PRS for Music: UK's leading music society sees 22.4% increase in revenues in 2021 to £777.1m25 April 2022 - Press release
Strong year-on-year growth driven by increase in online royalties, up 45.6% in 2021
Public performance royalties begin to bounce back as businesses re-opened during 2021, but still below pre-pandemic levels
Live music sector continues to be most adversely hit with royalties falling for a second year running
27 trillion 'performances' of music processed, a 20.5% increase on 2020
In a year punctuated by continued uncertainty, PRS for Music, the organisation that represents the rights of over 160,000 songwriters, composers, and music publishers, delivered significant growth, with a 22.4% increase in overall revenues to £777.1m, on a constant currency basis.
The year's highlight was a 45.6% (£83.9m) year-on-year increase on a constant currency basis in royalties collected from music played online, to £267.8m, representing a more than 50% growth since 2019.
PRS members featured on many of the most streamed hits of 2021, including Bad Habits by Ed Sheeran and Levitating by Dua Lipa; two of the highest performing songs in the Official UK Charts last year.
The popularity of PRS members' music throughout 2021 drove a significant increase in revenues from music streaming platforms like YouTube, and Apple Music. Music streaming accounted for the largest proportion of online revenue in 2021, contributing £225.5m to the overall online income, up 42.5% (£67.2m) since 2020, and 45.5% (£70.5m) since 2019.
Again, reflecting the rapid growth of the online market, revenues from video-on-demand platforms have almost doubled during the last two years, increasing by 50.7% (£11.6m) since 2020, and 94.9% (£16.8m) since 2019. This consistent upward trend in the market is being driven by increasing numbers of subscribers, increased pricing and offering from existing services, and new consumer services and products entering the market.
In 2021, PRS for Music worked tirelessly to secure new licences, concluding a record number of major licences throughout the year. This included a new licence with Disney+, and renewed agreements with Apple TV and Netflix, ensuring the flow of royalties for composers like Emmy-nominated Natalie Holt (Loki, Disney+), Marcus Mumford and Tom Howe (Ted Lasso, Apple TV), and classical reworkings of some of PRS for Music's most popular catalogue, like Strange by Oscar-nominated Celeste (co-written with Jamie Hartman), featured in Netflix's critically acclaimed, Bridgerton.
International royalty income outperformed predictions, yet still fell by 2.5% year-on-year to £242.4m. However, on a constant currency basis, adjusting for changes in currency values over the year, revenues actually increased by 2.1% (£4.9m) compared to 2020.
While restrictions and lockdowns differed from territory to territory, most faced similar adverse financial downturns due to COVID-19 in 2020 and 2021. Royalties from North America were impacted to a lesser extent, as the nature of restrictions varied from those in the UK and public performance is generally a smaller percentage of royalties collected. Asia Pacific and Latin America were the most heavily impacted overseas territories, primarily due to stringent COVID-19 restrictions, such as a wholesale ban on music played publicly in Singapore.
PRS for Music continues to build relationships in emerging markets like the Middle East and Africa, as well as renegotiating improved commercial terms for members in its international agreements, all of which will have a positive impact on royalty flow in the coming years.
Revenue from linear UK broadcast also remained relatively stable, increasing 1.5% (£1.9m) year-on-year to £129.3m. After a difficult 2020, commercial radio showed strong signs of growth, with royalties growing by 12.6% year-on-year and exceeding pre-pandemic levels by 2.2%.
PRS for Music secured new long-term music licensing agreements with Sky and the BBC in 2021, giving the broadcasters access to over 30 million musical works and the freedom and flexibility to develop and grow their digital content platforms.
'Public performance' revenue overall, which, as well as live music events, includes music used in business premises, shops, cinemas, pubs, clubs, hotels, and restaurants, amongst others, saw a significant 59.6% (£51.4m) uplift year-on-year, to £137.6m, despite the UK being in lockdown for over five months of the year. Though a welcome return of an essential revenue stream for music creators, total revenues were still down 38.1% (£84.6m) compared to 2019.
A more than 100% year-on-year increase was recorded in 'Pubs & Clubs' and 'Hotels & Restaurants', as many businesses across these sectors started to re-open. Music was once again a powerful business tool, with major retailers like B&Q and Marks & Spencer returning to using PRS repertoire as part of their marketing strategy, to enhance the store environment and encourage customers back into stores.
Royalties collected from 'Industrial Premises' including warehouse and storage facilities were up by 113.8% (£18.1m) year-on-year, the only public performance revenue stream to have increased since 2019, pre-pandemic, growing by 28.8% (£7.6m) over that period.
2021 saw further falls in royalties from the Live sector, declining 29.2% (£3.3m) year-on-year to just £8m. This represents a staggering total reduction of 85.2% (£46m) since 2019. High revenue generating concerts from Elton John, Dua Lipa and Eagles were postponed last year and, although there was evidence of recovery with festivals such as Reading and Leeds taking place, the impact of restrictions, as well as public confidence, continued to adversely impact the sector throughout the year.
There was an 84% decline in the number of live performance setlists reported to PRS for Music in 2021, falling from 124,000 in 2019, to 19,300. After the most difficult of years, 2022 has begun with renewed optimism for the live music industry, with over 240 major tours featuring PRS members planned throughout the UK and beyond. The company took positive measures when it recently launched its Back to Live Music Venue Prize competition to support venues as they find, with restrictions and protocols lifting, they can get back to business.
PRS for Music distributed £677.2m in royalties to its members in 2021. While a 3.2% (£22.2m) decline on 2020, PRS for Music's commitment to maximising and accelerating distributions has ensured the expected impacts of the pandemic's disruptions have been minimised for the music creator community.
Endeavours to resolve issues and process quickly and efficiently ensured distributions returned to almost pre-pandemic levels in 2021. This is just 1.3% (£8.8m) below 2019 figures.
Online royalties paid out in 2021 grew to £247m, which means online distributions have more than doubled over the last two years, from £118.8m in 2019, providing a critical income stream for members during the pandemic.
Delivering accurate and timely distributions has again required the processing of vast volumes of data. In 2021, 27 trillion 'performances'* of music were processed to distribute royalties. This is a 20.5% year-on-year increase by PRS for Music, and an increase of over 500% across the last five years. The effective management of data on this scale is only possible because of PRS for Music's investment in and support for new technologies, including shifting its distribution platforms into the Cloud.
On the membership side, PRS for Music welcomed almost 8,000 new songwriter, composer and publisher members in 2021, and nearly 240,000 new songs and compositions were registered. The company maintains its support for new music and talent through its donations to PRS Foundation, which totalled £2.5m in 2021.
PRS for Music has continued to drive operational efficiencies and investments to enhance its operations, however, its cost to income ratio remained constant compared to 2020, despite a one-off accounting impact of £2.7m due to changes in guidance. 2021 also saw investment in PRS for Music's new Hub in London Bridge, which following the completion of its property strategy in 2022, will bring long term savings of up to £1m per annum.
Andrea Czapary Martin, CEO, PRS for Music, said: "2021 was a successful year that further cements PRS for Music's place as a world-leading, innovative rights management organisation. In exceptional circumstances, and still with a recovering marketplace, we recorded a 22.4% year-on-year growth in revenue to £777.1m. The 45.6% growth in online meant we collected £267.8m – an extra £83.9m on 2020. The 59.6% uplift in public performance is encouraging as it reflects a marketplace, like the economy, that is getting back to business. Significantly, it underlines the organisation's ability to adapt to all market sectors to fully monetise and protect the value of the music rights entrusted to us.
COVID-19 has overshadowed my two full financial years as CEO of PRS for Music, but has given me and the whole PRS team, the opportunity to really focus on the importance and value of the work PRS does on behalf of its members and how we can better serve them in all areas of what they do. For all businesses, these have been unprecedented and challenging times. However, I believe we grasped that opportunity, and the entire organisation has embraced the chance to adapt and innovate. It will be from these solid foundations that we can meet our vision of becoming a billion-pound society in royalties paid out, while further strengthening our systems and partnerships, all with a cost-to-income ratio of below 10%."