PPNZ's revenue collection and distribution to members follows 4 main steps.
- We actively endeavour to contact and grant blanket licences to all New Zealand broadcasters, music users and suppliers in New Zealand who use our members' repertoire.
- We then deduct our actual running costs from this revenue. At least 80% (and often more) of the income collected is available
to be distributed to our members each year. Our aim is to keep administration costs as low as possible. - We collect usage information from our licensees and, where possible, allocate revenue to actual usage of each sound recording. Some licensees, such as television and radio broadcasters, provide actual usage data. For other licensees, such as public performance businesses, providing logs of actual usage is not practical. In this case, revenue from public performance licensees is distributed using radio broadcast logs as a proxy. Work is being done to collect additional data from Music Service Providers in the public performance area to supplement this data.
- Revenue is then allocated to individual sound recordings. The net revenue is collected into funds, each fund representing revenues received in respect of a particular type of licensing activity. This means that each fund is allocated against the corresponding usage information. For example, the usage information received from TV broadcasters will be applied to funds received from those TV broadcasters.
Description of the Funds
Funds for distribution fall into three "pools":
- The General Fund - licensing income collected from radio broadcasting, public performance licensing, compilation licensing, music-on-hold and other sundry licensing income.
- TV Fund - licensing income collected from TV broadcasters for broadcast of music video and incidental use of sound recordings.
- Specific Interest Pools - funds collected from Licensees who use a specialised selection of music not considered to be reflected in the general radio airplay data e.g. Concert FM, Iwi Radio and C4.
Who receives funds?
The recipients of the revenue PPNZ collects fall into two groups:
- PPNZ members - the owners of the sound recordings, often a record label (both larger and many small and independent labels).
- RAP Fund Participants - currently 1600 plus local artists, groups and musicians and labels who have registered their single, album and video in the PPNZ Recording Artist and Producer Fund.
Why is radio data used to distribute public performance income?
It would be unworkable and unfair to ask many businesses using music (such as cafes, bars, shops etc.) to keep manual logs of all the music they play.
The best proxy (or reflection) of the music these licensees use is radio logs from commercial music radio stations. PPNZ does however review its distribution methodology from time to time and is always looking for practical and effective ways to gather as accurate as possible data on music use.
