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Artists, managers and venues hit out at new PRS royalty rate for small-scale livestreamed shows

By | Published on Thursday 28 January 2021

PRS For Music

The UK’s Music Managers Forum and Featured Artists Coalition have again criticised collecting society PRS for announcing a licensing rate for livestreamed shows without widely consulting the artist and songwriter community. This time it’s a new licence covering small-scale livestreamed shows with revenues of up to £500 that has sparked criticism.

Although livestreaming has been a thing for more than two decades now, the COVID shutdown sparked much more mainstream interest in ticketed livestreamed concerts. As a result, the music industry has now properly started to consider how such events should be commercialised, what specific music rights are being created and exploited, and what that means in licensing terms.

Clearly songs are being performed during these livestreamed shows, which means a licence is required covering the rights in those songs. That’s where PRS comes in. Here in the UK, it licenses real world live shows on behalf of both its own songwriter and music publisher members, and the members of other collecting societies around the world with which PRS has a reciprocal agreement.

However, it’s not quite as simple as PRS just issuing the same licence for a livestream as it would for a real world live show.

First, the livestream is both a live show and a stream, and streams are licensed differently to live shows – partly because streams also arguably include the copying of music, which is licensed separately by either a music publisher or the mechanical rights collecting society MCPS. And secondly, a livestream is usually available globally, and PRS only usually issues live show licences within the UK.

So, there is a debate to be had regarding what specific elements of the song copyright are being licensed, and who issues the licence, and whether a single global licence can be issued.

And that’s before you get into what the rate should be for such a licence. PRS charges around 4% of gross ticket sales for live shows. But with streaming, PRS, MCPS and/or the music publisher would together collect around 15% of any subscription monies allocated to their repertoire. So should the livestream rate be 4% or 15%?

Last year, as the number of major livestreamed concerts started to increase, PRS announced a pilot scheme for licensing those shows on behalf of songwriters and music publishers. That scheme sees livestreamed shows primarily as a digital use of music. As a result, the rate on said pilot scheme starts at 8%, but increases up to 17% as ticket revenues reached certain levels.

In December, MMF and FAC published an open letter to PRS boss Andrea Martin calling the rates being charged as part of that pilot scheme “unworkable”. Applied retrospectively those rates would make many of 2020’s successful livestreamed concerts loss-making, they argued, and looking forward they could prevent the further growth of livestreamed concerts after the COVID pandemic.

Though MMF and FAC were most critical of the way the pilot licensing scheme had been developed, saying the rates had been “determined without consultation”.

Everyone knew that licensing livestreams would require tackling the various challenges and questions outlined above, but – MMF and FAC argued – PRS should have involved the wider artist, songwriter, manager and live community in that process.

The same criticism was made yesterday when PRS announced a separate licensing scheme for smallscale livestream shows which generate revenues of £500 or less. Under that scheme organisers of livestreamed performances will be charged a fixed licence fee of £22.50 plus VAT for revenues of up to £250, or £45 plus VAT for revenues between £251 and £500.

Artists who are PRS members will still need a licence even if they only perform songs they wholly wrote – because when you join PRS you assign the performing rights in your songs to the society.

Of course, that money will then flow back to the artist, minus PRS’s commission. Though if an artist has a publisher, some of the money will also be paid to them. If the artist is not VAT registered, they will also likely lose the VAT. And a self-published writer that’s not an MCPS member would also lose out on any monies allocated to the mechanical rights under this off-the-shelf licence.

Seemingly recognising that the debate around the licensing of livestreaming has proven somewhat contentious to date – and that many livestreamed shows in the last year have been about helping artists and/or their touring crews stay afloat during shutdown – PRS did imply that it is building some flexibility into its livestreaming licences.

With small-scale live streams, the society said it would not be “actively pursuing licences for livestreamed events” that took place prior to the launch of this new licensing scheme.

It also added that, while PRS sees livestreaming as digital use of music distinct from real-world live shows, it also recognises that during the pandemic livestreams are operating as an alternative to actual gigs. Therefore, when it comes to larger livestreamed shows not covered by this new licence, it is proposing to apply temporary discounts until the live sector re-opens and “conversations are active and ongoing with major licensees about the details of such discounted rates”.

PRS’s statement yesterday also conceded that there are still issues to be addressed regarding tickets sold to livestreamed shows to fans outside the UK. The new licence definitely covers the global repertoire in the UK and PRS’s own repertoire globally. But if songs controlled by foreign societies are performed and ticket buyers tune in from other countries, other societies around the world might also claim that they are due additional payments.

Despite those provisos and clarifications in yesterday’s announcement from PRS, MMF and FAC were highly critical of the society for launching the new licence “with no prior warning and without consultation with artists or their representatives”.

On the specifics of what has been proposed, they said that by “defining livestreaming as ‘a form of video exploitation'” the new scheme “seeks to impose a flat fee equating to a minimum 9% tariff on events generating less than £500 – even at its lowest, this rate is more than double the tariff for ‘in-person’ events”.

The CEOs of the two trade bodies, MMF’s Annabella Coldrick and FAC’s David Martin, added in a joint statement: “All of us want songwriters and composers to be paid fairly and efficiently for the use of their work, but this is not the way to go about it”.

“Once again, we would urge PRS For Music to stop acting unilaterally. They need to urgently listen to the growing concerns of artists and their representatives during the pandemic, implement a waiver for performer-writers to opt-out of such fees, and commit to a full and transparent industry-wide consultation before issuing invoices to cash-strapped artists”.

The Music Venue Trust, which represents many of the grassroots venues that have also got involved in small-scale livestreamed shows during the COVID shutdown, was similarly critical of PRS announcing this new licence out of the blue.

It said in a statement: “The live music industry, including grassroots music venues, artists and promoters, is in crisis mode and pulling together. The team at MVT have been in regular correspondence with the live team at PRS For Music throughout this crisis on how we can work together to ensure everyone at a grassroots level emerges from this crisis and we can all get back to work. At no time during those regular conversations across eight months has anybody suggested that a new tariff for streaming would be created. We have not been consulted on such a tariff, advised of it, or even notified of it prior to this press release being issued”.

“The principal financial beneficiaries of paid streaming during this crisis have been artists”, it went on. “The beneficiaries of charitable streaming, online broadcasts by artists to raise money for causes by donations from audiences, have included venues, crew, artists, and the wider community, including healthcare workers, food banks and homeless charities. It is unclear from their press statement whether PRS For Music wishes to reduce the financial returns for artists seeking to pay themselves or on artists trying to support charities”.

“We would strongly suggest that neither should have been advanced to the stage of an announcement of a tariff without understanding the most basic fundamental economics of what streaming is actually doing during this crisis; how much money there is, where it comes from and who is receiving it”, MVT’s statement continued. “It is extremely important to the grassroots sector that the songwriters whose work sit at the heart of our ecosystem are adequately and reasonable paid for their work. A fixed rate tariff is not a mechanism by which that will be achieved, and the methodology and rate proposed by PRS for Music will not result in grassroots songwriters being paid for their work”.

It concluded: “We remain available to discuss the realities of streaming during this crisis with PRS For Music if they wish to have an informed discussion on it. Unilaterally announcing ill conceived new tariffs in a crisis is not such a discussion”.

Launching the new small-scale livestream licence yesterday – and an accompanying online resource where the licence can be acquired – PRS boss Andrea Martin said: “We recognise the importance of providing simple licensing solutions wherever possible and the licensing portal for small-scale online events is an example of this. We are continuing to work hard to agree a range of licensing options for providers of larger events, including a proposed discounted rate during the pandemic”.

“This is a part of the market which has seen exponential growth and is itself constantly evolving”, she added. “Meeting the expectations for worldwide blanket licences is alone no small feat, but we are committed to finding solutions which ensure members can be paid fairly when their works are performed”.

Responding to the criticism from MMF, FAC and MVT, a spokesperson for PRS insisted that “in no way is PRS For Music seeking to prevent artists, many of whom are PRS members, from generating an income from online concerts”.

However, they added, its songwriter and composer members – and especially those who are not also performers – “have seen a significant impact from the closure of the live music sector”. With that mind, the spokesperson concluded, “it is essential that they can share in the value being generated by online live concerts which are using their works”.