As with most sectors of the music industry, digital has completely transformed the business of royalty collection society APRA AMCOS.
But as well as providing a huge boost in revenue distributed to their songwriter members, global platform such as Spotify also pose new challenges to the royalty collection society.
In a wide-ranging interview with NZ Music Business, APRA AMCOS’s head of New Zealand operations Anthony Healey talks about its successes to date and what the future holds for the organization.
“The revenue picture continues to look really good,” says Healey, summing up the current state of play. “But we are very mindful of remaining relevant for our members and our customers, giving each of them certainty around their royalty collection, so songwriters and publishers can earn a living.”
APRA AMCOS’s official annual report won’t be issued for a few months yet, but he says the organisation is on track to post another year of double digit growth. Much of that continues to be driven by the huge uptake of digital services in this part of the world, helped in part by the attractive bundling deals provided by telecommunications giants such as Spark. And it’s not just music streaming giants such as Spotify: music used on platforms such as Netflix – classified as ‘Video On Demand’ by the organization – are also providing a valuable new source of revenue for its members.
Healey acknowledges that if some of subsidised streaming offers came off the table there is a chance that there would be a drop in revenue.
“It’s slightly artificial because the end punter is not really paying for it,” he says. “And if they were forced to pay for it, there is every possibility that they wouldn’t – that’s a slight risk.”
With APRA AMCOS’s other revenue streams – live performance, broadcasting, background music licensing – all continuing to see solid growth, the organization remains in a strong financial position. Nevertheless, Healey is aware that there are new digital challenges to address further down the track, in particular the desire of the big multi-national music publishers to strike direct deals with the major digital platforms.
“We have to look at our operation and see where we fit in,” he says. “Are we going to be happy just doing our traditional television and radio licensing, and collecting license fees from public performances? Or are we going to be in that digital space?”
One option which APRA AMCOS will continue to explore are pan-Asian licensing deals. According to Healey, the roll out of digital services to some countries in the region are being hampered by the operators’ inability to obtain the necessary royalty licenses, so the organisation is well placed to fill that role. A number of Pan-Asia digital licensing deals have already been struck and it’s seen as a strong potential growth area for the royalty collection body.
The key to developing this side of the business is APRA AMCOS’s new IT system, Copyright Licensing Enterprise Facility (CLEF), which is due to come on line in November.
The launch has been put back a number of times but Healey is confident it will greatly improve the services offered to members.
“It’s backend operating system which will impact the way that our members interact with us – the way they register works, the way we store all that information, the way we redistribute money – and will give us much greater flexibility. We know it’s a worthwhile investment because everything that we throw at this will determine what kind of organisation we are in the future, so it is really critical.”
As well as digital growth, APRA AMCOS’s other big success story on this side of the Tasman has been OneMusic New Zealand, a joint venture with Recorded Music NZ, which offers businesses a one-stop shop to purchase a license to play background music.
“The growth there has been significant and it has not been around license fees but it’s been around increasing license numbers,” Healey says. “The whole concept was that if we could offer something simple – and not too expensive – and if we improve the customer service around it, numbers will improve and that is essentially what has happened.”
This side of the business has attracted some controversy – both within and outside the music industry – and Healey accepts that people are often reluctant to pay to publicly play music in their business, whether it be a café or a non-music retail outlet.
One of the big changes in the organisation is that we get the money out the door a lot quicker.
However, he makes no apologies for pursuing businesses who refuse to obtain the necessary license and says the organization currently has “hundreds of files” lodged with lawyers.
“There will always be controversy, there will always be someone who doesn’t want to pay, and there will always be someone who we have to issue copyright procedures against – and we don’t run a way from that fact. I want to make sure, though, that we operate in a business-like way and people understand what they need to buy and what they are getting when they pay for a license.”
“Routinely they never get to court,” Healey adds. “As soon as lawyers get involved, they realise that the law is very much in our favour and if you are using music in public then you do need to get a license.”
If OneMusic has at times attracted negative publicity, another APRA AMCOS programme has received much more positive media attention: SongHubs.
The workshops bring together New Zealand songwriters and producers with international guests and a designed to encourage local artists to pursue a more collaborative approach.
“If you look at the Billboard charts almost every song in the top 100 is written by four or more people,” Healey says. “Down here we don’t make music that way – or haven’t historically. We wanted to encourage that and that’s why the SongHub programme is very important.
“They have been incredibly successful and have almost immediately created a much more collaborative approach amongst our members.
“Members who have taken part in them have realised what a great opportunity it was and are now going out into their own communities and doing similar things. They’re really achieving everything we hoped.”
Earlier this year, APRA AMCOS ran a Nashville-themed SongHub and that will be followed in August by one aimed specifically at female writers and producer. The organisation is also looking to develop a SongHub for Te Reo Maori songwriters, so it’s a programme that is set to continue to grow and hopefully continue to benefit members.
And ultimely that’s what APRA AMCOS is all about for Healey. He is proud of the fact that the organisation is paying out more royalties to more writer and on more frequent basis.
“One of the big changes in the organisation is that we get the money out the door a lot quicker,” he says. “As soon as we get it in, we get it out. That does reduce our interest income, but our role is not to sit around and make a profit on other people’s money.”