How can PPL work for you? CEO talks royalties and Covid impact on payments

PPL CEO Peter Leathem has spoken to Headliner about how the royalty collection society can benefit the careers of studio professionals, how it was able to deliver its third highest ever revenues in 2020 despite the challenges, and the uncertainty set to be caused by the pandemic over the coming years.

Earlier this year, PPL reported that it collected £225.7 million for performers and recording rightsholders in 2020. While this may have marked a decrease of £46.1 million (17%) from 2019, the figure was still PPL’s third highest annual collections total, despite lockdown restrictions impacting revenue from many of its public performance and commercial radio licensees.

International collections during the year held steady with £85.9 million collected - a 0.9% downturn from 2019. Meanwhile, broadcast and online income also held strong, slipping by just 3.8% to £82.3 million.

Unsurprisingly, income from public performance and dubbing was the most heavily impacted by Covid, with £57.5 million collected in 2020, down 42.2% from 2019.

Key to PPL’s resilience is the inroads it has made on a global scale, with 105 agreements in place with music licenses the world over, as well as the efforts it has made in recent years to educate the wider industry on the benefits a PPL membership can have on their career.

Here, we catch up with Leathem to discuss his optimism for the future of the music industry despite the difficulties of the last two years, the ripple effect of Covid that could last for “at least” the next three years, and why producers and engineers could be owed more than they realise.

In 2020, PPL reported its third highest revenues of all time. How was this possible during the pandemic?

In more recent years, the PPL has been growing its revenue quite considerably. Even though we’ve had a decline, we’ve still had our third largest ever collections because we’ve been growing so well over recent years. Driving that has been international collections and the broadcasting area, because international revenues are pretty much flat with last year and broadcast hasn’t declined much. 

The one area that is really affected is public performance, which is understandable when you have bars, clubs, offices, factories all closed, and it was sensible for us not to be seeking to charge them while they were closed. 

That has been the model around the world. But overall collections have been growing well; we have the joint venture with PRS for Music now, which has seen good growth in the first two years of operation.

What are your predictions for 2021 revenues?

This year we think we’ll collect more public performance money than we did last year, although clearly we’re not back to pre-Covid levels. There is going to be a lot of work to find out what’s actually happened to a lot of our customers. There will be chains of stores that may have gone completely, while some will have lost some stores. It’ll be a case of working out what’s left. 

We clearly have lost a range of businesses, but some of those are replaced by other businesses. What we don’t know is how that is going to pan out and the timescale for how that will happen. There are lots of things that are hard to predict with the economy over the next 12 months, but what we do know is that businesses really do realise the importance of music. 

There is loads of information around how it is good for staff morale and productivity, it’s good for customers, it increases their dwell time. Beyond this blip of the pandemic, we think there is a very strong position for public performance and businesses using music effectively. That will come back and grow, it’s just a matter of how long it will take to come back.

There is always more you can do to educate the broader community Peter Leathem, CEO, PPL

Tell us about the partnership with PRS. What impact has that had on PPL’s work?

In 2018 we went live for the first time. It was a big bang approach, where we shut down our operations at PPL and PRS public performance licensing and went straight to a brand new office, mostly new people with a new IT system. 

That first year was hard, because you were trying to get customers to transition into a new organisation. But by the end of 2019 we were in a situation where the joint venture saw both of us collect the most money we’d ever collected, and we did so in a very effective way. Unfortunately, just after we achieved that, the pandemic hit…

What can you tell us about your international business? How will the various lockdowns and possible business closures around the world impact overall revenues?

I would say that the impact will be over at least a three-year period. PPL collects its money in a year and within six months of the end of that year has paid out about 96% of that money. And then we’ll spend the next few years paying out the rest as we track people down. 

We haven’t’ been impacted yet because we were collecting for 2019 and earlier last year. This year we will be collecting for 2020, so we’ll definitely see the impact. In 2020 the UK felt the impact far more acutely than some other countries due to lockdowns – some countries didn’t lockdown much at all to begin with, but are now having to do so. 

What that means overall, I don’t know. We’re still going to have a growing market and PPL is still acquiring more performers and record companies than it’s losing.

How much of a focus is there from the PPL on educating the wider industry (beyond artists) that they may benefit from a membership? Particularly in the studio world of producers and engineers?

However much work we do, there is always more you can do to educate and inform the broader community. Over the last 10 years we’ve done a lot of work with producers, working with individuals and with the MPG, as there was a real desire to make sure that studio professionals, where they could, were given credits and receiving money for their work.

In 2012 we launched a new form for studio producers to fill out and identify the tracks they were on. It’s an ongoing process to try to make it clear that we can provide services where you have the right to be paid. 

We have really good data and technology and we are an organisation that can look after you and can go round the world collecting for you where it’s appropriate to do so. We run around 150-plus seminars all over the country – or Zoom in more recent times – where we’re trying to talk to a broader audience.

What has PPL been doing to support areas of the music industry that have been hit hardest by Covid, such as live events?

When you have an organisation that has come on so much in the last 10 years or so, and when you are collecting and paying out the sums of money we are, we felt there was a need to support the wider industry. 

There were areas of the industry that were very severely hit, so we wanted to do whatever we could to show our support. We made donations to organisations like Stagehand [£100,000 in 2020], which then ensured that funds were allocated to those who were in the greatest need of support. It was something we were very pleased to do.