PRS announce new royalty rates for online music streaming

Following their recent bust-up with Youtube over royalty rates, the PRS for Music
have announced new rates for streaming services relating to new online music licenses, due to come into effect on July 1st of this year and applicable for three years.

For tracks streamed through ‘on demand’ streaming services such as Last.fm and WE7, the headline royalty rates will increase from 8% to 10.5% of revenue, whilst the per stream minimum will be reduced from 0.22p to 0.085p payable from such sites to the PRS.

According to an official press release, similar changes are also being made to the royalty rates and minima terms for commercial webcasting services. This ultimately translates to more potential revenue in the long term to artists via the PRS but with a reduced per stream minimum as a compromise to streaming sites.

Commenting on the changes, Andrew Shaw, Managing Director of Broadcast and Online at PRS for Music said: “We believe these new streaming rates will stimulate growth in the digital music market and will benefit our licensees and our members. This is a good deal for music creators and for music lovers”.

The changes to the streaming rates follow the announcement that rates for download services and music services funded by subscription, such as Nokia’s ‘Comes with music’ bundled phone subscription package will remain the same. The various Online Music Licenses are to replace the Joint Online License, which was established for digital outlets by the UK Copyright Tribunal in 2007 for a 2-year term.

The new terms are seemingly an attempt to reflect rapid changes in the digital market since the 2007 Joint Online license was established.

As previously reported by The Gen, Google, which owns YouTube, removed thousands of premium music videos from their streaming site in March following an ongoing dispute with the PRS over royalty fees.

Have your say: Will this resolve the dispute between the PRS and YouTube? Is this a valiant attempt by the PRS to push forward the evolution of digital models? Will it be enough of a change to satisfy streaming sites such as Pandora? Is this indicative of artists subsidising the digital industry to some extent in order to achieve better long term sales and distribution through streaming sites or does the increase in royalty rate maintain an even playing field? Let us know your thoughts!