THE GREAT REBATES DEBATE The controversial practice of European collection societies giving promoters rebates is peaking interest among a growing number of artist managers and agents, with many now exploring the possibilities for self-administering performance royalties, rather than relying on the local societies. The issue was highlighted as far back as five years ago when tour accountants flagged up to UK society, PRS For Music, that the figures it was receiving from sister societies in Europe for performance royalties did not match the sums that were actually being paid to certain collection societies at the end of concerts. However, Irish rockers U2 have famously been concerned about performance royalties since the 1990s and even attempted to set-up their own collection society. Research by the UK-based Music Managers’ Forum revealed that Dutch society BUMA regularly gives promoters 25% rebates on their performance fee payments – money that is meant for songwriters, composers and music publishers. The society justifies these rebates by claiming
that the promoters were helping BUMA to administer the process and therefore were entitled to compensation. Further investigation, however, has disclosed that such practices are commonplace throughout Europe, meaning that many promoters are being refunded fees earmarked as revenue for songwriters and composers. But the rebate schemes also mean that performing artists and agents are losing out on funds, because the show settlements that tour accountants are signing off on, do not reflect the true position of the finances for everyone involved. For its part, the UK’s PRS For Music (which does not have a rebate scheme for promoters) states that it does not have any say over the ways in which similar societies carry out their operations. But the society is examining the fees it is paid by sister societies and is in discussions with the likes of GEMA in Germany and BUMA over the differences in fees deducted from the box office gross, compared to those being repatriated by overseas collection societies. “There may be good reason for a discount, such as to
encourage a new market or to incentivise more use of music,” explains PRS For Music’s senior international manager, Iain Black. “These discounts exist in many countries, are explained in the published tariffs, and are normally listed in the invoices to licensees.” He adds, “We have asked societies to review any discounts within their concert tariffs with a view to simplifying the tariff and making them easier to understand for all parties, and we are already seeing some improvements in key markets.” Nevertheless, the subject is becoming a hot topic and one that will be discussed at the ILMC in March during the Performance Royalties: Shows, songs and settlements panel where MMF president Jon Webster will lead the debate. Adam Elfin, of Londonbased AEmusic, has been involved in the rebates debate for nearly three years, having worked with the MMF on the issue. He says that PRS For Music has stated that while rebates are not permitted under their reciprocal agreement with BUMA (the Dutch performing rights organisation), “discounts” are permitted.
PRS For Music highlights on its website that the rates of other societies are not all that they appear. Regarding what it refers to as the “published tariff”, PRS explains, “This normally consists of a headline percentage rate applied to the box office value, and discounts or other conditions may apply which reduce the rate. There may also be alternative calculation methods which can change the rate.” In another area of the PRS site, the society discloses exactly what some of those “discounts” are, with no fewer than 13 European societies offering such schemes, while elsewhere, the likes of Australia, Brazil, Japan and Thailand also offer discounts and a significant number of territories have a “to be confirmed” status on potential promoter discount programmes. Frustrated by such practices, certain artists and their representatives are looking to self administer their performance fees to ensure that the maximum revenues find their way back to the relevant rights owners. Indeed, the lack of transparency over performance
IQ Magazine March 2016
IQ Magazine, issue 64, March 2016