Finding Silver Linings In Dark Clouds: PRS 2010 Annual Report

UK-based TMV Staff Writer Laura G Thorne braved a rainy and blustery summer day in London to attend the PRS briefing at their headquarters on Berners St. Here’s her report:

While total UK music revenues were down by 4.8% overall in 2010, PRS’ Chief Economist Will Page was quick to point out that opportunities for growth still exist during his briefing last Thursday August 4 regarding the PRS third annual report, “Adding Up the UK Music Industry”. Joined by fellow PRS Economist Chris Carey and a panel including IQ Magazine’s Editor Greg Parmley and Andy Heath, Chairman of UK Music (and Beggars Group Director), Page set a light-hearted tone as soon as he reached the podium, beginning with an anecdote regarding former UK PM John Major asking former Russian Federation President Boris Yeltsin about the health of the Russian economy. Yeltsin says in response, “good”, but Major is puzzled as conditions seem actually to be quite bad, even dire. Therefore, Major presses Yeltsin to elaborate, and is then told that in fact the economy is “not good”. Page used this story (whether apocryphal or not) as an example that one must sometimes look below the surface and ask for more information. (He also said Major was brave for waking up next to Edwina Currie every morning, but that’s another story that probably has little to do with the music industry.)

Page encapsulated the year’s results in eight words, as follows: “Big numbers down, wee numbers up, exports strong”. Here are some of the figures, year-over-year (2009 compared to 2010):

• BPI retail value of recorded music: down -7.9%

• Estimated value of live music: down – 6.8%

However, these declines were offset by increases in certain other areas such as PPL & VPL collections (up 18.9%), estimated record company B2B revenue (up 7.2%) and advertising/sponsorship revenue (up 4.2%). When broken down into consumer versus B2B, consumer was down by -7.3%, but B2B increased 2.6%. When taken as a whole, the decline nets out to be -4.8%.

What does this mean? Clearly, there are areas where the soil remains fertile, certainly when it comes to licensing and diversification into other revenue streams, which record companies are becoming increasingly effective at doing. Soon, the PRS report anticipates, “the majority of record label revenues” will come from “outside the physical product market”. The report (with input from Frukt Communications) also suggests six key areas where brands might consider spending money on music: live music sponsorship, event creation, artist endorsement, digital, TV and advertising support.

Another area where the UK music industry consistently punches above its weight is in the realm of exports. As previously stated in the recent BPI Annual General Meeting, the UK’s share of the global music industry is 11.8%, or to put it another way, one-in-ten sales in the US is a UK act. The report suggests that profit margins on these transactions can be increased considerably by reducing the costs of administering them and also by standardising the use of metadata.

A name that was mentioned frequently – as is the case in any industry chinwag this year – was that of Adele, whose achievement can only be described with superlatives of such magnitude that she is now surely in a category of her own. Those present in the room attempted to analyse the Adele ink blot as if it was some kind of industry Rorschach test, even as Beggars Group Director Andy Heath (parent company of XL, Adele’s label) said that “one cannot extrapolate broadly from Adele’s success”. However, one might observe that in the case of Adele and other conspicuous best-selling artists such as Susan Boyle that the mainstream record buyer, who is perhaps finding him or herself increasingly disenfranchised (not just by the music they hear but also by the means required to acquire it) felt a warm and happy rush of recognition when they heard “Rolling in the Deep” that prompted them to actually get off the sofa and consume something in large numbers.

Another interesting nugget of information contained in the “Adding Up the UK Music Industry” report that one cannot ignore: of Pollstar’s top grossing tours of the decade, 40% of the total featured a band/artist where the lead singer was sixty years-of-age or older in 2011 (19% are in their 50’s, 35% in their 40’s and only 6% are in their 30’s). Do these statistics not indicate how desperately the industry needs to develop the talent that will sustain it for future generations? Indeed, if anything the takeaway from this year’s report pointed to a lack on the supply side when it comes to talent of quality and staying power as an explanation for lacklustre sales, even in the broader context of a dismal economy.

To read the report in its entirety, visit the PRS site at http://www.prsformusic.com/creators/news/research/Pages/default.aspx).

Related posts:

1. EVENT REPORT: MUSEXPO EUROPE 2010
2. Event Report: Bigsound 2010 – Entrepreneurialism and Music
3. Event Report: In The City, Manchester
4. Event Report: Eurosonic 2010
5. EVENT REPORT: LIVERPOOL SOUND CITY 2010

Posted by Laura Grivainis Thorne on Aug 9 2011. Filed under featured, Industry Events, Labels. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.