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Collection society warns on Apple's Match service

Collection society warns on Apple's Match service

In an interview with Music Week, Ashcroft said the industry was currently at a crossroads with regards to online licensing and explained it was essential the sector achieved fair value from cloud and streaming services if it wanted to grow.

"We are at a turning point. Either the internet becomes an economically viable replacement to CDs or else there is an admission you can't get fair value from the internet, which would lead to lasting damage to the music industry," he said.

His comments follow industry-wide concerns over iTunes Match - a component of the iCloud service announced by Apple earlier this month - which some people believe could lead to a 'laundering' of grey market files: the service allows users to match the files in their collection - wherever they come from - against those in the iTunes catalogue and download 'clean' and fully licensed versions onto their Apple devices.

Although Ashcroft did not wish to comment directly about Apple's proposals for iCloud he said PRS's main concerns with cloud and streaming services were centred on the principles of value capture and fairness. And he predicted if the issue of unlicensed material in locker services were not addressed then industry growth could flatline.

"If you admit stuff into a service that was not actually purchased there will be value leakage. We have struggled for years to build up a viable online licensing business and we are very proud of what we have achieved. But all of that could be cut by a factor of 80%," he said, adding the industry could even reach a stage where music became so easy to steal consumers were not even aware that they were doing it.

However, Ashcroft fell short of saying revenues for publishers and writers would go into terminal decline if his worse-case prediction occurred, adding it was essential that PRS ensured there was an equitable distribution of online rights to holders within the industry.

To this end, PRS is currently investigating instances of precedence for locker services in order to build its case to the various service providers as to which rights would be paid for within the service and which would be remunerated outside of it.

This, explained Ashcroft, would include whether a subscription fee would cover all of the royalty payments from a particular service, or whether additional payments could be negotiated each time a song was downloaded or streamed from the service (as is currently the case with services such as Spotify).

He said PRS was keen to see the creation of a service which not only acted as a locker service but also as a streaming service, allowing consumers the best of all services currently on the markets.

"It's a complicated legal landscape and one which we haven't yet got to the bottom of," he said, noting the organisation and the market in general were still yet to determine what a "real price" was for a mass-market service.

"However, the great news is that the people who are proposing to launch services like these have the penetration and the customer bases already, which means that this could also be the moment when the price goes down and the market goes up like crazy and suddenly licensing on the internet is both viable and pays money. That would be perfect."

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