What is copyright term extension?
On 1 November 2013, to comply with European law, UK law was changed so that copyright in sound recordings now lasts for 70 years (previously, it was 50 years). This means that record companies and performers can continue to earn income from these recordings during the extra 20 years of copyright (which is called the extended term). This applies to recordings released from 1963 onwards.
What is supplementary remuneration?
As part of the legal changes, performers now have a right to receive UK supplementary remuneration (SR) from record companies, if certain statutory criteria are met. The law in this area is quite detailed but, in summary, the right to SR arises where:
- You performed on a relevant recording (i.e. one which is now in its extended term);
- You are a relevant performer (i.e. you assigned certain rights in your performance to the record company and do not receive recurring remuneration, such as regular royalties, in return); and
- The record company earns relevant revenue from the recording (i.e. revenue from certain types of exploitation of the recording in the UK).
Further details about what these terms mean can be found in the “More Information” section below.
What is PPL’s role regarding SR?
The UK law on term extension places obligations on record companies and gives rights to performers, with only a relatively limited role for PPL. Record companies are obliged to make SR payments to a collecting society, for distribution to the relevant performers in accordance with rules set by the collecting society. In the UK, it is PPL carrying out that role of receiving the SR payments and distributing the resulting SR Fund.
When will PPL be distributing the SR Fund?
The law does not set a statutory deadline for distributing the SR Fund, but the statutory deadline for record companies to make payments into the SR Fund in respect of 2015 (covering relevant exploitations during that year of (P)1963 and (P)1964 recordings) was 30 June 2016.
Following this deadline, PPL has been processing the payments and associated data received from record companies for 2015. As a result of this work, SR Fund allocations for 2015 will be made as part of PPL’s distribution on 19 December 2016.
How does PPL distribute the SR Fund?
The SR payments made by record companies to PPL relate to specific recordings. As far as possible, PPL distributes the SR Fund to performers on a per-recording basis, using the performer line-ups for each of those recordings. PPL’s SR Fund distribution is based on the following key principles:
- The SR received for a particular recording should be shared equally between the relevant performers on that recording (i.e. with no differentiation based on the duration, quality or number of performances from each performer).
- Similarly, the different types of rights (copying, distribution and “making available” rights) assigned by the performer to the record company should be treated as being of equal value in this context, when allocating SR payments.
- PPL will apply a presumption that all Non-Featured Performers on a recording are eligible to receive SR for that recording (i.e. that they all assigned the relevant rights to the record company and receive no recurring payment from the record company in consideration of that assignment), and that the Featured Performers on the recording are not eligible for SR. However, that presumption can be rebutted, based on evidence.
What will appear on my statement?
If you are a performer to whom an allocation from the SR Fund is being made in the December distribution, this will appear as a separate line on your PPL statement (available from your myPPL account).
What is a relevant recording?
A sound recording falls into the SR regime if it is in its extended term. The first recordings to be affected were (P)1963 recordings, which entered their extended term in 2014. Each year, going forwards, more recordings enter their extended term and fall into the SR regime. So, (P)1964 recordings entered their extended term in 2015 and joined the (P) 1963 recordings in the SR regime.
What is a relevant performer?
To be entitled to SR payments for a relevant recording, a performer must have assigned (i.e. transferred ownership of) certain rights in their performance on that recording to the record company. The relevant rights are the performer’s right to consent to: (a) the copying of a recording of their performance, (b) the issue of copies of those recordings to the public (or the rental/lending of those copies), and (c) the electronic “making available” of those recordings to the public.
If the performer assigned these rights to the record company for a relevant recording, and is not already entitled to a recurring payment from the record company in return, then the performer is potentially entitled to receive SR payments for that recording. (In this context, “recurring payments” do not include the equitable remuneration payments made to performers by PPL.)
What is relevant revenue?
A record company has to make SR payments in respect of a relevant recording if it has earned UK revenue on that recording from exploiting (a) the right to copy that recording, (b) the right to issue copies of that recording to the public or (c) the “making available” right. This is an annual calculation; for example, the SR payments made by record companies in 2016 had to be based on their relevant revenues in 2015.
As a record company’s obligation to make an SR payment only applies to a recording that it is in its extended term, it is important to remember that revenues generated from other versions of the recording, with a later copyright “start date” (and therefore not yet in their extended term) are not covered.
What factors affect the value of the SR Fund?
For the second year of the SR Fund, it is (P)1963 and (P)1964 recordings which are affected (and, as explained above, the SR regime only applies to those recordings if they have relevant performers on them, and if the recordings earned relevant revenues in the UK in the relevant year). As a result, it was always anticipated that the SR Fund in the first years would be relatively small amounts of money, for a relatively small number of recordings, which in turn affects the number of performers to whom SR payments will be due. However, over time this is expected to increase significantly, as more years’ worth of recordings enter their extended term.
The total of the payments made into the PPL SR Fund for 2015 is £241,857 (relating to 11,600 (P)1963 and (P)1964 recordings).
This is increased from the total for 2014, which was £78,924 (relating to 4,800 (P)1963 recordings). PPL made a distribution of the 2014 SR Fund revenue in December 2015 (the first CMO in Europe to make an SR Fund payment to performers).
Does the SR Fund only cover recordings registered in PPL’s database?
The legal obligation is on record companies to make SR payments if the statutory criteria are met, regardless of whether the relevant recordings are already registered with PPL. Over the past two years, PPL has taken steps to try and make record companies aware of these obligations (and some record companies did make SR payments for recordings they had not previously registered with PPL). However, PPL cannot guarantee that all record companies have declared the SR payments they need to make on all relevant recordings. PPL has not been empowered to do so by the UK term extension laws.
If a performer is aware of any record company who they believe should have made (but did not make) an SR payment to PPL in respect of a (P)1963 or (P)1964 recording, then they should raise the matter with that record company in the first instance. Performers have statutory rights against record companies under the UK term extension laws, including a right to ask for certain information about their entitlement to SR payments from those record companies.
What is PPL’s cost deduction?
Under the UK term extension laws, the SR Fund is to be paid out in accordance with PPL’s rules and PPL is therefore permitted to deduct the costs incurred in administration of the SR Fund. For the SR Fund relating to 2015, PPL is applying its overall cost percentage from 2015, which was 14.2%.