The Federation of Small Businesses (FSB) has criticised actions
of the Performing Right Society (PRS) which represents music
creators and publishers. PRS licenses the public performance of
music in all workplaces.
"The PRS collects money on behalf of artists and musicians and
we've noticed in the past few weeks that they've become extremely
aggressive with small businesses, demanding back-dated licenses
which can cost thousands of pounds," FSB spokesman Simon Briault
told OUT-LAW.COM. "We think there should be an exemption for small
businesses."
A public performance licence from PRS is required for any
'mechanical performance' of copyright music as a background to
work, meals, rest rooms or breaks at work places in the UK. The
term covers recorded music played on CD as well as music playing on
a radio or television set. So providing a TV in a staff canteen
requires an employer to buy an annual PRS music licence, not just a
TV licence. If employees are listening to music through headphones
a music licence would not be required because it does not
constitute a public performance.
For many businesses, the typical fee is a few hundred pounds a
year. A licence for music played in a canteen or rest room costs
14.99 pence per day, per unit of 25 employees. So an annual licence
for 250 days for a canteen available to 135 employees would cost
£224.85, according to PRS.
Briault said that while it was fair for a business playing music
that could be heard by the public to pay licence fees, small
businesses that play a radio that only a few staff can hear should
be exempt.
"Our complaint with the PRS is that they are not accepting the
arguments of small business owners," he said. "Technically they
[PRS] are within the law. We think they're taking it way too far,
though, and their interpretation of it is far too stringent."
"PRS have taken it out of all proportion," he said. "Small
business owners who happen to have a radio in their back room are
being told 'you owe us'."
"The vast majority of people have never heard of the PRS," he
said. "It seems in the past month or so they've gone completely
unreasonable. Someone who used to work at PRS told me they were
having to chase one business for over six years' unpaid licence
fees – in total over £21,000."
PRS said that that example is untrue. It told OUT-LAW
that it has never made any such claim.
Another FSB member complained about receiving eight calls in 10
days about unpaid licences.
Briault said the FSB's main objection was in the tactics of the
PRS. "If it was conciliatory, you know, 'this is a warning – you
need to have a licence; get rid of your radio if that's what you
choose' – that would be fair."
The FSB is also calling for an exemption for micro businesses,
defined by the Government as any business employing up to 10
people.
"Anyone with less than 10 staff should be exempt. That would
require an amendment to the 1988 law [the Copyright, Designs and
Patents Act]. But also a change of attitude from the PRS," said
Briault.
"Instead of harassing small business owners and trying to get
money out of them whatever the cost, they should be more
conciliatory. Use their generous percentage of the money that they
do take to inform business owners about what the law is and, if
appropriate, they can stop listening to the radio," he said.
A spokesperson for the PRS told OUT-LAW.COM: "Under the statute
of limitations we are able to legally back charge up to six years.
Our charges are based purely on our customers' declarations and
agreement."
She said that 350,000 businesses across the UK currently have
PRS licences and last year it contacted over 100,000
businesses.
"All businesses first receive an introductory letter and
informative brochure before being contacted by phone to establish
if they need a PRS Music Licence," she said. "We also run
advertising campaigns in print and on radio throughout the UK to
help businesses understand the requirement for a PRS Music Licence
if they are playing music in their business. We only wish to charge
for the correct level of music usage and we will always aim to
determine this with the customer."
The PRS said has invited the FSB to discuss its views and ideas
for a micro business exemption directly with the PRS.
"We aim to ensure that our charges and processes are fair and
reasonable," said the spokesperson for PRS. "Unfortunately, the FSB
has not contacted PRS to discuss these complaints or any of its
suggestions. PRS has invited the FSB to discuss its views and
ideas directly with PRS."
She said that many of the PRS's 60,000 members "are themselves
small businesses and many rely on income from royalties." She added
that small businesses pay less, as little as £69 per year or less
than £1.35 per week.
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