A group of songwriters - including King Crimson founder Robert Fripp and two members of the Jesus & Mary Chain - have sued PRS. They say that the collecting society has put in place “unreasonable and unnecessary hurdles” when songwriters want to directly license live music. PRS has already responded and says it intends to “vigorously defend” itself.
The writers involved in the lawsuit say that, while “the efficiencies of collective rights management make perfect sense for songwriters and composers”, PRS has “strayed significantly from the principles on which it was founded 110 years ago, to the point that the organisation’s policies no longer appear to be operating in the best interests of its members”.
When it comes to live music, the industry has traditionally relied on a collective licensing approach. A venue or promoter gets a blanket licence from the local performing rights collecting society - PRS in the UK - which allows them to stage live performances of a vast catalogue of music. The venues and promoters pay royalties to the society. It then passes the money on to the relevant songwriters and music publishers, deducting admin fees for its efforts.
Because collecting societies usually only issue licences in their home country, PRS allows other societies to issue licences covering its members’ works in other markets. The local society collects the money from venues and promoters, passes it to PRS, which pays the writers and publishers. In that scenario, both societies usually charge admin fees, often referred to as “double commission”.
However, an increasing number of artists are opting to do direct licensing deals around live music, most often when significant artists are doing big tours.
In that scenario, a songwriter withdraws their live performance rights from their society and requires the promoter of the live shows to license the live performance with the artist directly. Payments are then made directly to the songwriter, bypassing the collective licensing system, meaning the songwriter will generally get more money - because society commissions are not being deducted - and that the money will often hit their bank account quicker.
Unsurprisingly, there is quite a bit of admin and negotiation involved in doing that, as well as added complexities if there are co-writers not directly involved in a performance, and/or support acts and cover versions featured in a show. Most artists who go this route hire the services of an agency to do that admin work, most notably Pace Rights Management, which is also involved in this lawsuit.
Setting out their grievances, the writers involved in the legal action say, “PRS has imposed a number of unreasonable and unnecessary hurdles which it says must be overcome if its members are to withdraw their live public performance rights”. These hurdles were put in place by PRS, they add, “without consulting its members or seeking their approval”.
This adds to the admin and complexity of direct licensing and, therefore, say the writers, they “cannot conceive of how these measures are supposed to further their best interests or that of other PRS members”. So much so, they add, that it seems these measures are “intended only to try to prevent the writers from direct licensing their rights, and receiving their money without PRS being able to deduct fees from it”.
The lawsuit also takes issue with the lack of transparency about the fees charged by other societies around the world as they process royalties. “This lack of basic transparency means writers are unable to make fully informed decisions about how to license their own rights”, the writers add.
For artists playing large-scale venues with capacities of over 5000, PRS does offer what it calls the Major Live Concert Service or MLCS. This aims to make the process of collecting royalties from shows more efficient. Among the benefits offered under that scheme, says the PRS website, are “reduced deductions and improved turnaround times with most major foreign societies”.
However, providing a service that treats big name artists differently to everyone else “is in direct conflict with PRS’s obligations as a collective management organisation”, say the writers. And, they allege, “the scheme has been implemented by PRS without consultation with, or approval or consent from the membership”.
Expanding on the impact of the MLCS, they go on, “according to PRS’s own figures, the preferential conditions of the MLCS results in its beneficiaries paying an average administration fee of 0.2%, while the wider PRS Membership pays 23% - proportionately, 115 times more. In effect, the most successful writers are being subsidised by the rest of the PRS members”.
Responding to the litigation, PRS insists that its policies and rules regarding things like the withdrawal of live rights are subject to a “thorough and extensive approval and review process” by its board and members council, and “were approved by members at the PRS AGM”.
It then adds: “PRS For Music has consistently sought constructive dialogue with Pace for many years, proposing and implementing solutions to the issues raised. We have worked extremely hard to simplify our processes in the interest of our members, which Pace has consistently failed to comply or engage with, which has resulted in royalties being unnecessarily withheld from PRS members for the live performance of their works at concerts. It has also created complexity and uncertainty for live music venues and promoters”.
This is the second potentially significant lawsuit filed against PRS by its own members in recent months. Blur’s Dave Rowntree is leading a class action lawsuit claiming that the society misallocates income that is not directly attributed to specific usages of specific songs, usually called the black box. How collecting societies deal with black box income is often controversial, and is one of the issues raised in the ongoing US Copyright Office review of American mechanical rights society The MLC.
