Memorandum submitted by MCPS-PRS Alliance
1. The MCPS-PRS Alliance represents 60,000 composers, songwriter and music publisher members as well as the music of the hundreds of thousands of composers, songwriters and publishers who are members of the equivalent royalty collecting societies across the world by virtue of some 121 reciprocal agreements with those societies. This enables the Alliance to offer its licensees access to the world's entire repertoire of music.
2. MCPS is responsible for licensing the recording of music onto audio and audiovisual products, PRS licenses the public performance and broadcast of music and both license the online use of the music. The MCPS-PRS Alliance is an operational alliance between the two organisations and this has enabled them to issue joint licences wherever it is appropriate, including to the BBC. The royalties they collect from such uses are distributed to the copyright owners of the music actually used, directly in the case of their members and via the relevant societies overseas in the case of non-members.
3. The BBC is a major user of music in the UK, reporting some 800,000 uses of music over its television, radio, internet and mobile services per month. This scale of music use makes the BBC the single largest licensing customer of the Alliance. It is rare that a broadcast programme does not make use of music in some way and indeed a programme without music would seem incomplete. Accordingly the demand for music creates a mutual dependency between the BBC on the one hand and the Alliance on behalf of its members on the other hand.
4. In addition to including music in its programming the BBC exploits the economic and cultural potential of that programming, whether through secondary sales abroad or by turning it into other products, some of which are exported. This additional activity is, for the most part, undertaken by BBC Worldwide, putting the BBC as a whole in a unique position and providing essential added value for the Alliance and its members.
5. The Alliance therefore welcomes the opportunity to respond to the Culture Media, and Sport Committee's inquiry into the commercial operations of the BBC. This paper will confine itself to the aspect of the inquiry on which the Alliance is most qualified to give evidence, namely the benefits and opportunities offered to its members by the BBC in its undertaking of a wide range of commercial activities in the UK and abroad.
The BBC as public service broadcaster
6. The BBC's public service broadcasting licence is worth some £50 million a year to MCPS and PRS together, accounting for 10% of the royalty income the Alliance collects for distribution each year. The scope and scale of the BBC's PSB programming provides an extraordinarily important platform for the entire breadth of the repertoire of music represented by the Alliance. The music usages reported by the BBC show that it draws on all genres, on niche as well as commercial music, and that it breaks new music as well as uses existing music, making it an essential outlet for some genres of music which would otherwise only be able to reach very limited audiences.
7. The BBC is also a major commissioner of music for a broad range of uses, ranging from theme music for new programmes to serious contemporary music, so providing important employment to composers and songwriters and encouraging the development of the UK's cultural life. The BBC's orchestras play a vital role in supporting composers of newly commissioned music by performing it to the highest standards in live concerts and for inclusion in programmes that are broadcast, so ensuring that the composer's work enjoys the best possible exposure to audiences. Its role in commissioning, performing and broadcasting serious contemporary music has positioned the BBC at the heart of the British music scene and has created a dependence on the BBC for a culturally important genre of music but one which does not generally have intrinsic commercial value. Whilst the commissioning aspect of the BBC's role falls outside the scope of the Alliance's licence to the BBC (with the exception of when new music is broadcast) it has a direct and very important bearing on the lives of the songwriter and composer members of the Alliance, providing them with an alternative and supplementary source of income.
8. The Proms and other live concerts and festivals provide a very important income stream to Alliance members by virtue of a separate performing right licence from PRS.
BBC Worldwide's added value
9. BBCWW generates valuable additional income for the Alliance and its members through its commercial activities, both as an extension of its public service offerings and through originating new programming and other commercial activities which make use of music. The value to MCPS of additional licences from these activities is currently worth in the region of £10 million per annum. To the extent that these activities consist of broadcasting abroad, further revenue flows back to PRS from overseas societies.
Additional value flowing from public service broadcasting
10. BBCWW plays an increasingly important role in maximising both the economic and cultural value of the BBC's public service broadcasting output which in turn provides a commercial benefit to the Alliance and its members over and above the public service broadcast licence and any commissioning fees to composers, on account of the use of music in the original output. This takes a number of forms including:
10.1. The sale of programmes to overseas broadcaster: BBCWW acquires a secondary use licence for this from the Alliance and the overseas broadcast of those programmes generates performing right income in the country of broadcast which is then remitted to PRS by the equivalent collecting society in the country of broadcast for onward distribution to the member owning the music in question;
10.2. The manufacture and sale of CDs and DVDs: BBCWW acquires a licence from MCPS;
10.3. The sale of TV programmes to internet services: this entails another secondary use licence from the Alliance.
11. BBCWW originates or invests in channels, many of which benefit from a secondary use of its own public service broadcast programming, including UKTV in the UK and BBC World News and BBC Prime abroad. BBCWW acquires a separate licence from the Alliance for the music on such channels. Alliance members also earn from the broadcast of those channels abroad, the income from which flows back to PRS from the overseas societies.
12. BBCWW sometimes co-commissions programmes being produced for public service broadcasting by the BBC where they are likely to have commercial potential, whether they are being produced by the BBC or other producers.
Additional value flowing from BBCWW's commercial activities
13. BBCWW has used the resources and opportunities available to it from the BBC and more widely to initiate some innovative projects involving music which few others would be likely to be in a position to risk. An example of this is the BBC Electric Proms in which last year the Kaiser Chiefs performed arrangements of their songs by film composer David Arnold, to great critical acclaim.
14. BBCWW's extensive international reach has the added advantage for British composers and songwriters that their music reaches the widest possible audiences. This aspect of BBCWW's activities makes an important contribution to the export of British music and British culture generally. The UK is a net exporter of music and BBCWW's activities help to consolidate that position.
15. Furthermore, the combination of the BBC's very strong brand with British music and culture, which are each held in very high esteem in their own right abroad, serves to enhance the reputation of our country in ways which are not only measurable in economic terms.
16. Whilst it is accepted that BBCWW could almost certainly not achieve all that it does without the benefit of the BBC Licence Fee and the existence of the BBC, we believe that it is currently using its advantage to benefit and enrich the musical life in the UK and its reputation abroad in ways that no other organisation could. As far as music is concerned the BBC is providing an essential service for the benefit of the 60,000 members of the Alliance and this deserves continuing support and encouragement.