In order to operate lawfully, i.e. without infringing copyright, an online music service will usually need to obtain the required permissions from rightsholders in relation to the works (i.e. compositions and lyrics) and the sound recordings. To clear the rights in the works, the online music service will generally need permission for two main rights; the performing (i.e. communication to the public or making available) right and the mechanical right.
Where a writer has a publisher, these rights are governed by the terms of both:
PRS members who are published typically assign 100% of the mechanical rights and the right to receive 50% of income from the performing rights to their publisher, whilst the remaining 50% is distributed to the writer through PRS.
In the context of pan-European licensing, the combined rights are typically licensed together through the relevant “Option 3” (defined below) licensing vehicle with the “publisher’s share” going straight to the publisher and the “writer’s share” going to PRS for distribution on to the writer.
Regardless of who you are published by, as a PRS member, there will be one licensing entity licensing your rights for online music services like Spotify, that operate on a multi-territory basis. This is because in 2005 the European Commission recommended that rightsholders should have choice over their administrator for these types of services, when operating in Europe (to clarify, an administrator does the administrative work necessary to collect, process and distribute royalties to writers and publishers). This is sometimes referred to as “Option 3”. Find out more about Option 3 by clicking on the Option 3 and multi-territory licensing box below.
If you have appointed PRS to look after your online rights:
This happens regardless of whether these royalties have been collected under a PRS for Music licence or an Option 3 licence. Click the Who is licensing and administering my rights for iTunes, Spotify, SoundCloud and YouTube box below for more details about your own circumstances.
Since the Option 3 recommendation was made, PRS has been at the forefront of investing in the technology needed to manage online rights across Europe and was one of the first collecting societies to do this. More recently, along with our partners, the Swedish and German collecting societies STIM and GEMA, PRS established ICE, a market leading licensing and administration hub for multi-territory online music services. Amongst other repertoires, ICE will be licensing the repertoire PRS directly represent and administering any Option 3 licences that PRS for Music previously looked after.
You can find out more about Option 3 licensing, ICE and how your online royalties from multi-territory deals flow, in the sections below:
Find out why someone other than PRS might have been appointed to administer your online rights for multi-territory music services
Find out more about our pan-European online licensing and processing hub
Showing how this differs between UK only and multi-territory online music services for PRS members
Information about how your royalties flow, depending on who your publisher is