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COVID-19 impact on February APRA royalty payment

Story Published Thursday 18 February 2021
Revenue areas impacted by COVID included live events, digital, radio and nightclubs

COVID-19 has impacted our revenue, and royalty payments.

This is the second of our COVID impacted distributions, affected by Victoria re-entering lockdown and eastern states operating with significant restrictions, particularly in events and hospitality.

February 2021 APRA royalty payment overall is down 8% compared to same quarter last year.

The February 2021 royalty payment is a total distributable amount of $44.7 million. This compares relatively well:

  • Year on Year (YOY) – a decrease of 8%; and
  • Quarter on Quarter (QOQ) – an increase of 5%.

Impact on the main Australian domestic royalty distribution pools for the July – September 2020 quarter:

Digital (incl Spotify, YouTube, Facebook and Netflix etc): Digital services remain strong and have largely been unaffected. Distributable revenue from this sector accounted for 55% of the total distribution with all major clients continuing to show growth. Video On Demand alone was up 36% YoY when compared to the same quarter last year. This was also the second quarter in which we have distributed Disney+ and Apple TV.

Commercial TV (eg: Network Seven, Nine and Ten): Distribution payments were down 20% YOY, primarily due to the continued reduction in music licence fees from retail, hotels, fitness etc which are in part added to other distribution pools such as commercial TV. Many businesses were closed, or operated in a reduced capacity during the quarter. This impacted the amount of revenue that would normally be added to the licence fees paid by commercial TV broadcasts as part of the distribution.

Commercial radio (eg: KIIS, nova and smooth fm): Advertising revenue for the sector was impacted by the pandemic over the September quarter (but noting signs of recovery into the December quarter).

  • Net distributable revenue decreased by 33% from the same time last year. This is consistent with industry figures published by peak body, Commercial Radio Australia.
  • Size of royalty distribution pool also impacted by lower ‘general revenue’ contributions from public performance licence fees due to COVID-19 trading restrictions over the quarter.

Cinema: Trading restrictions have had a large impact on cinema attendance and box office, resulting in distributable revenue from this sector 66% down on the same time last year. Without ‘blockbuster’ releases, many cinemas have introduced themed nights/weekends, almost doubling (from around 350 to just over 700) the number of discrete films receiving performances with the top 131 films, accounting for 95% of box office takings for the quarter.

Nightclubs: Virtually all nightclubs remained closed for operations over the September quarter leading to a significant contraction in revenue from the sector. Nightclub royalties are paid out in part according to music recognition devices located in selected nightclubs. The vast majority of those venues were not open during the period, and therefore unable to provide the required distribution data. Accordingly, given these two factors, the small amount of distributable revenue from this sector was deferred for payment in the subsequent distribution.

Distributable Events: Concert activity processed over the September quarter was impacted significantly by COVID and distributable revenue consisted almost entirely of events that occurred prior to the pandemic.

  • Distributable revenue was down by 84% on the same quarter last year, and down approx. 74% when compared to the June Quarter Distribution (P2010A)

The distribution also included:

  • The second round of payments for free live stream events on Facebook, Instagram and YouTube - a total of 604 claims comprising of 4,708 works.
  • A small about of revenue from individually licensed streaming events with box office takings.

Airlines: No distributable revenue available for the quarter because of Covid (this is the second consecutive quarter that has not included airline revenue in the distribution).

Background Music Suppliers: This segment was partially impacted by the pandemic and reduced operating conditions for hospitality-based venues. Major retailers have continued to trade during this time and have been invoiced accordingly. The royalty distribution from this pool was down 28% compared to the same time in the previous year.

Community Radio: The licence scheme structure for community radio causes fluctuations in quarterly revenue that do not reflect music use. Accordingly, from this distribution onwards, we will use an annual ‘fixed point value’ per song per play on community radio. This will lead to a steadier pay-out to members. Licence fees from the sector have been impacted by the pandemic.

A reminder: We strongly encourage you to apply for Support Act Crisis Relief Fund if you need financial assistance for living expenses. Read our tips for applying for crisis relief.