points us to a story from Billboard about a claim from the head of PRS in the UK, noting that the real problem with the music industry today is low interest rates
. You see, the way collections societies work is they collect money and hang onto it for a while before actually giving it out (if they give it out at all
). During that time that they hold it, they hope to earn money on the interest, but with interest rates so low, apparently revenue is expected to be way down. The article points out:
But while overall revenues are being hit by falling CD sales and lower income from music in advertising, Porter said 80% of the decline can be blamed on interest rate cuts.
I'm assuming they just mean on the publishing
side of the business, but it's worth noting this stat the next time you hear people complaining about how much songwriters are "hurt" by file sharing. If the impact of fluctuations in interest rates are a much bigger revenue concern, than the impact of file sharing really isn't that big. On top of that, any organization that bases expected revenue on something as variable and out of their direct control as interest rates is going to run into serious trouble pretty quickly.