The UK Cinema Association (UKCA) and PRS For Music, the UK organisation that collects royalties for songwriters, composers and music publishers, will face each other in London’s High Court of Justice next week.
They will settle a long-running dispute over the tariffs UK cinemas are required to pay PRS for playing music in their venues.
UKCA first made a referral to the Copyright Tribunal – a division of the High Court – in 2024 over changes to the PRS’ tariff the UKCA argues will have a disproportionately negative impact on smaller cinema operators.
In the UK, cinemas must pay PRS a tariff for playing music in their venues, both as background music in communal areas, and for the right to play music as part of the film soundtrack.
PRS handles the rights and royalties on behalf of music rights holders from across the globe when played in the UK. Cinemas across Europe, Canada and South America are also subject to similar terms, but not the US.
When a studio or film production company includes music in their film soundtrack, they will pay the composer a one-off synchronisation fee, but that does not cover where or how many times it is performed. Similar models exist in the UK for radio play, shops, restaurants and offices.
Since 2005, each cinema chain or venue could choose to pay according to one of two measures: 1% of box office revenues, or a pence-per-admission figure, which is currently 7.33p.
UKCA, the trade body that represents the interests of around 90% of UK cinema operators, wants to keep it that way, saying the duality is necessary to reflect the wide variation in cinema business models and ticket prices across the country. For venues charging an average ticket price of below £7.33, the percentage revenue model makes sense, while above £7.33 venues typically opt for a pence-per-admission figure.
PRS now wants a shift away from the dual system, removing the 1% option, and an increase of approximately 1.8p on the pence-per- admission figure. The UKCA argues this will mean an overall increase across its membership of 42% per year in the amount UK cinemas pay for music rights, totalling around £4m, with impact felt most acutely by smaller operators. Those with very low ticket prices, such as £4.50, would be looking at an effective payment rate of at least 2% of box office, double what had historically been paid.
Phil Clapp, chief executive of the UKCA, noted the case has already cost the organisation “several times our annual budget” in legal fees. But argued it is necessary to “challenge what is a completely unreasonable approach taken by the PRS”.
A PRS spokesperson told Screen: “We recognise the important cultural role small independent cinemas have in local communities. To support smaller cinemas, we are retaining the low admissions discount which can reduce a cinema’s royalty by up to 25%.”
PRS offers a discount of 25% for cinemas with fewer than 60,000 admissions per year. The UKCA argues there is no correlation between low-admission and low-ticket price, and that many of the cinemas most impacted are not eligible for the discount. Clapp also noted even for those who do qualify, a 25% discount is “meaningless” when the cost of the tariff is doubled.
PRS defence
“The current cinema tariff, including the royalty rates, have not significantly changed in more than 20 years, while the usage of music in cinemas has increased greatly in that time – on average 17% more music is being used in films since 2005,” said the PRS spokesperson.
“We undertook a rigorous review of the cinema tariff and engaged closely with representatives across the sector, particularly the UKCA, to ensure all views were considered. The proposed increase is modest, approximately 1.8p on the pence per admission rate, excluding live event film screenings.”
UKCA disputes the claim there has been such a big increase in music used by films since 2005 and said that PRS only made minimal changes after the consultation, which the UKCA felt made the proposal worse, rather than better.
PRS has also suggested online booking fees should be factored into the tariff, which Clapp says is “completely nonsensical” as the online fee has “nothing to do with the cinema experience and certainly nothing to do with the music. You could make that argument about a whole range of things that facilitate people’s visit to the cinema. We’re very keen to avoid any sense of mission creep.”
“Since the tariff was set in 2005, we have seen a rise in tickets sold through online booking systems,” responded the PRS spokesperson. “Our position is that the revenue generated from additional fees, which to the cinemagoer effectively form part of the cost of admission, should be factored into the royalty due to songwriters and composers to reflect the true value created from the use of their music in films.”
A 20-year dispute
The issue has been escalating for around two decades.
“UK cinemas have always believed that they pay too much, and PRS has always believed that they don’t pay enough,” explained Clapp.
Every year, from 2005 onwards, the tariff has come up for renewal, and has rolled over unchanged, bar the pence per admission number which has increased by an agreed percentage year-on-year – 3.25%.
In 2019, PRS proposed changes to the tariff the UKCA said in broad terms would have meant all its members would pay more, and in particular, members with low average ticket prices would pay significantly more. The UKCA rejected these proposals.
Then, the pandemic hit. “In fairness to PRS, they were quite flexible, as cinemas generally pay this money a year in advance on the basis of forecasted income or admissions,” said Clapp. “They were flexible and good in terms of paying back money that had been paid up front, and in terms of allowing cinemas to stage payments.”
In 2022, PRS came back with another proposal, which Clapp said “was so unreasonable, there wasn’t really a negotiation to be had”. In spring 2024, PRS sought to impose the new tariff.
“We had no option really but then to take it to the Copyright Tribunal, which is a very long, very expensive and very arduous process. Here we are, two years later, about to have our day in court,” said Clapp, who plans to travel back and forth between the case and the CineEurope convention in Barcelona, which takes place next week.
UKCA set up a ‘fighting fund’ two years ago to help cover the costs, with members paying contributions into it. Clapp says 96% of its members contribute despite the challenging financial landscape for many members. “Everyone, cinemas of all shapes and sizes, is absolutely aligned on this,” he said.
Of its ideal outcome of the case, the PRS spokesperson said: “We hope the result is we obtain a royalty rate that properly reflects the value of music in films while ensuring songwriters and composers, who depend on royalty income to sustain their livelihoods, are fairly paid for the use of their work.”
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