forward”.

The body is kicking off a search for a new chief executive, with MCPS managing director Jeremy Fabinyi stepping in as interim/acting chief executive in the meantime. PRS says it will be canvassing both internal and external candidates for the new role.

Porter has worked at PRS for Music for ten years, starting as director of finance in 1999, before becoming executive director of finance, then managing director, and then chief executive in April 2007. It remains to be seen whether Porter’s departure speeds up or holds up ongoing negotiations – for example with YouTube – over music licensing.

EMI Publishing is refusing to make its catalogue available for streaming under the new 0.085p minima rate proposed by PRS for Music in the UK. The publisher will now administer its own royalty collections with the aim of securing higher rates from streaming services.

“We are not currently satisfied that the new rates – in particular the minima – proposed by PRS for Music for streaming services are appropriate,” says general counsel for Europe Antony Bebawi. Universal Music Publishing and Sony/ATV are also thought to be unhappy with the new rates.

This is a serious problem. The new rates were hailed as a chance to give innovative new streaming services a chance to thrive. EMI’s decision to snub them shows that the problems facing online licensing aren’t just about technology firms versus the music industry – they’re as much about the infighting within the music industry itself.

Something tells us we’re going to see a lot of MJ-related stories today. We’re only going to cover the ones directly relevant to the music industry. Which means PRS for Music’s launch of an online condolence book for Michael Jackson gets in.

“Michael Jackson was an iconic figure in the music industry, a global inspiration to songwriters and performers everywhere as well as the ultimate showman himself,” says chief executive Steve Porter. “He leaves a gaping hole in the music world.”

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