Music fee hike backfires

Updated November 7 2012 - 12:53am, first published October 11 2009 - 9:31am

A PUSH by Australian record companies to make clubs, hotels, restaurants and cafes pay tens of millions of dollars more in fees to play their music has backfired.Businesses have decided to turn off tunes licensed by the record companies and play the music of artists that are not signed to major labels.The scheme would have increased some license fees from around $500 to almost $36,000.A Clubs Australia spokesman was unable to say how many central Victorian businesses would have been slugged with the drastic cost hike.“We’re talking about every restaurant, cafe and club being affected,” the spokesman said yesterday.The fee changes would have resulted in businesses such as the Bendigo Club, which staff said yesterday had a bistro capacity of about 50, paying $3075.80 instead of the usual $62.04.Bendigo District RSL staff said their bistro had a capacity of about 120, which would have increased fees by about $8500.Clubs Australia announced at its annual general meeting a new scheme that would allow clubs to bypass the license fee charged by record companies.Clubs Australia will set up a program to source and distribute the music of artists not signed to major record labels and who are consequently exempt from the restaurant tariff.As part of the new scheme, local musicians will be given the opportunity to sell their music in clubs, while money earned from the sale of background music CDs will be used to establish a fund for talented Australian musicians.From December 1, the Phonographic Performance Company of Australia will increase the tariff required every year by all clubs, hotels, restaurants and cafes wanting to play background music.Clubs Australia chief executive officer David Costello said the PPCA was an organisation whose board members included senior executives at EMI Music, Warner Music, Sony Music Entertainment and Universal Music.“It’s well known that record labels have suffered a decline in CD sales due to illegal downloads. If this is about countering falling revenue for the big music companies, then they should be addressing music piracy,” Mr Costello said.“Expecting the club and restaurant industry to make up for lower CD sales is not only unfair but as we have seen today, certain to fail.“Two years ago the PPCA increased the fee for recorded music in nightclubs by 1400 per cent as well as announcing it is increasing the fee for music played in gyms by 5000 per cent.“The music labels are working their way through the dozens of music tariffs paid by small businesses.“It seems only a matter of time before the PPCA increases fees for music on hold, jukeboxes, conference and pool rooms, squash courts and even swimming pools.“Clubs are today drawing a line in the sand and will no longer use music licensed by the big Australian record labels that requires they pay an annual fee to the PPCA.”A PPCA spokeswoman said Clubs Australia was “perfectly entitled” to go in another direction.“The rates give artists and labels a fair and reasonable deal and were the subject of extensive consultation with the industry,” she said.

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