ISM responds to PRS for Music call for views

In late 2020, PRS for Music announced an intention to introduce a new tariff for Online Live Concerts (OLC) which would be up to 17% of gross revenues on ticketed events. This is higher than the 4.2% tariff for in-person concerts and the new model also includes a set fee for shows generating less than £500. Along with many others in the sector, the ISM sought urgent clarification from this surprise announcement following the concerns raised by our members. In response, PRS first added a new provision for a free licence for small concerts and then launched a call for views which we have now responded to.

The ability to perform online has enabled both musicians and audiences to enjoy music making throughout the unprecedented COVID-19 crisis. It has been a vital innovation when the wider impact of the pandemic on our industry has been so catastrophic. Many of our members write and perform music and therefore as a representative body for rightsowners, we support the principle of licensing performances of copyright music, including online concerts.

However, our response makes it clear that we have serious concerns about a number of aspects of the OLC tariff. We are concerned that, while well-intentioned, it will have unintended devastating consequences if it is implemented as planned. We also urge PRS to consider the timing, in light of the impact of both the pandemic and Brexit on live performance. In summary, we are calling on PRS to rethink its entire approach to licensing online concerts.

We are also extremely disappointed that PRS has chosen not to provide any detail on the financial assumptions and modelling that underpin the proposed tariff. Without these, it is impossible to understand the rationale behind the rates. This further compounds the frustration, irritation and perceived high-handedness in the way PRS for Music has gone about introducing the OLC.

Although we have expressed our frustration at the lack of engagement with stakeholders ahead of the licence being launched, we are pleased that PRS has now undertaken this call for views and we will continue to engage with them on the subject.

The proposed structure and rates

Whilst there is an acknowledgement from PRS that online concerts vary from bedroom performances to major productions, this is not reflected in the tariff structure proposed, where a one-size-fits-all approach has been adopted.

The proposed structure and rates for the OLC tariff will significantly disadvantage the entrepreneurial musician who initiates online performances themselves. Amongst the ISM membership, 55% earn less than £20,000 per year. The online concerts they put on do not have the infrastructure or marketing support of those provided by venues, promoters or publicly funded arts organisations. The level of licence fees they pay, we believe, will be disproportionately high compared to the revenue earnt from such events. This will seriously compromise musicians’ ability to generate sufficient revenue to justify holding such events.

We acknowledge the carve-out provided for musicians performing their own works, but do not believe the exemption goes far enough for small scale events. To this extent, the OLC proposal acts as a serious disincentive to the sort of digital innovation which has helped keep music alive in these desperate circumstances.

The scope of the licence does not go far enough in that it only covers live online concerts. Many concerts are pre-recorded and ‘broadcast’ at a set time and whether live or pre-recorded, it is commonplace for them to be made available on demand for a limited period of time after. The proposed licence only offers a part-solution therefore and would require additional licences for all these usages to be legitimately covered. This places an unnecessary bureaucratic burden on musicians and we urge PRS to review and expand the scope of the licence accordingly.

Further concerns

The proposed tariff structure is also problematic as it puts the OLC tariff out of step with existing PRS tariffs, namely the LP and LC tariffs. These tariffs, as the 2019 LC tariff consultation went to great lengths to justify, are deliberately set at different rates to take into account the different operating models across different part of the business. Why has no similar delineation been made here?

The proposed tariff structure is also problematic as it puts the OLC tariff out of step with existing PRS tariffs, namely the LP (Live Pop) and LC (Live Classical) tariffs which are used to license in person events. These tariffs are set at different rates to take into account the different operating models across different parts of the business and we questioned why no similar delineation has been made with online performances.

Furthermore, no distinction is made between professional and amateur performances. This places amateur groups, the lifeblood of the UK’s leisure time music making and a vital source of work for the many professional musicians who lead them, at a disadvantage. If the tariff is introduced as proposed, we believe it will lead to a reduction in performances of works by living composers and works in copyright as the licence fees will be disproportionate to the income and costs of mounting an online concert.

Any new tariff must be at a level that does not discourage music making. The music sector is already one of the worst affected by the pandemic and research shows that 64% of musicians are already considering leaving the profession as a result. We believe that the introduction of this licence at this precarious time for the sector will further accelerate this process and have a detrimental effect on the sector in the long term.

COVID-19

Government support for the music industry throughout the COVID-19 pandemic has centred on preserving the infrastructure, meaning that very little money has flowed through to individual musicians, most of whom are freelance. Initiating online performances has therefore been one of the few opportunities available to performers to earn money throughout the pandemic.

Large number of musicians have been unable to access any fiscal support from government and the implementation of the OCL as currently proposed places even greater financial strain on those who are already struggling the most within the sector. We therefore question the timing of the licence’s introduction since our sector will be one of the last to reopen and it will take, we believe, a further 12-18 months to recover fully.