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<DIV>Thanks for this Alex,</DIV>
<DIV> </DIV>
<DIV>Certainly some interesting suggestions which I will represent next week
at the seminar.</DIV>
<DIV> </DIV>
<DIV>Could you clarify some of your figures/claims for me please so I can back
them up if needed/challenged? </DIV>
<DIV> </DIV>
<DIV><FONT face=Calibri><FONT style="FONT-SIZE: 12pt"><EM>‘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!’</EM></FONT></FONT></DIV>
<DIV>Where is this referenced? This is a PRS seminar and not PPL remember.</DIV>
<DIV> </DIV>
<DIV><FONT face=Calibri><FONT style="FONT-SIZE: 12pt"><EM>‘the top earner gets
over £0.5 million annually’</EM></FONT></FONT></DIV>
<DIV>This is a disgrace if we can prove it. Where is this figure published
please?</DIV>
<DIV> </DIV>
<DIV><FONT size=3 face=Calibri><FONT size=3 face=Calibri><EM>‘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%.
‘</EM></FONT></FONT></DIV>
<DIV>Again, let’s not forget this is a PRS seminar and not PPL. I would be
interested in receiving these figures please Alex if you could send me the
source.</DIV>
<DIV> </DIV>
<DIV>I will be there on Tuesday to represent the CMA in my capacity as Council
Member and also as an interested stakeholder. I hope it will be a constructive
and informative seminar and I will certainly bring everyone’s concerns to the
table.</DIV>
<DIV> </DIV>
<DIV>Regards</DIV>
<DIV> </DIV>
<DIV>Phil</DIV>
<DIV> </DIV>
<DIV style="FONT-FAMILY: 'Arial'; COLOR: #000000; FONT-SIZE: 10pt"><BR><BR>Phil
Gibbons - Station Manager<BR>phil@bcfm.org.uk<BR><BR>Bristol's Community radio
station - Your voice - Your choice!<BR>93.2fm in Bristol<BR>Online at:
www.bcfm.org.uk<BR><BR>0560 1126659 - Office
Phone<BR><BR><BR>www.bcfm.org.uk<BR><BR>The Beacon Centre<BR>City Academy
Bristol<BR>Russell Town Avenue<BR>Bristol<BR>BS5 9JH<BR><BR><BR>Bristol
Community Fm LTD No. 05377534. Registered Charity No: 1123827<BR>Registered
Address: The Beacon Centre, City Academy Bristol, Russell Town Avenue, Bristol,
BS5 9JH. This email is confidential and intended solely for the use of the
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forwarding, printing, or copying of this email is strictly prohibited. The
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<DIV style="BACKGROUND: #f5f5f5">
<DIV style="font-color: black"><B>From:</B> <A title=tlr@gairloch.co.uk
href="mailto:tlr@gairloch.co.uk">Two Lochs Radio</A> </DIV>
<DIV><B>Sent:</B> Friday, March 25, 2011 10:57 AM</DIV>
<DIV><B>To:</B> <A title=ian@transplan.uk.com
href="mailto:ian@transplan.uk.com">ian@transplan.uk.com</A> ; <A
title=t.buckham@futureradio.co.uk href="mailto:t.buckham@futureradio.co.uk">Tom
Buckham</A> ; <A title=phil@bcfm.org.uk
href="mailto:phil@bcfm.org.uk">phil@bcfm.org.uk</A> ; <A
title=cma-l@commedia.org.uk href="mailto:cma-l@commedia.org.uk">cma-l</A> </DIV>
<DIV><B>Subject:</B> Re: [cma-l] Free Community Radio Seminar</DIV></DIV></DIV>
<DIV> </DIV></DIV>
<DIV
style="FONT-STYLE: normal; DISPLAY: inline; FONT-FAMILY: 'Calibri'; COLOR: #000000; FONT-SIZE: small; FONT-WEIGHT: normal; TEXT-DECORATION: none">
<DIV><FONT size=3 face=Calibri>Spot on Ian! </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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. </FONT><FONT size=3
face=Calibri><FONT size=3 face=Calibri>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%. </FONT></FONT></DIV>
<DIV><FONT size=3 face=Calibri><FONT size=3
face=Calibri></FONT></FONT> </DIV>
<DIV><FONT size=3 face=Calibri><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV>
<DIV> </DIV>
<DIV>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". </DIV>
<DIV> </DIV>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. </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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!</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT><FONT size=3
face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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. </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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. </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>That's my pennyworth, anyway (or potentially £1m
pound's worth if our sector got its act together!)</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>Alex</FONT></DIV>
<DIV><FONT size=3
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