FAC and MMF bosses on livestreaming tariffs: 'We need to talk!'

This guest column is by David Martin, CEO at the Featured Artists Coalition, and Annabella Coldrick, CEO at the Music Managers Forum:

Whether it’s COVID 19, Brexit, the yearning for live shows and international touring, the economics of streaming, or the constant battle against inequalities, there’s a lot going on in the music industry right now.

The news cycle has been unrelenting, and it’s little wonder that trade bodies like ours have experienced such a substantial increase in membership. People need help and support and, in a business hit harder than most, there’s a lot of fires to attend to.

The current debates around livestreaming touch upon many of these issues, and it’s why the FAC and MMF have been so vociferous about potential changes to the licensing regime – ever since we became aware late last year of PRS for Music’s intention to impose retrospective tariffs, rising as high as 17% of gross revenues on ticketed online events. (Compared to 4.2% of gross ticket sales at a normal “in-person” live show.)

In the middle of a pandemic – with artists and live industry workers being absolutely decimated financially, and with livestreaming offering one of the only mechanisms to perform in front of an audience – the difference felt pretty staggering.

A £20 ticket to a live show would see 84p paid over to PRS. For a £20 livestream ticket, that fee could be £3.40, despite in many cases the production costs being higher for a one-off event and the artist playing the role of promoter.

No wonder so many artists and managers were up in arms.

A further PRS announcement of a fixed fee tariff for grassroots shows, launched in the middle of Independent Venue Week, arguably went down even worse.

Thankfully, and partly due to collective vociferousness, not only from our communities, but also from small venues across the UK, this latter tariff was replaced by a free licence for artists performing their own works and earning less than £500.

However, amidst an ongoing lack of clarity, on February 17th PRS announced what they term a “call for views” – an opportunity for all interested parties to put forward perspectives about the livestream market and how it can be developed and licensed for the benefit of all.

It wasn’t quite the extensive consultation we wanted, but at least it was a start.

FAC and MMF both publicly welcomed the move by PRS. The deadline for views is today (12 March) and, as well as sending a joint submission, our organisations have strongly encouraged individual members to contribute their thoughts.

The basis of our submission centres around three main points:

1. In the middle of a pandemic, any proposed changes to the licensing regime should be treated with the utmost sensitivity – especially the notion of retrospectively applying tariffs.

2. That livestreaming could represent a valuable new source of revenue, not least for songwriters and composers, but also for crew, venues and others. The format needs to be nurtured.

3. That livestreaming is a complex and fast-evolving market that covers a multitude of competing business models. All these elements, as well as the rights involved and the costs, need to be properly considered in setting a long-term viable rate.

The short-term approach, then, until full-scale live shows can return, should be light touch.

We believe all one-off ticketed “live” or “as-live” events should proceed under a discounted tariff that is as close as possible to the existing live performance rate of 4.2%. There should be no retrospective application of rates. Artists should be encouraged to participate and invest in the explosion of livestreaming, ensuring songwriters and composers can receive compensation comparable to traditional live events.

Longer-term, however, this market requires a more detailed consultation, and one that can cover issues including:

– The costs and economics of producing different sizes and types of events from empty-venue concert performances streamed ‘live’ or ‘as live’, to re-screening old concert footage, to hybrid models with audiences, to highly produced pre-recorded music videos.

– An evidence-based comparison of competing livestream models – including ticketed, ad-funded and on-demand.

– The incremental benefits of one-off ticketed livestreamed events, and the extended value and benefits for songwriters of potential repeat performances, and reuse of material (for instance as live recordings / albums, or as cinema or TV broadcasts).

– An examination of hybrid models, where in-person shows are also live-streamed concurrently. Early evidence suggests that in-person tickets are typically priced higher than equivalent livestream tickets.

– Whether there should be efficiencies to simplify the process for those artists performing only their own compositions, and for those events to be licensed differently from those performing predominantly co-writes or compositions written by others.

– The mandates of PROs and whether local societies have necessary permissions to agree licences on a global basis. We support PRS in trying to seek as simple and global a licencing regime as possible to ensure that royalties flows transparently and swiftly back to the songwriter following the performance with few links in the chain.

– The rights and licensing implications for record labels, music publishers and music venues

Hopefully, the ambition of everyone in this conversation is to ensure that livestreaming evolves into a valuable, incremental and innovative format, and in a way that benefits artists, songwriters, labels, publishers and the wider live sector.

Clearly, that won’t happen if rates are decided arbitrarily behind closed doors and applied inflexibly. Or if artists, songwriters and their managers don’t have a seat at the table.

In many ways, the entire debate is symptomatic of a wider shift away from a bygone era where “rights holders” acted unilaterally on behalf of artists, towards a more collaborative process that reflects modern industry trends and where artists and music makers are acknowledged as important stakeholders in licensing discussions.

This shift is required across the business, and in streaming as much as livestreaming as the DCMS Select Committee inquiry is showing.

To build a fairer, equitable and more fully-functioning business, our members have to be in the room. It’s non-negotiable. While a call for views is a welcome start, what we really want is a full and transparent consultation.

We need to talk!