Just Pay Me? PRS Is Now Processing 124 Billion Music Uses a Year…

During the Midem panel, How the Music Industry Manages Innovation (which I moderated), Incubus’ manager, Steve Rennie, laid into the head of UK songwriters’ collection society PRS, Robert Ashcroft. Rennie questioned why it takes several months for songwriters to get paid for online music usage.

Ashcroft responded: “Do you want to get paid fast or correctly?”

In 2007, PRS processed 15 million music usages – five years later that number had grown to a whopping 124 billion.

That includes every Spotify stream, Deezer stream, We7 stream, YouTube stream… the list goes on.  And while the services notify the stream of the song, collection societies have to divide the minute royalty payment it generates between those who composed it, who often don’t have equal shares in it and are signed to different publishers – all with publishing deals that, in turn, stipulate different splits.

If that isn’t complex enough, add that online music usage is divided into mechanical and performance rights.  For example, in the UK, 75 percent of a download is deemed to be mechanical, while 25 percent is performance.  The reverse is true for pure streaming.  And other countries use different splits between mechanical and performance (in the US, for example, there is no performance right to a download).

Add to this that Universal Music Publishing has withdrawn its repertoire from the societies to negotiate deals through France’s SACEM on a pan-European basis, so every music service has to withdraw the Universal rights from their invoices, while other major publishers have made similar moves…

You get the picture – this is beyond complex.

Yet it all has to end up as one monthly invoice on Apple’s – or any of the other music service’s – desk.  If it adds up to more than 100 percent (which can happen when the songwriters behind a song register differing splits of the song with their respective societies), then the service may keep the royalties in escrow until the disparity has been corrected.

No wonder deciphering how each payment on a royalty statement is calculated requires not only a degree in copyright but also in math – and most songwriters give up before they slip into a coma.

“We’re working very, very hard and investing millions and millions of pounds to get this right,” Ashcroft tells me.  “Because if we don’t make a success of the world of online – making it easy to licence, easy to get an invoice, and easy to get your money – then it’s not going to work.”

Setting up the Global Repertoire Database is going to be huge help in simplifying the process.  PRS is also advocating setting up European publishing rights hubs for licensing and back office, so that music services don’t have to make a deal with every single European society to be able to launch – and the invoicing process doesn’t have to be duplicated, at great cost, in every single society.

Chances are that some of the smaller societies – and the least transparent ones (I’m looking at you Greece) – will not welcome this proposal with open arms.  But, personally, I’d like to get paid both quickly and correctly.  Looks like it may still take a few years for that wish to come true.

5 Responses

  1. Jeff Robinson

    Paul, this is a great topic that needs to be talked about more in-depth.

    We’re in the process of trying to collect from ASCAP for a college radio campaign that ran for 6-months last year for a band out of Oakland. Band has had a ton of releases, done tons of college radio and has never earned a dime from airplay royalties.

    We took specific care this past campaign to track spins to present an audit to ASCAP for payment because they obviously don’t keep track. College radio is disorganized, likely playlists didn’t make it to ASCAP, the band didn’t make Top 30 at most stations, but were consistently in the Top 200. CMJ is useless because of the Top 30 reporting. College radio pays the fee, but I’d hazard a guess that 85% of artists on the radio see no money from PROs. A bright spot is a service like Spinnitron that can help verify spins, but it’s a genre-based chart system, but if you make a straight up alternative record, the stations that use it aren’t your target.

    What are other alternative, non Top 30 CMJ acts doing to get paid?

    • Jeff Robinson

      I present the previous post because PROs don’t have the analog thing nailed yet. How they possibly handle the digital domain?

  2. and

    ASCAP is bad. On more than a few occasions we’ve presented them with detailed info (show, episode, network, airdate, sometimes with a video link proving usage) and had trouble getting paid. A few times they even sent acknowledgement of use… but still took an extra few quarters to be paid (beyond the usual delayed payment.)

    Whatever can improve it, the better.

  3. Grant Goddard

    The much bigger issue than delays in payment is whether writers whose works are played by online radio will be paid at all. Many streaming companies are not required to provide UK music collection agencies with detailed analyses of every song they play. As a result, the distribution of royalties to songwriters in based on a sample of what is played online, not on a song-by-song audit of everything. As a result, however many times, for example, a dubstep songwriter’s works are played by an online dubstep radio station, that writer will receive nothing if no detailed usage return was required to be submitted by the station to the collection agency.

    This issue has been raised previously by angry songwriters at conferences organised by Music 4.5 in London. It is one of several issues I included in a presentation ‘Online Radio: The UK Business Model’ (view at Scribd) at Music 4.5 last year that need to be ‘fixed’ if online radio is to generate appropriate revenues for the appropriate creators.

    The whole idea of online audio/radio is to widen choice and champion millions of deserving artists and songwriters whose works are not exposed by traditional terrestrial radio. If they do not get paid (however small the amounts) for their online airplay, this new model is broken before it has really got started.

    • Jeff Robinson

      “Many streaming companies are not required to provide UK music collection agencies with detailed analyses of every song they play. As a result, the distribution of royalties to songwriters in based on a sample of what is played online, not on a song-by-song audit of everything.”

      This is just like terrestrial radio in the U.S.