Cost of background music to increase

http://www.theage.com.au/national/ill-have-a-little-elvis-with-that-thanks-20090613-c6sy.html

CAFE and restaurant patrons could soon be eating in silence, after a proposal by Australia's largest record labels to increase the cost of background music by up to 2000 times.

The push to raise the cost of playing recorded music could also make gym membership more expensive unless fitness classes use artists excluded by Australian copyright laws, including Elvis Presley and Beethoven.

The bid by the Phonographic Performance Company of Australia, which represents more than 750 record companies, follows a decision by the Copyright Tribunal to approve an increase of 15 times the music costs for the nightclub industry, which was recently endorsed by the Federal Court of Australia.

The Australasian Performing Right Association, which collects licensing fees on behalf of composers and artists, has launched a separate action for a tenfold increase in the fees paid by nightclubs for recorded music.

Buoyed by the nightclub ruling, the PPCA is now targeting eateries. It wants to increase licensing fees in a 120-seat restaurant to $19,344 a year — up from $125. Small cafes would be slugged with a 4729 per cent yearly increase from $124 to $5860.

Action against fitness centres is under way and the PPCA has indicated it will review the cost of playing music in pubs, shops and hairdressing salons.

Director of national affairs for the Australian Hotel Association, Bill Healey, said the huge tariff increases were unsustainable as the hospitality industry grapples with the economic downturn.

"The multinational record companies are obviously trying to reposition the cost of music, but they don't understand the economics of the businesses they're targeting," Mr Healey said.

"Businesses just won't play music or they will play music that won't incur a PPCA fee like classical music."

He said the AHA had already had discussions with several major recording labels to provide them with exclusive rights to play music in restaurants and cafes, which could compromise the PPCA's bargaining position.

The AHA has also asked the Small Business Commission and the Australian Competition and Consumer Commission to examine the massive fee increases.

Mr Healey said illegal internet downloads were robbing the music industry of its main income source — CD sales — and the PPCA was looking for other ways to make money for record companies.

PPCA chief executive Stephen Peach said recorded music attracted patrons to venues and was significantly undervalued. "The rates we have historically charged are barely nominal and we are looking to establish a fair return. The cafe owner just has to ask if the music is worth it, and if it isn't they don't have to play it," he said.

Health-centre operators are also bracing for a sharp increase in the cost of music for exercise classes, with the Copyright Tribunal expected to make a decision next month. The PPCA has asked for an increase of 400 times the cost for music played in gyms, from 96 cents a class to $4.54 a month for every member.

Fitness Australia chief Lauretta Stace said the proposed increase would add about $5 to a monthly gym membership. "The PPCA wants a levy on each member, but when you go into a gym most people are listening to an iPod."