This is the first in a four-part series on PRS for Music, grassroots venues, and what happens to the money in between. There is too much to cover in a single piece, too many technicalities, nuances, errors, and omissions in the system for anyone to absorb in one read. So consider this the foundation; an explanation of what PRS is, how it works, and why, in one specific and important part of the music economy, it does not. Parts two, three and four follow across the next week, on Tuesday, Thursday and Sunday respectively.
PRS for Music is the organisation that collects royalties on behalf of songwriters and composers when their music is performed publicly or broadcast. It was established over a century ago on a principle that remains not just sound but essential; if someone makes money by playing your song, you should get a share of that money. Nobody serious disputes this. Every musician, every venue operator, every music industry professional supports the idea that songwriters should be paid when their work is used. That is not what this series is about. But is is important right from the outset to understand that when PRS for Music describe the songwriters and composers they represent they talk in general terms which hint at the concept that they act on behalf of everyone who has ever written a song. They do not. PRS for Music acts on behalf of its members, and to be a member you must meet certain conditions and you must pay a fee to join. You should make a note of the difference between PRS for Music acting on behalf of its members specifically and PRS for Music acting on behalf of songwriters and composers in general, because what follows next will keep coming back to this issue: Whose interests do PRS for Music really represent?
What these four articles cover is a very specific part of what PRS for Music do on behalf of songwriters when it comes to the use of their work in the live music industry, and in these articles I am focusing on a very specific part of that industry; the grassroots sector. Every time a band plays a live show at a grassroots music venue in the UK, the venue pays a licence fee to PRS for Music. It does not matter whether the band is signed or unsigned, whether their songs are registered with PRS or anywhere else, or even if anyone in the room has ever heard them before. The fee will be paid and will be collected by PRS for Music. That is how the system works, and on the face of it, the system makes some sort of sense. Or at least it certainly made sense in 1988 when this process was adopted.
Before getting to the problem, it is worth being clear about what PRS does well, because the answer is quite a lot. PRS administers a genuinely complex system across an enormous range of music use. When a song is licensed for a film or television series, when it is played on BBC Radio 2, when it is performed at Glastonbury or the O2, PRS infrastructure is what ensures the writer gets paid. The sync licensing system, the broadcast royalty collection, the major concert series distribution; these are real achievements, operated at scale, and they matter enormously to the writers and publishers who depend on them. PRS represents around 170,000 members in the UK, has reciprocal agreements with equivalent societies around the world, and has processed billions of pounds in royalties across its lifetime. In the world of mainstream commercial music, it functions broadly as intended. In 2024, PRS paid out over one billion pounds in royalties. That is worth saying clearly, because the criticism that follows is specific, not general. Because in the grassroots sector the behaviour and practice of PRS for Music is a different world entirely.
What this series is about is something different from the generally good work that PRS for Music does on behalf of its members. It is about what happens when money is taken out of the system and never actually paid to the songwriters whose work is being used. It is about the gap between collection and distribution. And it is about why that gap is, in the grassroots sector, enormous.
A grassroots music venue fits into a variety of odd locations; a back room, a converted railway arch, an arts centre basement, a reclaimed supermarket, even a boat or a refurbished toilet, all of them providing a small dedicated music space with a capacity somewhere generally between 50 and 800 people. It is where most artists in this country begin their serious attempts at a professional career built on playing their own music. Not where they play their first sold out show, but where they play their first twenty shows, their first fifty; where they work out whether they have anything worth saying and whether anyone wants to listen. The UK has around 800 of these venues operating as part of a functioning network. Together they run approximately 186,000 shows a year. For every one of those shows, the venue pays PRS.
The licence fee is calculated on the assumption that every song performed at every one of those shows is a song that PRS has the right to collect for. This is called the 100% repertoire assumption, and it is the foundation on which PRS entire tariff structure for the grassroots sector rests. The problem is that it is wrong; substantially, demonstrably, and consequentially wrong.
Music Venue Trust has spent years gathering evidence on what is actually performed at grassroots venues. The picture is consistent. The majority of performers at these venues are unsigned, emerging artists playing original material. Many of them are not PRS members. Over the last twenty years the number of them that are not registered as PRS members has soared. Many of the songs they play have never been registered with PRS or any other collection society. Some performances are improvised; some involve traditional or public domain material; some involve artists who manage their own rights independently. When you account for all of this, the realistic proportion of music performed at a typical grassroots venue that PRS actually has a mandate to collect for is somewhere between 20% and 34%. PRS collects as though it is 100%.
This matters for two reasons, and they pull in opposite directions. The first is that venues are being overcharged. If PRS is only legitimately entitled to collect for roughly a third of the music performed, a tariff calculated on the assumption it controls all of it will always extract roughly three times what is justified. To tackle this issue, Music Venue Trust, a registered charity, has been compelled to raise money to employ its own rights management specialist, engaged to get involved and tried and resolve disputes over charges whenever they arise. That MVT dispute resolution work bears out the size of the overcharging error; across 41 resolved billing disputes, the average overcharge was 166%. Extrapolated across the full membership, the annual overcharging through this mechanism alone runs to between 3.9 million and 4.8 million pounds a year. That money comes off the top before venues pay artists, before they pay staff, before they pay the electricity bill. For a sector where the average net profit margin is 2.5% and 53% of venues return no profit at all, this extraordinary level of overcharging is not an irritant. It is frequently a key factor making the difference between a venue continuing and closing.
The second reason is harder to resolve and in some ways more troubling. Even setting aside the overcharging, a significant portion of the money PRS legitimately collects from the grassroots sector never reaches the songwriters it was collected for. This is partly a data problem. PRS operates a number of tariffs to asses the amount due from people, organisations and premises using its members work. Two of these, Tariff P and Tariff LP, are the main assessment tools used in the grassroots sector.
Tariff P, which covers smaller grassroots shows, is what is known as a blanket licence. It enables the licence holder to host the performance of any song by any songwriter - or at least, to be strictly accurate, any songwriter who PRS represent. Because of this, Tariff P collects no usage data at all from the venues being licensed; no event details, no setlists, no record of what was played, no mechanism for matching the fee to the writer. The sole method by which any of these licence fees can be distributed is if the following conditions apply; the songwriter is a PRS member, the songwriter is aware their songs are being performed, and the songwriter correctly lodges a claim for payment within a strict time period of one year. Without that data, distribution is impossible. Across the sector, roughly one in four shows operating under Tariff P generates any kind of setlist that could allow PRS to trace a payment to a specific writer. The other three in four leave the money sitting in a pool with no attribution.
After three years, that pool of Tariff P money gets redistributed. Not to the writers whose music was performed at those grassroots shows; PRS has no way of knowing who they are. Instead it gets distributed using data from major concert series and radio play metrics; the charts, the arenas, the songs already generating substantial royalties through every other channel. Money collected from a 150-cap venue in Sheffield ends up supplementing the royalty statements of songwriters who will never play that venue and whose music almost certainly was not performed there. The system takes money from the bottom of the music economy and redirects it to the top. Not through malice; through structural indifference to the difference between how mainstream and grassroots music actually works. It is a literal reverse Robin Hood, taking from the poor to give to the rich.
The venues pay. Sometimes the promoter pays. Whoever pays, and more on that below because the answer at grassroots level will surprise you, the money moves. And the songwriter who filled that room on a Tuesday night in front of forty people, playing songs they wrote themselves, registered nowhere, seen by nobody at PRS; that songwriter gets nothing.
By now you’re probably already thinking ‘but this system is daft’. Strap in, because it’s about to not only get dafter, it’s also going to get weird.
There is a further dimension to the collections mechanism in the grassroots sector that is almost never discussed, and it matters enormously to artists. Tariff LP, the licence applied to roughly half of the grassroots sector, is not a blanket licence. It deals with specific show details and setlists and collects money calculated as a percentage of ticket revenue. That sounds like a cost borne by the venue, and as far as PRS for Music’s demands within the terms and conditions of what it calls The Music Licence, legally they assert that it is. But the legal interpretation and what actually is happening if you follow the money more carefully is an entirely different picture.
Think of the total revenue from a grassroots show operating under Tariff LP as a fixed cake. The ingredients of the income which concerns PRS in Tariff LP are set; at this level, ticket sales, nothing else. Out of that cake must come the venue’s costs, the promoter’s cost (if there is one), any guaranteed artist fee and then two variables; any artist guarantee after percentage and the PRS licence fee. At grassroots level, venues and promoters are almost universally either breaking even or losing money. There is no icing on this cake to absorb any additional cost, there’s barely enough to think about baking at all. Because of that, the only variable that can possibly move to accommodate the PRS fee is the artist’s overall payment, guarantee or percentage. When a venue or promoter calculates a guaranteed fee for an artist, the PRS liability is subtracted from the available pot before the offer is made. When an artist is on a percentage deal, the industry standard at this level is 70% to 80% of net revenue after costs, and PRS is one of those costs. Either way, the artist receives less because the PRS fee exists. Being generous and assuming a show breaks even, the artist is effectively funding 70% to 80% of the licence fee out of their own earnings, but the reality at this level is that circa 100% of the songwriter fee is taking a bite out of the slice of cake reserved for the artist.
This produces an outcome that would be comic if it were not so damagingly ridiculous. Here’s how the scenario plays out in full: A songwriter performs their own songs at a grassroots venue. The PRS licence fee is deducted from the pot before the artist is paid, meaning the songwriter has in effect contributed the majority, and potentially all, of that fee from their own guarantee or percentage. PRS then collects the fee, retains an average of 28% as an administration charge, and, if everything works as it should, returns the remainder to the songwriter nine months later. A songwriter present in the room, performing their own registered work, sends money to a collection agency and then waits three quarters of a year to receive most, but not all, of it back. That, believe it or not, is the system functioning correctly. When the system functions incorrectly, which as the rest of this series will show is the far more common outcome, at the most basic level the venue facilitates the start of a process whereby the songwriter sends the money and receives nothing at all.
To be clear about what this is and is not. It is not an argument against PRS. It is not an argument against collective rights management. It is not an argument that venues should pay less and songwriters receive less. It is an argument that when money is collected in the name of songwriters, it should reach those songwriters; the ones whose music was actually performed, not a limited pool of songwriters who are members of a specific organisation, and certainly not a proxy population selected by a methodology that has nothing to do with what happened on a given night in a given room.
PRS is not a bad organisation staffed by bad people. But it is an institution built for a documented, registered, commercially distributed music world, whose rules of collection were established in 1988, before streaming or digital information even featured as a sidenote of a potential future for those rules, being applied wholesale to a world where most music being performed is none of those things. The fit is wrong, and the consequences of that wrong fit are measurable, significant, and landing hardest on the people least able to absorb them. Grassroots songwriters, artists, venues and promoters.
Part two, published on Tuesday 7 April, examines what MVT analysis of PRS own distribution records reveals about the scale of money sitting unclaimed or misdirected across the sector. The figures are larger than most people working in this area currently understand, and the methodology used to arrive at them is, if anything, stupidly but purposefully generous to PRS. Part three examines the overcharging mechanism in detail and confronts the most damaging fact in this entire story; what PRS agreed to do in 2017 and has still not done. Part four sets out what reform looks like and names the people and institutions with the power to deliver it.
The case for change is, at this point, unanswerable. That case starts by understanding that in the grassroots sector, no suitable Tariff to implement an accurate collections and distribution mechanism has ever actually existed.
And PRS for Music seem remarkably disinterested in creating one.
I have been a full member of PRS for over 50 years. It functions in an idiosyncratic, inequitable way, much like the real world! Only full members have a vote in elections, rule changes and the like, and the number of votes you have is dictated by the level of income you receive from the organisation. When I was active and fully engaged with music creation, I had, I think 100 votes. As my income depleted, so did my voting power, which dropped to 10 votes, and then back to the one vote I started with. The effect of this is that any change in the way the society functions is disproportionately voted on, by the people who benefit the most by it. That means that the system is flawed, and biased towards the already established big earners, so change is unlikely. When you are one of those big earners, why would you vote to give more of your money to the little guys? Let them become big guys themselves, is the attitude. The society is owned by its members, to the benefit of its members - there was never an intention to make it a level playing field for all. They also tried to digitise their database (which involved a mass of paperwork) in the early 1990s. The attenpt went horrible wrong, producing a computerised system which didn't work at all. This mess resulted in the membership losing 11 million pounds of their society's money, without redress. They merged their database with MCPS, which is still how it is today, and things improved a lot after that time. I truly believe they are honestly trying to administer a workload that is intolerably large, and out of date. It seems to me that AI may well be the way forward with their accounting, and that might produce a more beneficial result, but it's more thasn my 80 year old brain can take on. The great shame is that MVT's need is urgent, and PRS moves in a slow, and unwieldy, manner however well-intentioned it may be.
Huge congratulations for a very timely, succinct and cogent analysis of a body which we ought to support but whose methods I find extremely dubious. What you have outlined doesn’t just apply to rock music (however you define that term). I work in the Jazz sector whose performers play a mix of ‘standards’ and original compositions. There was a time that PRS asked us, the promotors, to send in set lists of what was performed, presumably so they could allocated receipts accordingly. No longer. It is now the artists that need to file their set lists with PRS. We get billed by PRS after each event we run based on ticket revenue. But I have absolutely no idea whether any of that money – which is a cost to us – actually gets back to the artists we book and whose compositions we hear. And I have little faith in the system. I look forward to reading the next three articles.