Paying the piper
Royalty collection is an important source of income for songwriters... but the current system of collection for live music simply isn't working for the vast majority of creators.
I’ve written quite a lot of songs. A few of them have received minor radio and TV plays, and four of them made it to an actual record. Vast numbers of them, probably about 80 different songs, have been played live at some point in front of people who paid money to get in. Quite often, but not always, by me while I was playing them in the band that featured all of the other people who had co-written them with me.
When I wrote those songs, together with others or on my own, I created a piece of intellectual property which is protected by Copyright Law. In songwriting, that moment of creation establishes the permanent right to be paid for the replication or performance of those songs any time there is a paying audience or a person who derives a benefit from the replication or performance of them. If you ever paid to get in somewhere to see me play any of these songs, a part of your entrance fee should have been allocated to pay me as the songwriter of the music you listened to.
In practice, nearly every single one of the songwriters I know, creators like me, literally hundreds of thousands of us across the last seventy years of British popular music, consider that we were financially compensated for the performance of the music we wrote by being paid for being in the band performing the songs. That’s the reality for me and for the vast majority of people who ever wrote a song and performed it anywhere in the grassroots sector - we wrote a song, we played it somewhere, people paid to get in, the promoter or venue or bar manager paid us some money at the end of the evening and that’s the whole thing done as far as we are concerned.
On a technical basis that’s not quite the full legal position - the Songwriting royalty is actually a separate piece of intellectual copyright for which a separate financial arrangement and settlement is effectively demanded by law. Any promoter, bar or venue could seek to meet that demand by having the songs performed and the financial cost of them detailed and managed within the performance contract, i.e. by explicitly stating in the performance agreement that the songwriting royalty is contained within the fee. This would cover the vast majority of songwriters/performers like I used to be, and is, effectively, what everyone involved in any event I ever played at has actually done. But that raises the issue of what about if the songwriter isn’t there? I can’t be paid the songwriting royalty for that time when the band I played in performed a cover version of Hey Bulldog. That money belongs to Lennon and McCartney, and nothing I, the promoter, or the venue, agree on the night will get that money to them.
Because there isn’t any clear way of claiming the royalty due on Hey Bulldog, an entire sector emerged in the live music industry, epitomised by the Performing Rights Society, of collections agencies. Collections agencies are bodies that represent any number of songwriters who have collectively authorised the agency to collect the royalties on their behalf. PRS for Music, the main UK based one of these collection agencies, is well on the way to becoming a billion pound a year company. Which sounds like excellent news for songwriters, except that there’s grit in the machine. And some of it is becoming huge pieces of grit that are threatening to snarl up the the validity of the whole process entirely.
PRS for Music is a very effective collective agency for its members. It takes a very forceful approach towards the performance of live music, and has established its own internal policies that ensure that almost every time you hear live music being played, PRS will be making a claim for the royalty that it generates. One of the key ways they do this is via something called the Music Licence, which includes several Tariffs including the main Tariff for live music performance, Tariff LP. This licence is managed by PRS for Music in such a way that it is almost impossible to avoid having one; PRS for Music refuse to allow any of their catalogue of songs to be performed without it, and if you state your intention not to use their music will closely monitor your activity to try to find an example where you did. Actually, if you are a PRS Member that seems like the sort of thing they should be doing - forcefully protecting your copyright and ensuring you receive your royalty. Once PRS identify a piece of music which they represent which has been played live in your venue they will, to protect their members, issue you with a licence. If 1,000,000 songs are played and 1 of them is a PRS registered work, they will issue you with a licence.
Copyright Law on the performance of live music, and the royalty it generates, is actually a pretty clear part of the law which it is easy to understand. The PRS for Music licence, however, is not. It is riddled with obligations and demands which are simply impossible for most small music venue operators to fulfill, creating a huge burden of administration which almost no one has the time or energy to complete. Among the most common of these demands are a full set list of every song performed, details of the performer, details of the songwriter(s), ticket receipts, gross ticket take, although I have also seen demands for bar receipts, guest list and numerous other little requests which add to the unlikelihood of a small operator being able to complete them. The result is that you must have a licence, but you cannot possibly deliver the obligations within it, which immediately puts PRS for Music in the driving seat of any resulting negotiation.
That process presents a huge challenge for grassroots music venues and artists, who can see that a significant proportion of the demands made by PRS for Music at this level are not reasonable and do not result in the correct songwriters being paid for the correct use of the correct songs. This methodology of collecting the royalty is a significant problem, but it is compounded by the challenge that I, and literally hundreds of thousands of other people who have written songs and performed them, haven’t ever been a member of PRS for Music. Yet despite never having been a member, and despite never authorising them to collect this royalty on my behalf, PRS for Music have demanded from promoters and venues for decades that they, and they alone, must be paid the full royalty for the performance of original songs I wrote at the events I performed at. You’ll probably want to read that paragraph a few times to get your head round it, so let me help with a practical example:
Last week at a 200 capacity venue on a Tuesday night, three new bands playing all their own original material performed for an audience of 100 people who each paid £8 to get in. The gross door take was £800. None of the acts performing played anything other than their own songs, and none of the people who wrote those songs are members of PRS for Music. Despite this, at some point in the next 12 months, the venue at which the event took place will receive an estimated demand from PRS for Music for the songwriting royalty due, based on the Copyright Tribunal’s agreement that the correct royalty rate for this event will be 4% of gross ticket sales.
Now, you might think that the demand for payment will be 4% of £800, £32, but you’d be wrong. Since PRS for Music don’t make any attempt to find out how many people attended, they don’t have any staff to do that, they will estimate the bill as £64, on the assumption that the event could have been sold out. You might think that given that PRS for Music represent only 160,000 songwriters in total from the last seven decades of music, the estimate would include an assumption that they should only claim for a proportion of the amount of money due, but you’d be wrong again. PRS for Music will assume that every song performed was written by one of their members. You might think that the venue will simply say that the demand is unreasonable, and you’d be right. But what happens next will probably astonish you.
Having issued an estimated bill based on no information about attendance, and no information about songs performed, PRS will then demand payment in full unless the venue can prove, to PRS’s satisfaction, the number of people who attended, the amount they paid, and evidence every song performed by submission of a setlist for each act and details of the songwriters for each song. They demand that information equally if the songwriters are PRS Members or not; if you are not a PRS Member, you are obliged by the licence to provide PRS with a set list or they will collect your royalty. IN many, many cases, they will collect the royalty even if you send them a set list and even if you declare you are not a PRS Member. Upon receipt of all that information, PRS will check if they believe they currently represent any of these songs, consider if they believe they might represent them in the future, and then decide how much the venue has to pay. There is no right of appeal, PRS’s decision is final. I have been involved in this process for thirty years, and I have never seen PRS return an incorrectly applied and charged royalty. Ever.
By now, logic will be telling you that this doesn’t feel right, and some of it might seem to be hovering around dangerous legal precedents. Surely, you’ll be thinking, someone is innocent of copyright infringement unless you can prove they are guilty of it, and PRS should not be able to collect a royalty on music they don’t represent? The challenge is that PRS for Music is such a massive company, and so immediately willing to pursue litigation, that so far no small venue or small songwriter has been prepared, or financially able, to take this point all the way to a court to find out if these practices are right or wrong.
These problems have been going on for some time, and the whole live music industry knows about them. Essentially what we have in terms of royalty collection is a methodology that is absolutely designed and fit-for-purpose for Taylor Swift at Wembley Stadium being applied to Dicky Dave and the Dullards at the Dog & Bucket on a wet Tuesday in Bromsgrove. Any attempts to discuss this with PRS for Music are shot down - they simply won’t even discuss what money is being collected, who it is being collected from, why and how it is being collected, and, most importantly of all, who it is being distributed to. And it’s this final point which is turning the grit in the machine into a boulder of discontent that is set to explode.
You might think that I, and anybody else who has ever written a song and performed it live somewhere for money, might be able to solve this by becoming members of PRS for Music. If you are thinking that, I’d like to have a chat with you about the meaning of the words ‘closed shop’, but let’s imagine, for a moment, that this was the solution. Firstly, I’d have to pay to become a member. It’s £100. This means that assuming I play on average three band bills where the songwriting royalty is split three ways by PRS (which they don’t do, by the way, they pay 80% of the money to the headliner), and assuming that every pound of it they collect was distributed correctly without any deductions and without any admin costs, none of which is correct but let’s not go there, I would need to have played at events that sold £7500 of tickets just to get my money back from registering as a PRS member. Until I’m part of bills that have sold £7500 of tickets, I’m actually losing money by being a member.
But let’s imagine that I did do that, and it was worth it, and maybe I was part of events that sold £15,000 of tickets, where for some reason the money was evenly split, netting me the whole princely profit of £100. I still wouldn’t get the money. Because, and this is the part that has driven the grassroots music venue sector into a frenzy, the shows I played happen more than 3 years ago. And even if I pay my £100 to register today, and even if I can tell PRS for Music exactly where I played, and how much was charged, and how many people were there, they still won’t pay me the money they took from that event. Because PRS for Music won’t accept any claim from a songwriter dated back more than 3 years.
Because all of that, from the 80% to the headliner to the 3 year limit, sounds like crazy talk, you can fact check it yourself HERE
I don’t know if you recall what the last 3 years were like, but we are now 3 years and 3 months from the date that live music in the UK was shut down entirely by order of the government in response to the Covid pandemic. And yet, despite this, two weeks ago PRS for Music started mass issuing claims to grassroots music venues for events that took place in 2019, prior to the Covid crisis. Those claims, see above, are based on estimates that every event was sold out, and that every song performed is part of the catalogue that PRS represent. One venue has an estimated claim for £20,000, representing an astonishing guess by PRS for Music that the value of the tickets they sold was half a million pounds in 2019 and that every song performed was written by one of their 160,000 writers.
Side note: Everyday an incredible 100,000 new tracks are being uploaded to Spotify. PRS estimates issued to small venues indicate that they believe they represent all 100,000 of these new tracks, which I guess at least shows that they think their 160,000 writers are keeping themselves super busy.
Let’s assume that every venue receiving these estimates has all the information PRS demand to be able to reduce them down to a more realistic level of maybe £1000 that is actually due to actual PRS members for the actual copyright of real songs genuinely performed in these venues during 2019. It would raise something in the region of £1 million… which PRS will then refuse to distribute to the songwriters because the shows took place more than three years ago.
How would that £1 million be distributed? Well, again, you can refer to PRS for Music’s own distribution policy for some of the answer - if they don’t know who it belongs to, it is distributed to its members on the basis of other established usage of the catalogue, mainly broadcast rights. This is a highly specialist subject that can get very confusing, so, again, let me give you a practical example of what this looks like:
Dicky Dave and the Dullards perform a set of their own songs in Bromsgrove on a Tuesday night. PRS for Music demand 4% of the gross ticket sales revenue. The venue is compelled to hand it over or face a lengthy court battle in which PRS will employ the most expensive legal team available on the market, because they are a billion pound company and can do that. The venue pays the money because they have no choice. None of the Dullards are PRS members, so three years after the venue pays the money over to PRS, it is distributed to the songwriters with the most radio plays. Dicky Dave and the Dullards, who have never been PRS members and will never have a radio hit, have performed their own songs and 4% of the revenue from people who paid to see them has been given to whoever wrote that year’s big summer radio hit.
A large number of grassroots music venue operators are also songwriters. Some of them are members of PRS. They have a bill sitting in their in tray right now, from the organisation which purports to represent them, for money they don’t owe, which they have to prove they don’t owe, despite there being no evidence that they do owe it, and even if they do owe it, and even if they do pay it, cannot and will not ever be paid out to the people it is owed to.
And no one can do anything about it because PRS for Music is not only too big to fail, it is too big to even consider that it has to make any serious effort to engage in a debate about it.
PRS need monitoring themselves - they are bullies and seem completely unregulated, like essentially just another tax. I also find it pretty gross that their CEO takes home around a million pounds in salary when so many in the industry are struggling. An example of how insane their policies are...
We ran some shows with a local band who have made it big. They are trying to help the venue and in turn trying to improve their chart position (it worked, they got to number 1). They covered the base costs of the venue to put in a number of shows over 3 days and make the events free entry when you purchase one of their albums. Sounds brilliant for live music, doesn't it? The venue wins, the band wins, other local businesses within the night time ecosystem win. However, then PRS get involved.
Later down the line, PRS come along and demand that the venue, who saw no ticket money from the shows whatsoever (remember, the fans purchased an album and not an actual ticket) pay them 4.2% of whatever was earnt on the ALBUM sales and not a ticket to an actual show. This in turn is now costing the venue hundreds of pounds in Tariff LP royalty collections, money that the venue never saw and potentially don't actually have.
I argue (you can't reason with them) that the physical product purchased was the album and not the ticket, therefor the shows are essentially free entry and should be billed as such. The is PRS' reply:
"But without buying the album, the audience wouldn’t have admission to the concert.
Therefore, the album price was the cost of admission, hence “unavoidable cost of admission”. It would be charged at the standard 4.2% for Live Popular music."
Even in their own description, taken from their Tariff LP document, it states:
"This tariff applies to live Popular Music performances at events such as concerts and festivals where a charge is made for admissions."
This wasn't, it was the cost of an album. MAKE IT MAKE SENSE.
I'm in complete agreement with your post. PRS are actually harming the very grassroots artists and songwriters they claim to support. How can you invoice for a show that an unregistered artist is playing at - you are taking money from the very people who need it most. It's shocking that it is legal to do this.
This is so depressing. I thought dealing with SGAE Spain in the 90s was bad. It makes me never want to play live again.