Buma to drop controversial tariff discounts
Dutch performing rights organisation (PRO) Buma, one of several PROs known to be offering controversial live tariff rebates to promoters, is to abolish the practice from 1 January 2017.
Rates will remain unchanged from 2016 – a maximum of 7% for events with more than two-thirds Buma repertoire; 5% for between one and two thirds; and 3% for less than a third – but the practice of granting ‘volume discounts’, under which promoters receive up to 25% of money earmarked for songwriters and composers, will cease.
Buma – the PRO component of Buma/Stemra, with Stemra overseeing mechanical rights – currently offers rebates ranging from 10% (for license-fee invoices of between €75,000 and €250,000) to 25% (€1m+). Other PROs offering discounts to promoters include Sabam in Belgium, SIAE in Italy, Gema in Germany, Suisa in Switzerland and Sacem in France, with most justifying the practice by saying promoters are helping to administer public performance rights.
A spokesman for Buma tells IQ the plan to drop the current rebates took into consideration the views of “all market players, including authors and performers”, and has been approved by the Supervisory Board of Collection Societies (College van Toezicht Auteursrechten, CvTA).
While the volume discount will end, there will be a smaller discount of 5% available to promoters that organise more than 25 shows per year and pay more than €100,000 in annual Buma fees.
“The new tariff is completely transparent, and creates a level playing field for all promoters, venues and festivals”
To qualify for the discount, promoters will also, the PRO explains, need to “pay monthly advance invoices to Buma, provide financial security in the form of bank guarantees, report repertoire in a way that allows Buma to digitally fingerprint any songs played [and] provide backstage access to Buma to events for inspection purposes”. (The 5% deduction will therefore, says the spokesman, be a “fee for services rendered”.)
The PRO will also introduce a ‘special event’ tariff for festivals “with a significant share of the cost in an overnight stay: hotel, campsite, bungalow, etc.” The tariff – designed for events lasting at least two days and with minimum turnover of €1m minus VAT – will allow festivals to deduct 45% from tickets that include an overnight stay.
The new system, says Buma, is “completely transparent, and creates a level playing field for all promoters, venues and festivals”.
The practice of awarding rebates to promoters is among the factors contributing to the rise of direct licensing, in which performers cut out PROs to license their performance rights directly from festivals.
There have, however, already been signs of a pushback by festivals faced with the prospect of paying twice, with festival association Yourope advising its members against booking bands who choose to collect their royalties directly.
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Rates rise to “kill goose that lays golden egg”
Belgian promoters have reacted with fury to an increase in festival tariffs by local performance rights organisation (PRO) Sabam (Société d’Auteurs Belge/Belgische Auteurs Maatschappij) planned for 1 January 2017.
The rates shake-up will predominantly affect larger festivals, which currently benefit from a discount in Sabam’s standard tariff of 6% on box-office receipts. The lowest rate is currently 2.5%, for festivals with a take of greater than €3.2 million, which is set to rise to “about 3.5%” for next year, reports Flemish-language paper De Morgen.
Live Nation Belgium’s Herman Schueremans, the promoter of Rock Werchter and TW Classic, calls Sabam “unreasonable” and says the PRO wants to “kill the goose that lays the golden egg” with the end of the current licence discount. He suggests matching the UK’s tariff of 3% of gross box-office receipts.
“Even with the increase in the Sabam rate, it remains low compared to the European average”
The Flemish Music Festival Federation (FMiV, Federatie van Muziekfestivals in Vlaanderen), meanwhile, has said it is considering taking Sabam to court in response to the move.
Separate new Sabam regulations may also have an impact on smaller and medium-sized festivals. Previously, tariffs were collected on their “artistic budget” – that is, fees paid to performers. However, as of 2017, that budget is defined as artist fees plus costs incurred by sound and lighting hire.
For its part, Sabam says it is simply bringing itself into line with other European PROs. “We have come to this conclusion after comparing international prices,” says Sabam’s Serge Vloeberghs.”We have found that our rate for the largest festivals are strikingly lower than abroad. We decided, therefore, that it should be adjusted to be in line with the international average. But even with the increase in the Sabam rate, it remains low compared to the European average.”
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