Are the PRS charging workers and customers twice over?

June 2009

Music Publishing

Last month we had a number of emails from small businesses who had received telephone calls from the PRS asking whether they used music in their business or whether they played music in an area where the public might be admitted. And many had received letters to saying “If your staff or customers are listening to music on your premises, played by any means from live performance through to radio, TV, CD or via the internet, you need our music licence” . People asked “Really”? This follows on from our May Updates when we reported that police officers in Wiltshire had been told by their Chief Constable that they could not listen to music played publicly from radios, televisions, websites and MP3 players following a demand for payment of £23,000 from the Performing Rights Society. The PRS say the licence is required for all uses of music in all the Wiltshire force’s police stations, offices, canteens and communal staff areas such as gyms and the PRS said the demand is in line with the rate agreed with the Association of Chief Police. Wiltshire Police said the “playing of music by any means across the force” would “cease forthwith” and that the licence fee money would be better spent on policing, and added that it was forced to impose the music ban “to avoid being liable to charges”.

The story reminded me of the ‘Kwik-fit’ story back in October 2007 when the tyre and exhaust fitting chain was taken to court in Scotland, accused of infringing copyright in music because its employees listen to radios at work. The action against the Kwik-Fit Group was brought by the Performing Rights Society, which collects royalties for songwriters and performers. The PRS claimed that Kwik-Fit mechanics routinely use personal radios while working at service centres across the UK and that music, protected by copyright, could be heard by colleagues and customers. The PRS claimed that, because the Kwik-Fit employees were playing their music very loudly (so that it was audible to colleagues and customers), this amounted to the “playing” or “performance” of musical works under s16 of the Copyright, Designs & Patents Act 1988 (CDPA) for which Kwik-Fit did not have a PRS licence. At a procedural hearing at the Court of Session in Edinburgh Lord Emslie refused to dismiss the £200,000 damages claim and ruled that the action could go ahead with evidence being heard.

Although this writer hasn’t seen a final decision in the Kwik Fit case  [the last heard is here ], case law seems to support the position of the PRS. Section 16(1) and 19 of the CDPA 1988 provides that The performance of the work in public is an act restricted by the copyright in a literary, dramatic or musical work. In Turner v Performing Right Society [1943] 167 CA the Court of Appeal held (applying Jennings v Stephens [1936] Ch 469) that where the proprietors of a factory, to prevent boredom on the part of their employees and thus to increase efficiency and output, relayed to their employees, who numbered about 600, while the latter were at work, programmes of music broadcast by the British Broadcasting Corporation and also gramophone records which were played at the factory and relayed by means of loud speakers then the performance of the music was a performance “in public” even though all strangers were excluded from the factory; InPerforming Right Society v Harlequin Record Shops [1979] FSR 223 Mr Justice Browne-Wilkinson held that a performance in a record shop was a performance in public within the meaning of the Copyright Act (of 1956) and that in deciding whether a performance is “in public” the character of the audience is the decisive factor. A performance given to an audience consisting of persons present in a shop into which the public at large are permitted, and indeed encouraged, to enter without payment or invitation with a view to increasing the shop owner’s profit, can only be described as a performance in public.

Of course in the Wiltshire police matter, no profit was involved – it can hardly be said that the police were using music in their business.
Now I am a strong supporter of the right of creators of music and investors in music to receive proper remuneration for their efforts and investment – and where a business uses music as part of its business then it is right that those who own copyrights get paid. I would be aghast if nightclubs, gyms, dance studios, music venues and concert halls didn’t have to pay to use music. But a garage playing a BBC radio station? A police station with local radio on in the canteen? A factory where, instead of personal radios, staff have one shared radio stream? A customer in a shop listening to their own MP3 player? A member of staff playing music from the internet? If you read the PRS letter carefully, it seems to lead to the conclusion that all of these uses require a licence if on business premises. What about a self employed person working at home? The mind boggles!

Is it right that a business has to pay in these circumstances? It is an interesting area and one which was again highlighted at the end of April 2009 when Garage owner Len Attwood was asked by the PRS for £45 to play music in his workshop. He said “I understand why pubs and clubs are asked to pay, they benefit from the pop star’s music, but customers do not come to my garage to hear the latest top ten, they come to have their car fixed.”  Too right Len? A spokeswoman for the PRS told the Telegraph newspaper that the organisation had introduced a new licence fee for workplaces with four or fewer workers on the premises, saying “If there is an intent to use music in a workplace to either enhance the working environment or provide music for customers then it is only right that music creators receive royalties and a licence must be obtained”.  She added: “We always try and be fair and use common sense in licensing decisions, whilst ensuring that when music is used commercially in business the correct licence is obtained.”

Mr Attwood, 61, from Witham in Essex, said he had been forced to put up a sign warning clients to turn off their music when they drove into the premises. Then Mr Attwood makes a very interesting point – “It’s total madness,” he said. The radio stations are paying to play the music and we have to pay to listen to it – they [the PRS] are taking with both hands. Even based on the PRS’s analysis of the CDPA, I have to say I have some compunction to agree with Mr Attwood here. The BBC on a national level and both commercial and BBC local stations pay the PRS an annual ‘blanket’ licence fee for the right to broadcast music. We all pay this – via the licence fee or ultimately via our spending habits which funds advertising. Surely this payment is meant to cover the entire national (or local) population – surely it doesn’t exclude those at work or even visiting those working? There is a big difference between having the radio on at work (even in a waiting room) and using music in a business. And whilst both might be the “performance of the work in public” I would suggest that, if the PRS maintains their current line, then the BBC and commercial radio stations should ask for a substantial reduction in their annual PRS blanket licence fees to reflect the fact that businesses (and therefore indirectly customers visiting those businesses) have to pay again for music for their ‘broadcast to the public’ then to be ‘performed’ to the public.

Of course, if the BBC implement this, then I would also like to see a reduction in my licence fee although I would add that any move in the current climate from a service provider payment model to a end user payment model is potentially a huge backward step in this age of illegal downloading and peer-2-peer file swapping  – where it is service providers who seem to be able to pay as we move away from “end users” payment – because end users can pay but won’t pay!  Food for thought.

Thanks to the Kat for some wise advice here!

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