Clubs take Record Label Music off the Menu

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.

Explaining the change, Clubs WA Executive Director, Peter Seaman stated that "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 a new scheme that will allow clubs to bypass the license fee charged by record companies by 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.

From 1st December, the Phonographic Performance Company of Australia (PPCA) had planned to increase the tariff required every year by all clubs, hotels, restaurants and cafes wanting to play background music. Under their new pricing scheme, Clubs Australia had feared license fees for some venues would increase by more than 6,000%.

Clubs Australia had highlighted that under the new PPCA system, clubs, hotels, restaurants and cafes that had previously paid between $100 and $200 annually to play background music in their dining area would have had to pay an annual fee of up to $10,000.

Clubs Australia Chief Executive 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, stating "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 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."

Image: Clubs Australia

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