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BBC jingle maker says PRS royalty distribution policies are “heavily influenced by the interests of its more powerful members”
By Chris Cooke | Published on Monday 9 August 2021
A production company that makes music for brands and media says that a change in royalty distribution policies at UK song rights collecting society PRS caused its annual earnings via the collective licensing system to drop from £800,000 to £20,000.
Delicious Digital – aka DeliMusic – has sued the collecting society through the UK courts, alleging that when it comes to setting policies regarding how royalties are shared out between the rights organisation’s members, the bigger publishers – especially the majors – have too much influence.
According to The Times, the lawsuit – which was filed earlier this year but has only now been made public – centres on music and idents the production company made for the BBC’s 5 Live and 5 Live Sport radio stations.
When broadcasters commission music, the performing rights element of any song copyrights created will usually be allocated to the music-maker’s collecting society, so PRS in the UK. Which means that whenever that music is subsequently broadcast, additional royalties are due through the collective licensing system. Given jingles and idents are broadcast a lot, those subsequent royalties can really mount up.
However, quite what royalties are due and how they work will depend on the licensing deals negotiated between each society and each broadcaster, and also the policies of the society regarding how any monies that come in from any one broadcaster are allocated across the membership.
In its legal filing, Delicious Digital says that PRS is “heavily influenced by the interests of its more powerful members” when it comes to setting those policies, and that the society’s distribution committee “comprises chiefly the major publishers”.
Smaller music companies like itself, Delicious then adds, “are unable to put forward their interests effectively due to the lack of representation and transparency”.
As a result, it alleges, the more powerful PRS members, and especially the majors, “have a significant competitive advantage and influence in dealings with and which affect smaller members such that decisions are taken which favour the interests of the powerful members and contrary to the interests of [smaller and middle-sized] publishers and composers”.
However, in its formal legal response to the lawsuit PRS denies that is the case. It argues that the society’s distribution committee has seventeen members, and no more than three of those members come from the majors. And any ‘principal voting member’ of the society, which includes Delicious Digital, can seek election to the committee.
The society’s defence document also adds that the organisation’s membership agreement “does not … contain any express term requiring the [society] to adopt policies in a manner which is fair, reasonable or transparent, or to consult with right-holders who would be affected by the policies”. Which is presumably true and possibly a legitimate defence to the Delicious Digital legal claim. Although, at the same time, it’s not a great thing to admit.
Confirming to the Times that the legal battle is ongoing, Delicious Digital directors Ollie Raphael and Ed Moris told the paper they were pursuing the litigation in a bid to “stand up for the small indie publishers and composers against the might of the PRS”.
Meanwhile, commenting on the legal battle earlier today, PRS told CMU: “PRS For Music is owned and controlled by its 155,000 songwriter, composer and publisher members and we collect and distribute royalties on their behalf. We are governed by the PRS Members’ Council and PRS Board, which each include an equal number of songwriter and publisher members, appointed by the membership. As a collective management organisation, PRS is aware of and complies with its duties to members and its statutory and other obligations regulating its licensing, distribution and governance activities”.
“PRS entirely rejects the claim which has been brought, and is defending itself against all of the allegations which have been made”, it added. “As the parties are engaged in litigation, it would not be appropriate for us to comment outside the context of those legal proceedings on the contents of our defence – or, for that matter, the claimants’ pleaded claim – generally or specifically”.
