PRS for Music sued by songwriters over royalties

A group of UK songwriters and composers has initiated legal action against their own collective management organisation, PRS for Music.

The group, which includes King Crimson’s Robert Fripp, among others, has been joined in the action by direct licensing specialist PACE Rights Management in a bid to “overhaul the implementation of procedures and policies” they claim are “prejudicial to their interests and to the interests of PRS members more broadly”.

The songwriters say the action centres around three key points in relation to the licensing and administration of live public performance rights by the organisation:

• The “unreasonable and unnecessary obstacles” that PRS presents to writer members who wish to withdraw their live public performance rights, and to directly license those rights.
• A “lack of transparency and withholding of information” by PRS about the deductions suffered by writers from their royalty income when their rights are licensed internationally
• The “preferential conditions” offered by the’ Major Live Concerts Service (MLCS), which are in direct conflict with PRS’ position as a collective management organisation, which they say creates a two-tier system where the most successful writers are effectively being subsidised by the rest of the PRS members

“PRS members are treated as second-class citizens in their own organisation”

“It has created a situation where, for instance, a songwriter whose works are performed at a concert selling just over 500 tickets with a face value of £30 is charged more administration fees by PRS, than a songwriter whose works are performed at a concert selling 80,000 tickets with a face value of £150,” says the group.

PRS has fired back, saying it “fundamentally” rejects the allegations, which “misrepresent the policies of PRS for Music”.

However, the claimants say that, according to PRS’s own figures, the “preferential conditions of the MLCS results in its beneficiaries paying an average administration fee of 0.2%, while the wider PRS membership pays 23% – proportionately, 115 times more”.

“In effect, the most successful writers are being subsidised by the rest of the PRS Members,” they continue. “The writers believe that, together with its previous incarnations, the MLCS has led to the vast majority of PRS members being overcharged administration fees by PRS on live and international income for nearly 30 years.”

“We have been left with no option but to seek redress through the courts”

The legal action brings the right of withdrawal from PRS into focus.

“From a theoretical or academic perspective, the efficiencies of collective rights management make perfect sense for songwriters and composers,” adds a further collective statement from the claimants. “However, PRS has strayed significantly from the principles on which it was founded 110 years ago, to the point that the organisation’s policies no longer appear to be operating in the best interests of its members. PRS members are treated as second-class citizens in their own organisation.

“Regretfully, after years of PRS refusing to discuss or constructively engage with these issues – including the withdrawal of live performance rights, the lack of transparency around international deductions, and the operation of the Major Live Concert Service – we have been left with no option but to seek redress through the courts.

“The ball is now firmly in PRS’s court. Either they constructively engage with much needed reforms to empower and benefit writers and publishers, or they continue to resist these necessary changes, and attempt to defend the indefensible by spending yet more of the members’ money on legal costs supporting policies that make the members less money.”

“Our policies and rules follow a thorough and extensive approval and review process by the board and the Members’ Council”

In response, PRS released the following statement: “We fundamentally reject the allegations in this claim which misrepresent the policies of PRS for Music. We have been engaged with PACE on these issues for more than five years including with representatives of the PRS Members’ Council and have sought to address their concerns collaboratively.

“PRS for Music is owned and controlled by its members and exists to protect the collective interests of all the songwriters, composers and publisher members we represent fairly. Our policies and rules follow a thorough and extensive approval and review process by the board and the Members’ Council, which is comprised of members and independent non-executive directors appointed by the membership. The rules which govern the process for live rights withdrawals were approved by members at the PRS AGM.”

It continues: “PRS for Music has consistently sought constructive dialogue with PACE for many years, proposing and implementing solutions to the issues raised. We have worked extremely hard to simplify our processes in the interest of our members, which PACE has consistently failed to comply or engage with, which has resulted in royalties being unnecessarily withheld from PRS members for the live performance of their works at concerts. It has also created complexity and uncertainty for live music venues and promoters.”

Previously, in 1994, U2 launched legal action to challenge PRS’ “anti-competitive and restrictive behaviour” on the issue and the alleged “inefficiencies, delay and excessive expenditure” they incurred.

A separate collective action, headed by Blur drummer Dave Rowntree, was launched against PRS in April on behalf of its writer members

Meanwhile, a separate collective action, headed by Blur drummer Dave Rowntree, was launched against PRS in April on behalf of its writer members, claiming that the organisation misallocates ‘black box’ income.

The claim says that PRS, which represents the rights of more than 175,000 songwriters, composers and music publishers, is violating UK and EU competition rules because it unfairly distributes so-called ‘black box’ income – royalties paid to PRS that it has not been able to allocate to the owner.

The lawsuit says that most of the black box income belongs to PRS’s writer members, but distribution of the income is unfairly skewed in favour of publishers. It seeks to recoup the difference between the black box income that writers should have been paid and what PRS actually paid them.

PRS denies the allegations, which it says are” factually incorrect and fundamentally misrepresent our policies and operations”.

PRS announced last month that it has become a billion-pound collection society after collecting £1.08 billion in revenues for 2023. The organisation paid out a record £943.6 million of royalties for songwriters, composers and music publishers last year, with total royalty distributions increasing by £107.4m (12.8%) on 2022.

World tours by PRS members including Harry Styles, Sam Smith and Shania Twain, contributed to an overall 93% uptick in international live income, while international royalties collected through its Major Live Concert Service (MLCS) rose 210% from £6.2m to over £19m.

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UK collection society passes £1bn in revenues

PRS for Music has become a billion-pound collection society after collecting £1.08 billion in revenues for 2023 – up 12% year-on-year.

The UK organisation paid out a record £943.6 million of royalties for songwriters, composers and music publishers last year, with total royalty distributions increasing by £107.4m (12.8%) on 2022.

World tours by PRS members including Harry Styles, Sam Smith and Shania Twain, contributed to an overall 93% uptick in international live income, while international royalties collected through its Major Live Concert Service (MLCS) rose 210% from £6.2m to over £19m.

Royalties paid out from public performance, including live music, were up 2% to £3.7m in 2023, buoyed by tours by acts such as Arctic Monkeys, Burna Boy and Busted. One-off special UK events such as Eurovision being hosted in Liverpool and Download Festival extending its lineup for its 20th anniversary were also credited as contributing factors.

PRS’ cost-to-income ratio also fell to a new low of just 9.2%, down from 9.3% the previous year.

“We’re shaping the future of our business and redefining how rights are managed globally”

“Our remarkable performance in 2023 is a testament to the team’s hard work behind the scenes of the music industry,” says PRS CEO Andrea Czapary Martin. “We’re not just surpassing financial milestones at the lowest cost-to-income ratio amongst our peers; we’re orchestrating a significant shift in the music business. My vision to ascend to a billion-pound society in royalties paid out isn’t just a goal – it reflects our commitment to music creators worldwide.

“We’re shaping the future of our business and redefining how rights are managed globally. For 110 years we have existed to ensure that every music creator receives fair compensation for their artistry, wherever and whenever their music is played.”

Meanwhile, a collective action, headed by Blur drummer Dave Rowntree, was launched against PRS last month on behalf of its writer members, claiming that the organisation misallocates ‘black box’ income.

The claim says that PRS, which represents the rights of more than 175,000 songwriters, composers and music publishers, is violating UK and EU competition rules because it unfairly distributes so-called ‘black box’ income – royalties paid to PRS that it has not been able to allocate to the owner.

“Musicians’ royalties, perhaps to the tune of hundreds of millions of pounds, have been paid to the wrong people”

The lawsuit says that most of the black box income belongs to PRS’s writer members, but distribution of the income is unfairly skewed in favour of publishers who end up receiving a large portion of the income that should be paid to writers. It seeks to recoup the difference between the black box income that writers should have been paid and what PRS actually paid them.

“I’ve agreed to be class representative because musicians’ royalties, perhaps to the tune of hundreds of millions of pounds, have been paid to the wrong people,” says Rowntree, who is working with law firm Maitland Walker. “It’s because of bad data and processes, and in today’s digitally connected world, there’s no excuse for either.”

PRS denies the allegations, which it says are” factually incorrect and fundamentally misrepresent our policies and operations”.

“PRS is owned by its members and its rules, which are robust and determined by members, treat the interests of both writers and publishers fairly,” it said in a statement. “The claim is based on a misinterpretation of PRS’ governance and operational practices, as well as the flow of royalties between publishers and the writers they represent.

“For over two years PRS has constructively engaged with the claimant’s legal representatives and has repeatedly offered to meet with the claimant. Despite this, and the misconceived nature of the claim, an application has been made for consideration by the Competition Appeal Tribunal.”

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Elton John invests in music tech company Audoo

Elton John and his manager David Furnish have invested in a music technology company that is bidding to “revolutionise” public performance royalties.

The duo have joined the likes of ABBA’s Bjorn Ulvaeus, MPL Ventures, Tileyard and Edinv in backing London-based Adoo, which has secured $5 million (€4.76m) in its latest funding round, taking its total raised to $22m.

The investment round follows key hires at Audoo, including music publishing veteran Nigel Elderton as chair and Melanie Johnson as chief commercial officer.

“Working as a musician can be seen as all glitz and glamour but for the vast majority of artists, especially new and emerging acts, this isn’t the case,” says Elton. “It’s often brutally unfair and this sadly extends into being paid correctly. Right now, artists are not being paid accurately for their plays because the data simply doesn’t exist.

“People have given up on their dreams and we’ve lost talent and future stars because of this disparity. That’s why we’ve invested in Audoo and their world-class technology and data, to help create a more transparent system for everyone, and ultimately to keep the music alive.”

“Being able to draw on the support of artists in our mission to revolutionise the royalty space has been key to Audoo’s success”

Formed in 2018, Audoo’s board includes experts from APRA AMCOS, BMG, Bowers and Wilkins, PRS for Music and Sony Music Publishing. According to the firm, its technology “powers the commitment to improving accuracy, transparency and reporting in quasi-real-time without burden for licensees, PROs and CMOs”.

“Being able to draw on the support of artists in our mission to revolutionise the royalty space has been key to Audoo’s success,” says Audoo founder and CEO Ryan Edwards. “We are proud to welcome more icons to aid the next stage of our journey.

“With Elton and David’s strategic investment, we continue to champion and deliver a fairer and more transparent music industry for creatives to benefit for generations to come. We look forward to welcoming more international partners, licensees and creators to join us on this industry-changing journey.”

Audoo works to provide solutions to the challenges faced in public performance royalty data collection and payment distribution with its Audoo Audio Meter and insights platform that is rolling out across the UK, Europe, Australasia and Africa through industry-first partnerships.

The company says the installation of Audio Meters in businesses worldwide – including cafés, bars, hair salons, restaurants, gyms and retail locations – “sees its small, discreet plug-in solution cut through foreground noise, identify the music, match the song data, and report this usage back to PRO and CMO partners – ultimately improving fair and accurate payments to rights holders with a greater level of accuracy”.

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APRA pushes back royalty payment change

Australian collection society APRA is to delay the implementation of its new royalty rate.

The proposed change to the distribution practice was announced in May, whereby songs performed by a support act at major concerts in Australia and New Zealand will be allocated a fixed 20% of APRA royalties from the concert, compared to the headliner’s 80%.

The plans were originally due to be brought into play in November, but have now been pushed back to next June as they had not taken into account “negotiations on guaranteed fees for support acts that were underway prior to the announcement”.

Currently, the split is roughly 66/33 in favour of the headliner, although that can shift in certain situations such as when there are multiple support acts. While the move will bring the territory into alignment with other countries and collecting societies, one artist manager told The Music Network that the changes would mean a “massive difference” in the performance royalties generated by Aussie support acts.

An amendment was approved for a new start date for the changes to the distribution practice for major concerts to be effective for all setlists provided after 1 June 2024

TMN understands that one of the sticking points was Australian pop star’s Tones and I’s upcoming support slot for Pink, produced by Live Nation. Since the activation date for the new split has now been deferred, APRA will apply equal weighting to the tour.

“Following the announcement, discussions continued with members and managers to further understand the implications of the proposed changes,” says an APRA statement. “We’ve taken this feedback on board and acknowledge the proposed November 2023 rollout did not take into consideration negotiations on guaranteed fees for support acts that were underway prior to the announcement.

“At the August APRA board meeting, an amendment was approved for a new start date for the changes to the distribution practice for major concerts to be effective for all setlists provided after 1 June 2024.”

The proposed changes do not apply to music festivals licensed by APRA.

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BMI reacts after live groups appeal rate increase

Live Nation, AEG and the North American Concert Promoters Association (NACPA) have filed to appeal against BMI’s court triumph over performance royalty rates paid by the live industry.

The US collection society claimed victory in the long-running court battle back in March after New York District Court Judge Louis Stanton ruled a new rate of 0.5% would replace the previously tiered rate of between 0.15% and 0.3%, which had been in place since 1998.

The ruling said the new 0.5% rate also applies retrospectively to shows that took place from 1 July 2018.

However, it was revealed this week that the live groups have filed a notice to appeal the decision, which could mean they intend to move forward with the appeal, but could also be a procedural move to keep the option to appeal open. The move was drew criticism from BMI.

“Given Live Nation, AEG and NACPA’s bizarre position throughout trial that concertgoers attend concerts for the experience of the staging, videos and light shows, as opposed to the actual songs and music being performed, their appeal was not a surprise to BMI,” says BMI president and CEO Mike O’Neill.

“For decades, the live concert industry has fought to keep rates suppressed. And even now, when they are making more money than ever, in more ways than ever, they are determined to deny songwriters and composers the fair value of their work, despite the fact that without their contributions, a concert wouldn’t even be possible. BMI will continue to fight on behalf of our affiliates, the creators of the music that is the very backbone of the live concert industry, to prevent that outcome.”

At the outset of the case in 2018, BMI said its total income from the US concert business was $20 million annually

It claims the court’s decision “ended decades of below-market rates”, arguing the revised rate reflected “the importance of music in the live concert experience”.

“The decision also expanded the definition of the total revenue base to which the new rate is applied, taking into account the way modern promoters monetise concerts,” it adds. “This includes tickets sold directly onto the secondary market, servicing fees received by the promoters and revenues from box suites and VIP packages.”

BMI (Broadcast Music Inc) represents the public performance rights in over 20.6 million musical works created and owned by more than 1.3m songwriters, composers, and music publishers.

At the outset of the case in 2018, BMI said its total income from the US concert business was $20 million annually, or less than 0.19% of the industry’s revenue. This number is less than 2% of the $1.118bn it paid to songwriters in 2018 (BMI paid $1.5bn in 2022).

The live groups have not commented on the appeal. However, responding to the March 2023 ruling at the time, Live Nation said in a statement, “We advocated on behalf of artists to keep their costs down, and managed to hold the increase to less than 1/3 of BMI’s proposed increase. This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”

An spokesperson for AEG said back in May: “AEG Presents and NACPA were defending performing artists, who bear the costs of BMI fees, in this litigation. The result is that BMI was awarded significantly less than it sought, which is an important benefit for performing artists. AEG Presents will always support all of the artists who make their living on our stages.”

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PRS for Music hails live music rebound

UK-based rights management organisation PRS for Music has hailed the rebound in live music after revealing record collections for 2022.

The society, which represents the rights of over 165,000 writers, composers, and music publishers globally, collected £964 million in 2022, a year-on-year increase of 22.9% (£179.4m), and an 18.9% increase on the previous high of £810m achieved in 2019.

Live music was responsible for generating £62.7m of royalties, an increase of 683% (£54.7m) on the pandemic-hit 2021 and 16.1% up on 2019. More than 128,000 live events were reported to PRS across the year in the UK, including major tours from the likes of Dua Lipa, Ed Sheeran, Little Mix, N-Dubz, The Cure and the Rolling Stones.

“In 2021, PRS for Music set out its vision to pay out over £1 billion in royalties within the next five years,” says PRS CEO Andrea Czapary Martin. “Last year we accelerated progress towards, and beyond, this milestone. Through our ambitious licensing strategy and utilising our joint ventures we have maximised the value of members works at every opportunity, while our investment in new technologies and services means we can pay out royalties more quickly and accurately, delivering the best possible service to members at a market leading low cost-to-income ratio.”

“LIVE continues to champion our sector, and recognises that not all parts of the live music value chain have experienced the same rebound”

PRS also launched its Back to Live Music Venue Prize competition in 2022, which saw six independent music venues across England, Northern Ireland, Scotland and Wales awarded a total of £60,000 of financial support to improve live music experiences for performers and for the local communities they serve.

“Today’s PRS for Music announcement reflects the UK’s love of live music from our talented artists and writers,” says a statement from LIVE, the trade body of the UK live music business. “LIVE continues to champion our sector, and recognises that not all parts of the live music value chain have experienced the same rebound.

“We will continue to work with government and other stakeholders to ensure that the whole live music ecosystem can grow sustainably and uphold the UK’s reputation as a leader in the music industry. Our own report Valuing Live Music will build on this work to explore the dynamics underneath the headlines and highlight the difficulties and successes of the sector.”

Elsewhere, PRS says the European market grew 7.5% (£10.4m) in 2022 to £148.3m, predominantly due to the recovery in live touring – particularly those using PRS’s Major Live Concert Service including Coldplay, Iron Maiden and Sting.

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Artists donate royalties to Earth

Brian Eno’s climate change charity EarthPercent has launched a scheme where artists can make the environment the beneficiary of their royalties.

The Earth as Your Co-Writer scheme enables artists to list the Earth as a songwriter and legal beneficiary of royalties, with the money going directly to environmental organisations.

EarthPercent is inviting acts to donate 1% of one new composition – or more should they wish – with funds raised going to the charity’s grant-giving fund.

More than 23 artists including Aurora, Anna Calvi, Jacob Collier, Dave and Stormzy producer Fraser T Smith, Mount Kimbie and Eno himself have signed up for the cause.

Some, including Big Thief, have pledged to donate 1% of touring revenue to the charity to help offset their own environmental impact.

Big Thief have pledged to donate 1% of touring revenue to the charity to help offset their own environmental impact

“The Earth as Your Co-writer is a beautiful idea in which we harness the poetic construct of The Earth as a co-writer of music and direct some of the income from our compositions towards tackling the climate emergency,” says Eno who came up with the concept, and has listed the Earth as a songwriter on new track A Thought.

“EarthPercent provides an easy way for the music industry to make a difference by asking artists to commit a small percentage of their songwriting revenue. All musicians are inspired by the precious planet we live on, so it’s fitting that we are now able to name The Earth as our co-writer.”

The initiative has been created over an 18-month period by a cross-industry advisory group working with EarthPercent.

One of the advisors, Grammy Award-winning record producer Kevin Bacon, reached an agreement with Unison, an accredited rights management entity, who will be collecting the income for the Earth.

During the pilot phase, the charity will be working with the UK Music Publishing Association on how to build the scheme so it can be rolled out on a bigger scale in the future.

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How royalties can rebalance a fairer music funding model

The ongoing Covid-19 pandemic has hit the pause button on the ‘live’ global music scene, with many in the industry now turning to new alternative funding streams in keeping their music ambitions and hopes alive. Although musicians and their teams have suffered heavy losses, government-initiated relief funds for artists around the globe has eased the financial burden on the music industry. In the US, for example, close to $20 million has already been raised for struggling artists. Spotify has also collaborated with several organisations to support the global music community, contributing a collective $10 million in donations, as part of the Spotify Covid-19 Music Relief project.

The need for these relief efforts is indicative of the overwhelming dependence artists have on touring and live shows. Yet, there is hope for the music industry with digital music revenues projected to reach one billion US dollars in the UK alone by the end of 2020, while US streaming music revenues grew 12% to $4.8 billion in the first half of 2020. This begs the question: why have artists been slow to reap the benefits of the new digitalisation of music? Despite streaming services proving an important utility to artists, perhaps it is time for musicians to take back more control of their music rights and revenues.

Herein music royalties provide the solution. By opening up music royalties to investors, the music industry can offer up a new sustainable funding revenue model to the benefit of artists, publishers, and record labels alike. For investors and music fans it offers a gateway to a constantly evolving market that is largely immune to geo-political and macro events.

With streaming services under close scrutiny lately, prospective changes to copyright law and royalty negotiations are looming. While the industry may correct itself to remunerate artists more equitably, no one can predict how long this will take. Instead, the funding vacuum ought to be filled by fans, through redirecting the flow of revenue back to artists by investing in their music royalties. With the promise of diversification and returns for investors and much needed liquidity for artists, this could be the next catalyst that lights up a more equitable and sustainable funding model for the music world.

Vanity investments for the new era
Avid music fans will already be well acquainted with vanity investments, where making money isn’t the only primary motive. So in the same way an artist may absorb the full expense of publishing and promoting a particular project, a musical zealot will spend their time and energy supporting their favourite artist purely for the enjoyment in the music and their association with the artist. Record labels have built an important part of their business model on this premise, with the most obvious expenditure for fans being live performances, estimated to constitute approximately 28% of the average musician’s income.

It is time for musicians to take back more control of their music rights and revenues

Merchandise sales are another avenue for vanity investors. With that said, where merchandise can be invaluable for fostering connections between artists and their fans, they represent a paltry 2% of the average artists’ revenue stream. In today’s funding model, support on social media is the only remaining option, which can actually have a significant impact. An article from Pigeons & Planes featured statistics from Indify, which aggregates listener data, social metrics, and online trends to identify emerging musicians.

Outside of streaming and purchasing physical copies of music, there are currently very little alternatives available for music fans to support artists. While committing to a streaming service is a necessary requirement for most musicians in today’s music industry, the uneven distribution of funds and the deferred payments don’t always allow artists to kickstart new projects or make their own career decisions. The artist is ultimately the supplier of the music, so it is about time we  see them have fairer access to funding models.  What if you could dedicate your funds directly to the artist of choice, cutting out the intermediaries and with the promise of a return?

Music royalties unleash new funding alternatives
Music rights have several characteristics that enhance their value as an asset class. Should a song find its way into an advertisement, a film soundtrack, or perhaps repurposed by another artist in a sample, this will boost the generated royalties. Copyright ownership continues seventy years after the last living recipient has passed, making for a substantial long-term investment. Posthumous record sales often boost the value of an artists’ catalogue too. For example, the famous artist behind “Bowie Bonds” had his first #1 album featured on the Billboard top 200 chart following his death in 2016.

Previously, music royalties have been very much a private market between the artists, record labels, catalogue owners  and publishers. Now, with the advent of streaming and the incremental role of smart devices, platforms such as the Hipgnosis Songs Fund are making strides in opening up royalties to the masses. Vanity investors can now convert their funds into royalties investments, underpinning the success of their favourite artists, with the added appeal of returns. Also on our own platform, Anote Music, music fans of all genres have committed their money to acquire music rights, with some of them receiving approximately 8% in returns on their investment within less than three months following the  investment platform’s official launch.

How to fix the flaws in a traditional business model
During the pandemic-induced hiatus, some of the shortcomings of various streaming services were exposed using the #brokenrecord and #fixstreaming twitter campaigns. This is reminiscent of a similar campaign, Sleepify, which saw American funk band, Vulfpeck, receive $20,000 in streaming royalties from an album with nothing on it. Despite Spotify’s recent efforts to support struggling artists, this loophole in Spotify’s royalty calculation model exposed how little control artists have of their own music royalties, not least their future finances.

Enabling fans to redirect their funds towards their favourite artists can offer artists a chance to diversify and manage their revenue streams

On a similar note, while publishers make the world of music go ‘round, artists have on occasion proclaimed their dissatisfaction with the way copyright ownership is managed. Examples include Kanye West’s latest outburst, Prince and his infamous debacle with Warner Bros, and Paul McCartney’s lawsuit against Sony to regain copyright ownership over music by his former band, The Beatles. These intellectual property disputes also reflect unease in the current music industry.  A new funding model that is transparent and unties publishers, artists, and record labels is therefore the ticket to correct the perceived imbalances weighted against artists.

Many new projects driven by the likes of blockchain and other modern technologies  are already embarking on the mission to unite the music industry (publishers, musicians, online streaming services, music fans and catalogues). Some investment platforms offer music royalties of artists through the auctioning of music catalogues, based on the future expected earnings of the music royalties. By offering up music royalties in this way, artists can access a potentially vast  liquidity pool to free up cash, while retaining 100% artistic  control over their music rights.

All these new initiatives are a welcomed sight for a traditional industry which has been struggling to find answers to its current flaws.  In example, there is an estimated $2.5 billion worth of unpaid music royalties tied up globally, either unclaimed or unpaid. Paperchain is circumventing it by turning streaming data from Spotify, YouTube, and others, into digital assets. Correspondingly, opening up music royalties as a viable alternative serves by democratising funding in the music industry, and allowing artists to retain more control over their creative rights. It is a collective effort of the music business and emerging technologies, that so far is proving a unifying force in the music industry. And if you’re doubtful just ask Massimo Benini, CEO of Irma Records, or prominent Polish musician Tomasz Lubert on how they felt about the process.

Time to welcome music royalties as an innovative solution
Until the playing field has been levelled, the funding model of the music industry will continue to cause a divide between right holders, and online streaming services.  An equitable, balanced and fair funding model is long overdue for the industry. An impetus is emerging from this pandemic that will prompt fairer treatment of music artists, in terms of copyright ownership and the problematic funding model. Music royalties as a way of investment for fans just might be the answer to addressing these problems.

The availability of smartphone technology, the ever growing passion for music and the low entry barrier means almost anybody can invest in music royalties. Enabling fans to redirect their funds towards their favourite artists can offer artists a chance to diversify and manage their revenue streams, rather than relying solely on a publisher or record labels. Equally, this could address issues of intellectual property, considering that new revenue streams could produce material detached from a specific publisher. In this way, investing in music royalties could foster a fundamental change to the current funding model of the music industry. It is time the music industry once again became united – with music royalties being the answer.

Marzio Schena is co-founder and CEO of ANote Music, the European marketplace for investing in music royalties.

Cisac expels controversial Spanish member

The International Confederation of Societies of Authors and Composers (Cisac) has voted to expel Spanish society SGAE for a one-year period, following the society’s failure to convince the body of its “commitment to reform”.

The decision to expel SGAE, known as the Sociedad General de Autores y Editores, was made at Cisac’s annual assembly in Tokyo. The expulsion follows Cisac’s resolution to undertake a sanctions process against SGAE in December, “in view of the society’s breaches of Cisac rules”.

The expulsion is set to last for one year but “can be adjusted or lifted at any time”, provided that the Cisac board of directors concludes that SGAE has made sufficient progress towards implementing its requirements. Cisac recommended a series of changes to its rogue Spanish member following an in-depth investigation which concluded in May last year.

“Today’s vote to proceed with the sanction of a one-year expulsion follows an in-depth analysis of recent reforms set in motion by SGAE’s new President, Ms Pilar Jurado,” reads a Cisac statement.

“Further important technical work and changes are needed and expected by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules”

“While a number of welcome changes have been proposed, they have not yet been approved by the SGAE General Assembly. Further important technical work and changes are needed and expected by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules for member societies.”

SGAE appointed Spanish soprano singer Pilar Jurado as president in February following a vote of no confidence against former chief José Ángel Hevia, who held the position for just three months.

Jurado states that “Cisac is giving SGAE the opportunity to decide its own future”, and called on members to support her proposed reforms in the General Assembly in order for the society “to leave this situation behind us”.

Earlier this week, minister of culture José Guirao demanded SGAE produce a detailed outline of the steps it would take to comply with regulations. Failure to do so would result in intervention from the court.

SGAE has been at the centre of a scandal known as the wheel, or ‘la rueda’, for a number of years. The scam, which saw SGAE members and TV execs create “low-quality music” to broadcast on late-night TV, allegedly brought in several millions in performance royalties over the years.

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PRS for Music relaunches Major Live Concert Service

UK performance rights organisation (PRO) PRS for Music has announced the launch of its upgraded Major Live Concert Service under the new brand MLCS™ by PRS.

MLCS™ by PRS is an online tool that shows local tariffs across global territories.  The aim of the service is to aid arena and stadium-level PRS members performing overseas to negotiate “full and fair royalty settlements”.

The tool offers a pre-tour royalty calculation service, details of headliner and support splits in each country – allowing for accurate forecasts of royalty streams throughout the tour – and provides a post-tour royalty reconciliation feature.

Upgrades to the service include fixed payment terms and further reduced administration fees, as well as a range of new technological solutions and streamlines processes.

Special administrative rates have been implemented for the MLCS™ programme, including local rates of 8.5% in some key territories. PRS for Music now charges an administration fee of £125 per set-list per event for members using the service.

“We acknowledge representing the world’s top talent comes with expectations, and we need to be in a position to offer a service that meets those requirements”

The PRO also states it is working on eradicating “promoter kickbacks” in some territories, and that it provides “full transparency to artists on all aspects of the royalty collection and distribution process” as part of the service.

“We acknowledge representing the world’s top talent comes with expectations, and we need to be in a position to offer a service that meets those requirements to be given the privilege of continuing to collect their concert royalties,” states Sami Valkonen, director of international, PRS for Music.

“We’ve taken on board feedback from several of our key member representatives and are committed to making MLCS™ a proposition that further solidifies PRS as the go-to provider of major concert tour copyright management.”

In 2018, £21 million was collected across 60 countries on behalf of nearly 200 PRS for Music members via the service. The tool was used for Ed Sheeran’s record-breaking ÷ tour and world tours by Bruno Mars, Rogers Waters, U2 and the Rolling Stones.

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