COVID-19 impact on November APRA royalty payment

Tuesday, 03 Nov 2020

COVID-19 and the subsequent recession have impacted our revenue, most immediately affecting the November APRA royalty payment. This payment relates to revenue from the April-June quarter. Revenue from concerts, live music, radio and television, cinema, airlines and hospitality was hit dramatically in this quarter. Digital revenue continued to grow, which helped shield the impact, but the November APRA royalty payment overall will be down 18% compared to the same quarter last year.

The pandemic has also impacted our expenses. While APRA has reduced staff numbers by almost 20% in this quarter (salaries are the largest part of our expenses), the positive impact this will have on our expenses will not be felt until future royalty distributions.

APRA makes quarterly royalty distributions each year from its NZ and Australian licence fees. Broadly speaking, each distribution occurs four-and-a-half months after the end of the relevant calendar quarter. For example, revenue from the April-June quarter is paid to members in mid-November.

Impact on the main New Zealand royalty distribution pools for the April-June 2020 quarter:

Digital (incl Spotify, YouTube, Facebook etc): Net distributable revenue – ie: royalties - increased 27% compared to the same quarter last year. Digital makes up just over 50% of the total June quarter royalty distribution. Royalties increased in part because of increases in subscribers to those types of services (or increases in their advertising revenue where relevant).  

Commercial TV (TVNZ, TV3 etc): Royalties decreased by 46% compared to the same quarter last year as a result of a number of key factors, primarily:  

  • a reduction in TV advertising revenue, which has resulted in lower licence fees from the TV sector;
  • and reduction in background music revenue (To make our royalty distributions to members and affiliates, licence fees from background music in retail, hotels, fitness etc are in part added to other distribution pools such as commercial TV. Many businesses were closed during the quarter, reducing our revenue from background music as a result).

Subscription TV (Sky Television): Royalty distributions are down 20% compared to the same quarter last year due to the continuing decline in Sky subscribers.

Commercial Radio (e.g. NZME networks and Mediaworks statons): 23% decline in royalties compared to same quarter last year due to two key factors:  

  • APRA’s licence scheme with commercial radio is linked to advertising revenue. The revenue in commercial radio has been reasonably steady (pre-pandemic) but the impact of Covid is significant although perhaps not as bad as we had anticipated; and  
  • and the large reduction in background music revenue (see above), impacting the licence fees added to this pool.

Concerts/Events: A 24% decline in concert royalty payments compared to the same period last year. APRA invoices concerts/events after box office figures are known. As no concerts occurred in April – June 2020 due to COVID restrictions, the distribution was only made up of revenue from events that occurred in the prior quarter.  

General Live Performances: APRA has historically distributed royalties from this pool to members on an annual basis. This normally occurs in November but in response to the pandemic, APRA brought forward Performance Reports payments of $885,000 to May 2020.

Cinema, Nightclubs, Fitness and Airlines: As you will imagine revenue from these sources has been severely impacted by Covid. There was for instance no revenue from from Air NZ for the quarter.

We’ll keep you updated on significant impacts to future APRA royalty payments.

A reminder: MusicHelps is still operating its benevolent fund and wellbeing service, and we strongly encourage anyone to get in contact with them if necessary. Head to https://musichelps.org.nz/backline/ or phone 0508 MUSICHELP


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