How do I know if my PPL PRS music licence invoice is correct?
Why a correctly calculated invoice isn't necessarily an accurate one.
For many businesses, music licensing is simply another annual expense. An invoice arrives from PPL PRS, it's checked against the previous year's charges, approved and paid.
But how many businesses know whether the amount they're being charged is actually correct?
Unlike many other operating expenses, music licensing isn't necessarily based on a straightforward quantity or consumption figure. The cost can depend on a combination of factors, including how music is used, where it's played, the nature of the premises and which licensing tariffs apply.
An invoice can be calculated correctly against a particular tariff but still be inaccurate if the information, assumptions or interpretation used to calculate it are wrong.
And unless those details are reviewed, inaccuracies can remain undetected for years.
What determines the cost of a PPL PRS music licence?
TheMusicLicence, administered by PPL PRS, generally covers the public performance of music controlled by PRS for Music and PPL.
Although businesses usually receive a combined licence and invoice, the underlying PRS and PPL charges are calculated according to their respective tariffs.
Depending on the nature of the business and its music use, those calculations can involve several different factors.
These may include:
The size of the premises: Some tariffs calculate charges according to the area in which music is audible.
The type of music use: Background music, live performances, DJs and exercise classes can attract different charges.
The nature of the business: Different tariffs apply to hotels, restaurants, shops, offices, gyms and other premises.
The frequency of music use: Certain charges depend on how often particular activities take place.
The number of people involved: Some tariffs use employee numbers, attendance or capacity as part of their calculations.
Even something as seemingly insignificant as the type of device used to play music can affect the licence fee.
Not every factor applies to every business, and different activities within the same premises may be subject to different licensing arrangements.
This means that establishing the correct licence fee isn't always as straightforward as checking a published price.
Why might a music licence invoice be incorrect?
In our experience, there are several reasons why a music licence invoice might not accurately reflect what a business should be paying.
Incorrect or outdated information
Licensing charges depend on the information used to calculate them.
If a business has changed its layout, operating hours, facilities or music use, those changes may affect the appropriate charges.
However, unless the relevant information is updated, invoices may continue to reflect arrangements that no longer exist.
For businesses operating multiple sites, even relatively small inaccuracies can become significant when repeated across an estate.
The wrong tariff or interpretation
Music licensing tariffs are designed to accommodate different types of premises and activities, but businesses don't always fit neatly into a single category.
A hotel might operate bedrooms, restaurants, bars, function rooms and leisure facilities. A motor dealership may have customer-facing showrooms alongside workshops and other staff-only areas.
Different tariffs or charging provisions may apply depending on how those spaces are used.
Sometimes the difficulty isn't simply choosing the right tariff, but interpreting how its provisions apply to a particular activity or area.
Even where the underlying information is accurate, a different interpretation of the relevant tariff can produce a different licensing charge.
This is one reason specialist knowledge can be particularly valuable.
Music use that doesn't reflect reality
Businesses may find themselves paying for music use that doesn't actually take place.
For example, during recent reviews of hotel licensing arrangements, MMS identified function rooms where background music had been declared despite not being used, alongside spa facilities where royalty-free music was being played or no music was used at all.
We also identified areas being charged separately despite already being covered within other licensing arrangements.
These weren't necessarily obvious errors on the invoices themselves. They only became apparent when the licensing declarations were compared with how the hotels actually operated.
It's a good illustration of why checking the figures on an invoice isn't always enough.
Additional or unexplained charges
Invoices may also include charges relating to previous periods, adjustments or surcharges.
These shouldn't automatically be assumed to be incorrect, but businesses should understand why they've been applied and whether the circumstances justify them.
Where the basis of a charge isn't clear, requesting an explanation is a sensible starting point.
How can you check whether your invoice is correct?
A useful starting point is to compare the information held by PPL PRS with how your business actually operates.
Consider whether the areas, activities and music use being licensed are accurately described, whether relevant changes have been reflected, and whether any additional charges have been properly explained.
It's also worth comparing your current invoice with previous years.
An increase may simply reflect an annual tariff adjustment, but a more substantial change could indicate that other factors have influenced the calculation.
Understanding why the charge has changed is often the first step towards establishing whether it is justified.
Does an incorrect invoice mean you've been overcharged?
Not necessarily.
An inaccurate declaration or inappropriate tariff can result in either an overcharge or an undercharge.
The objective of a proper licensing review should be to establish the correct position, rather than simply identify opportunities to reduce the fee.
Music licensing exists to ensure that rights holders are appropriately remunerated for the use of their work. Businesses, equally, should be charged accurately and in accordance with the relevant licensing terms.
Getting the calculation right serves both interests.
Where an error has resulted in an overpayment, it may also be appropriate to consider whether previous charges can be corrected. The availability and extent of any retrospective adjustment will depend on the circumstances and applicable terms.
Why independent verification matters
Most businesses don't have the time or specialist knowledge to examine music licensing tariffs in detail.
And understandably so.
A hotel operator needs to concentrate on running hotels. A restaurant group needs to focus on its customers. A gym operator needs to manage its facilities and members.
Understanding the complexities of music licensing shouldn't have to become another specialist function within those businesses.
At MMS, we review music licensing arrangements to establish whether charges accurately reflect the way businesses operate.
Since 2014, 82% of our reviews have identified improvements or areas requiring attention, with an average overall saving of 19%.
Those findings don't mean that every business is being overcharged. They do, however, demonstrate the value of checking that licensing arrangements are appropriate rather than assuming an invoice must be correct because it has been issued.
Not sure whether your PPL PRS music licence invoice is correct?
If you're uncertain about the charges on your PPL PRS invoice, or simply haven't had your licensing arrangements independently reviewed, MMS can help.
Our initial review is always free, and where we identify opportunities to reduce your licensing costs, we can manage the process of securing those savings.
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