Annual Review 2Oo9 Welcome to the 2Oo9 Ppl Annual Review

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Annual Review 2Oo9 Welcome to the 2Oo9 Ppl Annual Review ANNUAL REVIEW 2OO9 WELCOME TO THE 2OO9 PPL ANNUAL REVIEW. OUR MISSION IS TO MANAGE THE RIGHTS AND MAXIMISE THE EARNINGS FROM THE BROADCAST AND PUBLIC USE OF RECORDED MUSIC, AND DISTRIBUTE THEM IN THE MOST EFFICIENT MANNER POSSIBLE. WE LOOK TO CREATE MAXIMUM VALUE FOR OUR RECORD COMPANY AND PERFORMER MEMBERS AT ALL TIMES AND A FIRST CLASS SERVICE TO ALL OUR CUSTOMERS, ALL OF WHOM ARE IMPORTANT TO US. TO ACHIEVE THIS, AND TO SET GLOBAL STANDARDS OF EXCELLENCE, IT IS ESSENTIAL FOR US TO MAINTAIN AND INVEST IN FIRST CLASS PEOPLE AS WELL AS MAINTAIN AND INVEST IN FIRST CLASS SYSTEMS AND DATA. 2 OUR YEAR 28 OUR PEOPLE 4 CHAIRMAN AND CEO’S STATEMENT 3O EXECUTIVE MANAGEMENT TEAM, SENIOR MANAGEMENT TEAM 6 BUSINESS REVIEW AND BOARD OF DIRECTORS 8 2OO9 HEADLINE: MUSICWORKS 32 PPL LIVE 1O FINANCIAL SUMMARY 34 CORPORATE SOCIAL RESPONSIBILITY 12 2OO9 HEADLINE: TRIBUNAL 36 OUR PEOPLE 14 BROADCASTING AND ONLINE 15 PUBLIC PERFORMANCE AND DUBBING 38 THE PEOPLE’S CHARTS 17 TRIBUNAL 4O 2OO9 HEADLINE: 18 2OO9 HEADLINE: INTERNATIONAL THE PEOPLE’S CHART SHOW SERIES 2O INTERNATIONAL 42 THE PEOPLE’S CLASSICAL CHART 2OO9 22 2OO9 HEADLINE: 44 THE PEOPLE’S POP CHART 2OO9 INVESTING IN THE FUTURE 46 THE PEOPLE’S CHART 2OOO – 2OO9 24 MEMBER SERVICES 26 PPL CLOSING THE RIGHTS GAP 1 “ …THIS IS A ROLE % WHICH [THE COPYRIGHT 9.8 TRIBUNAL] IS ILL-EQUIPPED Commercial radio revenue OUR decline in 2OO9 TO PERFORM…” YEAR COPYRIGHT TRIBUNAL (Source: RAB/Ofcom) 2OO9 MAY HAVE BEEN “ …UNLESS OUR RIGHTS 1 IN 56 ARE PROPERLY VALUED, A TOUGH YEAR BUT IT Business failures reached an THEN MUSIC MAY MERELY STRENGHENED estimated 36,OOO in 2OO9 – CEASE TO BE A VIABLE OUR DETERMINATION the equivalent of one in BUSINESS…” TO UPHOLD THE every 56 companies FRAN NEVRKLA (Source: BDO Stoy Hayward CULTURAL AND Industry Watch) COMMERCIAL VALUE OF OUR REPERTOIRE 87% 2,36O Of musicians earn less The number of pubs than £16,OOO a year that closed in 2OO9 from their profession (Source: BBPA) (Source: Musicians’ Union) “ …2OO9 WAS A YEAR WHEN MANY COMPANIES ROYALTIES WERE PREOCCUPIED The Copyright Tribunal WITH SURVIVAL …” decision led to a CBI reduction in royalties 2 “ A RESTAURANT “ UK LABELS HAVE % WITHOUT MUSIC, ARGUABLY DONE 95 IS LIKE A CURRY 2.9BN A BETTER JOB OF MusicWorks survey WITHOUT SALT” Seconds of music usage DIVERSIFYING THEIR shows 95% of people ENAM ALI MBE, data matched by PPL REVENUE STREAMS, prefer shopping when FOUNDER OF Distribution team in 2OO9 DUE IN PART TO music is playing BRITISH CURRY AWARDS THE SUCCESS STORY THAT IS PPL...” WILL PAGE, PRS FOR MUSIC “ MUSIC IS GROWTH “ THANKS SO MUCH VALUABLE AND Estimated 3% increase FOR ALL YOUR MUSICIANS HELP! I AM INDEED 2 on the previous SHOULD BE VERY PLEASED. Removing 2 music 12 months for market licensing exceptions COMPENSATED value of leisure industry YOU HAVE BEEN FOR MAKING IT” A GREAT HELP AND would mean (Source leisuredatabase.com) more revenue for THE GUARDIAN A BLESSING TO ME” performers and QUINDON, PPL RIGHTS HOLDER record companies + * “ FOR MOST + “ WE HAVE % BUSINESSES, % SUCCESSFULLY 2 INTANGIBLE ASSETS 3 COMPLETED THE Year on year income REPRESENT WELL Predicted growth FIRST STAGE OF growth at PPL OVER HALF OF for UK advertising THE PPL SYSTEMS * See page 11 CORPORATE VALUE” revenues in 2O1O UPGRADE for more information (Source: Magna) ACCA ON TIME AND ON BUDGET…” PETER LEATHEM 3 CHAIRMAN AND CEO’S STATEMENT In 2OO9 we experienced some stormy waters which certainly made plain sailing very difficult. In spite of the awful economic climate and other adversities, mentioned below, PPL succeeded in raising the bar yet again by increasing some of its main income streams. It is easy to forget that not so many years ago PPL was not expected to reach the magic number of £100 million of annual income. Now the company exceeds that figure substantially and can aim for the next significant target on the road to obtaining a proper return for the many broadcasts and public uses of the fantastic sound recordings in our repertoire. Similarly, we forget that only a few years ago PPL was collecting no overseas income at all, simply because it had no authority and remit to do so. The year on year growth in recent years has been remarkable and the 2009 international collections totalling £21.6 million represent a fantastic achievement on the part of our International Department. And yet, all this is achieved in spite of enormous obstacles, negativity and, at times, outright hostility. I refer to LICENCE FEE INCOME £M the current mindsets and the nearly schizophrenic relationship modern society * has with culture, all things creative and 129.6 especially music. +2% *See page 11 4 On one hand, there is a growing The working conditions of most British Happily, that decision was reached in appetite for general consumption of musicians are something of which we a statutory context that will shortly cease music, although, unfortunately this is should not feel proud. The same is true to have any application, and it is not the frequently based on the premise that of the levels of remuneration with the end of the story by any means. It is likely all music should be easily accessible sole exception of a small number of that the Copyright Tribunal will be asked and “for free”. On the other hand, there extremely successful superstars. It is not to consider again these PPL tariffs and is also a general realisation that music generally appreciated that approximately it is essential that the Tribunal has all the is probably the single most powerful 90% of the tens of thousands of British facilities, time and expertise to make well tool when advertising products, services musicians, singers and other performers informed, balanced and commercially or anything else. Most individuals and earn less than £16,000 a year from sustainable judgements about the companies are also aware that music their profession. My colleagues and value of music and the underlying rights alone creates a better, softer and more I have also highlighted on many occasions of performers and record companies. effective working environment which the fact that, generally speaking, the Unless such rights are properly valued, undoubtedly helps businesses and other licence fees which the vast majority of then music may cease to be a viable organisations to keep their staff happy, businesses have to pay annually for the business. This would be a disastrous to sell more products and therefore use of music, are pitifully low. It is ironic development for modern society, for increase their profits. Quite often, and sad that all these businesses have our culture and for UK plc generally. the use of music results in the creation to pay several times more for cleaning In my view, the above represents the of wholly new businesses which or garbage collection. biggest challenge going forward and become highly successful and In 2009 PPL faced a Copyright Tribunal our constituents, both the performers and immensely profitable. Reference in relation to several of its public the record companies, can rely on our Whilst we are happy to applaud most performance tariffs. This is nothing unusual complete determination to carry on the of these trends, we feel very strongly that in itself and, whilst PPL tries its hardest good fight in safeguarding and enforcing the use of music should and must be to conduct its business in an intelligent, the rights vested in us and in obtaining paid for. Moreover, it has to be valued flexible and user-friendly manner, it is their proper value. I thank all our friends properly and therefore at commercially inevitable that occasionally tricky situations and supporters in the music industry and viable but sensible rates. This is particularly and disputes arise which undoubtedly elsewhere for helping us in this difficult, important in the inevitable process of require adjudication by an impartial extremely challenging but essential task. physical format sales continuing to decline. and objective body. Onwards and upwards! It follows, therefore, that other income That said, we are very unhappy about streams including broadcast, public the latest Copyright Tribunal decision. performance and other types of usage, Surely it cannot be right that talent which hitherto have been considered should be ignored and that something secondary and therefore “complementary”, as precious as music should be valued are now becoming prime revenue sources at such low rates as those applied by for performers, as well as for those who the Tribunal to the thousands of premises invest in existing and new talent. Fran Nevrkla who for several years voluntarily agreed Chairman and to pay the fees sought by PPL. Similarly, Chief Executive Officer how can it be right that performers and record companies/rights holders should receive so much less than composers and publishers in respect of the licensing of public performances in the same premises? 5 BUSINESS REVIEW WE LISTEN... 6 ... AND WE RESPOND 7 MUSICWORKS COMMUNICATING THE BENEFITS OF PLAYING MUSIC IN PUBLIC. 77% 92% OF PEOPLE SAY OF PEOPLE LIKE THEY ARE MORE A BAR WITH LIKELY TO VISIT BACKGROUND A HAIRDRESSING MUSIC SALON WHICH IS PLAYING MUSIC 8 % OF PEOPLE SAY MUSIC MAKES THEIR 8O GYM WORKOUT MORE ENJOYABLE WHY MUSICWORKS? MUSIC WORKS, AND THE MUSICWORKS PROGRAMME WAS LAUNCHED IN THE SUMMER OF 2OO9, IN CONJUNCTION WITH PRS FOR MUSIC, TO COMMUNICATE TO BUSINESSES THE BENEFITS OF PLAYING MUSIC IN PUBLIC. INVALUABLE RESEARCH CARRIED OUT BY ENTERTAINMENT MEDIA RESEARCH (EMR) HIGHLIGHTS POTENTIAL COMMERCIAL GAINS TO BUSINESSES. More at musicworksforyou.com 74% OF EMPLOYEES ENJOY GOING TO WORK MORE WHEN MUSIC IS PLAYED 9 FINANCIAL SUMMARY THE COMPANY’S PRINCIPAL During the year the company increased In tough market conditions for PPL’s ACTIVITY IS THE COLLECTION OF its licence fee revenue from most sources members, the changes within the music LICENCE FEES FOR BROADCASTING in accordance with management business in recent times have been AND PUBLIC PERFORMANCE objectives.
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