Knowledge Bank

news category created 29 April 2014 written by Mick Glossop

PPL – an explanation of payment allocation

For those who may have any confusion on this matter:
Following a meeting with PPL, and questions about what exactly is the cap on a non-featured artist/performer (producer)’s share, Camilla Waite sent the following:

As discussed, the allocation of PPL’s licensing revenue to performers is, in most cases, a two-stage process run by our bespoke payment system.  Essentially there is a Primary Allocation and then, in most cases, also a Secondary Allocation (once the recording is marked as having a complete line-up and depending on number of performers linked to the recording).

Explanation of PPL’s Performer Allocations

1) Primary AllocationTotal revenue for a track is divided as follows:65% to Featured Performers (“FPs”)35% to be shared between Non-Featured Performers (“NFPs”).An individual NFP can receive no more than 7% of that first allocation of 35% (i.e. 7/35ths).

If there is only one NFP, the total NFP share is therefore only 7% of the total (i.e. not 35%).

With the FP share of 65%, this adds up to only 72% of the total receipts for that recording.

This means that there is 28% of the total revenue for that track left-over and still to be shared out. Therefore, PPL runs a Secondary Allocation to allocate this remaining 28%.

2) Secondary Allocation

The left-over revenue is pro-rated between FPs and NFPs. The pro-ration is calculated as follows:

The FPs will receive 65/72ths.

Each NFP will receive 7/72ths.

A worked example of the allocation process is set out below, for simplicity using £100,000 as the total recording value:

Primary Allocation:

100,000 x 0.65 =    £65,000

100,000 x 0.07 =      £7,000

£65,000 + £7,000 = £72,000
£100,000 – £72,000 = £28,000 (28%) remaining to pro-rata

Secondary Allocation:

£28,000 / 72,000 = 0.3888

0.3888 x 65,000 = £25,277.77

0.3888 x 7,000 = £2,722.22
Total FP share = £90,277.77

Total NFP share = £9,722.22

Note: when claiming for PPL payments as a ‘performing producer’ you are considered within the category of ‘non-featured performer’. In the UK, a performer can claim only once for each piece of music on which he/she performed, i.e. you get paid the same amount whether you performed in one role (e.g. guitarist) or many roles (e.g. drummer, guitarist, singer, performing producer). Thus, you might think that it’s not worth listing all of your roles, if there are more than one. However, in some other countries with which PPL has a reciprocal collection arrangement, e.g. Germany, performers are paid more if they have more than one role. So it’s always to your advantage to enter full details of all your roles in every recording, because PPL will collect accordingly on your behalf from those countries which pay more for multiple performances.I hope this information is helpful and that adding some figures helps to bring the process to life a bit.  Further information can be found on PPL’s website (see the FAQ “How is the money distributed between performers and rightholders in the UK?” here:www.ppluk.com/I-Make-Music/Understanding-Your-Payments/What-does-my-statement-mean/).  PPL’s Distribution Rules are also publicly available on the website here: www.ppluk.com/I-Make-Music/Understanding-Your-Payments/How-is-money-distributed/PPL-Distribution-Rules).

This video explains the Eligible Studio Producer Form – created for producers to submit claims for payment from PPL:

http://bcove.me/vyqtstfy

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