This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Business News Labels & Publishers Top Stories
PRS cut streaming rates
By CMU Editorial | Published on Wednesday 27 May 2009
NOTE: Check this subsequent correction re figures in this story.
Songwriter collecting society PRS For Music yesterday announced it was rejigging its rate card for online streaming royalties, with the revenue share rate set to increase but the crucial per-stream rate set to fall by more than half. The collecting society says it hopes the new prices, and especially the large reduction in per-stream fees, will help stimulate growth in the digital music market.
The new rates come as part of the collecting society’s revamp of its online licence, the so called Online Music Licence, which will replace the old Joint Online Licence (‘joint’ because it was the first licence to give licensees rights to both make mechanical copies of and broadcast performances of songs – rights previously managed by two separate although allied collecting societies, MCPS and PRS). The old JOL rates were not without controversy, though were endorsed by the UK’s Copyright Tribunal in 2007.
The new rates will see PRS look to increase its over all revenue share from any digital music service from 8% to 10.5%, however in terms of per-stream fees, the rates will drop from 22p per stream to 8.5p per stream. Given most digital music services are not yet profitable, and therefore revenue share splits are not substantial, the per-stream fees are what matter to both the society and their licensees – for the former because it provides a guaranteed minimum income based on how much music is consumed (10.5% of nothing isn’t worth much), for the latter because they have to find the money to pay the per-stream fees oblivious of their advertising or subscription income. The cut is substantial, though given some of the bigger online service providers have been pushing for fraction of a penny rates, 8.5p will still seem over priced.
The new rates were passed by the collecting society’s board on 20 May, and will be in place for three years. Confirming the new rates, PRS For Music MD of Broadcast And Online, Andrew Shaw, told reporters: “We believe these new streaming rates will stimulate growth in the digital music market and will benefit our licensees and our members. The Copyright Tribunal established the principle of a per-stream minimum to protect creators; maintaining this principle will ensure that writers, composers and music publishers continue to be rewarded every time their music is enjoyed. As new entrants join the market and existing providers expand, music creators will reap the rewards by sharing in the success that their talent is generating. This is a good deal for music creators and for music lovers”.
In reality, many start-up streaming services have negotiated special rates with PRS, though it’s often when start-up arrangements come to an end and the collecting society start to point to their standard rate card that negotiations start to falter. The most high profile faltering negotiations, of course, have been between PRS and YouTube, with the video service pulling premium music videos off its UK website after failing to reach a deal with the collecting society.
Insiders say 8.5p per stream is still a lot more than Google and YouTube want to pay, so yesterday’s announcement won’t really make any difference in terms of that fallout. YouTube were non-committal yesterday, saying simply: “We’re still in discussions with the PRS to agree license terms for YouTube”.
