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Direct Licensing: Rates, rights and wrongs

Direct Licensing: Rates, rights and wrongs

Chair: Jon Webster, MMF (UK)

Guest speakers:
Iain Black, PRS (UK)
Ben Challis, Glastonbury Festival (UK)
Paul Crockford, PCM Management (UK)
Adam Elfin, PACE Rights Management (UK)
Anja Kroeze, Buma Stemra (NL)
Jude Luscombe, PRS (UK)

licensing2In a heated debate, the panel tried to work out a solution for the current practice of acts who write their own songs and take out their rights from their respective PRO to license them directly to promoters. 

The reason artists who write their own songs started doing so was that a number of collecting societies started selling their members’ rights at a discount to large promoters. Artists were receiving as little as half of what they had originally paid in songwriter fees back from their own collecting societies. Crockford called it a “fraudulent” system, because the rebates collecting societies offered were taken from the writer’s share, not the PRO’s overhead. “Why is the writer paying it?” he wanted to know.

Black put things into perspective by explaining that of 67,000 live music events that PRS licensed in 2016, only 21 had a direct licensing request. According to Challis, such requests would be fine if promoters had an easy way of paying both direct and collective licensors. Right now that isn’t the case, which creates a problem for festivals in particular, which are multi-day and multi-artist events.

UK Festivals are currently paying PRS a blanket licence fee for the use of all the music at the event. Suddenly, PACE came in saying they direct license, which effectively meant festivals paid twice, because PRS has no way of reducing its tariff according to the direct licence requests the festival also has to accommodate.

Which is why Glastonbury has started to refuse to book bands that direct license. Challis emphasised that they’d be happy to pay direct licensors, but that a system had to be in place. If there was a way to pay PRS a reduced rate of, say, 2.5%, and 0.5% to PACE for artists who license directly, that would be totally fine with him.

licensing4Elfin, explained that PACE wasn’t a collecting society, and that it was paramount for all stakeholders – PROs, promoters, managers, accountants, and writers – to sit down together and work out a solution. Elfin and Crockford were both convinced that direct licensing was the way forward, and that any band that found out it was possible would opt in.

Elfin pointed out that PACE was needed because traditional PROs didn’t have a system in place to deal with different amounts of repertoire at concerts/festivals being licensed in different ways.

It became clear that figuring out a way to accommodate both direct and collective licensors was the most pressing issue at hand, and while the direct licensing proponents didn’t hold back with blaming the PROs for not dealing with the issue, the representatives of PROs countered that they did.

“We’re all in the same boat,” Black said. He did admit though, that PRS was entitled by the UK’s copyright tribunal to collect 3% of the promoter’s gross, but that they didn’t have to collect that amount. So a co-operation with an alternative PRO such as PACE would be possible.

The panel agreed that the easiest solution would probably be to streamline the tariffs across Europe, so that in the end there would be one PRO in each territory that didn’t grant rebates. The panel also agreed that this would not happen, because there were too many board members on too many PRO boards.

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