Blur drummer Dave Rowntree has lost an appeal against the PRS in a case over the distribution of so-called ‘black box’ royalties.
What are ‘black box’ royalties? Good question. Well, they refer to the increasing number of live gigs where PRS takes a cut from the ticket sales but has not been able to allocate it to the appropriate songwriters because of a lack of information about a setlist. And it’s a growing problem – according to PRS’s own website, there are over 106,000 gigs where performance royalties have been collected but not distributed. Most of these are from small-scale gigs in grassroots venues.
The amount in the so-called black box is a substantial one too. According to a news feature in the Guardian last year, it amounted to £2.7 million for one year – 2019 – alone. PRS distributes them to its members according to market share.
Rowntree’s action claimed that PRS was handling the black box royalties in a way that was favouring publishers more than songwriters, who make up the vast majority of the PRS membership, and because of the lack of transparency over them, they were breaking UK and EU competition law.
The drummer’s action was thrown out by the Competition Appeal Tribunal last August and has now been rejected by the Court of Appeal. Lord Justice Miles said a "true" or "accurate" distribution of these royalties could not be known "because the root of the black box royalties problem is the absence of accurate information - and, conversely, if accurate information were available, the relevant royalties would be matched".
Essentially, because of the very lack of information, no PRS member can say they are entitled to any specific amount of the black box royalties.
"Once one accepts that the PRS has to adopt some rule of distribution for the black box royalties, the fairness of its chosen rule can only be assessed by comparison with some other rule," the judge added.
"In my judgment the reason why no counterfactual has been advanced, even in general terms, is manifest: it is that the very data failure problem which has given rise to the black box royalties means that there is no plausible basis for suggesting a more accurate, let alone fairer, distribution."
Rowntree has issued a statement saying he accepts the Court’s decision but said the action "succeeded in shining a light on the magnitude of PRS black box royalties".
He added: "I would welcome the opportunity to work with the PRS to find ways to shrink the value of black box royalties for the benefit of its 160,000 songwriter members. There must be better ways for royalties to be identified and paid to the correct songwriter, especially given the pace at which technology is evolving.”
