On the heels of yesterday's announcement by the British Phonographic Institute that digital sales have overtaken physical sales comes news from the UK's PRS For Music, Britain's collection society, that digital royalty payments will soon match those from physical sales.
Royalties from the digital sales of U.K. repertoire worldwide will match those from the sales of physical recorded media, including CDs, in the year 2014, predicted PRS for Music, Great Britain's collecting society, during its AGM (annual general meeting) today (May 31).
Chief financial officer Craig Nunn pointed out that the current tough economy, which has seen youth unemployment reach a staggering 22%, had not hurt the organization's income stream.
"But considering that those under 30 (years of age) account for half of all digital sales, that could be damaging. Yet, in 2011, revenues from online grew 42% to £39.1 million ($60.9 million)," he said. Online represented 10% of royalties collected in the domestic market last year, he said.
However, as sales of physical recordings decline, digital sales will grow to catch up in two years' time. "By 2014, online royalties will cross over physical recorded media (income) at £70 million ($109 million) apiece," he said.
Royalties from overseas were also healthy for PRS members, Dunn said. The society collected £188 million ($293 million) from 150 countries last year. "We're becoming less and less reliant on the U.K. market," he stated.
The healthy growth of digital sales' share was confirmed by CEO Robert Ashcroft: "Online now represents a larger proportion of royalties than either live music or (performance rights from) pubs and clubs, which is a considerable achievement and one that validates our approach of licensing new (digital) services. So successful have we been that the U.K. represents nearly 50% of the entire European market for legal downloads."
Speaking to an audience of rights owners, Ashcroft added: "With the U.K. market now showing signs of slight decline, we depend on the strength of your repertoire overseas."
The improving overseas performance has been helped by the ICE (International Copyright Enterprise) system, a joint venture with Swedish royalties-collecting organization STIM to make copyright management more efficient.
He also disclosed that GEMA, the German collecting society, is "expected to announce shortly their intention to become a shareholder in ICE."
PRS collected £630.8 million ($982.5 million) last year. Of that, £557.2 million ($868 million) was distributed to its members, a 3.2% increase from 2010.