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PRS reviews live music fees

Innovative promoters and event organisers have been instrumental in pushing the revenue boom of the live music sector. Chairman of the Performing Right Society/PRS for Music Ellis Rich applauded this success, stating "British music has thrived and remains popular across the globe." However, the organisation's proposals to increase its share of the ticket sale booty is causing concern within the live music sector.  Sat Bal (9 Jul 10)

 

Music fans spent around £1.45bn on live music in 2009 and this was up 4% on the previous year. The fees collected by PRS for Music are for the benefit of its members, the composers and songwriters who create the music played at live events. No-one would therefore dispute their right to collect. However, the fear is that the PRS review might increase tariffs from the current 3% to as high as 8%. When pressed by Red Carpet, PRS spokesman Barney Hooper refused to be drawn into the likely level of increase ahead of the open consultation which is currently in progress. PRS for Music expects to review all responses to the consultation received on or before 7 September.

Red Carpet received a copy of the consultation document which runs to some 20 pages. At heart are the PRS licence charges for the use of copyright music at popular music events (Tariff LP) and dance parties (Tariff DP - which could be scrapped/subsumed into Tariff LP). More controversial is the extension of the review to"Ancillary Incomes" derived from sponsorship, corporate hospitality, booking fees and a host of other related activities. Secondary Ticketing is also under the focus of PRS for Music which argues that "this market, estimated at £149m a year, proves that the face value of a ticket does not reflect the value of that ticket."

Its rationale for review rests on the fact that the current tariffs have been in place for the past 20 years. "The live music industry has changed considerably in the last twenty years and this consultation will be open to everyone, to discuss the changes and whether the current tariff structure is relevant for today’s live scene in the UK,” said Jeremy Fabinyi, executive director licensing, PRS for Music. 

Under review is "whether both the percentage (3%) and the base (gross ticket receipts) represent a fair charge, considering the significant changes in this market sector over the last 20 years." 

The PRS consultation document views the quoted changes as "an extensive value chain associated with music events," whose emergence wasn't originally accounted for.

The document also cites the UK as having one of the lowest charge rates in Europe, with other European centres collecting up to 10% of receipts. This has give rise to the fear that circa 8% could be the new levy to maintain consistency with Europe.

The organisation stresses that it aims to apply fairness to any revised charges by proposing a sliding scale linked to the capacity of venues "...as we believe larger venues and events benefit more from ancillary incomes and secondary ticketing." 

It also advances proposals to reduce the Tariff LP minimum charge from £32 (+VAT) to
£15 (+ VAT) per event where income receipts are low. It also proposes concessions for events with "non-music" content and ticketed events which include a charge for accommodation orcamping.  

 
Red Carpet spoke to industry figures about the review proposals with Festival Republic's Melvin Benn (Leed, Reading, Latitude...) already denouncing it as "money-grabbing". He argues that the PRS is already benefiting from the additional cash accrued by the overall rising spend on live events and that implementing higher tariffs will invariably raise ticket prices.

 

Other views have come from:

 

Phil Mead, Chairman, National Arenas Association 

"We are being consulted by PRS so I can't say too much at this stage. However, anything that drives ticket prices higher is clearly not good for us. In 2009 research shows that attendance was up some 30% on the previous year at UK arenas so that's a healthy increase. If anything we think PRS should be reducing the tariffs!"

 

"We spent £29m on the LG Arena in Birmingham last year and the only way to pay for it is via the secondary income that PRS proposes a cut of. PRS should be grateful to the venues industry because once we agreed to collect on behalf its members we made it a lot easier for them. 

It's not good news when the general trend for 2010/11 across arenas is that ticket sales will be down."

John Probyn, Chief Operating Officer, Live Nation

“All this is going to do is make a ticket more expensive for the customer in the same way as the rise in VAT.  As for the claim that they are entitled to a percentage of sponsorship and other ancillary income, I’m interested to see how they feel that singers, songwriters and publishers contribute towards this and are therefore entitled to a part of it!”

PRS for Music is inviting customers, rights-holders and representative bodies to be part of the consultation. Details at: 

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