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Andrea C Martin (PRS for Music): ‘In 2022, we will have higher revenues and we will pay out more royalties to our members’



PRS for Music CEO Andrea Czapary Martin is in a buoyant mood. PRS for Music — one of the biggest music rights societies in the world — has announced last week good financial figures and the company is on track with its modernisation plans, despite of the pandemic.

In 2021, PRS collected £777.1 million (€925.7m), up 22.4% year-on-year, which is an achievement when performance royalties for the use of music in a public space have gone down significantly due to the pandemic. The upside is that digital collections grew by 46%, which almost compensated the drop in revenues from other sources.

Throughout the pandemic, and despite multiple lockdowns in the UK, PRS managed to maintain a strong level of business and engaged in some of the most radical changes in the history of the company. The society implemented new governance rules, which introduced a Members’ Council alongside the Board.

The society also made the necessary adjustments to a business becoming increasingly driven by digital use of music. This meant adapting processes to deal with trillions lines of usage, shifting documentation and usage data into the cloud, and ensuring that it really delivered a better system to members.

The society has also moved to new and smaller offices, new London Bridge, and they no longer called an office but a “hub.” The move took into account the fact that less people wanted to go back to the office post-pandemic, and will save one million pounds a year in expenses.

The new location will consolidate PRS’ two working sites in London, the main offices in King’s Cross, at the heart of London, and the membership processing offices in Streatham.

“We have downgraded but also reduced our footprint by 45% less than the two locations combined,” said Martin, about the new headquarters.

“King’s Cross is gone and people have relocated to the new place, and by the end of the year, the rest of the company’s staff from Streatham will join us in the hub,” said Martin. “We have new ways of working which is really exciting. And its a great location.”

Martin had also to deal, from the outset, with the shortcomings of ICE, the digital licensing hub created by PRS, Germany’s GEMA and Sweden’s STIM. This led to the appointment of a new CEO and CTO at ICE, and an upgrade in the systems and tools used by ICE.

For Martin, who took on her new job a few months before the pandemic started, the highlight of the year so far is that business is resuming is a sort of normal way. “I can finally go out!” she enthused. “I started this job and went straight into lockdown.”

Creative Industries News had a zoom conversation with Martin from her new London offices. Here’s an edited conversation of Andrea Martin with Creative Industries News’s Emmanuel Legrand.

The figures for 2021 are quite impressive, especially the 45.6% year-on-year growth in digital revenue. How do you analyse that?

Andrea Czapary Martin: We had a really good year. What it shows is the resilience of the music industry in the last two years. It shows the power of music that allowed us to get through our life. It also shows how quick the industry can bounce back and we can see the optimism. We had an overall 22% increase in revenue and a 50% increase from online revenues. The online growth was really great because it compensated the downfall we had in international, live and performances in public space. And if you take into account what we know about 2022, the first three month show that it further bounces back in the sectors that were down like international and places where music is played in public. These are very encouraging results in 2021 and I am very optimistic about the future.

With live music, you were impacted not only in the UK, but internationally since you collect international live music royalties on behalf of many songwriters. How do you see the situation shaping up in 2022?

Andrea Czapary Martin: We’ve seen it bouncing back as many countries are opening up, and we’ve seen it in the UK too. We were in lockdown quite a lot in the UK and live was not really happening. Our revenues from live in 2021 were 8 million pounds, which is nothing compared to what we had in 2019. It represents an 85% decrease from pre-pandemic years. What we are seeing now is that there are many tours that have been booked — over 240 tours — and big festivals like Glastonbury are happening. If we look at just the first three months of the year, we are seeing that live is bouncing back in 2022.

Are public performance collections from businesses that use music bouncing back too?

Andrea Czapary Martin: Absolutely.

Don’t you feel that compared to US societies for example, the over-reliance of European societies on public performances has been really exposed during the pandemic and that there was a need to find new streams of revenues and accelerate digital?

Andrea Czapary Martin: That’s why we focused mostly on growing online revenues. Without the increase in online revenue of 46% in one year, we would have never had the great results that we had. We made investments in ICE and investment in new licenses — we signed a lot of new deals in 2020 and 2021 such Disney+, Apple TV, Netflix and many more. We made close to 50 deals last year compared to 9 in 2019. That focus on online, that focus on new deals, on becoming more commercial, has contributed to these great results.

From an international perspective, which parts of the world were the most affected by the pandemic?

Andrea Czapary Martin: The area that was the most hit was Latin America, especially Peru and Brazil, and that was the biggest downfall for us. Of course, some countries in Europe were more affected than others. Asia too.

Do you expect all the streams of revenues to be back in order in 2022 or are there still some dark spots?

Andrea Czapary Martin: There are still some dark spots. When we look at our budget for 2022, international will still be a little bit down, because, as you know, there is a lag between the moment royalties are collected locally and the moment we get paid — some societies keep on paying us once a year! On average it takes societies 10 months to distribute — we are much better than that as we only take five months. The lag in international will impact 2022 results, but not as bad as in 2021. And then of course, live will still be impacted and will not go back yet to 2019 figures. We’ll see that happen in 2023. Overall, we will have higher revenues in 2022 and we will have more royalties paid out in 2022 to our members versus 2021.

Going back to licensing, what type of businesses are you licensing that were not around two or three years ago?

Andrea Czapary Martin: Well, Disney+ and Apple TV, obviously, but we are also seeing more video game companies that we did not have as licensees, and that will contribute even more to the growth in 2022 than in 2021. The online live concerts business that started in 2020 is not going away. This will help. And at the same time we just renewed the BBC deal and we have signed with Sky, which was behind schedule. These are old deals but they are also better deals than before. Those will contribute to the growth.

Is there any business yet in all these new catch-words such as NFTs, metaverse…

Andrea Czapary Martin: I think this is a massive opportunity in whatever form it’s going to be. What is not clear yet is what the business model of the metaverse and web3.0 is going to be. There needs to be further development and how we do define the business model. These license deals are going to be expected to be worldwide and that’s going to be the biggest challenge. We follow these new potential businesses very closely but there is going to be a lot of development before we can define the business model on that.

You made quite a few significant changes at ICE in the past few months. Are you satisfied with the way things are?

Andrea Czapary Martin: I have been very involved with ICE. I would say that I spent about half of my time last year on ICE in doing the job description for the new CEO, in hiring the new CEO and a new CTO. I was also involved in CUBE [a could-based copyright platform] and also the project we call Apollo, which is a new processing system, and move it from IBM and bring it into the cloud. I was also involved in understanding how, in the CUBE project, did we go wrong, and learning from that and not repeating the past. I’m very hands on. Of course, it plays to my strength, because my background is big data, tech, digital transformation and change. It is still early days because the new CEO started on the 1st of March and the CTO at the beginning of April. There’s already a lot of changes and I am very encouraged. We are very much focused on CUBE — more than half of it has been built and we brought it in house so we are building the team and the capability for CUBE, but also for Apollo. The next six to nine month will see how that plays out in the long term.

Are there improvements in the way you operate with your sister societies on the data side — and not simply among ICE partners?

Andrea Czapary Martin: I think we still have a long way to go on that. With CUBE, which is going to be a copyright multi-territory system, I hope that we can collaborate more on data. There needs to be more collaboration on data with other societies. I am in contact with Cécile [Rap-Veber, the new CEO of France’s SACEM] and I am going to meet with her in May. We are also working quite closely with BMI, ASCAP and GMR [Global Music Rights]. As you know, BMI are testing out ICE. Of course, we are partners with STIM and GEMA on ICE and last year we collaborated as shareholders much more than before to really put ICE and CUBE back on track.

Do you see the role of collective management organisations like yours growing or fading in the future? Why would songwriters or publishers still need you?

Andrea Czapary Martin: They will still need us to do these multi-territory online negotiations, processing and provide a global copyright picture. One of the big advantages that we have is that we are neutral and our members trust us — they trust that we protect and grow their rights. We have to continue to build on that trust and continue to deliver great results to them. At the end of the day, what are they looking for? They are looking for a big pay-check that arrives every quarter — and we are trying to improve on that — and continue to deliver on our services, be transparent and as accurate as possible. We need to be an efficient society — our goal is not simply to distribute a billion pounds by 2026, but also to have a cost to income ratio below 10%. The more efficient we are the more we can pay out to our members. If we can do that I think they will continue to be with us. We just have to make sure we stay relevant!

You also made last year significant changes to your governance rules. Almost a year later, what are the effects of these changes?

Andrea Czapary Martin: It’s working very well. It really has helped the company to be more flexible and quicker in decision making. We had so many meeting with the board, the executive board, the different committees, so that has been reduced. Just with the board and the executive board, we had 13 meeting a year, which required a lot of paperwork to prepare. And doing so we were not really running the business and delivering results. Now, it’s much more simplified, and it’s working very well. There’s still things we need to put in place to make it even better, but I am quite happy with the outcome of that. Not only does it allow us more flexibility, but as the world is accelerating, we need to be quicker in decision making, and it allows us to do so. We can also bring more diversity into the council and the members’ board. Before, we had four male independent directors, we now have two women and two males. We now have a woman, Michelle Escoffery, who is President of the PRS Members’ Council and who is from the black community. So we are bringing much more diversity around the table, and not just in gender. We are also making sure there is more diversity among our employees — we have more women in executive roles, we have more staff from diverse ethnic background, so the PRS of today is getting much more diverse. We are not there and there’s still more to do. And when you have diversity around the table, the results are there.

Last time we spoke you said you’d let part of the staff continue to work from home. Is that still an option?

Andrea Czapary Martin: Yes, absolutely, we have new ways of working so people come here to collaborate and work together. That’s why we call it a hub and not an office. People don’t have to come to the office as often as before. We saw in the last two years how productive people were by working from home. It’s been working really well for us.

You’ve now been in the job for three years. You are Canadian, you came from a background that had nothing to do with music. So what are the best and the worst parts of the job?

Andrea Czapary Martin: What I really like about the job is learning about a new industry and at the same time applying my experience from other industries in big data, digital and tech transformation, and also changing a culture and having a high-performing team. That’s something I am proud of. I am a big believer that if people are happy and ready to engage they will create great results. When I came in, every year they were doing these engagement surveys with all the employees. The engagement rate when I came in was at 63% and last year, after the September 2021 survey, we had an engagement score of 83% and that transpired in the great results we had. We delivered huge technical projects that PRS could not deliver in the past, and why? Because we had people involved. We moved into the cloud with Oracle and it was such a huge project that we had direct access to the Oracle board because they had never moved 22 trillion data points into the cloud. And we delivered that on time and on budget. That was a two and a half year project and we had 200 employees involved in that project. It was not just an IT project. All aspect of the business had to be involved. We delivered CRM, a new customer delivery system, because ours was so old, and it was on time and on budget. I am very proud of what the team has done and how they worked as a team with a positive mindset, despite the challenges of working from home. For me that is worth gold. Now, our board, our members and our customers are happy with the new systems. The biggest challenge was to get a company together through Covid. I never did that. I’ve been through crisis before but Covid was of a different kind and we were in an industry that had been severely impacted. Bringing a company through Covid in a virtual world was quite hard. The governance changes were also a big challenge for me. I had experienced changes in governance but that was of a different kind too. I learned a lot. There were times last year when I had to breathe in and breathe out but we got through it. I had a lot of support from my chairmen, the executive team and the staff and it gave me the energy to get through these challenging times.

Emmanuel is a Washington, DC-based freelance journalist, blogger and media consultant, specialising in the entertainment business and cultural trends. He was the US editor for British music industry trade publication Music Week. Previously, he was the editor of Impact, a magazine for the music publishing community (2007-2009), the global editor of US trade publication Billboard (2003-2006), and the editor in chief of Billboard’s sister publication Music & Media (1997-2003).

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