Select Committee on Culture, Media and Sport Fifth Report




Areas of dispute

18. We explored three of the main areas of dispute between those in favour of and those against the abolition of the Classical Music Subsidy. The first area of disagreement focused on the beneficiaries of the Classical Music Subsidy and on certain anomalies in its distribution. The second argument concerned the adequacy of PRS' consultation with its membership prior to announcing its decision to abolish the subsidy and the speed with which this change to its distribution policy was introduced. The third area of dispute centred on PRS' role as a collecting society and whether it had any right in principle to operate a subsidy which benefited one section of its membership at the expense of another.

The Classical Music Subsidy's beneficiaries

19. The press release of 23 December 1998, in which PRS announced its decision to phase out the Classical Music Subsidy, described how the subsidy had been distributed in 1997. Sixty-one per cent of the subsidy had been paid to writers or their estates and the remaining 39 per cent had been paid to publishers. The subsidy was paid to PRS writer and publisher members and also to their counterparts abroad via the international collecting societies with which PRS has reciprocal representation contracts. A breakdown of the subsidy's distribution to writers, using a sample of the top 500 recipients of the subsidy (who received 88 per cent of the subsidy paid to writers), showed that 33 per cent of the money had been paid to living composers and that 67 per cent had been distributed to the estates of deceased composers. (The estates of deceased composers receive performing right income as copyright lasts for 70 years after death.)[32]

20. Although we received a variety of analyses of the distribution of the Classical Music Subsidy in written evidence, the trends in the data were broadly consistent. A substantial proportion of the subsidy was paid to classical music publishers. The major share of the money distributed to writers was paid to the estates of deceased composers rather than to living composers.[33]

21. Classical music publishers. The thirteen publisher members within the Classical Music Alliance defended their receipt of the Classical Music Subsidy by emphasising that the publication of classical music required long-term faith and investment on behalf of the publisher. It took many years for composers of contemporary classical music to gain the type of recognition that would generate a financial return.[34] They claimed that the relationship between a classical music publisher and composer was far broader than the typical relationship between composer and publisher in other genres. Publishers were often instrumental in nurturing the careers of composers by providing skilled support in all component areas of the publishing business—production, distribution, promotion and protection of copyright. The production of scores and performing materials required significant financial investment on behalf of the publisher. In addition, classical music publishers bore responsibility for the world-wide availability of the music they published and played a major part in promoting their composers' reputations and music.[35]

22. Publishers of other genres of music did not accept that the costs and risks for classical music publishers were different in kind to those of other publishers. It was argued that all publishers had to make complex and often risky commercial decisions.[36] Music publishers were not charitable institutions.[37] Mr Ellis Rich, a popular music publisher and PRS Deputy Chairman, argued that publishers of popular music also had to invest heavily in new bands. He explained that a publisher signing a new pop writer might have to provide enough money for him to eat and live, to pay for master-quality recordings and possibly even a van and some instruments. A successful work of popular music was often transitory and did not have the same potential as a successful work of classical music to earn performance income over the long-term.[38]

23. Mr David Bedford, a classical composer and the other PRS Deputy Chairman, accepted that the production of performing material for classical music was expensive, but explained that the costs were falling due to the introduction of score-writing computer programmes such as Sibelius.[39] Sibelius is a software package designed to notate, edit, play back and publish music of every kind. Mr Julian Joseph, a jazz pianist and composer, said that jazz composers often paid their own printing costs and did not enjoy the luxury of a PRS subsidy. Although he found it quicker to write by hand, he had started writing scores on a computer as it helped produce the parts more efficiently. In the final analysis, he argued that "if you want the music played, reproduce it".[40]

24. The estates of deceased composers. Representations from the estates of deceased composers justified their receipt of the Classical Music Subsidy by referring to their role as grant-givers.[41] The Classical Music Alliance informed us that the estates of six composers—Britten, Delius, Finzi, Holst, John Ireland and Vaughan Williams—distributed in excess of £1.2 million per annum in support of contemporary music. Awards were made to living composers, music festivals, young performers and music education projects. Loss of the Classical Music Subsidy would reduce the income of the estates and hinder their grant-giving activities.[42] The conductor Mr Nicholas Cleobury emphasised that the money which went to estates from the subsidy did not go to "the fat cats of music and the top handful of performers"; it went to "the ground-roots of performers, it helps performances to happen, education to happen, and if it went it would decimate a very important part of our musical life".[43]

25. Nevertheless, the fact that such a substantial proportion of the Classical Music Subsidy was paid to the estates of deceased composers was seen as particularly invidious by many opponents of the subsidy.[44] The view of Mr John Truelove, a publisher of dance music, was representative: "I am at a loss to understand how we are furthering any cultural goals by providing royalties to composers who will never publish again (by virtue of their being deceased)".[45] There was also criticism of the way estates appeared to make grants almost exclusively to projects within the classical sector, even though the subsidy was drawn from the royalties earned by writers from a range of genres. Witnesses from Jazz Services and the English Folk Dance and Song Society stated that, to the best of their knowledge, no estate had ever made an award to a jazz or folk musician.[46]

26. Anomalies in the distribution of the Classical Music Subsidy. Supporters of the abolition of the Classical Music Subsidy argued that there were a number of anomalies in the way the subsidy was distributed. Some of these anomalies arose from the difficulty involved in providing a definition of classical music. We were given a variety of responses when we asked witnesses to provide such a definition.[47] Ms Sarah Rodgers, Chairman of the Concert Executive, the British Academy of Composers and Songwriters, summarised the difficulty, explaining that "inevitably, in all genres, there is, if you like, a core of the genre which you can define quite clearly, and then as you get to the perimeters there is bound to be lots of cross-over ... there are going to be fringes and the edges are going to be blurred".[48] It appeared that works of music at the edges were likely to have been subjected to arbitrary decisions about their qualification for the subsidy.

27. Critics of the subsidy pointed to a further anomaly in the distribution of the subsidy. Qualification for the subsidy depended on the tariff under which the concert had been licensed. If a concert were licensed under the LC tariff (Live Classical), every piece of music performed under copyright would receive the subsidy.[49] Indeed, Mr Hutchinson informed us that Jimi Hendrix's estate would receive some money through the Classical Music Subsidy this summer as one of his pieces of music was to be played in a Promenade concert.[50] However, if the concert were licensed under the LP tariff (Live Performance), because it was predominantly non-classical in nature, none of the copyright music would qualify for the subsidy. Mr Bedford described the way that some of his own compositions for wind bands changed value depending on their surroundings. He explained that "on one night one of [my] pieces might be done with melodies from the Beatles or Andrew Lloyd Webber, and not achieve a subsidy because the concert is licensed under the tariff called LP, the next night it might be done with Holst and Vaughan Williams wind band music and get its subsidy".[51]

28. There was also criticism of the fact that the majority of the Classical Music Subsidy distributed to writers was concentrated in the hands of the composers who already enjoyed the greatest financial success; winners were seen as winning more.[52] PRS indicated that their analysis of the distribution of the subsidy in 1997 showed that, although the subsidy had 3,700 beneficiaries, 60 recipients had been paid 64 per cent of the subsidy and 300 recipients had been allocated over 85 per cent of it.[53] Mr Bedford considered it "a bit absurd" that, under the subsidy, Rachmaninov's Second Piano Concerto, one of the most popular pieces of classical music, doubled its performing right income.[54] This anomaly was also cited in written evidence; the subsidy was criticised for its failure to discriminate between popular and specialist forms of classical music, and between active, experimental, specialist living composers and dead composers and their publishers.[55]

The consultation undertaken by PRS prior to announcing the abolition of the subsidy

29. The second main area of dispute between the Classical Music Alliance and PRS centred on the adequacy of PRS consultation. The Alliance argued that PRS had failed to engage in any formal consultation with its membership prior to announcing its decision to abolish the Classical Music Subsidy at the Society's AGM in September 1998.[56] Members of the Alliance alleged that PRS had contravened its undertaking to the MMC to take the principle of formal subsidy, including the classical subsidy, to its membership.[57] Many submissions from supporters of the Alliance referred to a section of the MMC Report in which the MMC stated that the Classical Music Subsidy appeared "from the evidence provided to us to have the broad approval of writer and publisher members".[58]

30. PRS defended its consultation process. In March 1996 a survey distributed to members with PRS News had included a question which asked members whether they thought the Society should continue to subsidise the live performance of classical music. PRS believed that the evidence collected from the 3,200 members to respond called into question the MMC's statement that the subsidy enjoyed broad support.[59] The first 289 replies to a questionnaire on "Support for Contemporary Music", distributed to members in March and May 1999, revealed that, although 65 per cent agreed that PRS should support contemporary music, 52 per cent considered that no particular genre should receive priority treatment and less than 20 per cent of respondents thought that classical music should receive priority treatment. Over three-quarters of the 289 respondents identified their own genre of composition or publishing as classical.[60]

31. Mr Hutchinson said that PRS consulted and communicated with its members on a daily basis through various fora. There had been over 70 formal consultation meetings since 1996 in which PRS had sought its members' views on issues such as distribution and subsidy, and more recently views on PRS' role in funding new music.[61] Mr Hutchinson argued that PRS had the "undoubted view from our membership that not only do the majority of our members oppose [the Classical Music Subsidy], but that a high proportion of the classical music fraternity oppose it as well".[62] PRS told us that the Office of Fair Trading (OFT) was overseeing the implementation of the MMC recommendations and had been informed of PRS' actions; thus far, PRS believed that it had been given a clean bill of health in the OFT's reports to the Secretary of State.[63]

32. The British Academy of Composers and Songwriters considered that the decision to remove the Classical Music Subsidy had been announced with "inappropriate haste and without sufficient regard for the necessity to work towards a means of supporting and increasing the value of the copyrights of members whose earnings would be thereby disadvantaged".[64] Others submitting evidence disagreed. Mr Andrew King, a dance music publisher and member of the PRS Advisory Group, argued that many members of the Classical Music Alliance, especially those that had served in the PRS Council, were well placed to read the situation very clearly. He suggested that "they should ask themselves whether they were prudent to carry on as if the subsidy was theirs by right and in perpetuity".[65]

33. PRS argued that it had decided to phase out the subsidy over three years to allow current beneficiaries to adjust their expectations.[66] Furthermore, PRS' calculation of the net impact of the subsidy's abolition on recipients demonstrated that 85 per cent of writers receiving the subsidy stood to lose £100 or less in subsidy over the three years and that, on average, the total distributions of PRS classical composers and publishers would be reduced by 6-7 per cent. The phasing out would spread that effect over three years.[67]

The role of PRS as a collecting society and the legitimacy of the Classical Music Subsidy

34. The Classical Music Alliance argued that the subsidy should be retained in recognition of the fact that royalties from live performances of classical music in the United Kingdom are amongst the lowest in the world.[68] It argued further that live performance income forms a disproportionate amount of classical composers' income as broadcasts and recordings are relatively rare.[69] PRS acknowledged that, although Tariff LC (Live Classical), at 3.3 per cent of net admission receipts (box office), was the Society's highest tariff, it was lower than equivalent published tariffs in many continental European countries. PRS agreed that the tariff needed revision to improve the income of classical composers and publishers.[70]

35. Whilst the Classical Music Alliance's demands for the tariff to be increased enjoyed considerable support, their argument that the shortfall should continue to be made up by the subsidy was vigorously contested. Opponents of the Classical Music Subsidy argued that there could be no justification for the cross-subsidy of one genre of music by another. The subsidy was viewed as unfair and illegitimate as it involved taking earnings from one section of the PRS membership and giving them to the classical section of the membership.[71]

36. Many critics of the subsidy accepted that the classical sector needed additional support.[72] Mr Peter Hewitt, Chief Executive of the Arts Council for England, acknowledged that different genres of music had different needs and that the classical sector was vulnerable.[73] This view was echoed by the British Academy of Composers and Songwriters. Ms Rodgers explained that classical music was an area of music which found it "much more difficult to survive without support of one kind or another".[74] Nevertheless the Academy considered that, "by virtue of the fact that that subsidy depends on taking earnings from other composers, in order to give it to classical composers ... it is not justifiable".[75] The Arts Council accepted the view of the PRS General Council that the cultural consensus underlying the Classical Music Subsidy had broken down. Although the Arts Council had seen the subsidy as "an enlightened example of music patronage", it recognised that it had become increasingly difficult to defend a subsidy which gave the classical sector uniquely favourable treatment and that PRS had no choice other than to remove it or to introduce analogous subsidies for new classes of low-earning members.[76]

37. The Classical Music Alliance argued that the subsidy had been funded from public performance blanket licensing revenue which was not attributable to particular compositions or performances.[77] Mr Hutchinson denied this. The money did not come from an unallocated pool, but from a fund which was distributed on the basis of samples and analogies rather than on census information. The Distribution and Data Review had led to changes in the way these performances would be sampled in the future. PRS had engaged a market research company who would be using a team of over 100 people with musical knowledge to visit venues and to sample the music played in those venues. PRS would now be able to distribute this fund of money with greater accuracy and ensure that it was paid to a greater proportion of the people that had earned it.[78] Many opponents of the subsidy expressed resentment that their earnings had been appropriated by PRS to finance the subsidy. Jazz Services argued that the subsidy was financed by a substantial number of members with low earnings who often came from under-represented genres of music and who had the money for the subsidy deducted from their earnings without their consent.[79]

38. PRS' plan to improve its sampling method and to increase the accuracy of the distribution of live performance income was welcomed as an overdue measure.[80] The Association of Festival Organisers complained that, although many of their 350 members paid a PRS licence for their events (which are predominantly folk and roots based), there was little evidence to suggest that the fees were being distributed to the people who had written the music performed at those festivals.[81]

The new PRS Fund for the support of contemporary music

39. The PRS press release of 23 December 1998, in which the PRS Board affirmed its decision to abolish the Classical Music Subsidy, announced that it would make available £1 million for a fund to support the creation and performance of new music in 2000 and years thereafter.[82] Under the PRS constitution, up to 1 per cent of its revenue may be used for donations, awards and schemes. PRS already operates a Donations and Awards scheme but, since this had a value of £300,000 in 1998, this announcement heralded a significant increase.[83] Mr Hutchinson explained that, as a membership society, the PRS had to ensure that its actions were consistent with the wishes of that membership.[84] He said that "consultation with members showed that they still felt that PRS has a role to play in the funding of new music; however, they want funding that is properly focused, available to all genres of music, and for its effectiveness to be measured. Many would prefer to see more of the funding go to younger, living, grass-roots writers who currently share in only a small proportion of the Classical Music Subsidy".[85]

40. The Classical Music Alliance was critical of the new fund as the awards would be discretionary. It argued that discretionary funding was no substitute for a guaranteed and identifiable income source. Since the fund was to be made available to all genres, it seemed inevitable that classical composers and their publishers would see a reduction in their income from live performance.[86]

41. To many supporters of the Classical Music Subsidy's abolition, this new fund appeared to represent a far fairer method of supporting contemporary music as it meant that PRS support was no longer restricted to one sector of its membership.[87] Mr Hodgkins asserted that "Jazz Services and the Association of British Jazz Musicians believe that it is appropriate that the Performing Right Society's subsidy fund should be open to all genres of music; quality not privilege should determine allocation".[88] Mr Bedford, who has been nominated Chairman of the charitable foundation that will administer the new fund, explained that the fund will be distributed by application and that all genres will be able to apply equally. He wanted to ensure that there was a minimum of bureaucracy and that the application forms were simple to complete.[89]

32  Q 105. Back

33  Evidence, pp 24, 44, 45 140; PRS Music News, 23 December 1998. Back

34  Evidence, pp 4-5. Back

35  Evidence, p 5. Back

36  Evidence, pp 124, 78. Back

37  Evidence, p 126. Back

38  Q 100. Back

39  Q 100. Back

40  QQ 27, 34-35. Back

41  See, for example, Evidence pp 85, 87, 91-92, 95-96. Back

42  Evidence, p 3. Back

43  Q 17. Back

44  See, for example, Evidence pp 110, 112, 116, 124. Back

45  Evidence, p 126. Back

46  Q 38. Back

47  QQ 9-10, 36, 58-59, 107, 140-146. Back

48  Q 58. Back

49  Q 110. Back

50  Q 108. Back

51  Q 111. Back

52  Q 95; Evidence, p 119. Back

53  Evidence, p 44. Back

54  Q 104. Back

55  Evidence, p 126. Back

56  Evidence, pp 1-2, 7, 87. Back

57  Evidence, p 2. Back

58  Cm 3147, p 23. Back

59  Evidence, p 44. Back

60  IbidBack

61  Q 87. Back

62  Q 95. Back

63  Q 87. Back

64  Evidence, p 31. Back

65  Evidence, p 124. Back

66  Evidence, p 43. Back

67  Evidence, p 45. Back

68  Evidence, pp 2, 7, 9-10. Back

69  Evidence, pp 2, 6; QQ 10, 14-16. Back

70  Evidence, p 41. Back

71  QQ 21, 58; see, for example, Evidence, pp 18, 24, 31, 110, 112, 117. Back

72  QQ 57, 81; Evidence, pp 30-31, 56-57, 126. Back

73  QQ 129, 150. Back

74  Q 57. Back

75  Q 58. Back

76  Evidence, pp 56-57. Back

77  Evidence, p 2. Back

78  QQ 98-99; PRS News, No 52, Summer 1998, pp ii-v. Back

79  Evidence, p 24. Back

80  Evidence, pp 24, 72, 107. Back

81  Evidence, p 107. Back

82  PRS Music News, 23 December 1998. Back

83  Evidence, p 43. Back

84  QQ 87, 90. Back

85  Q 87. Back

86  Evidence, p 4. Back

87  See, for example, QQ 21, 23-24; Evidence, pp 112, 125. Back

88  Q 21. Back

89  Q 102. Back

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