What are you announcing today?
We are announcing a consultation process on the PRS for Music Workplaces Tariff.
What is the purpose of this consultation?
PRS for Music is running a consultation on the terms of a new Workplaces tariff, reflecting our effort to simplify how we license this sector. We have recently embarked on an extensive programme to review and simplify our 44 public performance tariffs. The aim of this project is to create tariffs that are easy to understand as well as simple to purchase and manage. The driving principals of the new tariffs are to understand our customer’s music usage; deliver tariffs which are fair, simple to acquire and manage and; remain cost neutral for the customer base as a whole.
How have you approached this consultation?
PRS for Music has a long history of undertaking consultations on key issues that impact on its members. Making sure to develop proposals that promote simplicity and transparency for both our customers and members. All our consultations are undertaken in line with our published Code of Conduct.
Does the consultation itself indicate a change in direction for PRS for Music insofar as its review of tariffs?
Not at all. This is normal practice for a member organisation whose duties and obligations lie with protecting our songwriters, music publishers and composers’ best interests.
It is important, that wherever possible, our customers have an easy, efficient and transparent experience in obtaining a music licence. PRS for Music is dedicated to improving the experience and ion support of this is now in a process of reviewing all existing tariffs.
Who is affected by this?
This is a consultation with current workplaces customers, e.g. factories, offices, warehouses and distribution centres under PRS for Music’s I, GP & SP. Currently we have 32,209 customers and 66,168 premises under these tariffs.
What does the PRS for Music Workplaces Tariff cover?
The tariff covers the charges we make for the performance of copyright music, controlled by PRS for Music, in the workplace. You can see what is covered in the proposed tariff.
How many businesses do you expect to feedback on the consultation document?
The purpose of the consultation is to present the opportunity for all of our 32,309 customers currently licensed to use music in the workplace to have the chance to participate.
How long does the consultation run for?
The Workplaces tariff consultation runs for 12 weeks. The deadline for responses from both customers and representative bodies is 13th January 2017.
How many respondents are you hoping to get?
Our aim is to get a representative sample to ensure that we build as comprehensive an understanding of today’s market, as possible.
How do people take part?
For relevant licensee stakeholders, they should go to prsformusic.com/workplacesconsultation to download the relevant details and questionnaire. All relevant parties are also being contacted directly via email.
You mentioned ‘cost neutral’; what does this mean in practice?
In practice, this indicates that most areas of simplification should be ARPU1 (Average revenue per user) neutral, meaning that the cost should not change for the average customer. Where possible we aimed to ensure annual licence fees remain neutral, however there will be some variances (positive and negative) from current annual licence fees for some premises when moving to the new proposed tariff.
The consultation looks very dense and complex. Are you being purposefully opaque?
We have undertaken to make this consultation as clear as possible and have set out a questionnaire which highlights the pertinent areas which we need to discuss. We take our role and responsibilities to our members and licensees very seriously. It is our ambition to set best practice in collecting society management across all areas of our membership and licensing activity. As part of our commitment to best practice, we have developed and published a Code of Conduct that encompasses the whole of the business.
Will this consultation have any impact on the outcome of the tariff?
The aim of this project is to create tariffs that are easy to understand as well as simple to purchase and manage. The driving principals of the new tariffs are to understand our customer’s music usage; deliver tariffs which are fair, simple to acquire and manage and; remain cost neutral for the customer base as a whole. It is important we understand this sector to ensure that we operate a fit-for-purpose tariff. A consultation will ensure that we have listened to the relevant parties involved before any decisions are made.
Where can I find the current tariffs applicable to the Workplaces Sector?
What happens to the licence fees collected under the Workplaces tariff?
PRS for Music distributions are normally made four times a year, in April, July, October and December. We aim to include payments in the second quarterly distribution after the event has taken place. For example revenue from a May concert would be included in the October distribution.
There are a number of methods to track the music being played in different environments that allows us to distribute as accurately and efficiently as possible, including surveys on businesses and tracking radio play.
How much does PRS charge in admin rates for Workplaces Tariffs I, GP & SP, and how is this applied?
If you cannot agree on a tariff, what happens next?
In the event that we were unable to agree upon a new tariff, and we conclude that a new tariff is justified, we would be left with no alternative but to promulgate the new tariff. As the current tariff was set by the Copyright Tribunal any change will require its approval.
What is the Copyright Tribunal?
The Copyright Tribunal is an independent tribunal established under the Copyright Designs and Patents Act 1988, whose primary purpose is to resolve commercial licensing disputes between collection societies and businesses who use copyrighted material.
What will happen next?
We intend to review all responses thoroughly and maintain an open dialogue with respondents in the hope of arriving at a satisfactory solution for all parties.
What timescales are you looking at to report back?
The workplaces consultation runs for 12 weeks. The deadline for responses is 13th January 2017. There will follow a period of review, the details of which we will communicate.
Will you be publishing the findings of the consultation?
Yes. We intend to publish the findings of the consultation subject to any confidentiality provisions as detailed within the questionnaire.
Aren’t you concerned that, if you go to a tribunal, the rate may actually decrease?
No. The aim of the tariff simplification is to remain cost neutral for the customer base as a whole. The driving principals of the new tariffs are to understand our customer’s music usage; deliver tariffs which are fair, simple to acquire and manage. Our goal remains achieving a satisfactory solution for all parties without the need for a dispute in front of the Copyright Tribunal.
What is the tribunal process exactly?
If PRS for Music proposes a new tariff, but is unable to agree a tariff with the market, then PRS for Music will need to make an application to the Copyright Tribunal in order to amend the current tariff. If licensees object to the new tariff, then they may oppose it through the Tribunal. Full Tribunal proceedings may then follow. This could take 18 months or so and could cost each party a sum of around £1 million or more.
What is PPL's position? Couldn't this mean extra red tape and costs for small businesses?
Whilst PRS for Music collects royalties on behalf of songwriters, composers and music publishers, PPL represents the rights of performers and record companies.
Why are you looking to consult with your customers as they approach the busiest time of the year?
We have been in discussions with our trade bodies who have identified this as an appropriate time to conduct this consultation.
Is twelve weeks long enough to conduct a thorough consultation?
In accordance with our Code of Conduct we believe a twelve week consultation provides adequate time for responses.
When was the last PRS for Music consultation?
The website contains details of all our previous consultations.
What is your CEO’s salary? How can you justify it when your members are earning so little from their work?
The CEO’s salary is a matter of public record and fully approved by the board. (For Consideration: PRS for Music as a world leading collective rights organisation recognises the need for high quality individuals to lead shape and develop this business).
Can you tell me what collective licensing is?
It is important, that wherever possible, our customers have an easy, efficient and transparent experience in obtaining a music licence. PRS for Music is dedicated to improving the experience and this is also something we want to achieve from the consultation. The value of collective licensing lies in PRS for Music’s ability to operate as one stop shop. We license over 14 million songs/compositions, we represent over 124,000 members in the UK and many millions more worldwide. We license approximately 350,000 establishments and in addition thousands of broadcast outlets. If PRS for Music didn’t exist all these parties would have to negotiate individually for the use of these compositions.
I don’t want to pay for a licence, because how do I know it’s going to the songwriter?
PRS represents songwriters, composers and music publishers, and collects royalties on their behalf whenever their music is publicly performed. We distribute royalties to our PRS members four times a year; in April, July, October and December.
I’m a struggling business and your fees are adding extra financial pressures, why should I pay?
When a music-creator becomes a member of PRS for Music, they give us exclusive permission to license the public performance of their works. Therefore, you can’t get a licence to play those works from anyone else. Studies have shown that music can provide many benefits when used effectively in a business. Music in the workplace has a positive impact on staff morale and productivity.
Within the UK, everyone is required to comply with copyright law (as defined in the Copyright, Designs and Patents Act, 1988). A Music Licence grants you the legal permission to play millions of songs, saving you the time and money needed to gain permission from the music creators directly.
How did you come to these metrics? Why do you think this is fair?
From reviewing our customers we believe we have created a tariff that best reflects the use of music in the Workplace, using metrics that are easily applied regardless of what sector our customers work in. For music in the workspace we have created a fixed fee dependant on the number of employees that music is audible to, up to 25 employees. For those customers with 26 or more their charge calculated dependant on the number of employees, number of days and number of hours within a shift and or room, with a standing charge. This will allow more flexibility for customers who have a large number of employees but where fewer average working days and a variety of shift durations are used to calculate the charge. Additionally, this will make it easier for calculation of seasonal and/or temporary employees. Canteen music will be calculated based on the number of employees to whom the canteen is available. Background music for all areas under control of customer, including receptions, meetings rooms, onsite gyms and bars will be charged on a flat fee basis dependant on the total number of square meters where the music is audible.