14 Oct 2009
A push by Australian record companies to make clubs, hotels, restaurants and cafes pay tens of millions of dollars more in fees charged to play music has backfired with clubs deciding to turn off music licensed by the major record labels.
Clubs WA Executive Director, Peter Seaman said "Clubs in Western Australia, like fellow clubs from around Australia have determined that paying big dollars for the convenience of PPCA and its commercial vested interests will not be their best option for background music going forward".
Clubs Australia has announced at their annual general meeting a new scheme that will 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.
The Phonographic Performance Company of Australia (PPCA) will from December be increasing the tariff required every year by all clubs, hotels, restaurants and cafes wanting to play background music. Under their new pricing scheme, some venues’ license fees will increase by more than 6,000%.
Most clubs, hotels, restaurants and cafes currently pay between $100 and $200 annually to play background music in their dining area. Under the new PPCA system venues could have to pay an annual fee of up to $10,000. Clubs with two restaurants and a café will suffer a bill of $30,000 just so they can play legally purchased music in the background.
CEO of Clubs Australia David Costello said that the PPCA has no one to blame but themselves for the millions of dollars in fees they will now miss out on.
“The PPCA is an organisation whose board members include 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. 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 1,400% as well as announcing it is increasing the fee for music played in gyms by 5,000%.
“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.
“Clubs have well established relationships with local, unsigned artists who regularly perform acoustically in clubs. I expect many of these musicians will jump at the chance to be paid to have their music played in club restaurants and cafes,” David Costello said.
Media: Jeremy Bath 0419 267 789
Examples of how much clubs are currently paying to play music in the background of restaurants and cafés as well as how much they are expected to pay under the new PPCA fee.*
* all fees listed below are per annum
Forestville RSL (NSW) restaurant capacity 150
Old fee: $124.19
New fee: $9,227.40
Foster Golf Club (VIC) restaurant capacity 150
Old fee: $124.19
New fee: $9,227.40
Tewantin Noosa RSL (QLD) restaurant capacity 150
Old fee: $124.19
New fee: $9,227.40
Canterbury Leagues Club (NSW) restaurants with combined capacity of 500
Old fee: $498
New fee: $35,987.82
Condobolin RSL (NSW) restaurant capacity of 50
Old fee: $62.04
New fee: $3,075.80
Maclean Bowling Club (NSW) restaurant capacity 150
Old fee: $124.19
New fee: $9,227.40