PRS, LIVENow, and the business of responsible livestreaming licensing

Livestreaming came into its own during the COVID-19 lockdowns, and the segment has become a multibillion-dollar business able to boast large audiences. Some of the biggest audio streaming services are seeing the value of adding video performances to their offerings and are leaning on live concerts both as a marketing tool and as a new revenue stream. However, in common with any form of streaming, the correct licenses are required if rights-holder content is involved. The livestreaming platform LIVENow has fallen foul of licensing requirements and has been taken to task over the problem by the UK authors’ society PRS For Music. Howard Ricklow, a partner at law firm Collyer Bristow and specializing in intellectual property matters, has kindly provided Music & Copyright with his thoughts on the dispute, what the current system is for licensing content from an artist for livestreamed concerts, and what the future is likely to be for hybrid content like livestreamed concerts.

PRS sues LIVENow for unlicensed livestreaming

PRS filed legal proceedings at the beginning of December at the UK High Court against LIVENow, a livestreaming platform, for broadcasting live concerts online without first obtaining a license for the inclusion of songs written and/or published by the authors’ society’s members. LIVENow is best known for live broadcasting Dua Lipa’s Studio 2054 concert in November 2020, which was filmed in London’s Printworks venue and won the Guinness world record for highest ticket sales for a paid livestream by a female artist. PRS obtains from its members the rights to collect royalties within the UK and charges differing rates for live and livestreamed concerts. Following LIVENow refusing to provide PRS with the revenue information required to calculate royalties, and an extensive period of negotiation, the lawsuit, according to PRS, is the culmination of the authors’ society’s endeavors to obtain royalty payments.

No defense of the claim has yet been filed. On the face of it, providing PRS can demonstrate that the society is empowered to exercise its members’ right to prevent streaming of their music without consent in the form of a license, and can prove that LIVENow’s streaming of PRS members’ songs infringes those rights, the society is likely to succeed in its claim for damages. PRS is also seeking an injunction against LIVENow to prevent further streaming of its members’ music—this too seems likely to succeed unless an agreement can be reached between PRS and LIVENow for a license.

While unlikely to be ground-breaking legally, the case is important from the view of PRS and its members in sounding alarm bells to other online platforms who may wish to stream live “virtual” events without PRS’s blessing. It also reassures PRS members that the society is doing its job in policing copyright infringements on their behalf.

No trial date has yet been set, and one can only guess what LIVENow’s defense may look like. The claim, rather than setting out a figure for damages, seeks a reasonable license fee for each infringement committed by LIVENow in the six years prior to the date of the claim. The claim form sets out the particulars of only one sample infringement, Dua Lipa’s Studio 54 concert, and the claim sets out 18 songs that featured in the performance. The event was allegedly watched in 150 countries, with ticket sales of nearly 285,000. The claim quotes Rolling Stone magazine’s report that the event attracted 5,000,000 viewers, suggesting that the concert was made available to huge numbers of subscribers free of charge to promote LIVENow’s business. The claim goes on to say that LIVENow has hosted more than 25 virtual music concerts, some pay-per-view and others free of charge, which PRS will claim against in addition.

The current system of livestreaming concerts

Songwriters and music publishers pay a fee to become members of PRS. PRS collects income from the performance of songs from many sources, primarily radio, TV, pubs, discos, live music events, “hold music” (on telephones), and cinemas. From the revenue PRS receives, it deducts its administrative expenses and pays the balance to its members.

PRS charges companies a variety of tariffs that affect the performing or broadcasting of songs PRS controls. The tariff for livestream events has a controversial history. In 2020, when COVID-19 led to increased engagement with livestreaming platforms, PRS first proposed introducing a new livestreaming license at a starting rate of 8%, rising to 17% of gross ticket receipts, compared to live in-person concerts, which were generally at 4–4.2% of gross ticket receipts.

In December 2020, a letter was written by the Music Managers Forum (MMF) and Featured Artists Coalition (FAC), which included managers of stars such as Dua Lipa and the Artic Monkeys, urging the society to reconsider the proposed livestream event tariff as it was unaffordable for both emerging talent and superstars alike. They pointed out what they said was a “staggering disconnect” between the rate for a live event compared to a streamed event. In their argument, they succinctly stated that “a ticket is a ticket.”

The two organizations were particularly irked by the fact PRS held no consultation and, in their view, imposed arbitrary terms intending them to be applied retrospectively, which could cause grave financial distress to artists and their wider teams, especially during the pandemic. The MMF and the FAC argued that charging artists up to four times the live rate would strangle, rather than nurture, the innovation of livestreaming, and that it would be impossible for some smaller artists to find the additional monies to pay PRS, when they only just manage to cover their livestreaming costs anyway.

The letter was signed by close to 90 managers. It can be assumed that it was a result of this letter that PRS reduced the rate they were seeking for livestreaming to the present rate: the higher of 3p per five minutes of song and 10% of the event revenue. If a concert is both livestreamed and has a live audience at the venue, two licenses will be necessary from PRS. Possibly as a result of the MMF/FAC protest, at the beginning of 2021, PRS announced that members performing their own works in small online ticketed concerts could obtain a free license.

Knowing the ins and outs of licensing responsibility

It is important to consider who is actually responsible for obtaining a PRS license for concerts. Essentially, it is the person responsible for the performance of the songs. In the case of live events, that will be the promoter or venue. In the case of streamed events, generally whoever is “communicating the songs to the public,” which, in the case of LIVENow, would have been LIVENow.

The reason PRS offered a free license for artists performing their own works for small online ticketed concerts was so that whoever was operating the online platform (which could, of course, be the artists themselves) would not have to pay for the privilege of performing their own songs only for the artist to ultimately receive back that payment less the deduction of administrative expenses.

It has long been argued by some singer-songwriters that it is quite unjust that when performing their songs at a large event, such as the O2, the promoter of the event would need to pay PRS a sizeable sum in respect of those songs. PRS would then deduct their administration fee, and sometime later, the singer-songwriters receive the balance of the money PRS collected. As far as I am aware, that remains the case, with PRS refusing to vary their normal policy. It should be noted that the exemption being granted by PRS in relation to “small online ticketed concerts” means any individual concert with revenue below £500 ($604).
While many PRS members may be grateful that it is taking action against LIVENow and that the action serves as a warning to other livestreaming platforms that host virtual concerts without a PRS license, it also raises the issue of PRS being a monopoly and the discord between its role as a policeman protecting its members’ rights and, on the other hand, being rather inflexible.

What artists should do to ensure they receive all the royalties they are owed

This issue is about songwriter artists. This does not involve artists who are not songwriters. Most songwriters have assigned their copyright to music publishers that collect music royalties on their behalf (including 50% of the monies PRS collects). The publishers’ royalty departments will scrutinize royalty statements they receive from various quarters to ensure the proper royalties are being paid. They will issue royalty statements to the songwriters, who should themselves review them carefully (or ask their accountants to do so).

What the future is likely to be for hybrid content like livestreamed concerts

Streaming platforms became very popular during lockdown but continue to provide access to fans who are unable to attend concerts in person. In a sense, there is nothing new at all about livestreamed concerts. Music has been disseminated via the internet for very many years, and platforms like YouTube are properly licensed by PRS. Owners of livestreaming platforms should ensure they obtain the licenses they need to undertake livestreaming.

The PRS LIVENow case has just been adjourned until March 1 so that the parties can engage in alternative dispute resolution (ADR). If the dispute is resolved through ADR, we are unlikely to know the agreement reached.
This analysis was very kindly put together by Howard Ricklow, a partner at the law firm Collyer Bristow and a specialist in matters relating to intellectual property.