Heated Direct Licensing Debate At ILMC

Promoters, lawyers, managers and representatives of collecting societies discussed the growing practice of artists who also write their own songs licensing their rights directly to promoters at ILMC in London March 9. 

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ILMC managing director Greg Parmley as things get underway March 8

The reason many songwriter-artists decided to do so was the revelation that some authors collecting societies (PROs) granted large promoters a rebate on the songwriter fee they pay.

However, those discounts were not taken from the PRO’s overhead but rather the songwriter’s share. Artists were receiving as little as half of what they had originally paid in songwriter fees back from their own collecting societies. It’s not a problem with single concerts. But multi-day and multi-artist festivals already pay a blanket license fee to PROs for the use of music. If a few acts want to license directly, the festival promoters pay twice, because PROs currently don’t have a way of reducing the tariff they charge accordingly.

One of the panelists was Adam Elfin, who founded a direct licensing company by the name of PACE. PACE has been approaching festivals with direct licensing request, to which artists are legally entitled. PROs are equally entitled to collect a certain tariff for the use of their member’s music from the same festival. Both parties need to come to a solution, it shouldn’t be the festival promoter’s problem, Glastonbury’s Ben Challis said.

ATC Live’s Alex Bruford spoke up from the audience, pointing out that the situation of PACE being at loggerheads with festivals had to be solved. While none of his acts wanted to direct license at the moment this could change. And then he would have to tell them that they cannot play certain festivals, because they refused to book them. This was “a big problem.”

One of the festivals that announced to stop booking acts that license directly is Glastonbury. Challis emphasized that they would happily pay direct licensors if it didn’t mean paying twice. Ian Black from the UK’s PRO PRS put the issue into perspective, claiming that PRS licensed 67,000 live music events in 2016, of which 21 had a direct licensing request. Artist manager Paul Crockford replied that “it’s going to be many more this year.”

The more artists understood that they could license directly, the more would chose to do so. He called the current system “fraudulent,” because the discounts PROs granted to promoters were taken from the songwriter’s share rather than the PRO’s own money. PRS currently collects 3 percent of the promoter’s gross on any given night for the use of its members’ music. It is entitled to that rate, but doesn’t have to apply it.

So, in theory, there’d be ways of cooperating with another collecting society that handles direct licenses and approach promoters together. If, however, PRS members found out their society isn’t pushing for the full rate of 3 percent, that could potentially cause a backlash too, proving that this is a complex issue, which can only be solved by all stakeholders – PROs, promoters, managers, accountant, writers – coming together with the will to solve it.

On this, the entire panel, which also included Anja Kroeze of Dutch collecting society Buma Stemra and Jon Webster of the IMMF, was in agreement. Panelists also agreed that it would be the best solution to streamline the rights collection process across Europe, creating one society for each territory that simply didn’t grant any rebates. They also agreed, however, that this wouldn’t happen because there were too many board members on too many board of too many collecting societies that would object.