U.K. collecting society PRS for Music's new CEO is planning to work more closely with and monetize emerging digital music distribution platforms.

That was the key message from Robert Ashcroft, at his first annual general meeting (AGM) in London yesterday (April 29).

The organization hopes he brings some stability to the crisis-ridden society that has seen five CEOs in the last five years (Billboard, March 6, 2010). In January, Ashcroft replaced Steve Porter, who left abruptly in July 2009. Jeremy Fabinyi had been interim CEO.

Ashcroft emphasized plans to use his experience in digital music distribution, particularly during his tenure as senior VP at Sony NetServices, to enable PRS for Music to exploit online and mobile more effectively. Sony NetServices, which operated the now defunct Connected music store and the mobile streamed-music technology StreamMan, was acquired by RealNetworks in 2007.

Speaking to Billboard.biz after the AGM, Ashcroft says, "It helps that I've come from that sector because rights owners have been the ones who push boundaries when it comes to adopting new technologies. We want to sit with the Internet Service Providers (ISPs) and telcos to see if there is a way to make this work."

During his AGM keynote speech, he had expressed the importance of staying on top of digital distribution. Although royalties for the calendar year 2009 had increased 2.4% to £623 million ($954.8 million) from the previous year, the 'Broadcast and Online' division fell 1.6% to £177.4 million ($271.9 million) during the same period.

Online distribution alone jumped 73% to £30.4 million ($46.6 million), but the division was hurt by a 9% drop in revenues from TV, a 6% decrease in radio royalties, and a 56% slump in ringtones revenues.

"It's tough to compete against free. Online still represents only 5% of our revenue," he told the audience of PRS members. The IFPI said that digital accounts for 19% of the digital recorded music market.

Digital Economy Act

Ashcroft welcomed the new Digital Economy Act, which requires ISPs to disclose the identities of serial copyright infringers, and paves the way for a graduated response scheme.

"We shall engage with the ISPs to define a framework to encourage [the development] of licensed music services and make unlicensed ones unattractive," he stated.

He said he was confident that new Europe-wide licensing initiatives, such as the new IMPEL (Independent Music Publishers' European Licensing), will enable PRS to comply with European Union legislation while competing effectively against rival societies in the region.

ICE's "teething problems"

Moreover, he added, he had high hopes for ICE, the international copyright database system jointly owned with Swedish society STIM, which came into effect in January.

Despite "teething problems," ICE has helped process more than £200 million ($306.7 million) in revenues for PRS and STIM members already, Ashcroft disclosed.

Among 2009 revenue categories, the 'International' division reported a healthy 19.4% jump to £167 million (£256.1 million).

Challenges ahead include negotiations to renew PRS' five-year license for U.K. public broadcasting giant the BBC, which is funded by the government-mandated TV-license fee. "The governance, scope, purpose and funding of the BBC might change," Ashcroft warned, following any change of government after May 6.

Despite any obstacles, PRS "delivers the highest net distributable revenue per capita in the world," he added. "This makes PRS the most efficient collection society among the major markets, and our members the most successful exporters of copyright in the world. PRS is in good shape and we're fit to face those challenges."

New Management Structure

Ashcroft also disclosed the structure of his new management, which will center on two divisions: the licensing division, which will be headed by Fabinyi as executive director, licensing; and the operations division, which will be headed by Niall Stirling as executive director, operations.

Ellis Rich, in his final years as PRS chairman, pointed out that the industry still needed to educate the government, businesses, consumers and all music users about why creators deserved fair compensation for their hard work.

He felt campaigns such as the PRS Heritage Award scheme, which honors the venues where legendary artists performed their first gigs, helped spread that message. Last year, the scheme was awarded to the "performance birthplaces" of Blur, Dire Straits, Jethro Tull and Squeeze.

He said the decision to reduce new-membership fees to £10 ($15.3) from £100 ($153) had seen "the number of new writers double in 2009," and several have already earned royalties.

The PRS for Music board of directors appointed two new writer members: songwriters Barry Blue and Julian Nott.