Royalty Distributions ‘Hit Dramatically’ for April-June Quarter, APRA Warns

Royalty payments to creators across Australia have been “hit dramatically” due to the health crisis, and will contract by double-digits, APRA has warned.

COVID-19 and the current recession will impact distributions for the April-June quarter, which will be reflected in the November royalty payment, the PRO confirms in a statement. Though digital continued to grow, taking some of the brunt, the royalty payment due in mid-November will be down 11% compared to the same quarter last year.

APRA makes quarterly royalty distributions each year from its domestic license fees.

The pandemic and its aftershocks have been felt across APRA’s activities. The organization has let go almost 20% of its staff in the quarter, which frees-up the burden of salaries, the largest part of its expenses.

In a breakdown of its revenue streams, APRA noted:
– Digital (including Spotify, YouTube, Facebook and Netflix). Net distributable revenue (NDR) increased by 27% compared to the same quarter last year. Digital makes up just over 50% of the total June quarter royalty distribution.

- Commercial TV. Royalties decreased by 20% compared to the same quarter last year, due largely to several factors: a recently revised commercial TV license scheme, a reduction in TV advertising revenue, and a “large reduction” in revenue from background music, played in retail, hotels, fitness and other venues which were shuttered during the period.

- Subscription TV: Royalty distributions are largely unchanged.

- Commercial Radio: Royalties declined by 57% versus the same quarter last year due to a pullback from advertising revenue and from background music licenses.

- Concerts/Events: A 24% decline in concert royalty payments compared to the same period last year.

- Cinema and Nightclubs: Royalty distribution from cinema reduced by 76% and nightclubs by 82%.

The results aren’t unexpected.

Last month, APRA AMCOS reported a downgraded financial year and a small decline in royalty distributions, due to the effects of COVID-19 and last summer’s bushfire season, with public performance income the hardest hit.

“With restrictions remaining on live music, concerts and touring,” reads a statement issued with publication of its Year In Review, “music royalties are expected to take a more substantial hit in 2020-21.”

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