Licensing ‘Has Become Our Battle’

The comments came at Reeperbahn Festival 2016 in Hamburg after a meeting of Yourope member festivals considered moves by some bands to license the music they perform outside of the “blanket license” issued by national collection societies.

Festivals currently pay a flat fee for the right to play any music at their event. The fee can be anything from 3 percent of box office revenues in the UK to 10 percent in Spain – before that tariff was recently ruled illegal by The Spanish Supreme Court. The societies in each country collect the money on behalf of their members, the songwriters. “That’s not the problem, it’s a very simple system and it works,” Challis said. What happened is that a number of collecting societies started offering rebates to large promoters.

In countries like Switzerland this practice is transparent, and people know it’s happening. In Holland and Germany it wasn’t transparent. It was discovered by a couple of artists who write and perform their own songs, most recently Mark Knopfler and Nick Cave.

“They had, say, £1,000 deducted from their show settlement for music rights to be paid to the local performance right organization, for songs they wrote, because they wrote the entirety of their set. When they got their report back from their own collection society a year later, only £500 were being paid back to them,” Challis explained.

Artists were receiving as little as half of what they had originally paid in songwriter fees back from their own collecting societies. The societies had been selling their members’ rights at a discount to some large promoters, but those discounts never made it back to the songwriters. In Germany, rebates could reach almost 50 percent. “And quite rightly, bands who write and perform their own material were quite upset about this,” Challis said. In the UK a band can withdraw its live performance rights from PRS For Music and direct license itself.

For a concert promoter, this shouldn’t pose a problem. Instead of paying 5 percent to, say, Buma/Stemra for a concert in the Netherlands, they’ll add that 5 percent to the artist’s fee. The problem is, “for festivals, how do we do that?” Challis asked. Not all acts playing at a festival write their own music. Not all would want to direct license.

It’s why the system of collecting societies makes sense for multi-artist events. But it also means that festivals don’t have the structures in place to accommodate both performance rights organization members and artist-songwriters that want to license directly.

“It’s an ongoing and very new issue for festivals,” Challis said. No promoter wants to be confronted with more costs. But handling hundreds of artists, some of whom want to license their material directly and some who are represented by a PRO, could raise administrative costs. It is unlikely collecting societies will just waive the amount promoters are paying to songwriters directly from their “blanket licensing” bill. Until this mess gets sorted out, promoters could end up paying more licensing fees than they should.

The answer surely can’t be to stop booking direct licensing bands, although Glastonbury considered doing exactly that, Challis revealed. Once a festival of Glasto’s size takes a stand, the industry may realise there’s a need to talk.

“The problem is not between festivals and agents and artists, although they are the ones who’ve been left to deal with all of this at the moment. The real problem is between artists who write their own material who are rightly investigating the activities of their own collection societies. “It’s not our battle, but it has become our battle” said Challis.