With the Copyright Directive passed, will the music industry now aim to collect revenue from popular video games, including Fortnite?
Earlier today, British collecting society PRS for Music posted its total collection revenue for 2018.
Representing over 135,000 songwriters, composers, and music publishers in the UK, PRS for Music collected a record £746 million ($946 million) last year. This figure represents a 4.4%, or £31.6 million ($40.8 million), increase over 2017. After costs and other income, the 2018 collection figure results in net distributable revenue of £648.4 million ($838 million). The British collecting society also represents two million members worldwide.
PRS for Music collected £280.6 million ($362.7 million) through agreements with collecting societies around the world. This figure represents a 9.1%, or £23.4 million ($30.2 million), increase over 2017, and a 42% growth rate over the last three years. The collecting society attributed the growth to global chart successes and live world tours from its members, including Ed Sheeran, U2, and The Rolling Stones, among others.
Thanks to the strong growth of streaming music platforms – notably Spotify and Apple Music – royalty income from digital services grew 17%, or £21.2 million ($27.4 million), to £145.7 million ($188.3 million).
Last year, PRS for Music also reached licensing agreements with three major companies – Mixcloud, Facebook, and Instagram.
Income from traditional broadcasters – the BBC, Sky, and Global Radio – declined 5.1% to £127.7 million ($165.1 million). PRS for Music attributed the decrease to a combination of a reduction in linear TV viewing and a large one-off payment from ITV in 2017.
Royalty income from general business usage also decreased to £192 million ($248 million). The British collecting society attributed the decline to a “challenging situation” in the UK’s retail sector and delays in the establishment of a new licensing business with PPL.
The live sector grew 12.8%, climbing to £38.9 million ($50.3 million). PRS for Music explained music fans in the UK continue to seek “the live experience.”
Last year, the British collection society processed 11.2 trillion music performances across multiple channels. This represents a 70% increase over 2017. The collecting society expects further “dramatic growth” in the future.
In addition, distribution to songwriter, composer, and music publisher members dropped 0.2% to £603.6 million ($800 million). The collecting society pinned the blame for the slight reduction to processing delays at its joint venture partners. This figure represents the second-highest distribution in its history.
Speaking about the figures, Robert Ashcroft, Chief Executive of PRS for Music, explained,
“It’s testament to the creative talent of our 135,000 members that royalty revenues from their music have continued to grow, and I’m proud we collected almost three-quarters of a billion pounds on their behalf.
“Royalties from international and digital continue to underpin our growth, areas in which we have invested systematically over the past ten years. The way in which we all consume music has changed dramatically over this period, switching from ownership to access, but the popularity of UK music endures; long may it continue.”
Now, Ashcroft has aimed his sight at a popular video game.
The British music industry v. Fortnite.
Hailing the passage of the recent Copyright Directive and Article 13 (now Article 17), Ashcroft has placed Fortnite on notice.
According to the Chief Executive, the new European Union law has opened the door to allow revenue collection from popular video games. The new legislation, strongly opposed by Facebook and Google, among other tech giants, have previously sought to exploit music licensing for their own benefit.
“We currently license a lot of digital services, like YouTube music, already anyway. It’s really important for us to have a level playing field for these services that we don’t yet have licenses, such as music used in the massive multiplayer online gaming market, like Fortnite. That is one of the areas we will be looking at.
“[The new law] clarifies the liability of key technology platforms to pay for their use of copyright material.”
Taking aim at other online gaming platforms, Ashcroft also warned video game developers they’ll need much-needed music licenses.
“The massive multiplayer gaming platforms: their audience is absolutely enormous, with young people watching gameplay and listening to music streamed there.
“These are the things that we are obviously looking at and working out what the best route forward is. And that’s why it was so important to get that Copyright Directive passed. It makes it clear that if you’re hosting this content, you have to get a license.”
Featured image by Fortnite.