Peter Leathem OBE on driving PPL to unprecedented heights and industry innovation

In summary (click to jump to each section):

• Unprecedented revenue growth: Growth under Peter’s 12-year leadership, with annual collections approaching £300 million.
• Game-changing joint ventures: Launching the PPL PRS Ltd joint venture with PRS for Music, and streamlining public performance licensing.
• Global collections expansion: Enhancing international collections and capitalising on emerging markets.
• Innovative industry services: Collaborating with other collective management organisations, improving accuracy and reducing costs across the music industry.
• Resilient leadership: Peter’s leadership during the Covid-19 pandemic reinforcing PPL’s commitment to its members and adaptability in challenging times.

 

However, the size of the annual collections – which topped £200 million, then £250 million for the first time during his tenure, and now heading for £300 million – is just one measure of the indelible impact the company has had under him. Among the many achievements, he steered through the successful launch of a game-changing public performance joint venture with PRS for Music, while other key developments include everything from further driving forward PPL’s industry-leading expertise in data and technology to providing a desperately needed lifeline for thousands of performers during the Covid-19 pandemic.

Peter acknowledges he was “quite nervous” when he took over from Fran as CEO at the beginning of 2012, given his predecessor’s success. “Fortunately, 2012 was a really successful year revenue-wise, with double-digit growth,” he says. “From there, things moved on quite seamlessly. Fran stayed on as Chair for four years, and we did a really successful handover process, which is what most companies aspire to do, but don’t always get the chance. If you have that continuity over a period of time, it means you can develop a good strategy around what you’re aiming to achieve and try to continue that.”

Peter Leathem interviewed by Mark Sutherland in 2019

Launching a public performance joint venture with PRS for Music

Even before Peter became CEO, there had been “a number of attempts” to forge a joint venture with PRS for Music to handle public performance collections but none had come to fruition. Peter was directly involved in a number of the previous negotiations and sought to learn from those experiences once he took over as CEO.

Progress started to be made when Robert Ashcroft became PRS CEO in 2009. Peter forged a close working relationship with him, but a number of obstacles continued to stand in the way of the venture happening, including the choice of IT systems, where the new company would be located and agreeing terms between the two organisations. But finally in February 2018, PPL PRS Ltd was launched, providing a single public performance licence to hundreds of thousands of premises to play recorded music. It ended 84 years of PPL and PRS issuing separate licences.

“Seeing how hard it was to come together, I could see why it failed over a few decades,” Peter says. “Bringing it together was a really good outcome. We’ve had lots of success already and that’s with two years of setup, and then two years of Covid, which held us back. We’ve now had a good few years and there’s much more potential for the organisation yet. So I have to say it was a good achievement, getting the agreement, building it, launching it and now trading successfully.

“It took us 84 years to get there, but only five years to pay out more than £1 billion in royalties to our respective members.”

The increase in public performance revenues has been a key factor in PPL’s total annual collections increasing, which hit another new high of £283.5 million in 2023. “We have excellent opportunities to carry on growing our tariffs and improve market penetration and efficiency in PPL PRS. So public performance has definitely got good potential growth over the coming years,” Peter says.

The growing breadth of international collections

Peter is equally optimistic about the potential for international collections, which reached £75.4 million in 2023, following a record high of £94 million in 2021.

“We had a couple of really high years of collections for international, where we were effectively bringing through multiple years of past payments owed to members. That’s now settled down and we’re focused on the great opportunities for international to grow. There are only about a third of the countries in the world that have rights for record companies and performers,” he says. “It’s much lower than people would think. That’s starting to change. China now has record company rights; India has more structured performer rights than in the past, and we’re seeing rapid developments in the Middle East – all these changes over time will help grow the total market. Collections are also getting better in lots of different territories, as are the methods of collaborating to get proper identification of repertoire. At the same time, we’re acting for more and more performers and rightsholders internationally, all of which combine to create a great opportunity.”

Peter Leathem OBE with CEO of ISAMRA Sanjay Tandon and PPL’s Director of International Laurence Oxenbury 

Peter suggests establishing additional rights in just one of the largest territories “would make a big difference” to international collections, including in Japan where currently there are broadcast rights but no public performance rights. The big anomaly continues to be the US where there are digital performance rights but none for terrestrial radio, despite decades of lobbying to change that, or for public performance in bars, shops, offices, etc.

One potential area of growth is in the EU, following a 2020 European Court of Justice ruling that EU member states should be allowing payments to US performers. Previously, because the US has no performance rights for terrestrial radio or public performance, EU countries were not required to pay US performers and rightsholders for those rights when their recordings were played in their respective territories.

“Following the ECJ case, European governments have changed their laws to protect US repertoire,” says Peter. “More countries in the EU now protect repertoire than don’t. Our government in the UK is currently consulting on whether to extend qualification for US repertoire as well. If that changes following the consultation, it would open up millions of pounds for US performers which wasn’t there for them in the UK previously.

Increasing competition for international neighbouring rights

The increase in international neighbouring rights collections across the industry has resulted in a hugely competitive market with hundreds of rival entities offering to collect on behalf of performers. Peter believes this has happened as a consequence of PPL first entering the international neighbouring rights marketplace in the 2000s.

“When we started doing international collections there were a few companies that were collecting for some performers for some of their repertoire in some countries and doing it at a high cost,” he says. “So us coming in made everyone professionalise. They got much better. The price point came down from about 20% to a much lower level. PPL charges a flat rate of 7% for international collections, and our aggregated cost-to-revenue ratio for UK licensing sits at about 14%. We’ve driven better standards, better cost rates, and created open access to all if they want to come to us, but also we report the information so we make it quite clear how much money is being collected.”

While Peter welcomes the competition, he predicts that over time a lot of the companies in this field will exit. “There will be a bit of consolidation, a bit of people giving up. Some of the publishing and record companies involved have realised it’s not that easy to compete with us.”

Driving value out of the broadcast market

Out of PPL’s three key collection areas, Peter sees broadcast as the area which is seeing the fastest change. “The way people are consuming music is changing; it is not all linear TV and radio as in the past,” he says. “On the broadcast side, revenue growth has been down to the popularity of the use of music on TV and radio. TV takes more work to try to make the use of recordings easier and the deals we negotiate. We’ve achieved very good licensing and dealmaking and driven value around the broadcast area over a long period of time. Now the job is to keep evolving our licensing in step with the changing ways that music is being used, to keep the focus on driving that revenue back to members.”

Peter Leathem OBE re-elected to the Board of global trade body SCAPR in 2022

Supporting other CMOs with an industry-leading suite of business services

One new area of business that PPL has moved into under Peter’s leadership is offering backoffice services to other collective management organisations around the world. This includes matching and identifying rightsholders and performers to repertoire, as well as undertaking distribution calculations and reporting based on local distribution rules. Six CMOs across Estonia, Iceland, Ireland, Latvia, Lithuania and Portugal use a mix of these services, which means that they do not have to make costly investments in their own individual systems to manage their data, as well as improving accuracy and consistency across payments.

“The back-office collaboration side has been growing steadily,” Peter says. “We’ve even been providing HR services to some UK organisations as well. We saw it as an opportunity to try to help the industry and build efficiencies where we can. It’s going very well, helping to build good relationships, as well as removing cost from the ecosystem in general.”

PPL’s active role in the wider music industry

One of Peter’s priorities as CEO has been to further professionalise the organisation, including bringing in “better and better quality people”, which has helped realise his goal of PPL becoming more actively involved in the wider music industry. This has manifested itself in many ways, including Peter joining the boards of performer CMO global trade body SCAPR and UK Music, the UK music industry’s collective voice to government. Other members of the executive management team also serve on various industry boards and committees.

“It was a gradual movement of just getting involved with lots of different organisations, but then we went on a journey of working with and supporting AIM for the indies and the Musicians’ Union and then providing HR services for them,” says Peter. “Those things are us trying to play our role in the bigger picture. Yes, we have our own revenue and cost agenda to manage, but if we can also help other organisations in the music industry, as well as making our colleagues’ jobs more interesting and fulfilling at the same time, it’s a win-win. Over time, that means more of the industry is working with our colleagues, seeing how well we’re run and it’s helped PPL’s reputation because we’re involved with so many different people across the industry in different guises.”

PPL’s successful relationships across the music industry

PPL’s wider music business role highlights what Peter sees as its “pretty unique” position of having positive direct relationships with almost every component part of the recorded music industry.

“When I look at the people around our boardroom table, we’re keeping happy the major record companies, the indie companies, the featured performers, the non-featured, the producers. Everyone thinks we’re doing a good job for them and that’s quite hard to achieve.”

“That gives us real strength to push back and say, ‘That’s a daft idea’ because they trust us to be saying that for the right reasons, as opposed to be motivated by just looking after certain interests. We’ve worked really hard to achieve that respected position.”

Continuing to make PPL even better

More than 12 years after becoming CEO, Peter is “more excited than ever about what we’re going to do over the next three years” as he looks to push PPL forward even more. “I’m driven by wanting us to get better, and being competitive,” he says. “I’ve always been hard-working and keen to challenge the status quo. That’s my character and I want to be the lead agitator because you get what you tolerate and if I’m not bothered, no one else will be.

You’d get a drop-off effect. I’m always trying to challenge things and then try to get that mentality across the business. It’s a big focus at the moment, to keep driving that sort of thinking and sense of constant iteration and improvement.” And, in this 90th anniversary, there is also the opportunity to reflect on everything that PPL has already achieved, particularly over the last two decades. “It’s been immensely satisfying to work for a company that’s got better and better at what it does over the years and to have been a key part in that journey over the last 20 years,” he says.

“We’re doing lots of good work. We really believe in PPL’s role, which is effectively trying to collect and share some of the commercial benefits businesses obtain from playing recorded music with the performers and recording rightsholders that created and own those recordings. It’s a great thing to get behind and we just want to provide really good services at a good price for them. It’s very satisfying to have had some success on that journey and be respected and thought well of for doing so.”

Read more about PPL’s impact in the 21st century here