Let the music play on

Music to whose ears? Phil Crier analyses the Government’s decision to remove charities’ music royalties exemption

The Government is removing the current exemption enjoyed by charities and non-profit organisations from the requirement to obtain a music licence from Phonographic Performance Limited (PPL) for playing copyright music to the public.

The decision has been taken after the Government considered responses from the music industry, charities and other organisations to its consultation paper issued in July 2008, in which it put forward three options for consideration.

The change requires parliamentary approval through an amendment to the Copyright, Design and Patents Act 1988, with a proposed implementation date in April 2010.

Although the existing exemptions do not apply to the rights of composers and lyricists, which are administered by Performing Right Society for Music (PRS), the new system of charging will include a simplification of the current framework which will be of benefit to charities and non-profit organisations.

In summary, the changes once implemented will include the following:
• statutory exemptions for charitable and non-profit organisations playing recorded and broadcast music in public (PPL rights) to be repealed;
• PPL and PRS agreement to jointly run a new simplified licensing system for the third sector with just one form and point of contact required;
• PPL to undertake a joint consultation with the Community Sector Law Monitoring Group to agree affordable tariffs based on relevant criteria and consult with relevant third sector organisations;
• PPL will not charge for certain uses of music ie use for domestic/family occasions such as weddings, music as part of divine worship, residential homes/hospices, hospital wards and medical therapy;
• PPL to offer blanket licences for occasional but varied use of community/rural halls (as offered currently by PRS);
• PPL will develop a code of conduct with an independent complaints reviewer (as PRS currently operates); and
• PPL and PRS have agreed to incorporate a charities event discount and an amnesty on back charges as part of the simplified system.

Keep it simple
The Government's assessment of the simplified tariff system is that the cost of the licences for previously exempt charitable and non-profit organisations will be in the order of £81 annually, although this is based on a number of assumptions. Its justification for the removal of the current exemption is that it is necessary for a proper balance between the owners of the rights to the music and users in accordance with international and EC law.

Phil Crier is a partner at Blake Lapthorn and head of the firm's Licensing team. Contact Phil on 023 8085 7232 or at phil.crier@bllaw.co.uk.

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