The PRS Licence Loophole — What It Is and What Rights Holders Lose

What is the PRS licence loophole?

The term "PRS licence loophole" is used to describe a series of exemptions in UK copyright law — primarily in the Copyright, Designs and Patents Act 1988 (CDPA) — that allow certain categories of venue, event, or use to play music publicly without obtaining a PRS licence. When a venue falls within one of these exemptions, it does not need to pay PRS for Music, which means the performance royalties that would otherwise flow to songwriters and publishers are never collected. The exemptions exist because Parliament judged certain uses to be sufficiently limited in commercial impact that licensing would be disproportionate. In practice, the impact on songwriters' income is real — and the lines between exempt and non-exempt use are frequently misunderstood or deliberately exploited.

The main exemptions in UK law

The most commonly cited exemptions in UK copyright law that affect PRS royalty collection include:

• Section 72 CDPA — free public showing of broadcasts: Originally designed to allow hotels and similar establishments to show TV broadcasts to guests without a separate copyright fee. This section was narrowed significantly following a European Court of Justice ruling (ITV Broadcasting Ltd v TV Catchup), but residual interpretations continue to create disputes about what qualifies as a 'free public showing.'
• Section 31 CDPA — incidental inclusion: A copyright work that appears incidentally in another work does not infringe copyright. Venues sometimes argue that background music playing when a camera pans across a room is 'incidental' and therefore does not require licensing. In practice, music that is deliberately chosen and played in a business environment is not incidental.
• The Live Music Act 2012 — small venue live music exemption: Live performances in venues with a capacity of 500 or fewer do not require a premises licence for live music in England and Wales. This is often conflated with a PRS licence exemption. It is not. The Live Music Act removed the need for a licensing premises licence for live music — it did not exempt venues from paying PRS for the public performance of copyrighted compositions.
• Private and domestic use: Music played in a genuinely private and domestic context does not require a PRS licence. Businesses sometimes argue that playing a radio or streaming service in a workplace constitutes private use. Courts and PRS have consistently rejected this argument for commercial premises.

The radio-in-the-workplace issue

One of the most persistent areas of confusion is radio played in shops, salons, garages, and offices. PRS requires a licence for any music played publicly in a business environment, including radio broadcasts played through speakers in a commercial space. Businesses that argue they are simply receiving a public broadcast — and therefore do not owe an additional licence fee — are generally incorrect. A separate PRS licence (and a PPL licence for the sound recording) is required whenever music is played in a commercial context, regardless of the original broadcast source. Businesses that avoid this licence are receiving the benefit of songwriters' work without compensating them.

What songwriters and publishers lose when loopholes apply

When a venue falls within a genuine exemption, or when an unlicensed venue exploits a perceived loophole, the result is the same for rights holders — performance royalties that should be collected are not. PRS can only collect from venues that are licensed. The gap between the total public performance of music and the total licensed premises represents a structural shortfall in the UK royalty system. For songwriters with music in regular use in unlicensed venues — particularly smaller hospitality businesses, independent shops, and pop-up events — this shortfall can be meaningful over time. PRS enforcement teams pursue unlicensed use actively, but the gap never closes entirely.

How publishers and label services providers can help

While the legal exemptions are fixed by statute, a publishing administrator can ensure that all licensed uses of your work are correctly reported and paid. Many shortfalls in songwriter income come not from deliberate loopholes but from administrative failures — works not registered with PRS, incorrect writer/publisher splits, unregistered ISWC codes that prevent matching, or overseas performances collected by reciprocal societies that never reach the UK. Code Group Music's publishing administration service actively pursues these gaps. Start with a Catalog Assessment at codegroupmusic.co.uk/#catalog-assessment.

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