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Towards the end of 2006 I wrote a short article about the legality of digital broadcasting to UK audiences using SHOUTcast; essentially it’s quite legal to broadcast music in the US - to the US - at a small license fee, however if UK residents download the stream then a separate license is needed – and at the time of writing it was believed that there wasn’t one available…

In October I spoke to somebody at a publishing conference who directed me to the PRS website (Performing Rights Society). After a two month wait, somebody finally replied to my email about legal online radio streaming… and I received details of two licenses available to webcasters with UK based listeners. On Tuesday of this week I was reminded of this when, at the doctors, I saw a certificate up licensing the practice to play music in the waiting room.

From what I’ve been given by the PRS it seems that the distinguishing factor between the two different online radio licenses is, as you might expect, how much you’re making from your endeavours. If you’re earning less than £4,250 per year from your webcasting activities (or online radio station) you can apply for the Limited Online Exploitation License (LOEL).

For the LOEL you pay a range of segmented fees for the number of works available at any one time, the number of streams and the total number of hours the streams play for. For webcasting (or using Shoutcast) it looked to me like a license fee of £400 would be payable – providing 33,000 total allowable broadcast hours. I estimated this to be 90 hours a day (i.e. 45 people per day each listening for 2 hours) obviously pretty small scale. Anything more than this and you’re looking at the very complex Joint Online License (JOL).

The Joint Online License (JOL) is for those earning more than £4,250 per year in revenue from their stream or wanting to broadcast more than 33,000 downloadable hours per annum. The license covers most audio methods of supplying music online including downloads, webcasts and individual streams. It doesn’t cover ring tones, music used with advertising or rebroadcasting of a traditional scheduled broadcast. The fee for the JOL is a joint PRS and MCPS royalty rate of 12% of gross revenue for online revenue (although the rate is currently charged at 8%). This would be 8% of revenue from subscription income, download fees, advertising and sponsorship etc.

How the fee is calculated when one might not be earning from the webcast but be broadcasting more than the 33,000 hour limit set in the LOEL license I don’t know. It’s also even more complicated to obtain this license anyway due to a series of stringent criteria (far too complex for the non-company broadcaster):

1. Initial credit check, provide details of your company, accountant, auditors and bank.
2. Application detailing service details, type of download, duration of service, current audience statistics (if new then a business plan).
3. Quarterly payment of royalties in arrears.
4. Provide full details of number of downloads, tracks played (with artists).

So in essence the PRS will give a license for web streaming to listeners in the UK as long as you don’t have too many of them. The main thing that confuses me completely about both licenses and the information I have been given is this sentence within the terms and conditions: “Please note that in addition to MCPS and PRS licences, you will also require licences from the relevant record company or other copyright owner for the use of the sound recording.�. To me this suggests that regardless of the license (which will cover you for royalty payments) you still require permission from the record company concerned on each track. This is hardly an easy task for small scale webcasters and still in my opinion means that there are a lot of illegal webcasts being broadcast into the UK. I still have a hunch that if you broadcast from the US into the UK nobody can stop you.

I conclude that despite the PRS thinking that they have a reasonably straightforward licensing scheme, in reality I believe they don’t; they’ve failed to grasp the realities of the Internet – that one boy in his bedroom can innocently amass an audience of thousands. The only way the PRS can check up on this is to do a deal with all the ISPs of the world to see where we’re located when listening to streaming radio. I imagine it will cost them a fair bit to force overseas broadcasters to lock out UK IP addresses too…

The latest noises from the PRS suggest that there could be some positive change coming this year - but fingers crossed it’s easier to understand than the two licenses described above. The PRS released the following Press Release relating to a new pan-European license offering last week:

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EMI, GEMA, MCPS-PRS Alliance Cement licensing partnership
A one-stop shop for the licensing of online rights moved a step closer today when EMI Music Publishing (EMI) and two of Europe’s largest collecting societies formalised their collaboration.

EMI will work with the UK’s MCPS-PRS Alliance and Germany’s GEMA who will exclusively clear the rights of EMI’s Anglo-American songs across Europe for online and mobile usage.

Having all EMI’s Anglo-American songs available in one place for licensing represents a significant move towards truly pan-European licensing.

The partnership was first announced in January 2006 following the European Commission giving the go-ahead for such collaboration in its Recommendation on the future of online licensing in Europe, published in October 2005.

Now, the relationship has been formalised with documentation signed at MIDEM.
Roger Faxon, co-CEO of EMI Music Publishing, said: ‘It is a very exciting day for EMI Music Publishing and our songwriters. We are extremely pleased to be joining with GEMA and the Alliance in this initiative. It represents a major step forward in the licensing of music rights in Europe that will benefit both those who wish to use music and those who create music.

Harald Heker, the Chairman of the Board of GEMA, said: ‘We are excited about having established in cooperation with our partners, MCPS-PRS-Alliance and EMI Music Publishing, a future-oriented, pan-European online licensing system. This will guarantee efficiently the protection of rightholders in the digital networks.’

Crispin Evans, General Counsel of the MCPS-PRS Alliance said: ‘We are thrilled that this exciting initiative is moving forward so positively and are delighted to be working with EMI and GEMA on this. We will now start providing solutions for major online customers to meet their pan-European needs.’
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Technorati Tags: shoutcast, prs, performing rights society, music royalties, online radio, digital broadcasts

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