U.K. Performance Royalty Societies Create Joint Venture to Streamline Licensing (Music Business Worldwide)
This week’s news out of the U.K. is a good reminder that sometimes, less is more.
The British way of collecting and distributing public performance royalties is already much easier than that of the U.S., and just got a whole lot easier.
As a quick primer - public performance royalties are due whenever any business uses music to enhance their business to the public and to their customers. That includes music played on radio, online streaming, TV, concert venues, bars, clubs, restaurants, coffee houses, airlines, etc.
Licensing this music can be complicated for businesses. It’s not always clear that there are at least two licenses required--one for the musical composition and one for the sound recording--and each license comes with its own terms, royalty rates, administration.
This gets more confusing in the U.S., where there are four collection societies (ASCAP, BMI, SESAC and GMR) for the musical composition. And the public performance right for the sound recording doesn’t even exist for FM/AM radio.
Things are much more simple in the U.K. There is one society for the musical composition (PRS for Music) and one society for the sound recording (PPL).
The announcement that the two have created a joint venture means the U.K. is creating one license to cover both the sound recording and the musical composition for virtually all music publicly performed throughout the British territories.
“This is an important moment for the music business at large and is a move towards greater efficiencies for our licensees and greater returns for our members who create the music enjoyed by those we license all around the UK.”
Dubbed “TheMusicLicence,” the PPL/PRS joint venture mimics similar moves in other countries (such as New Zealand, which created a joint venture called OneMusic).
Of course, the catchy names are meant to alert music users they only need one license to be legal and free to play whatever music they want.
The “one license” idea aims to not only improve the current licensing and royalty collection system, but also to incentivize businesses to acquire these licenses (and use more music as a result). Most businesses want to follow the rules and pay music creators, but get stymied by a process that’s often too confusing for those not in the music business.
The more these businesses see the new process as virtually painless, the more likely they are to get licensed (rather than risk flying under the radar). As a result, more royalty income is collected and there is less legal trouble for the unlicensed business.
Unfortunately, the chances of applying this in the U.S. are rather slim.
1. None of the new copyright reform legislation bills suggest merging musical composition and sound recording licenses.
2. The discrepancy in U.S. government regulation between the musical composition and the sound recording makes it legally impossible. Too many holes and contradictions exist under U.S. Copyright to make a “one license” even possible.
For example, it would be impossible to reconcile under one license the U.S. government’s regulation of FM/AM radio royalties via ASCAP/BMI. The U.S. government doesn’t even recognize an FM/AM radio performance royalty for the sound recording. You can’t make “one license” if one of those rights doesn’t even exist under U.S. law.
What’s more, it would prove quite difficult to get all four PROs (ASCAP, BMI, SESAC, & GMR), as well as the sound recording groups in SoundExchange and the major record labels, to agree on the same terms and royalty rates.
Nevertheless, U.S.-based artists and writers should benefit from the joint venture whenever their music is played throughout the U.K.
And now for this week’s other headlines:
Spotify Goes Public (Billboard)
Universal Music Publishing Group’s Annual Revenues Have Grown By $125M Over The Past Two Years (Music Business Worldwide)
Benom Plumb, Assistant Professor of Music Industry Studies at the University of Colorado Denver, reviews the biggest stories of the week affecting music royalties. He is a music industry professional, not an attorney. For more info about Benom, visit his website at www.professorplumbmusic.com.