Features October 17, 2018

APRA AMCOS breaks $400m revenue barrier as digital eclipses broadcast for first time

APRA AMCOS breaks $400m revenue barrier as digital eclipses broadcast for first time
APRA AMCOS CEO Dean Ormston

Australian collective rights management organisation APRA AMCOS has had another record year –having broken through the $400 million milestone for the first time.

Its group revenue for the 2017/18 financial year reached $420.2 million. Fuelling the growth was strong income generating from digital sources. Digital overtook radio and TV broadcast for the first time with both sectors showed growth.

Digital revenue escalated by 21.9% year on year to a staggering $134.5 million, from $110.3 million.

Broadcast revenue only posted a 5.8% year on year growth but with a revenue reaching $132.6 million.

Total royalties payable to songwriters, publishers and affiliated societies (net distributable revenue) $362.8m, 8.2% year on year growth

“This year’s results highlight the strength of the organisation’s financial performance, breadth of member service, and commitment to improving our industry’s ecosystem,” remarked chief executive Dean Ormston, who stepped into the role on July 1, following CEO Brett Cottle’s retirement after 28 years in the role.


 DIGITAL REVENUE

The $134.5 million digital figure —nearly a third of all revenue—showed that audio streaming made up the bulk, with $81.9 million.

Audio streaming revenue was a 31.9% year on year growth.

Digital grew 21.9% from the previous year’s figure of $110.3 million.

Income sources categorised as digital include audio streaming (up 31.9%), video-on-demand (up 30.5%) and websites and User Generated Content (UGC) (up 30.4%).

The growth in UGC royalties can be attributed to APRA AMCOS’ landmark licensing agreement with Facebook, which opened up a game-changing revenue stream that will see Australian, New Zealand and international songwriter and music publishers remunerated for the use of their music on Facebook, Instagram, Oculus, and Messenger

The deal also enables the platform’s users to incorporate music into content in a variety of dynamic and, importantly, legal ways.


BROADCASTING REVENUE

Broadcast revenue (radio and television, free and subscription) remained strong, at $132.6 million, up marginally from the 2017 result “primarily due to the reversal of the provision against Network Ten whilst under administration, and reversed due to the eventual sale to CBS in the financial year under review.”

Radio was up 11.2% to $46.9 million.

Television grew 20.4% to $85.7 million.


PUBLIC PERFORMANCE

Income from public performance (including live music) totalled $85.8 million, an increase of 10.4% from last year’s figure.


LIVE MUSIC

Live music is a vital part of the music ecosystem, and the $25.3 million in revenue from the concert sector grew 24%, a notably larger increase than last year’s 15.9% uplift.

Over one million fans attended Ed Sheeran’s blockbuster Australia and New Zealand tour, which featured local supports Missy Higgins, Fergus James, and Bliss N Eso on the Australian leg.

Midnight Oil’s 25-date national tour featured a veritable who’s who of Australian music, with 22 different acts stepping into the opening slot, including Something For Kate, A.B. Original, Adalita and Irrunytju Band.


INTERNATIONAL

APRA revenue from international sources has grown an impressive 105% over the past five financial years, with $43.7 million collected in 2017-18.

Digital distribution, music service uptake, and the globalisation of the music marketplace have made for more viable international pathways for Australasian songwriters.

This is a statement, APRA says, which can be supported by a tremendous increase in the number of overseas concert performances reported by members.

In 2012, 2,845 performances were submitted to APRA AMCOS, in 2017, 7,095 reports were received, a 149% uplift over the period.

Ormston summed up, “While these results are strong, there is a real need to consider the longer-term sustainability of the Australian music industry.

“This will be achieved through proactive government and industry policy and investment that prioritises a fair copyright framework, music in education, a strong live music touring circuit, Australian music content, and music export.”


OTHER FIGURES

Amount of APRA members: up 4.5% to 99,453 (in July 2018 it hit the 100,000 mark)

Amount of AMCOS members: up 9.2% to 19,074

Aboriginal and Torres Strait Islander members: grew 9.6% to 1,468.

Businesses licensed across Australia and New Zealand: 147,416

Songs and compositions paid: 1,441,486

APRA members who earned royalties: 47,648

APRA members paid international royalties: 18,137.

Revenue from recording was up 2.7% to $11.4 million.

Revenue from education grew 2.2% to $9.1 million.


 FUTURE PRIORITIES

“In July 2018 we welcomed our 100,000th member. Our future success will rest on our ability to provide world’s best service to our songwriter, composer and publisher members, and our licensee clients,” said Ormston

“We intend to be the business partner of choice for our writer and publisher members – from local to global, live to digital.

“The immediate priorities for the organisation are the commissioning of our new operating system, CLEF, and launching OneMusic Australia in mid-2019. OneMusic Australia will build on the ground-breaking success of OneMusic New Zealand – now going into its sixth year – offering a joint licence with the record industry under one umbrella and delivering a simple and effective licensing service.”

“In addition to a better service for licensees, we forecast considerably increased market penetration and return for our members over coming years.

“More immediately we have begun renegotiations of some of our major industry agreements in Australia and New Zealand, including free-to-air television, pay TV, YouTube and New Zealand commercial radio.

“We will lodge our application for reauthorisation with the ACCC in December this year, with the objective of securing at least a three year authorisation, effective 1 July 2019.

“With a clear view on the longer term, we will continue to take an industry lead on key issues that impact the music ecosystem. Importantly we will continue our work on issues and opportunities, including; addressing gender parity and diversity; local content; live music; music education; and ensuring the strength of the copyright framework and our members’ right to equitable remuneration.

“We have recently lodged our submission to the Federal Government’s Inquiry into the Australian Music Industry, which provides an opportunity to articulate to a cross-government portfolio audience the issues and opportunities referenced above.

“In New Zealand we will submit to the current review of copyright law and look to support the New Zealand government’s desire to exponentially grow the domestic music industry.

“We are well positioned as one of the world’s leading copyright management organisations. I am honoured and excited to have the opportunity to lead APRA AMCOS and a team that is focused on world’s best service delivery.”

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