The Australian licensed clubs industry has responded to the move by record companies to significantly increase fees to clubs, hotels, restaurants and cafes for playing recorded music with the announcement that it plans to set up a new scheme to bypass the major record labels.
Clubs Australia is setting 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.
Clubs Australia said that under their new pricing scheme, some venues’ license fees will increase by more than 6,000 per cent.
It said 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 per cent as well as announcing it is increasing the fee for music played in gyms by 5,000 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.
“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.