Grassroots venues, direct licensors welcome new PRS tariff

Campaigners for direct licensing, along with grassroots venues and festivals, have welcomed today’s announcement by the UK Copyright Tribunal that it has approved a new popular music concerts (LP) tariff after more than three years of negotiations.

British performance rights organisation (PRO) PRS for Music launched an industry wide consultation on tariff LP, which applies to live popular music events, in April 2015. Terms of the new-look tariff – which had been levied at a flat rate of 3% of gross box-office receipts since 1988 – were agreed with a cross-section of industry associations last September.

However, the final decision was delayed by an objection by PACE Rights Management – which sought to enshrine a provision for direct licensing for festivals, which are facing rising bills as a result of acts directly licensing performance royalties – earlier this year.

In addition to the incorporation of a direct licensing ‘mechanism’, changes to the tariff – which differs from the one presented to the tribunal last year, prior to PACE’s intervention – are:

• The royalty rate for concerts and all other live music events within the scope of tariff LP will increase from 3% to 4% – or 4.2% if the licensee elects not to account to PRS revenue generated from booking fees, administration and service charges – except for festivals which meet certain criteria 
• For qualifying festivals (see p5 of the tariff for the criteria) the royalty rate will reduce from 3% to 2.5% (or 2.7%, as above)
• The minimum fee charged for events will be waived entirely, providing that music reporting requirements are met

Mark Davyd, founder and CEO of Music Venue Trust (MVT), says he “warmly welcomes” the final provision abolishing the minimum fee, which disproportionately affected smaller venues.

“It’s long overdue and should have been done a minimum of three years ago, but it’s good that it’s finally done,” he tells IQ. “It’s a major victory for small venues – especially those under 200 capacity, which desperately needed the abolition of the minimum fee.” (The minimum fee was previously £38 – a comparatively large chunk of average nightly earnings for an independent, small-capacity grassroots music venue.)

“It’s a major victory for small venues”

Davyd also reveals that MVT has secured a “side agreement” with PRS that says the PRO will work with the association to “look at all the processes impacting on venues”. “I’m pleased we’ve got this side agreement,” he adds, “which commits [PRS] to look at better ways of working with grassroots venues.

“We stuck at this for three years, when I think most people would reasonably have given up. Now, I’m going to the pub…”

Also celebrating is the Association of Independent Festivals (AIF), which has achieved its aim of a dedicated tariff for UK festivals. AIF chief executive Paul Reed says: “AIF is pleased that, having made the case and called for festivals to be treated differently to concerts at an early stage of the process, this has been acknowledged in the new tariff LP with a reduced rate for festivals. By working with PRS and our partners across the live industry – including the Concert Promoters’ Association and others – a resolution has been reached.

“We have all worked hard on this issue over the last three years and it is a significant result not only for AIF members but the entire festival sector.”

Direct licensing agency PACE Rights Management is also claiming victory, with a spokesperson telling IQ that, “after years of refusal to license festivals proportionally, the PRS has finally been forced to accept proportional licensing at festivals”.

However, they warn that “no solution has been discussed or agreed as to how the deal made between the live sector parties, or LSPs, and the PRS will be operated when direct licensing occurs at festivals. Given the terms of the deal” – see p8 of the tariff – ” the solution may well see the LSPs having to pay more than is envisioned within the deal, either due to increased licence fees and/or increased administration costs”. “The deal,” the spokesperson says, “seems to have been rushed through, with little or no thought about how it will actually work.”

“By coming to this agreement … we believe it works in the best interests of all parties involved”

PACE also cautions that the decision made by the tribunal to apply the new tariff rate to the total ticket income of festivals is “not consistent with the judgement in the recent decision by the Belgian courts in the Belgian concert and festival industry vs Sabam case” – which saw a Brussels court rule that a system of tariffs based solely on gross receipts means that PRO Sabam “also essentially levies copyrights on security personnel and metal detectors”, as the costs are factored by promoters into the ticket price.

The PACE spokesman suggests the issue is far from settled: “Either the [Copyright] Tribunal is wrong or the Belgian courts are wrong. Either way, it will have consequences for one or both of those decisions.”

Commenting on the PRS announcement, Live Nation’s Phil Bowdery, chairman of the Concert Promoters’ Association, says the new tariff “recognises the importance of the live industry, but also what is of huge significance is that it recognises the sector’s diversity. By coming to this agreement, and the recognition of the common ground we share, we believe it works in the best interests of all parties involved.”

Adds Paul Clements, PRS for Music’s executive director of membership, international and licensing: “By working together with our colleagues across the live sector we have successfully negotiated an agreed outcome for all parties, and I’m very pleased that the Copyright Tribunal has now approved the terms, as agreed between PRS and the live sector representatives.

“We have reached an agreement which not only recognises and rewards the huge contribution made by our songwriter and composer members to the live industry but, as importantly, recognises the different needs and strengths of the thousands of venues and events across the UK that are critical to the ongoing sustainability and diversity of the UK live music scene.”

The new tariff LP will become effective from Monday 11 June 2018.

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