June 07, 2009

Unconvention Manchester... Friday Afternoon Fieriness!

‘The Modern Role of Collection Agencies’ was a heated debate on what the collection agencies are doing to collect and manage their data accurately, and how to simplify the processes of applying and maintaining correct accounts for artists.

Granted, the societies have to deal with huge numbers but simple and secure systems should be in place, and the data should be automated from there to the respective departments. One unfavourable point that was raised, and was the cause of much criticism throughout, was that of escalating admin costs for the societies - a valid point when they deduct their admin fees from members’ royalties and operate as a non-profit organisation.

Steve Lawson offered a constructive and educated view, raising both that there is “little sense of you [the PPL / PRS] working on our behalf” and that “accountability and transparency are key critical points now and moving forward”. Again, the issue of expenditure was raised, with reportedly 200,000GBP spent on the PPL website without members’ consent. The PPL say that they sent every one of their 38,000 performers a letter inviting them to attend and contribute to the annual performers meeting, and it was also web-streamed, to which one long-term member said that he received no letter or email invite, and the fact that the PPL were using the postal service and were reliant on pieces of paper to communicate in 2009 was crazy.

The discussion almost ended in a bit of a Stalemate, with PPL and PRS representatives feeling that they are doing enough to move the payment and communications systems and admin fees forward and downward respectively. There were a number of fiery interjections debating about the efficiency of the organisations, and many audience members have varying contact, unsolved payments problems and were ultimately dissatisfied with some of the societies’ answers.

I managed to throw in the last query, which was a change of topic, welcomed by the moderator at that point(!), being: In developing nations, i.e. India, Thailand etc. there are millions of mobile phones / devices are being sold, and therefore there will be millions of music downloads and streams as a result. How do you plan to retrieve data and ultimately collect royalties in these new emerging markets? The PRS rep was keen to point out that they would be limited by the respective parties in those countries, where many associations exist but laws are often vague, rarely followed, and never enforced. Every foreign agency, the PPL has a reciprocal agreement with to collect foreign royalties, and the PPL guy will be travelling to numerous places in Africa and the Caribbean and starting to develop relationships with various artists and organisations, by starting at a grass roots performing level and hoping to build from there.

I think that some of the best comments came from the audience in this section of the conference, and the key point that stuck with me was that people’s perception is an obstacle for the companies to overcome so that more performers feel that they should join them. Attending events such as Unconvention and listening to audience feedback may be one way that they can move forward in this respect.

Lee Jarvis.

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consterdine said...

Nice piece Lee. As one of the 'fiery' audience members I'd like to clearly outline my issues with PRS 4 Music.

Firstly, if you wish to manufacture product in the UK or EEC then you have to join and adhere to the rules of the collection agencies. This effectively makes them monopolies.

Under a AP2 manufacture license, the standard license for small indie labels, it is required that the label should pay a ‘mechanical’ royalty, 8% of the wholesale price, on all manufactured units. The MCPS (as was, now the PRS 4 Music,) then pay out to the artist - minus their 12% 'admin fee'. In the US, and for larger labels using an AP1 license, the mechanical is paid only on 'shipped' (or sold) units. Also, AP1 licenses allow for the first 400 copies to be ‘mechanicals’ free.

This extra cost to the smallest of labels can represent the difference between recouping or not on a project and is also a hefty outlay at the manufacturing stage of a project, i.e. before any money has come in. The MCPS has closed down small companies over issues relating to mechanical payments.

This process alone is a bar to entry on emerging artists and companies and could have been solved easily at any time in the last 30 years.

Alongside this, are issues relating to the use of an artist or labels own music on their own website, which they technically have to pay the PRS 4 Music to do, losing their admin fee as a result. Also, an independent label or artist that publishes it’s own output has to pay £450 to join and has to sign 5 different contracts.

Also, each year there is a large sum of money with the agency cannot accurately assign to individual members. This is known as ‘The Pool’. This pool is normally delivered on a pro rata basis to the highest earners in the previous year. This money would be extraordinarily valuable were it distributed to the poorest members, who are often badly served when it comes to calculating earnings from plays of their music anyway.

In short, the bias towards larger businesses and the most successful artists, combined with it’s monopolistic and arcane practices make the PRS 4 Music a poor support system for emerging artistic and business talent.

I hope this sheds some light on my grievances with the PRS 4 Music and thanks again Lee for a great blog and

Lee Jarvis said...

Hi Colin, thanks for reading and sharing your comment! Your points on the 'effective monopoly' and also the fees that can mean the difference for a small label breaking even or not are both very well-founded indeed. I'm glad you raised the points at the panel and again here on my blog.

Fiery is good! It means people have passion for music! Keep up the good work, and hope to see you back here soon :)