What does the Tariff LP review mean to me?
The Copyright Tribunal has approved the terms of a Modified Tariff LP (covering live music events) following three years of discussions between PRS and representatives of the live sector.
PRS launched a consultation on Tariff LP with PRS members, licensees, stakeholders and live sector industry bodies, in April 2015. Agreement on the terms of a new Tariff LP was reached in July 2017 with major industry bodies representing the live sector. Terms of the agreed new tariff were subsequently submitted to and approved by the Copyright Tribunal. The revised terms will be applied to Tariff LP events for which the tickets go on general sale from 11 June 2018.
The below outlines some Q&As regarding the new LP (light and popular) Tariff approved by The Copyright Tribunal on 14 May 2018.
What is the LP Tariff?
The LP (light and popular) Tariff is used to license the use of copyright music, controlled by PRS for Music, at live popular music events. These are music events where the main genre played is “light” or “pop”.
Tariff LP applies to:
- Live Popular Music performances at events such as concerts and festivals. (So, for example, if a classical piece by Katherine Jenkins at an otherwise pop concert was played, the concert would still be classed under this tariff.)
- A charge must be made for admission to the event.
- This tariff does not apply to variety, revue or pantomime.
- This tariff excludes events falling within the scope of other PRS for Music tariffs.
The tariff defines “Popular Music” as: all copyright music and all copyright words or lyrics set to music and includes what is called “classical jazz” but does not include what is usually known as “classical”. For example, events such as Taylor Swift at the O2 Arena would fall within the scope of the tariff, but a classical performance by the Britten Sinfonia at the Barbican Centre would be considered as “classical” and would be licensed under the relevant tariff (Tariff LC).
Why did we launch a review?
Tariff LP was set in 1988 by order of the Performing Right Tribunal, which later became the Copyright Tribunal. The live music sector has changed dramatically since 1988 and we felt it was appropriate to undertake a review after this lengthy period.
Here are some of the reasons why we launched the review:
- The previous tariff did not reflect the changes in the various sources of revenue flow for live events since 1988, including the wide and varied revenue streams (such as booking fees) from which many live events now benefit;
- The previous tariff did not adequately value the contribution that the musical composition makes towards the success of live concerts and festivals;
- The licensee declarations (the box office total provided by the licensee to enable a calculation of the royalty due) made under the tariff didn’t properly account for the actual final price (including e.g. booking fees) that consumers pay for access to many live concerts, thereby leading to ongoing underpayment under the tariff;
- The previous tariff didn’t account for free or discounted tickets and, in this regard, the revenue base didn’t reflect the value of this type of admission.
Why has the review process taken so long?
This process has taken time to complete because it was important that we consult with as wide a group of licensees, members and other relevant stakeholders as possible to ensure that (i) we developed a comprehensive understanding of the live music industry to inform the development of a tariff that is fit-for-purpose in today’s marketplace, and (ii) we conducted the review in accordance with our Code of Conduct.
After the consultation period, we entered into detailed and lengthy negotiations with representatives from the live sector, and the revised tariff is a result of these discussions. As the Copyright Tribunal has jurisdiction over the tariff, the agreed changes were then submitted for its approval.
How has the tariff changed?
The key amendments to the tariff include:
- The royalty rate for concerts and all other live music events within the scope of Tariff LP, will increase from 3% to 4% [or 4.2%*], except for festivals that meet certain criteria, as below.
- There will be a new royalty rate within the tariff for festivals that meet certain criteria which recognises specific considerations for festivals. For these qualifying festivals the royalty rate will reduce from 3% to 2.5% [or 2.7%*].
- In order to support grassroots/smaller venues the minimum charge has been reduced and will be waived where music reporting requirements are met;
- The incorporation of a direct licensing mechanism, and a provision for events comprising almost wholly of public domain works (to be licensed on an alternate basis).
*The higher charge in both instances (4.2% and 2.7% respectively) will apply where the licensee elects not to account to PRS in respect of revenue generated from booking fees, administration and service charges.
What does this mean for me?
Royalties generated by the new tariff will continue to be distributed in accordance with the current distribution policy. PRS sought to amend the tariff to terms that saw greater recognition of the contribution made by songwriters to the success of an event. The revised terms were developed in co-operation with representatives of the live sector. While it is not possible to predict exactly how royalties in an individual case will change, we believe that this is a good result for our members, which also takes into account the extensive feedback provided by licensees.
Will licensees have to pay more for a licence?
The impact of the new terms will vary between licensees and will depend on the size and characteristics of each event.
When can we expect things to change?
The new tariff will apply to events for which tickets go on general sale from 11 June 2018. Events where tickets were released on general sale prior to this will be licensed under the previous tariff. The distribution of royalties from LP events will continue as normal, and royalties from the new tariff will not appear on member statements separately from those under the previous tariff.
Is it a positive outcome for members or licensees?
The revised terms have been developed in co-operation with representatives of the live sector. We believe that this is a positive result for our members, licensees and the live sector as a whole.
Paul Clements, Executive Director of Membership, International & Licensing, PRS for Music, said: "By working together with our colleagues across the live sector we have successfully negotiated an agreed outcome for all parties and I’m very pleased that the Copyright Tribunal has now approved the terms, as agreed between PRS and the Live sector representatives. We have reached an agreement which not only recognises and rewards the huge contribution made by our songwriter and composer members to the live industry but, as importantly, recognises the different needs and strengths of the thousands of venues and events across the UK that are critical to the ongoing sustainability and diversity of the UK live music scene."
Will this damage the live sector?
The revised terms have been developed in co-operation with representatives of the live sector. We believe it will deliver benefits for our members and the live industry.
What is the impact of the tariff on grassroots music venues?
The new tariff demonstrates a commitment from PRS to supporting grass roots music venues. In response to feedback from small and medium sized venues that the minimum charge under the previous Tariff LP was disproportionately onerous and damaging to this area of the industry, the new Tariff LP introduces a reduction in the minimum charge (from £39 to £15), which will be waived in its entirety where the licensee complies with the various reporting requirements under the tariff, namely;
- (i) a set list (or lists) from the event confirming the musical works performed, including the performer(s), title(s) and original artist(s);
- (ii) wherever reasonably practical and proportionate, writer(s) and duration of works used at the event; and
- (iii) for each and every element of the Gross Receipts, full and accurate accounting, on a category by category basis.
In such cases, the applicable tariff rate will be applied to the revenue base, even where the resulting total is lower than the £15 minimum fee.
Why are you reducing the rate for festivals?
There was an extensive discussion with representatives of the live sector and it was agreed that there are key differences between concerts and festivals which, objectively, justified some differences in the licensing terms. From the perspective of festival licensing, PRS concluded that the unique infrastructure costs of staging festivals in comparison to concerts and the multi-arts content that many festivals schedule at their events warranted a reduction in the royalty rate.
Does this affect UK performances only or overseas too?
Tariff LP is only applicable in the UK.
Will it affect my Classical, Theatre or Variety performance charges?
The revised tariff terms will only apply to events falling within the scope of Tariff LP.
Light or popular music is defined in the new Tariff LP to mean all copyright music and all copyright words or lyrics set to music and includes what is called "classical jazz" but does not include what is usually known as "classical".
Do I still report my performances the same way? How?
Yes, continue to log your performances as you do normally. You can access our live performance reporting tool here.
You can report UK and Overseas live performances from all sizes of venue, from gigs to concerts and across all genres. For each, we have a time limit on when you can make your claim for your performance so we would recommend members report their performances as soon as possible:
- Gigs and Clubs: no more than one year ago
- International performance: no more than two years ago
- UK concert: no more than seven years ago*
*with exceptions, items over 7 years old require review and approval.