[cma-l] Free Community Radio Seminar

Fri Mar 25 12:09:28 GMT 2011

Alex, Ian n’ all

Firstly my apologies for getting PPL and PRS muddled up 

 and secondly, I
think Alex has knocked me into the silver medal position regarding long
e-mails. By the time I’d got to the end of it I’d grown a beard !        LOL
good stuff though.

In my opinion it doesn’t matter whether it’s writers, publishers, performers
etc etc             it’s all a load of cobblers and a money making racket
jobs for the boys.

If Fred Bloggs wants to release a cd but use 10 songs that were written by 5
x Herbert Thistlethwaite + 5 x Nora Batty                  then it is up to
Fred to pay Herbert and Nora 

 it ain’t my responsibility or problem.

Furthermore if Henry Clackett buys a Ford Mondeo and opens up a Taxi
business he’s making money out of using that car that he has purchased. Does
he give Ford another 5p everytime he drives it ???

So far as performers rights and ppl etc are concerned        if it is copied
or performed for profit then there should be a charge or even a FINE !

Sell yer product, take money and get on with the next project. That’s it

. Don’t create a bottomless pit, which is what we’ve got at the moment.

I’m struggling to try to explain what my feelings are 
.. I know it’s a bit
rough at the edges and possibly needs thinking through, you’ll have to
forgive me 

.. but, nevertheless, I think people catch my drift??

It’s a con-trick

Nick

  _____  

From: cma-l-bounces at mailman.commedia.org.uk
[mailto:cma-l-bounces at mailman.commedia.org.uk] On Behalf Of Two Lochs Radio
Sent: 25 March 2011 10:58
To: ian at transplan.uk.com; Tom Buckham; phil at bcfm.org.uk; cma-l
Subject: Re: [cma-l] Free Community Radio Seminar

Spot on Ian! 

What is really galling is that PPL justify their substantial minimum raes
(as opposed to proportional to use) by saying that it is necessary to cover
administration costs with the smallest stations. In other words they are
saying that most of the royalties paid by the smallest stations do not in
fact go to the artists and record companies, but in fact are spent on PPL
admin overheads! Although they are a 'not for profit' company like all of
us, they do still maintain a large staff with well paid senior management
(the top earner gets over £0.5 million annually), legal teams etc, who are
paid for before remaining monies are distributed to rights holders. Overall
PPL (for which I have figures) spends 15% of its gross income on overheads,
but I would guess that in the not-for-profit sector this proportion is
nearer 80%. 

Also last year PPL reported a £1m increase in revenue from radio
broadcasters, despite by their figures, an 8% fall in commercial radio
revenues. Also, for some reason they exclude the costs of their defined
benefit pension scheme when calculating overheads.

PRS recorded around £15m increase in income over the same period of industry
downturn, however it's overhead costs are lower, at around 10%, and it
boasts of being "one of the world’s most efficient combined rights
collecting operations". 

To take some round figures to put this into perspective, a typical
broadcasting licensee has a minimum charge of around £600 and there are
around 200 very small licensees who are likely to have genuine proprtional
use more like an average of, say, £100. Those figures would mean PPL is
costing the sector £100k per year in admin overheads that simply go to pay
for staff to collect the money, while only £20k is passed on to rights
holders. 

Not a very efficient system, to say the least, and a substantial drain on
the community sector, and that's just for one collecting body. Those are
conservative estimate figures - the total efficiency waste for the whole
non-profit sector across all three royalty collectors, including web stream
royalties, could easily mount up to as much as the entire annual Community
Radio Fund!

The royalty bodies are really able to maintain their present position only
because they have the financial backing to stand the legal costs that would
be involved in arguing the case before a Copyright Tribunal (which is the
legal arbiter on what the royalty collectors can do), so the small stations
(and even not-so-small) are not in a financial position to challenge them.

It is legally open to the user of any copyright works to declare that they
are not being offered a realistic licence by the collecting body, and to
deem their own reasonable rate of payment pending an application to the
Copyright Tribunal (that's simplified, but is the basic provision in law).
But of course there are high stakes in that for an individual station, and
most of us would be financially broken by a week's legal costs if awarded
against us. 

Three years ago, after a year of negotiation was getting nowhere fast, we
told one copyright body we were going to go down that route, but before we
got to formal legal procedings they came up with a compromise offer that
suited us reasonably well at the time. I suspect that despite the potential
threat of legal costs, they equally knew that the case could have brought
them adverse publicity and set a precedent for other stations.

PPL is well known for doing nothing to minimize the legal costs that are
racked up. So much so that in one case in which their case was accepted, the
Tribunal ordered them to pay the 'losing' parties' costs anyway because the
Tribunal recognized that PPL had unreasonably racked up the legal costs by
various tactics.

If the whole sector stood together with joint financing of an action, or the
CMA performed that function with the formal backing of the sector, a case
could be taken before the Tribunal and I think it would stand a high chance
of winning, but of course the stakes are still high.

I would prefer to see CMA do for non-profit stations what the RadioCentre
does for the (notionally)profit-making stations' MCPS payemnts. The
RadioCentre pays MCPS a total figure for all its members, based on the total
music usage across the board, and then passes on the costs to its members in
strict proportion to their TSAs (it could possibly be done more fairly in
proportion to income, but that would add a large admin overhead in cllating
the figures). Doing this means that a very small community-based stations
pay typically only £50-150 a year, while the big commercial stations pay a
fair share.

This would destroy the royalty collectors' defence of their high minimum
costs as they would now have the overhead of dealing with only one body for
the majority of the sector. This would cost more than administering one
station, since there would need to be some auditing checks etc, but the
costs would be a tiny fraction of the costs they claim in administering
several hundred stations individually, and the individual stations should on
average see a several-fold reduction in their fees.

I think CMA should offer to take on this role, or if it is unwilling, they
not-for-profit sector could set up its own aggregating body to handle this
(and if successful, it could potentially develop to other things in future -
such as group insurance schemes, or even advertising sales). CMA already has
to do membership admin and could handle the PPL/PRS payments in the same as
RadioCentre does with MCPS - simply adding the proportional charges to the
annual renewal invoices, with automatically calculated amounts requiring
little admin overhead. 

This should also benefit CMA and sector cohesion as stations would see a
direct financial and admin benefit from CMA membership in addition to all
the more nebulous lobbying and education work. In the case of RadiCentre,
membership for smaller commercial stations is cost-negative because of the
savings they make in MCPS fees by paying a proper proportional amount
instead of an individual minimum fee-based amount.

That's my pennyworth, anyway (or potentially £1m pound's worth if our sector
got its act together!)

Alex

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