Elton John, Paul McCartney Seek Review of UK Song Royalty Payment System

(Bloomberg) -- Some of the UK’s most famous songwriters, including Elton John, Paul McCartney and Thom Yorke, are demanding a review of how songwriters are paid through the country’s royalty collection service, questioning the amount of administrative costs.  

A group of 18 songwriters added their names to a letter sent last week to PRS For Music, asking the group to explain why it sets aside so much money out of royalty collections for business expenses. PRS represents songwriters, composers and music publisher members’ performing rights and collects royalties on their behalf whenever their music is played or performed publicly, like in an arena or bars and restaurants. 

“This request is prompted by growing concerns about the transparency, accuracy and overall representation of members’ interests”  the songwriters wrote in the letter, which was reviewed by Bloomberg. Establishing clear and fair methodologies is important for future songwriters, they said. “Their livelihoods will depend on it.”

For 2024, PRS said it collected £287 million ($387 million) for public performances on behalf of songwriters. The organization deducted £49 million for “distribution processes.” The songwriters questioned why more efficient technologies aren’t employed to reduce the costs.

The letter “highlights the challenges of collecting data from hundreds of thousands of businesses and matching against millions of individual works to accurately pay royalties,”  a spokesperson for PRS said in a statement to Bloomberg.  “We have met with representatives of these members and will continue to explore all practical changes which can achieve our shared goal, supporting the songwriter and composer community.”

The complicated copyright system that sustains the incomes of songwriters has come under fire in the US for similar reasons. The US Copyright Office is investigating the current process, which is overseen by at least a half a dozen performing rights organizations. The proliferation of the PROs has made venue owners feel like they’re being squeezed while songwriters say the complicated system makes it hard to track their payments and that money is often directed wrongly toward the biggest stars. Some songwriters said they can hear their songs playing in public places, yet never receive a penny.

Part of the difficulty is determining what’s played in various establishments, given that licensees don’t widely employ tracking technology, such as a streaming service that does so automatically or a device that listens in. The same goes for live concerts.

In the US, the PROs encourage performers to submit setlists, so the proper songwriters get paid. But that doesn’t always happen. In the UK, the Guardian found that PRS sits on millions of pounds in unpaid royalties because it doesn’t have setlists for more than 100,000 gigs that would determine how the money gets paid out. 

PRS is also being sued by songwriters  over how it handles payments for concerts and live performances, in which songwriters should receive a royalty cut from ticket sales. The suit accuses PRS of placing high administration costs on smaller songwriters while giving preferential treatment to already successful stars.

In the recent letter, the writers said that failing to address their concerns could threaten future membership retention, “an outcome we are sure PRS would wish to avoid.”

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