PRS: Performing Rights Scam!

by RouteBot on July 2, 2009

prsThe music industry is very confusing at times, even for people within the industry. For musicians who are unsigned or independent it seems a complete nightmare. Who does the unsigned musician signup to? Who do they have to use?

In this article we are going to talk about the PRS in the UK and what they actually provide and don’t provide. In every country around the world there is an organisation similar to the PRS (who are a UK organisation), in which they “collect royalties for any public performance of music, whether live or recorded, and from radio and television broadcasts and online”. That is how the PRS explain themselves via their own website.

However, people don’t actually know that the PRS is just a not-for-profit organisation and are no way an official body. The PRS make the average pub, club, and music event, think that they are an official government type organisation, demanding money, claiming that they represent all artists in the UK for music performance rights (the actual artists they represent remain nameless). In fact the PRS are only a small organisation here in the UK which musicians and record labels sign and pay a membership fee too, and then the PRS are supposed to actually just collect those public performance royalties for their members only!

For musicians it isn’t at all a requirement that you join the PRS. They just provide a royalty collection service for some artists. Likewise if you are a pub, club, music event or venue, you need to pay an arranged royalty collection fee with the PRS if you play music from their artists. However, you don’t have to pay for royalties for artists who aren’t signed by the PRS, but they try to make you think that you just have to pay a blanket fee for all musicians! Simply not the case. The PRS needs to be able to provide information on exactly which artists they are representing, then each music venue, pub or club, should be able to negotiate a particular fee for every situation individually. The PRS believe that they even have the right to set a price and make people pay that price without any negotiations at all.

In conclusion the PRS are just a collection agency representing the performance rights of certain artists. The PRS don’t have the rights to make any place that plays recorded music pay a fixed amount. The PRS also needs to provide documentation on which artists they are and are not representing,  then it is a simple process of negotiating a price individually with a venue. Artists don’t have to signup to the PRS they are just an optional collection agency for performance rights and they work in a similar way to how RouteNote works, but obviously in a different sector. If the PRS don’t represent artists who’s music is played in a particular venue then each venue is supposed to, by law, find out and pay whoever owns that particular copyright on every single track. So why pay the middle man, or in some cases the artist and the middle man? Why do the PRS find it acceptable to demand royalties for a list of names they refuse to publish? Why do we have to pay the PRS for listening to the radio at work, do the radio stations not pay enough royalties themselves?

Update: A leading digital music site has responded to our article with the following.

Not a good article, in my opinion. There seems to be a huge misunderstanding of PRS, copyright law and blanket licenses.

Collection societies and all the issues in the post are hardly new. And, yes, they CAN make public establishments pay flat fees if the venue plays their artists. (The author of the post should have taken the time to go to the PRS website to look up the tens of thousands of songwriters it represents.) I don’t know what percent of the market PRS has, but in the U.S. there are three and the vast majority of artists are signed with either BMI or ASCAP. Individual licenses are completely unrealistic. A venue can’t be expected to know what songs a radio station will play, or what cover songs a band will play. And since there are so few collection societies, any venue can be assured that a good portion of the music played will be part of any one collection society’s catalog. So collecting societies offer blanket licenses that cover their entire catalogs. It’s very efficient. (The model is very much like what would have to be adopted in a legal, paid-for P2P network. The ISP or user would pay a flat fee for a blanket license and revenue would be split between labels/artists according to volume. Users who downloaded songs not covered by whatever licensed the ISP had obtained would be breaking the law.)

Bottom line is songwriters have a right to get paid when their songs are used in commercial settings. If music adds value to a public establishment, that business has a LEGAL obligation to pay royalties.

There is one easy way around paying collection societies: make sure only originals are played by songwriters who are not signed with any collection socieity: http://www.newsreview.com/sacramento/content?oid=1026770. But that’s a rare expection and not practical for most places of business or live venues. A lot of managers would not want to send their artists to a venue that does not pay collection socieities.

Our Reply: This is our reply with regards to the Update above.

C: Not a good article, in my opinion. There seems to be a huge misunderstanding
of PRS, copyright law and blanket licenses.

RN: Everyone is entitled to an opinion…

C: Collection societies and all the issues in the post are hardly new.

RN: True, but the world is changing around them. These self appointed ‘institutions’ are from the days when we were all buying our music on vinyl, now the increasing trend is to consume music digitally, a totally different ball game – they’re essentially a musicians’ trade union, and not a particularly comprehensive one. Any union that charges minority members money to become a member seems suspect to me.

C: And, yes, they CAN make public establishments pay flat fees if the venue plays their artists.

RN: Capitals, eh? That lends a lot of force to the argument… The issue here is not whether the artists are owed money for their copyright; no-one in their right minds would argue that artists don’t deserve reward for people using and enjoying their work, the issue is how they go about it. With no investigation of the music use in 99.9% of all cases, and no proper design of fees let alone consultation with the people they’re charging money to. I can’t set my own prices for the work I do and unilaterally bill people with no discussion, only the threat of litigation; that’s not business, it’s extortion.

C: (The author of the post should have taken the time to go to the PRS website to look up the tens of thousands of songwriters it represents.)

RN: If you can find this list on their website you’re a better man than me, and I’d be very interested to see it! In every instance where I’ve asked the PRS for information like this they have declined to give it out. A cynical person would say that this is so they can bluff their way through and charge anyone they want, whatever they want regardless.

C: I don’t know what percent of the market PRS has, but in the U.S. there are three and the vast majority of artists are signed with either BMI or ASCAP.

RN: How can you state this? Do you presume to know how many performers and artists there are in the UK or the States? Have you asked even the musicians in your acquaintance whether they’re signed up? I’ve never seen any figures on this, apart from the PRS’ claim of 60,000 artists on their books, a list I’ve never been privileged to see.

C:Individual licenses are completely unrealistic. A venue can’t be expected to know what songs a radio station will play, or what cover songs a band will play.

RN: The radio station should have a pretty good idea though… If they’re broadcasting a service, and they’re making money off advertising during their broadcast, then they should be responsible for tracking what’s played and for paying the broadcast royalties. To suggest anything else is ludicrous – a thought experiment to illustrate this. 100 music fans listen to their radios at home, no problem, according to the PRS; they picks up their portable sets and go to a venue, pub, club, place of work… whatever – same ears, same radio, but suddenly we have a big problem according to the PRS. What’s changed about the licensing situation? That they’re stood in a different room?

C: And since there are so few collection societies, anyvenue can be assured that a good portion of the music played will be part ofany one collection society’s catalog.

RN: Where’s the accountability? Why in the face of all good sense and precedent is the music listening public being assumed guilty until proved innocent in this instance? If someone wants to charge me for something, they need to have evidence of an exchange of consideration in my favour. If you want me to pay for my meal, you should at least be able to prove that I ate it…

C: So collecting societies offer blanketlicenses that cover their entire catalogs. It’s very efficient. (The modelis very much like what would have to be adopted in a legal, paid-for P2Pnetwork. The ISP or user would pay a flat fee for a blanket license and revenue would be split between labels/artists according to volume. Users who downloaded songs not covered by whatever licensed the ISP had obtained would be breaking the law.)

RN: So the P2P network would be expected to keep track of what got shared and played, and the revenue would be split openly and fairly, not based on the dubious assumptions of a body accountable to no-one, and the use of the P2P network’s paid for services would be voluntary and agreed in advance by both parties rather than handed down from on high by that same self-appointed body.

C: Bottom line is songwriters have a right to get paid when their songs are used in commercial settings. If music adds value to a public establishment, that business has a LEGAL obligation to pay royalties.

RN: Agreed – to the people that deserve it; those that have had their music used… I’ve staged local artists before in UK venues that haven’t seen a penny from the PRS even though they were signed up. They don’t benefit from me paying a license fee to some remote beauracracy – they benefit from me paying them to gig their own material that night. In any case, why should the artists lay out to have their rights protected? If the PRS are so interested in protecting artists they should offer their services to musicians free, and take their costs out of the licenses they firk from venues and broadcasters, just as RouteNote lets artists sign up for free, and takes our costs from music sold by stores to willing customers.

C: There is one easy way around paying collection societies: make sure only originals are played by songwriters who are not signed with any collection socieity: http://www.newsreview.com/sacramento/content?oid=1026770.

RN: Or you can pay the bands that play at your venue. A direct relationship obviates the need for any of the infrastructure of the PRS, all those people need to eat and drive their cars and have an office to work in… but do musicians really need to pay them for it? That’s obviously something for each artist considering signing up to a society like the PRS to consider for themselves, but if I am paying someone, I expect them to justify the money they charge me. I don’t believe that members have any say whatsoever about the salaries drawn by executives – let alone the costs of running the office. If it were a tuly equitable society, these things would all be open to decision by members votes at an AGM, and all accounts would be published for public review, or at least review by members which would amount to the same thing.

C: But that’s a rare expection and not practical for most places of business or live venues. A lot of managers would not want to send their artists to a venue that does not pay collection socieities. Also, PRS is not-for-profit, not “just a corporate organization,” as described in the post.

RN: Hmm. I think the director of the PRS probably doesn’t have to ride a push-bike to work… They say they “only deduct a small administration/commission fee to cover operating costs.” Who is controlling their use of their members’ money?

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