It became apparent last year that PRS for Music was increasing its monitoring of music played in the workplace and in other premises, to check whether such businesses hold the appropriate licences. This trend is continuing.
In recent months it has also become apparent that PPL is also conducting an aggressive enforcement campaign. It seems that PRS for Music and PPL share information. If your business needs licences from both of these organisations but only has a licence from one of them, then your business may well be a target for investigation by one of these organisations.
However, there is some good news. A recent ruling of the Copyright Tribunal, vigorously but unsuccessfully contested by PPL, confirmed that some of the tariffs charged by PPL from 2005 to 2009 were too high and unreasonable. Therefore, your business may be entitled to a refund if you paid PPL licence fees, under the affected tariffs, during that period.
Why you may need a licence to play music in public
Copyright is a long-established legal right which protects certain types of works from unauthorised commercial exploitation. For example, copyright protects the lyrics of songs, music, the recordings of songs or music and radio or TV broadcasts. The owner of the copyright in any of these works can control their commercial exploitation by either (i) stopping or (ii) charging third parties for the privilege of playing or performing them in public.
The lyrics of a song, the notes of music, a recording of a song or a piece of music, or a radio or TV broadcast, will be played ‘in public’ where they are played other than for private and domestic purposes and can be heard by at least one person, in addition to the person who caused them to be played. Examples of what would amount to playing or performing such works in public include playing a radio, TV or CD player in a restaurant, shop or office (or having the radio on in a private room forming part of the premises which can nonetheless be heard by the public coming into them), putting on live music in a hotel or restaurant and playing music or songs to telephone callers whilst they are kept on hold. Examples of what would not amount to playing or performing such works in public include an office worker listening to an IPod via headphones at work or watching TV or listening to the radio or a CD at home with family or friends.
It is not a defence that you have bought and paid for the CDs that you play. When you buy a CD you are, in effect, buying a licence to play that music for your private and domestic purposes. Playing music in public will be outside that licence.
PPL and PRS for music – who they are and what they do
PPL and PRS are collecting societies that collect and distribute licence fees to their members. This centralised function means that businesses which play or perform music in public only have to deal with these two organisations instead of having to deal with hundreds of recording companies, individual musicians and song writers.
PPL collects and distributes licence fees in relation to sound recordings on behalf of record companies and performers. PRS for Music, by contrast, collects and distributes licence fees relating to the performance in public of the underlying song lyrics and music.
For many businesses if you have a PPL Licence you will need a PRS for Music Licence and vice versa. For example, if your business plays recorded music via the radio, TV, CDs, DVDs or via computers then you will need both a licence from PRS for Music (for the underlying music and/or lyrics) and from PPL for the underlying sound recording.
How PPL and PRS for Music calculate their licence fees
Both PPL and PRS for Music fees are payable annually in advance (and attract VAT). You can apply for your licence either online or by telephone. PPL and PRS calculate the licence fees payable to them in different ways.
PPL has a number of different tariffs depending on where sound recordings are played. For example, Tariff 210 relates to background music in pubs, bars, restaurants and cafes. Some of the PPL tariffs were set in 2009 by the Copyright Tribunal (a public body which oversees the charges set by PPL) and are calculated by reference to the size of the area in which the music can be heard. The bigger the audible area the more you pay. PPL also has a range of other tariffs where the fees are calculated on a different basis. For example PPL tariff 001 covers music played in nightclubs, discos and dances and the fees are based on the number of events per year, their duration and the average number of people who attend them. PPL charges a 50% uplift on its standard licence fee rates for those who have played music without having a licence in place and are paying retrospectively.
PRS for Music also has a number of different tariffs, for example Tariff HR relates to hotels, restaurants and cafes. Some tariffs are calculated by reference to the number of people who can hear the music and the number of days/occasions on which it is played. Other tariffs are calculated in different ways. For example, where live music is performed, the PRS for Music licence fees are calculated by reference to how much it costs the venue to put on such music on an annual basis. PRS for Music also charges a 50% surcharge in relation to licence fees that are paid retrospectively, only after the public performances of works has already taken place.
Play Then Pay?
It is always sensible to acquire the necessary licences from PRS for Music and PPL before you start playing music in your business. To play then pay can have a number of serious consequences, for example you will be required to pay the retrospective licence fees plus a 50% uplift and your business could be sued for copyright infringement. It is also worth noting that it is a criminal offence to play music in public without a licence if you knew or had reason to know that doing so amounted to copyright infringement. This could lead to directors of companies who play music in such circumstances being sentenced to up to six months in prison or paying a fine of up to £5000.
Dealing with approaches from PRS or PPL
Both PPL and PRS for Music maintain enforcement teams that seek to identify unlicensed businesses, which play music in public. Neither are government bodies. They are private sector organisations. Like any other private claimant the burden is on them to prove that a third party owes them licence fees. There is no presumption of guilt on the part of any third party. That said, there is an obligation on businesses to ensure that they have the necessary PPL and PRS licences in place and they should comply with that obligation. When dealing with PPL and PRS for Music businesses should at all times conduct themselves in a reasonable fashion, that will stand up to scrutiny in Court.
It is our experience that PPL/PRS can often be quite aggressive in their pursuit of licence fees. For businesses and those that work in them who are not used to dealing with these issues, this can often be intimidating.
Some important points to bear in mind when dealing with either PPL or PRS are:-
- Control the flow of information – you should have one (and only one) senior person nominated to deal with PPL/PRS for Music or their lawyers, to whom other employees should be told to refer communications from PPL/PRS for Music.
- Don’t be panicked into giving incomplete or inaccurate information – for a multi-site organisation it can be time-consuming to work out what music has been played where, when, in front of whom and by whom. Providing inaccurate information under pressure, which you subsequently have to correct, will often be characterised by PPL/PRS for Music as proof of dishonesty and may generally undermine credibility in any subsequent legal proceedings. Make it clear to PPL/PRS that you will answer relevant questions, properly raised, only once you have had an opportunity to collate and review all relevant information.
- Make it clear that you will pay what is properly due (for past and future) and that you won’t infringe – PPL/PRS for Music will frequently threaten legal proceedings and injunctions.
- Engage experienced lawyers early on – often it will save money in the long run if specialist lawyers are engaged early on. You should not agree to disclose any of your documents nor agree to the terms of any court order without having first taken proper legal advice.
- Agree a deal where possible – if your business has played music in public, without having the necessary licences in place, then you will need to settle with PPL/PRS to avoid court proceedings, which will inevitably be expensive. This does not mean that you need to write a blank cheque to PPL/PRS but it does mean that realism is required. Face to face meetings with PPL/PRS representatives and mediation can both help to resolve disputes. Use of without prejudice save as to costs offers and special offers made under Court Rules (known as Part 36 offers) can give a measure of costs protection for your business. Your lawyers will be able to advise on this.
- Have a written policy on playing music in your business and enforce it – it may well help your case, when dealing with PPL or PRS, if you can evidence that your business has a written policy on playing music in the workplace, which is enforced. This policy should be referred to in employment contracts and handbooks and be on your firm’s intranet site and notice boards. Breaches by employees should be dealt with formally and the process documented.
Claiming rebates from PPL
As stated above, the Copyright Tribunal imposed new tariffs on PPL in 2009 lowering the tariffs that PPL had been charging between 2005 and 2009. This means that many businesses which paid PPL’s licence fees between 2005 – 2009 are entitled to a refund. These refunds can be very substantial indeed for a multi-sited business.
We have significant experience in acting for clients who are being pursued by PPL or PRS for Music for licence fees or who are in dispute with PPL or PRS for Music about the amount of licence fees payable. We have developed a market-leading PPL/PRS compliance product, which will enable your business to meet its PPL/PRS obligations with the minimum of fuss. We can also assist your business with drafting your firm’s music at work policy documents and with claiming rebates from PPL.