april 2014 – march 2015 - publishers' licensing services · pdf fileannual review...

Annual Review April 2014 – March 2015

2 | Annual Review April 2014 – March 2015

Report from the Chairman“Change is the only constant” has been the theme of PLS since I became Chair in 2013.

Last year, Kevin Fitzgerald left CLA, after seven successful years as CEO. In the wake of his departure, CLA has gone through substantial restructuring, with Adam Singer (the chair of ALCS) and myself now jointly chairing a streamlined Board, following the conclusion of a new “members agreement” between ALCS and PLS. Mat Pfleger became Managing Director of CLA and has overseen the signing of an unprecedented six-year agreement with the Department for Education for the licensing of state schools. He has also begun to implement a series of strategic projects, to ensure that CLA remains relevant to its licensees – and to its rightsholders – into the future.

Change at CLA and PLS has been driven in part by the changing regulatory environment, as we await the implementation of the European Collective Rights Management Directive. While we broadly welcome the resultant changes, these have created significant additional work for

Sarah and her team, which they have managed with their usual quiet competence.

In the midst of all this activity, we are preparing to move office. For the first time, ALCS, CLA and PLS will be sharing the same office space. We anticipate not only increased efficiency across all three organisations but also additional momentum being given to the improvement in communication and collaboration that has characterised the past year.

Historic tensions have often been caused by disagreement over the “splits” in the distribution of revenues between different categories of rightsholder – authors, publishers, illustrators and photographers. It is a signal of the very different environment in which we now operate that PLS and ALCS, working with three organisations representing the graphic arts, are currently facilitating the first professionally-determined, objective valuation of the rights which these classes of rightsholder bring to CLA and NLA licences. This project will bring new clarity to the distribution

process and with it a reduction in tension between stakeholders.

Finally, I must say “thank you” to my colleagues on the PLS Board, whose wisdom, expertise and good humour are unfailing. Two farewells – one to Martin Rosser (who joined the Board all too briefly representing the PPA) and one to Graham Taylor; Graham was a member of the PLS Board, representing the PA, for 13 years, three years as Chair. He left the Board at the end of December, and will be very much missed. We extend a warm welcome to two new Board Members: Richard Mollet, CEO of the PA; and Nick Service, Chair of the Hemming Group (representing PPA).

Mark Bide, Chairman

Annual Review April 2014 – March 2015 | 3

ForewordThe big number for PLS distributions for 2014/15 was £33.8 million. This is evidence of the fact that collective licensing remains in rude health despite the threats and challenges that face PLS and its licensing agents, CLA and NLA media access. It marks another excellent year for PLS and all the publishers who trust us to manage the collective licensing of their rights. None of this could be achieved without the hard work of all the staff at CLA, NLA and, not least, PLS, to all of whom I am very grateful.

We devoted some energy during the year towards a thorough upgrade of the PLS mandate. Not surprisingly, in the ten years since the last revision, it had fallen somewhat out of step with digital developments. The upgrade also allowed us to reflect the benefits to publishers of the regulatory environment that has enveloped organisations such as PLS in the last year (see page 13). I am proud that we are launching the newly styled Publisher Account at our 2015 Annual Open Meeting. We look forward to signing up those publishers who

have not yet done so as soon as possible.

Developments on which I reported last year have been completed and are already fully embedded and an integral part of our every day business. For example, a year ago we were still in the very early stages of licensing through NLA and managing that new relationship. Overall revenues have been exceeding expectations by some way in the first 18 months and the forecast is for this trend to continue.

Our Access to Research two-year pilot project, which has been running smoothly and is thoroughly applauded by those who use it, was launched only last year. We are already at the stage of commissioning research to evaluate the project in order to inform decisions on its future when the pilot finishes at the end of 2015.

PLSclear has captured the interest of all the publishers and authors we have been able to share it with so far, proving to us that we are meeting a strong demand for streamlining and accelerating the permissions

process. PLSclear will migrate from being a simple dating service to a full licensing service by the end of the year for those who want to use it.

And the new PLS website was completed during the year and launched at last year’s Open Meeting and is already attracting more traffic than ever before.

Whilst I will be sorry to leave Russell Square, which has been an excellent home for PLS and has allowed the team to flourish, our move to Barnards Inn provides an excellent and exciting opportunity to work with CLA and ALCS. I am delighted that the PLS team is equally looking forward to this new chapter.

Sarah Faulder, Chief Executive


Income and Expenditure

2015 2014

£ £

LICENCE FEES RECEIVED 35,954,366 38,170,899

Distributable to publishers (33,856,095) (36,384,747)

TURNOVER 2,098,271 1,786,152

Administrative expenses * (2,037,642) (1,826,357)

OPERATING SURPLUS (DEFICIT) 60,629 (40,205)

Bank interest receivable 40,679 42,890

SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION 101,308 2,685

Taxation (34,066) (8,799)

SURPLUS (DEFICIT) FOR THE YEAR 67,242 (6,114)

BALANCE BROUGHT FORWARD 552,758 558,872

BALANCE CARRIED FORWARD 620,000 552,758

For the year ended 31 March 2015

* This figure includes £168,153 (2014 £162,761) for Directors’ remuneration including pensions.


2015 2014

£ £

FIXED ASSETS

Tangible assets 342,615 351,117

CURRENT ASSETS

Debtors 1,014,698 541,204

Short-term fixed deposits 4,535,783 1,526,516

Cash at bank and in hand 4,348,043 9,491,930

9,898,524 11,559,650

CREDITORS: amounts falling due within one year (9,589,272) (11,328,060)

NET CURRENT ASSETS 309,252 231,590

PROVISIONS FOR LIABILITIES (31,867) (29,949)

TOTAL ASSETS LESS CURRENT LIABILITIES AND NET ASSETS 620,000 552,758

RESERVES

INCOME AND EXPENDITURE ACCOUNT 620,000 552,758

The financial information on pages 4 and 5 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Income and expenditure account and the Balance sheet have been extracted from the audited statutory accounts for the year ended 31 March 2015. These accounts have been delivered to the Registrar of Companies and carry an audit report

which was unqualified and did not contain a statement under Section 495(4) of the Companies Act 2006.

Balance Sheet

Commentary

At 31 March 2015


Summary of Distributions

Overview

Distributable revenue in the year ended March 2015 showed a 7% decrease on the previous year. This was largely due to the figures for the year ended March 2014 having been inflated by certain exceptional one off distributions, including an early payment of scanning revenues from the higher education sector as CLA improved their distribution processes and an early distribution of revenue from Business and Government (Local Authorities) to accommodate the new licensing for some magazine publishers through NLA. After taking account of these exceptional items the underlying trend for distributions in 2014/15 was marginally up.

Total distributable revenue from all sources

* PLS changed its accounting date during this period and the distribution therefore spans 18 months rather than the usual one year period.

14/1504/05 05/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

£36.

4m

£23m

£26.

2m

£28.

4m

£34.

2m

£30.

4m

£33.

5m

£17m

£33.

8m

£35.

7m*

How we pay publishers

We allocate the licence fees we receive from CLA and NLA by linking the usage data they supply to us to the relevant publishers on the PLSe database. This usage data indicates which titles have been used under each licence and is gathered from a representative sample of licensees through a combination of surveys, audits and record keeping returns. We deduct 6% from the monies we receive to meet our administration costs and we distribute the balance of licence fees, as allocated, in accordance with our Distribution Charter and Distribution Timetable (available on our website at www.pls.org.uk).

3,300+ UK publishers

currently signed up with PLS

£33.8m distributed to

publishers from collective licensing


Total distributable revenues from each sector

Education Central government,

local authorities and NHS

Business, including

MMO and NLA media access

Document delivery

International Other

£12.

9m

£13.

3m

£3.4

m

£2.7

m

£12.

5m

£11.

4m

£0.4

m

£0.2

m

£6.1

m

£6.0

m

£0.5

m

2013/14

2014/15

Copyright Licensing Agency (CLA)Monies received from CLA and available for distribution to publishers are net of the following deductions so that publishers have no further obligations to other rightsholders:

CLA administration fees: 11%

Fixed share of licence fee income payable for visual artists: 8%

A share of the balance to ALCS, namely 50% of monies attributable to books, 15% of monies attributable to serials and 50% of non-title specific licence revenues.

NLA media access (NLA)Monies received from NLA and available for distribution to publishers are net of NLA’s administration fees of 20%. Publishers are responsible for making any payments that may be due to third party contributors.

£0.4

m


Sources of Distributable RevenueCopyright Licensing Agency

UK Licensing: £25m

• Schools: Up 18% CLA has agreed a new extended agreement with Department for Education until 2021.

• NHS: Up 5% CLA has agreed a new agreement with NHS Scotland.

• Higher Education: Down 10% due to one-off catch up payment for scanning re-use in the previous year.

• Business: Down 12%* due to adjustment of rate card to account for magazines no longer licensed by CLA.

Australia£1,738,943 (29%)

Japan£755,463 (12%)

Norway£649,983 (11%)

Denmark£601,034 (10%)

USA£479,035 (8%)

Netherlands£331,081 (5%)

France£317,502 (5%)

Germany£297,929 (5%)

Canada£277,653 (5%)

Sweden£131,512 (2%)

Ireland £114,015 (2%)

South Africa£110,370 (2%)

Switzerland£90,165 (1%)

Finland£66,879 (1%)

Others combined£89,928 (1%)

Schools

£5,920,395 (24%)

Higher Education

£4,850,624 (20%)

Further Education

£2,484,840 (10%)

Business

£8,209,997 (34%)

Government (including Local Authorities and NHS)£2,648,402 (11%)

Other**

£327,471 (1%)

International distributable revenues: £6.1m

*Adjusted to take account of 15 month payment in 2013/14.**Other: Includes Document Delivery and Media Monitoring.


Sources of Distributable Revenue

NLA media access

Total licensing: £3m

2014/15 saw the first full year of payments from NLA’s licensing of business and government sectors.

Business & Government£2,570,589 (83%)PR

£176,534 (5.7%)

Media Monitoring Agencies£154,854 (5%)

Charities£195,117 (6.3%)


Year in Brief

The PLS mandate, the agreement publishers enter into when signing up with PLS, was last updated in 2004. In the intervening decade digital publishing has become a well established

and understood alternative to print. As more and more of life is conducted online it is hardly surprising that users expect to be able to access and use books, journals and magazines online and claim to be photocopying less and less. Our experience has shown that almost all publishers, when asked, have been willing to opt in their digital rights and to opt in to digital licences.

PLS has taken this shift towards digital usage into account in its new mandate, now known as the Publisher Account. Publishers are being asked to authorise PLS to license all their publications, whether print or digital, for all collective licences offered by the Copyright Licensing Agency (CLA) and, in the case of some magazine publishers, NLA media access (NLA), subject to the flexibility to opt out as mentioned below.

Another driver for updating the PLS mandate at this point in time has been the recent surge in regulation of ‘collective management organisations’

(CMOs), which include organisations such as PLS. The Copyright (Regulation of Relevant Licensing Bodies) Regulations were introduced in April 2014 and an EU Directive on collective rights management, adopted in February 2014, will come into force in the UK in April 2016. Quite apart from ensuring that CMOs operate fairly, efficiently and transparently, principles PLS has always been proud to adhere to, the regulations place a strong emphasis on choice for rightsholders in how their rights are managed.

We have therefore redesigned the PLS mandate by making PLSe an integral part of it, so giving publishers flexibility at their fingertips. In addition to giving publishers even more control than before over which of their rights and works are included in collective licences in particular territories, publishers will be able to sign up at a stroke to new services that PLS may offer from time to time.

The new mandate combines a new Publisher Account Form with updated General Terms and Conditions, Distribution Charter and Code of Conduct as well as the new version of PLSe (see opposite).

April 2014 May 2014 June 2014

Charles Clark Memorial Lecture New website launched at www.pls.org.uk

An overview of activity

Introducing the new PLS Account, effective 1st July 2015

Section 4: Signature I confirm that I have read the PLS General Terms and Conditions*, the Distribution Charter* and the Code of Conduct* and I hereby agree on behalf of the Company / Organisation to grant to PLS the rights set out in this Account Form. I understand that PLS will provide self-billing invoices for all sums distributed and these will include VAT where appropriate.

SIGNED ..............................................................................................................................................................(To be signed by an authorised signatory)

Name ..........................................................................................................Date ...............................................* Available in the print Guide to your PLS Account and on www.pls.org.uk Words and phrases in this Account Form with initial capitals have the meanings given to them in the PLS General Terms and Conditions.

Office Use Only

PLS ID .................................................................................................................. New Mandator Date of bank account update .................................................................. Initials ..........................

PLS is owned and directed by:

Section 3: Contact DetailsMain Contact

The Main Contact is your designated contact for all communications from PLS.Name

Email address

Job TitleDirect telephone number

Finance Contact (if different from above) The Finance Contact will receive invoices and remittance advice payment emails when a payment is due. NB: payment emails can ONLY

be sent to one designated contact.Name

Email address


Permissions Contact (PLSclear - if different from above) PLSclear is a service that routes permissions requests to the appropriate contact in your company. Name

Email address


When you have completed and signed this form, either:• Scan and email it to [email protected], or• Post it marked ‘Publisher Services’ to our address, which can be found at www.pls.org.uk/about/contactM01/15

Section 1: Company / Organisation details

Company / Organisation Name .......................................................................................................................

Registered Company / Charity Number

VAT Registered (if yes, provide VAT number) No Yes

Address ...........................................................................................................................................................

..........................................................................................................Postcode: ...............................................

Telephone Number .........................................................................................................................................

Website ...........................................................................................................................................................

Trade Association Membership

PA PPA ALPSP IPG Publishing Scotland Other ................................................

Which sectors do you publish in? Please choose one or more categories:

Science, Technical, Medicine (STM) Academic Educational Professional

Section 2: Bank Account details

Bank Account Holder Name ............................................................................................................................

Bank/Building Society Name ...........................................................................................................................

Account Number

Sort Code

Building Society Reference (ONLY necessary for building societies. Max 18 characters)

B2B magazines B2C magazines Trade

Publisher Account Form

To be read in conjunction with:

General Terms and Conditions | Distribution Charter | Code of Conduct

www.pls.org.uk


July 2014 August 2014 September 2014

PLS Annual Open Meeting PLSclear launches

PLSe is an online account that allows publishers to participate in collective licensing comprehensively and conveniently, in the UK and overseas.

The upgraded interface, developed earlier this year, ties in with the new PLS Account Form launched in 2015. This will see a publisher’s PLSe account becoming an integral part of their agreement with PLS, with a greater emphasis on the role of PLSe in defining participation in collective licensing. PLSe has been upgraded to reflect this, and includes:• Easier to manage digital and print licences.• Increased flexibility for participation in

UK licensing.• Greater control and visibility over licensing

options and settings outside the UK.• A more dynamic and interactive homepage for

easier account management.• New tools to manage title lists and settings,

including open access titles.

These changes are designed to complement and enhance the existing services which include:• A clear overview of licensing settings

and participation.• Itemised breakdown of PLS payments. • A flexible and responsive revenue reporting tool

for easy analysis of licensing revenue at title and licence level.

• Convenient title upload functionality, making it easy to keep title lists up to date.

• An interactive tool, PLSe Assist, to enable quick and efficient transfer of titles between publisher accounts when acquired or divested.

We encourage publishers that may not yet be familiar with their PLSe account to take the opportunity to access PLSe from www.pls.org.uk.

PLSe – new developments in online rights management


Our new web-based permissions tool, PLSclear, aims to streamline the permissions process for publishers receiving requests, and those requesting to re-use content (such as authors and editorial staff).

PLS has developed the service for various reasons: primarily, feedback from publishers indicates a need for such a service; the area has been subject to critical scrutiny (particularly in the 2011 Hargreaves Review of IP and Growth); and PLS is uniquely positioned to develop a cost-efficient solution using our existing rights management framework (PLSe).

The first version of the service, launched in October 2014, solves the communication problems that often arise, helping licensees find the right contact and provide them with the information they need to make a quick decision. One user described it as a “godsend”.

The next version of the service, due Autumn 2015, will help automate requests, aiming to improve the profitability of permissions.

As well as developing PLSclear, we are helping publishers improve their permissions practices through a series of workshops open to all publishers.

October 2014 November 2014 December 2014

Consultation on new mandateFrankfurt Book Fair

Straightforward permissions with PLSclear

The Access to Research service was launched in response to a recommendation from a Government-commissioned report on open access. The Finch Report, as it is now known, indicated that the major STM (scientific, technical and medical) subscription publishers should allow free, licensed access to their subscription services by local library users.

PLS has led the delivery of this service, working with ProQuest, the Publishers Association, the Association of Learned and Professional Society Publishers and the Society of Chief Librarians.

The service been available since January 2014. 92% of local authorities have signed the licence to use the service and c. 2,600 libraries are providing access to it. It contains over 10 million articles from more than 8,500 journals. User feedback has been positive. Comments include “a treasure house of information”; a “wonderfully public spirited initiative” and this is “a very important development”.

The service is running as a two-year pilot, due to end in December 2015. A stakeholder review will determine whether it should continue beyond that date.

Access to Research


Collective rights management organisations (CMOs) such as PLS collect and distribute significant amounts of money to rightsholders. As a result they are rightly subject to close scrutiny from their members

and users alike. As a matter of good practice virtually all UK CMOs volunteered for self-regulation by introducing codes of conduct by 2012. When Walter Merricks conducted his review in June 2014 the PLS Code won a clean bill of health.

Regulators in both the EU and the UK have in the meantime built an entire regulatory framework covering all aspects of the workings of CMOs, including governance, management and operational matters. We wait to see how the UK’s 2014 Copyright (Regulation of Relevant Licensing Bodies) Regulations, ostensibly intended to regulate CMOs where self-regulation of the type mentioned above did not meet certain minimum criteria, are to be reconciled with the 2014 EU Directive on collective rights management (due to be implemented in 2016). Both instruments cover largely the same ground but slightly differently. Compliance has therefore been a feature of the year for PLS, as we have reviewed and refreshed our Articles as well as all our operational practices and procedures and our

communications. This process is set to continue well into the next year as the new regulations come in.

The modified and new exceptions to copyright, arising from the 2011 Hargreaves Review of IP and Growth, came into force during the year. We have been particularly keen to see the impact of the exceptions for education and research. Before we will know their full effect on collective licensing we have been promised new proposals by the end of the year for reforming EU copyright by the new European Commission. We will be working closely with our trade association owners to ensure that any such reforms are kept to the minimum necessary for ensuring a functioning digital marketplace.

The need for the Copyright Hub in this evolving regulatory environment is more pressing than ever, being a practical demonstration of just how effectively copyright can work for both rightsholders and users. PLS remains committed to supporting the development of the Copyright Hub along with other rightsholder organisations and increasing international interests.

January 2015 February 2015 March 2015

New Account Form rolled outOne year into Access to Research pilot

The regulatory environment

Code of ConductPLS staff have worked in accordance with the Code of Conduct. No complaints were received during the year.


Vision, Aims and Values

We reviewed and updated our Vision, Aims and Values in early 2015.

A clear vision helps us set the path for PLS for the

future; agreeing aims means we can then implement the vision in a focussed way; and the values embody the culture at PLS and encompass how we strive to work.

Sharing these key messages with the wider world, and our external and internal stakeholders, is important. It means we can work together in a more targeted way and provide increasing clarity about the role of PLS for the publishing industry, both now and in the future.

Our VisionTo provide efficient and effective copyright and licensing solutions to support publishers in providing access to their content.

Our AimsWe aim to achieve our Vision:

Through collective licensing by:• Facilitating access to the widest possible

repertoire through the most appropriate licensing channels;

• Representing publishers’ interests in licensing the use of their works on a collective basis, both in the UK and overseas;

• Ensuring publishers are remunerated for the use of their publications;

• Maintaining publishers’ rights data to the highest standards;

• Distributing revenue generated from collective licensing regularly, diligently and accurately.

Through wider services by:• Continuing to adapt to new technologies and to

develop new services in response to publishers’ needs, whether economic or political, using our technical rights management framework (PLSe);

• Promoting a strong copyright framework and a better understanding and awareness of copyright amongst publishers.

Our ValuesAt PLS, we uphold the following principles:

• Transparency• Efficiency• Responsiveness• Accountability• Collaboration


DirectorsChairMark Bide

ALPSPJen HoltonDave JagoAudrey McCulloch

PPAAndrew HortonNick Service** Andrew Yeates

PAIan RussellRichard Mollet***Lis Tribe

Directors

Up to three directors are nominated by each of the trade association members of PLS (ALPSP, the PA and the PPA) and are approved by the Board. The Chairman is appointed by the Board and is independent of the members. The Chief Executive is appointed by the Board.

* Up to 31 March 2015.

** Appointed February 15, replacing Martin Rosser who resigned December 2014.

*** Appointed February 15, replacing Graham Taylor who resigned December 2014.

StaffChief Executive Sarah Faulder [email protected]

Deputy CEO and Head of Business Development Jonathan Griffin [email protected]

Head of FinanceLydia [email protected]

Communications and Events Manager Joanna Waters [email protected]

Publisher Relations Manager Antonella Pearce [email protected]

Publisher Relations Executive Suzanne Beynon [email protected]

People at PLS*

Head of Operations Tom West [email protected]

Data and Distributions Manager Pam Singh [email protected]

IT Manager Mohammed Anisuzzaman [email protected]

Operations Officer Rachel Hunt [email protected]

Operations Officer Emily McLean [email protected]

PA and Office ManagerAntoinette Rudden [email protected]

Contact usBarnard’s Inn, 86 Fetter Lane, London, EC4A 1ENEmail: [email protected]@PLSlicensing

PLS is owned and directed by:

ISSN: 2056-3108 © Publishers Licensing Society 2015

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