UK Music Licensing Fees Slashed

by Robin Pilgrim, LawAndTax-news.com, London

29 May 2009

The UK's music royalty collection agency, PRS for Music, has announced a major reduction in the rates it charges for on-line streaming services.

This is the final stage in the unbundling of the agency's Joint Online License system which expires at the end of June. At the beginning of the month it had been announced that the rates for Online Music Licences, covering download services and services funded by subscription would stay the same, following extensive consultation with the music industry, as designated by the Copyright Tribunal in 2007.

For streaming services, however, the per stream minimum (what the agency receives for the playing on-line of one song) is being reduced from 0.22p (£0.0022) to 0.085p (£0.00085). In exchange, the headline royalty rate (what PRS receives from advertising revenues) will increase from 8% to 10.5% of revenue. Similar changes are also being made to the royalty rates and minima for Premium Interactive Webcasting Services and Pure Webcasting Services. PRS for Music says that its decision took into account feedback from the consultation process and reflects the changes that have occurred in this part of the digital market place since the Copyright Tribunal’s 2007 decision. The new rates will apply for 3 years.

Commenting on the changes, Andrew Shaw, Managing Director of Broadcast and Online at PRS for Music said: ‘We believe these new streaming rates will stimulate growth in the digital music market and will benefit our licensees and our members. The Copyright Tribunal established the principle of a per stream minimum to protect creators; maintaining this principle will ensure that writers, composers and music publishers continue to be rewarded every time their music is enjoyed. As new entrants join the market and existing providers expand, music creators will reap the rewards by sharing in the success that their talent is generating. This is a good deal for music creators and for music lovers.’

PRS for Music brings together two royalty collection societies, MCPS and PRS, and exists to collect and pay royalties to its members (writers, composers and music publishers) when their music is exploited in one of a number of ways – when it is recorded onto any format and distributed to the public, performed or played in public, broadcast or made publicly available online. Money is collected in respect of any public performance of music, whether live or recorded, from radio and television broadcasts, and online.

It remains to be seen, however, whether PRS's new structure will help to resolve its difficulties with YouTube, which wants a flat-fee model, and has been blocking access to UK music videos in protest at what it considers to be excessive licensing charges.

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