British music royalties suffer first ever decrease

In the United Kingdom, PRS for Music has announced that the total royalties that artists in the music receive has decreased by 1%. This is the first time that such a decline has ever occurred.

The company has reported that the total was £611.2 million (US$977.8 million, €693.9 million) in 2010, a decrease of overall annual revenue of 1%, or £7 million (US$11.2 million, €7.9 million), from 2009. PRS for Music has claimed that these descents are due to a lack of sales of Compact Discs and DVDs, as well as digital copyright infringement.

The collection society, which is a representation of seventy-five thousand writers, composers and publishers of music, gathers royalties from music being used in excess of twenty-five billion times annually by various means, including television / radio, commercial businesses, musical venues, Compact Discs and DVDs.

Robert Ashcroft is the Chief Executive Officer of PRS for Music and is responsible for being the representative of such British music artists as Adele,Jessie J and Florence Welch. Speaking about this news, Ashcroft said: "The loss of high street outlets, the slowdown in physical music sales as well as the challenges capturing the full value of music usage online has meant that for the first time we have seen royalties collected dip. Previously, any reduction from falling physical sales had been offset by our strong performance in music licensing both in the UK and internationally. In 2010 slower growth at home and abroad failed to fully mitigate the decline."

In 2010, the sales of music physically and digitally by 7% to achieve 120 million units. Meanwhile, sales of compact discs fell by 12.4% to a total of 98.5 million. British global entertainment retail chain HMV has attempted to save money by closing down sixty of its shops in the UK. In 2010, royalties' growth reduced in speed to 4.3%.

Simon Neil, of Scottish rock group Biffy Clyro, explained that "[t]he thing about PRS is for a lot of bands it's the only way you make money. In our first six years of being in a band that was the only kind of income we had. It's the bread and butter for bands. It's almost your only guaranteed source of income."

PRS for Music has stated that its payout to its members was decreased by £800,000 (US$1,3 million, €900,000), due to improved society efficiency and a reduction in costs related to administration. According to Newsbeat, the small royalty drop may trigger a larger decline, causing new musical composers and writers to avoid joining the music industry. The company believes that further action needs to be taken to prevent the lack of CD sales and compete with outlawed piracy websites, including the development of legalised downloading websites.