UK collecting society PRS yesterday posted an update about its new licence for livestreamed shows, confirming that it would be offering a discount for any livestreams that have taken place during the COVID shutdown. Though, compared to what was first proposed last year, that “discount” means the starting rate goes from 8% to 10%, which is an unusual kind of discount. Meaning plenty of artists, managers and promoters are unhappy with the latest proposals.
Although livestreaming is not new, it was only really when COVID forced the live sector into shutdown last year that the music industry started focusing on the commercial potential of ticketed livestreamed shows. That then posed the question of how the promoters of such shows would go about getting a licence covering the song rights that would be exploited through those livestreamed performances.
That then resulted in a debate over to what extent a livestream is a live show and to what extent it is a stream. Because when it comes to song rights, live shows are generally licensed through the collective licensing system, which means in the UK promoters get a licence from PRS, with the basic rate being around 4% of ticket revenues.
However, with streams licences are variously issued by both collecting societies – in the UK that would be PRS and MCPS – and music publishers, with a rate more like 15% of any revenue linked to a song. So that’s quite a difference in terms of complexity and price.
Late last year PRS began circulating – although never formally launched – a proposed new licence for livestreamed shows.
It said that – despite this usage of music basically being a stream – it was working with music publishers to provide a one-stop shop licence covering all elements of the song copyright exploited via that stream. So that includes the so called performing rights controlled by PRS itself, and any reproduction or synchronisation rights which would be controlled by either MCPS or the publishers.
That would simplify the licensing of livestreamed shows somewhat, which was good news for those artists, managers and promoters who, by this point, had already been staging ticketed livestreamed shows for months.
However, said artists, managers and promoters were less impressed with the proposed rates. They would start at 8% on the first £50k of revenue, but then slowly increase on subsequent revenues generated by the show, so that on any income above £450k the rate would be 17%.
Many artists, managers and promoters who had staged livestreamed shows during lockdown hit out at those proposals, arguing that they would make many past shows loss-making for artists, and risked damaging the commercial viability of livestreaming moving forward. They also criticised PRS for coming up with a new licensing scheme without properly consulting the wider music community.
PRS did subsequently announce that it was talking to its music publisher members about offering a discount for livestreamed shows staged while the COVID shutdown was in force. And a separate scheme was also launched for smaller shows that generated £500 or less in revenue, although that too was criticised, because it was a fixed fee system which, some argued, actually penalised the organisers of those smallscale livestreams.
Two further concessions were then announced, both in relation to the licence for smaller scale shows. Artists that only livestream songs they personally wrote and wholly control – but who are nevertheless PRS members – would be able to get a free licence, to ensure that they didn’t have to pay over royalties that would then flow back to themselves, but minus an admin fee.
The society also said that it wouldn’t actively pursue artists and promoters who staged smaller shows of this kind during the COVID shutdown in 2020, even if technically that meant they had been unlicensed.
Nevertheless, criticism continued about the new PRS licences and how they had been organised. In response, the society announced a ‘call for views’ and a series of discussions with stakeholders from across the music community. It was following those submissions and discussions that PRS formally unveiled its licensing scheme for livestreaming yesterday.
The first main change is that the scheme for smaller scale shows – and the exceptions attached to it – are being extended to cover any livestreamed events with revenues of up to £1500. Organisers of those shows will also be able to choose between fixed fee and revenue share options, allowing them to go with whichever set-up is more cost effective.
The other main change is that, for shows with revenues over £1500 there will now be a single percentage rate applied on all revenue, rather than the rate going up as revenues increase.
What that rate will be long-term is still to be announced, however for livestream shows that take place during the pandemic it will be 10%. That’s described as “discount”, because presumably the long-term rate is going to be higher. However, maths fan will note, it’s not a discount on the rate previously proposed for revenues up to £50K, which was 8%.
The changes mean that organisers of small scale and large scale livestreamed shows will likely be better off, the latter no longer having to pay the higher rates on revenues above £50K. However, for middle level shows, who were anticipating an 8% rate, the prices just went up. And some still argue that, during COVID at least, the 4% rate for actual real world shows should actually apply.
There also remains one added complication, which is whether this one-stop shop licence can apply on all repertoire globally. Obviously with real world live shows, the performance happens in one place, and the local society is usually empowered to issue a licence covering pretty much the global songs repertoire, so both its own members’ songs and the catalogues of other societies around the world with which it has reciprocal agreements.
However, in the streaming domain, things are much more complex. PRS has set out from the start to try to offer as close to a global solution as possible for livestreams, though there has been much debate over to what extent it can do that. In its latest guidance, it says “we are working with our sister societies to provide the broadest possible territorial coverage”.
The US is definitely excluded though, meaning that livestream organisers would need to get separate licences from the collecting societies in the US if they are selling tickets in that market, which they probably are. Although, the rates are actually cheaper in the US, so providing an organiser is able to do the extra paperwork, that might actually save them money.
Commenting on the revamped livestream licence yesterday, a spokesperson for PRS said: “We have had healthy debate on ticketed livestreamed events with key stakeholders across the industry representing venues, event promoters, digital platforms and PRS members. Importantly, everyone agrees that songwriters must get paid when their songs are played and used”.
“Nearly 2000 people answered our call-for-views on the topic, 80% of whom were PRS members”, they went on. “More than half – 54% – of these songwriters said their work had been performed by someone else as part of a livestreamed concert. Songs are the heart of the music industry”.
“The discounted rate we are providing will ensure songwriters, composers and publishers are paid for their work, while allowing the emerging online live concert sector the freedom to innovate and grow. As the rate is competitive with those charged in other countries, it will help ensure the UK remains a great place to host live online concerts”.
“Throughout 2020, nearly 8000 songwriters joined PRS For Music, that’s 22 every single day, and over five million songs and compositions were registered”, they concluded. “We will continue to do everything we can to protect the livelihoods of our members, ensuring that their music is valued, whilst at the same time, giving the market the freedom to evolve”.
Perhaps unsurprisingly, the revamp was immediately criticised by the Music Managers Forum and Featured Artists Coalition, who were particularly vocal on this issue late last year too. They said in a joint statement that “PRS For Music’s announcement today that livestreams will attract a backdated ‘interim tariff’ of 10% of gross revenue has the potential to be damaging for many artists who have livestreamed during the pandemic”.
“For most, this was the only way in over a year that artists were able to connect with fans, earn some income and employ their crew”, they added. “We called for PRS to acknowledge this when setting their tariff. The proposed levy is considerably higher than the initial 8% tariff proposed by PRS in late 2020, and more than twice the rate for physical live shows”.
“This rate completely disregards the feedback that PRS received in its ‘call for views’. The responses, which by PRS’s own admission were almost five times more in number than any other consultation they have carried out, make the case for a significantly discounted rate while COVID restrictions remain”.
Both MMF and FAC did acknowledge that there were “some positive changes announced … particularly at a grassroots level” and added that they “welcome global licensing of livestreams as far as possible”. However, noting that quite how global the global licence actually is hasn’t been confirmed yet, they said: “[We] advise that artists and promoters wait until this is formally agreed until fees are paid over to avoid double claims on this income”.
They then concluded: “MMF and FAC believe that the high level of backdated tariffs for online shows will be widely viewed as unjustifiable. This hits those artists in the middle the hardest and certainly cannot be construed as a ‘discount’. We urge PRS to reconsider and come back with fair and reasonable proposals that the whole industry, including their own members, can benefit from”.
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