Royalty Payments - Whats The Deal? |
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I'll begin then with how online radio appears to be handled by the MCPS/PRS Alliance, and how, in my opinion, the whole operation comes across as rather slow, antequated, and for the most part, rather lazy. Sixhits Digital Radio pays its fee's for broadcasting its stream online to MCPS/PRS Alliance on a monthly basis, spreading its payments across a series of months, thus making it economical and viable for the station to remain financially sound. I was very impressed by the MCPS/PRS Alliance's willingness and desire to issue me with a licence very quickly, without delay, and fire me an invoice for immediate payment. Obviously, I don't have a problem with this, fee's must be paid, and paid they are, however, how long would it have taken MCPS/PRS Alliance to get in touch with me if I had allowed Sixhits to commence transmissions last year without the licence in place? Essentially, unless someone contacted MCPS/PRS Alliance Online Licencing Team to enquire about whether Sixhits is licenced (and in the early days, many did), they would never have heard about us. I think, looking at other situations on-going in the UK's growing online radio community, that the alliance for which I will call them from now on for ease, would most likely not have got in touch with us at all at this point. It goes without saying that between Sixhits and I'm sure the opinion is the same from other online station managers, we're getting more and more miffed by the fact that the alliance are not the sharpest tools in the box when it comes to dealing with online radio piracy. They are very quick, very sharp, and very well organised when it comes to taking the legitimate broadcaster's money, issuing invoices, and getting on the phone when a payment is late, but if a station is reported to them by a member of the public, by a licence holder (licence holders are obliged to report any illegal activity regarding breaches of copyright), or as we are currently seeing in one situation, widely reported in the press, this well-oiled piece of machinery seems to lose its wheels, and veer rapidly into a brick wall to which it's blind to get around. The alliance is charged with looking after its clients (artists, composers, singers, songwriters etc etc), although it seems that they are only interested in doing this if as a broadcaster, you come forward and make yourself known to them. This smacks of the reality that the alliance are relying on the honesty of the online broadcasting community to come forward and do just that, but as we know all too well, they are being remarkably over-optimistic. It could be incredibally simple for the alliance to keep their well-oiled copyright machinery in full working order, and keep the online broadcast community on board, by simply enforcing the rules which they preach to the honest broadcaster. Once they can confirm that an online broadcast exists, but doesn't hold a licence, an invoice should be issued regardless. If it is not settled within seven days, or a payment schedule arranged, then enforcement action should be taken, simple as that. A harsh stance is certainly needed in this area, or the chances of online radio being sustainable as a going concern, business or indeed hobby, will be seriously affected, and infact, are being. One example of this is that of the highly publicised and continuing saga of a company called "Hitz Radio Ltd" which broadcasts two online streams from Ayrshire. The owner of this station vehemently continues to mislead not only the press, and public, but also any other good-intentioned business who may enter into dealings with him. Listener figures are highly inflated compared to actual capacities available, and most importantly, the broadcasts (yes, both broadcasts) remain unlicensed. Infact, both broadcasts haven't been at all licensed since the launch of this company in its current guise in 2006. A phone call to the alliance online licencing team will confirm that they are aware of the broadcasts, and that they have been in communication with the broadcaster, but still no licencing is in place. Source: MCPS/PRS Alliance Online Licencing Team, 0207 306 4991. So, surely somethings got to give here. With all the press attention and radio and tv appearances by the owner of "Hitz Radio Ltd", you'd have thought that there would be a distinct willingness to be legitimate, and be licenced. Instead, twelve months of free music usage for that man over there, because the alliance seem to be in reverse gear regarding enforcement action in this matter. Of course, there is the possibility that because of the quoted but dubious listener figures widely announced, the alliance may well have a dilemna of having to calculate an insanely large invoice. Music usage is not cheap when audiences are large, but then again, a company with a claimed turnover that "Hitz Radio Ltd" has publicly quoted would have a sufficient income to cover it (sources: Daily Record, The Times), so it still doesn't answer the question why this station is still unlicenced and effectively an Online Pirate Radio station. I wonder what would happen if royalty payments from Sixhits and other legitimate online broadcasters were to be witheld on the basis of the case above? Surely there isn't a need to be legitimate if you can get 12 months of broadcasting for free? Of course, it doesn't work like that, as soon as a payment is missed or something happens that the alliance don't like in regards to a licenced broadcaster, the phone rings and an explanation is requested. There is also no delay in issuing a letter threatening the involvement of solicitors in the case of missed payments, as I found earlier this year when a payment was made late. So, why then is the case which I mentioned above still on-going? Surely it is simply a case of pay up or shut down? Afterall, the alliance themselves state on their website: "If you play music in your business or want to include it in your product you need clearance to do so from the owners of that music. PRS and MCPS represent the owners and can get you the clearances you need. If you don't obtain clearance for your use of copyright music, you could face legal action for copyright infringement and may become liable to pay damages and costs." Source: MCPS/PRS Aliiance. One answer of course is that the Online Licencing team, and enforcement people at the alliance are too busy googling for and shutting down harmless, nostalgic and informative websites. One such example is "TV Cream", a website which hosted a collection of television theme tunes recorded from the actual programmes when they were originally broadcast. Granted, this activity is infact a breach of copyright, but surely it is archiving a piece of broadcasting history, for nostalgic purposes and not harming the original composer who had already been paid by the broadcaster in the first place. Personally, I have a lot of support for these websites, as they are generally not commercial, and exsist for only one reason, and that is to remember periods in broadcast history from decades ago. Going back briefly to the story of "Hitz Radio Ltd", some have come to the defence of the owner by saying that he is a young person trying to make it in radio, and at least he is not outside breaking the law. Indeed, this is true, and entrepreneurship should be widely encouraged and embraced. However, developing a product designed to make money (on the basis of figures quoted in the press, the company in question will turn over a million pounds, most of which will be profit, apparently), which is based on copyrighted works, whatever way you try to gloss it, the copyright holder must be paid. TV theme tune websites don't turn over an income, and certainly aren't businesses, and therefore should be exempt. The alliance certainly need to get their priorities right in these instances, and protect their clients, and licence-holders alike, from piracy, which as the music industry go to great lengths to tell us, will harm legitimate business worldwide. So, do the alliance have their priorities wrong? are they too soft on copyright infringement? should they be more strict when inforcing copyright law? I believe the answer to these questions is yes. The alliance should be dealing with extensive breaches of copyright law and forcing pirate online broadcasts to licence or stop, this can also be said for illegal MP3 download sites. The alliance is certainly too soft on those found to be infringing copyrights, by giving endless periods of time to provide information and "discussions" regarding licencing. If you use copyrighted works, you pay and get licenced, if not, you stop. I'm of the opinion that a broadcast should not be allowed to take place until a licence is in place. At the moment, licencing can be arranged post commencement of transmissions, which isn't right. A broadcaster should also be accountable for the information they provide to the alliance, so for example, over-inflated figures should have an invoice to match. As usual, I invite your feedback on the subject of the alliance and their ways of dealing with online piracy. Should the British Phonographic Industry (BPI) step in like they do with Car Boot Sales, and Bootleggers? You can email me, This e-mail address is being protected from spambots. You need JavaScript enabled to view it and of course leave your comments here on the blog. UPDATE 9TH SEPT: Sixhits Threatened By MCPS/PRS Alliance, using 'bully-boy' tactics. Click Here References: MCPS/PRS Alliance Internet Radio Licencing Hitz Radio Wikipedia Article (includes links to press articles) TV Cream Discussion (Digital Spy) All of the views in this blog are those of myself, and not those of my employers or other associated companies or organisations.
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In the UK, there are three organisations charged with the task of collecting royalties for use of copyrighted works. They are the Mechanical Copyright Protection Society (MCPS), Performing Rights Society (PRS), and Phonographic Performance Limited (PPL). MCPS and PRS are by defacto, an alliance, and known widely as the MCPS/PRS Alliance. In this post, I will be looking at the very perculiar way in which MCPS/PRS Alliance in particular are currently handling royalty payments for all things online, from radio broadcasts, to websites offering downloads of television themes, or how they are not handling them in some cases. 
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