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Are PRS biting the hand that feeds them?

The Performing Rights Society (PRS) has managed to gain a decent amount of publicity over the last couple of years. An organisation that for many years had gone quietly about the business of looking after the interests of performers and composers was suddenly finding itself plastered across both local and national press. It was no longer going about its business quietly – in fact it was making a right bloody racket and had somehow managed to become public enemy number one amongst a host of small business owners. That it did was down to a combination of heavy-handed tactics and a public relations disaster not seen since the likes of Gerald Ratner (younger readers should Google ‘crap jewellery’).

As is often the case, it was the most extreme stories that made the press. The print media has developed the ability to allow one or two sensational stories to over shadow the serious issue at the heart of them. PRS had begun to pursue businesses they believed did not hold the appropriate workplace licence required for ‘public performances’ and were keen to address the situation. Cue the story of the 61 year old garage owner who was told he would need a licence to cover radios that could be heard in cars parking on his forecourt. That one must have been true – it made the Daily Telegraph. Anyway, more on Len the machanic later.

Whilst that scenario (true or otherwise) is clearly daft, there is a bigger debate that needs to take place. What should constitute a public performance? Who should need a licence to stick the radio on at work? And are PRS beginning to bite the hand that feeds them – are they inflicting a slow and painful death upon the golden goose?

As a radio station Head Of Music, I deal with PRS on a regular basis. Regular returns are completed, detailing all the music played on my stations – not just songs but also incidental music used in idents, imaging and commercials. This I am told enables PRS to make accurate royalty payments to their members and I have no reason to doubt that. To complete this process, our Finance Director needs to handover a sizeable sum of money each year. The over-riding principle that performers, composers, and musicians gain financially from the use of their work by others sits at the heart of PRS very existence – and it’s a principle I support unequivocally.

In this age of social media, streaming services, YouTube, a plethora of music based TV channels, try before you buy downloads (the list goes on) radio stations need musicians more than musicians need radio. It is far easier for a band to find alternative outlets for their work than it would be for us radio stations to fill that 48 minutes per hour currently taken up by music! It’s therefore right and proper that we compensate those artists whose work we rely on to sell and shape our own commercial product. Without their work, we are nothing. The process by which radio station charges are calculated is also progressive, sensible and transparent. Quite simply we pay a pre-agreed percentage of our turnover in royalties – the more money we make, the more PRS gets. If we have a bad year, so do they!

Of course in a recession many radio stations are having ‘bad years’ so the latter comes into play. PRS revenue is therefore down and like any organisation, they are looking at ways to make up the shortfall. This is where the problems begin. This where we return to our 61 year old garage owner.

Len Attwood was (or probably still is) his name. He had been running his garage for more than 30 years when he received a call from PRS. Despite not having his own radio on the premises, he did mention that on occasions, customers would drive onto his premises with music clearly audible in their cars. That, PRS said, was a public performance and Len would have to ensure car stereos on his premises were turned off – either that or cough up for the appropriate licence.

The Federation of Small Business tell the story of the small web design business with three employees who were told by PRS they must purchase a licence in order to continue using their radio in the office. They now listen ‘privately’ to their iPods – it’s not very sociable but it’s free. And of course they could all still be listening to the same radio station anyway, just through headphones rather than a communal speaker. I challenge anyone to robustly defend such a scenario.

The questions for me should be these: Is a business using music to enhance its product and make it more attractive to the consumer? Is it carefully pre-selected music to create a specific ambience or atmosphere? Would the loss of music be directly detrimental to the core function of the business? Ted could confidently answer ‘no’ to all of those and therefore should not be expected to cough up for a licence. So too the girls in the office with their iPods on. I never have and never will choose where to have my car serviced on the basis of their choice of radio station. Likewise the guy in the overall about to change my spark plugs hasn’t turned up to work just to guess the year on today’s ‘Time Tunnel’. The presence of the radio is not in anyway linked to the productivity of the business. This is where PRS need to get real . Where do they draw the line? If four employees in an office need a licence, do those same four employees travelling in a company car also need a licence to turn the stereo on?

Restaurants and pubs, however, would answer ‘yes’. Hairdressers and clothing retailers may also answer ‘yes’. If you have in-store radio, it’s an automatic ‘yes’. Why would you pay to create your own tailor-made in-store entertainment if you felt it would not be beneficial to your business?  But the likes of BP, Argos, and Debenhams are a world away from my dentist who may just chose to have a radio on in the background whilst extracting one of my molars. I’d like to think that at this precise point, the low level drone of Take That would not in any way enhance or detract from her performance!

So where is all this heading? Evidence suggests that more and more small businesses will shy away from paying for a licence – particularly as we enter a double-dip recession. Some will leave the radio on and take the chance, others will simply switch off the music. All of which will adversely affect daytime listening for many radio stations – the natural conclusion being less listeners, less advertisers and therefore less revenue for radio stations. That, as previously explained will in turn hit PRS revenues elsewhere. Their search for a short term fix seems to be at the expense of longer term gain – bearing in mind we are talking about a not-for-profit organisation that exists to serve its members both now and in the future, I think the time is right for a serious debate on what constitutes a public performance.

Finally, I was asked in a letter from PRS just this week whether we have any music on in the workplace. The answer of course is yes – myself, the Programme Director, our Engineer and Sales Team all need to be across our output which is piped through the office PA twenty four hours per day. It’s not on purely for entertainment (although it is a great product), nor is it a public performance. It’s an integral part of our job. It’s music that we are already paying a tidy sum for the right to broadcast – and that many of our listeners will be paying a smaller sum to hear. Surely PRS won’t request a third payment in order for a radio station to monitor it’s own output on it’s own premises? Will they? Right now, I wouldn’t bet against it.

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One response to “Are PRS biting the hand that feeds them?

  1. Hi Pete,

    I would welcome the chance to chat about your PRS posting [great piece]. Having worked in this industry for over thirty years I too have strong views on the subject. I am also interested in talking with you on any possible future collaboration between my company and yours. I look forward to hearing from you.

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