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No margin for error

Evolution Festival, Newcastle/Gateshead

PHOTO: Chris Bishop

Venue and festival operators keeping watchful eye on PRS for music’s tariff review


Anumber of key representatives and executives from across the UK’s festival, venue and hospitality communities have moved to highlight the potential problems a PRS for Music tariff increase could cause for smaller operators on already tight margins.

PRS launched an eight-week consultation on the terms of its Popular Music Concerts Tariff on April 13, encompassing ticketed live popular music events such as concerts and festivals. The tariff was originally set in 1988 and is 3% of gross box office receipts per event.

The move has been welcomed by songwriters, publishers and indeed live operators themselves - who are keen to see artists properly remunerated under the PRS licenses in 2015 and beyond. However, the latter group has also pointed out that a rise in PRS costs could spell disaster for smaller venues and festivals.

“First and foremost, AIF and its members think that artists being paid and treated properly is incredibly important and we would welcome a PRS tariff structure that is both fair and fit for purpose on all sides,” said Association of Independent Festivals GM

Paul Reed. “However, a simple raise to the current tariff would have a serious impact on many of our member events, who do operate on extremely tight margins each year. These are largely multi-arts, experiential events built from scratch in the middle of a field and the current PRS percentage is often already a huge chunk of their music programming budget.”

While the current PRS review will only affect popular music festivals and concert venues, Music Week understands that separate reviews of other PRS tariffs will occur in the near future, including those affecting EDM venues and the hospitality sector.

Despite running a venue himself, it is Ministry Of Sound boss Lohan Presencer’s view that both the PRS and PPL tariffs for clubs and bars that play dance music are currently “far too low in light of the importance of music to their business models”. Speaking to Music Week, he also pointed out, however, the potential negative impact of any sudden PRS tariff hike on smaller operations.

“For many venues, an increase in tariff could substantially impact what is a pretty tight operating profit, tipping the venues into loss,” he said. “We believe there should be a long term plan to gradually increase tariffs over a period of three to five years so that the venues can budget accordingly and plan to value music properly for its significant contribution.”

Kate Nicholls, chief executive of ALMR, which champions smaller independent companies that own and operate pubs, bars and restaurants added: “PRS has a job to do in making sure that everyone is properly licensed and we support that. But, in the current economic climate, we’re not capable as an industry of sustaining massive increases in costs. You can have a very high revenue business that’s trading at or near the margins of profitability. We need to make sure we have a system that’s sustainable for all.”

A PRS for Music spokesperson commented: “As we said at the outset, the purpose of this consultation process is to provide an open dialogue in reviewing PRS for Music’s Tariff LP. We recognise our customers have concerns in what is a rapidly changing and diversifying sector. We have an obligation to ensure that our licensing is simple, efficient and fit for purpose and would actively encourage all interested parties to respond to the consultation so that, in addition to the research we carried out, we have the most comprehensive overview of the market as possible.”