Aussie Record Labels Demand $5 p/Member Gym Tax

Also wants almost $20,000 from restaurants up from $125, as it increases fees to play background music in cafes, restaurants, gyms, and everywhere else, but some say they’ll simply switch to classical music.

The record industry seems to get more desperate by the day as music fans switch from physical media to digital, so it’s no surprise to learn that it’s trying to extort a captive audience in Australia – the businesses, large and small, that play background music for customers.

The Phonographic Performance Company of Australia, a group representing more than 750 record companies, and which is the licensing body for the “broadcast, communication or public playing of recorded music,” is demanding a huge increase in the fees businesses pay per customer for the ability to play copyrighted music. In some cases the increase will be some 2000%!

Just how much are we talking?

Mid-sized restaurant (120 seats): from $125 to $19,344 a year.

Small restaurant (50 seats): from $84 to $16,016.

Cafe (50 seats): from $62 to $10,010.

Smaller cafe (30 seats): from $124 to $5864 a year.

Gyms: Up from 96 cents a class capped at $2600 a year to $4.54 per member a month.

It claims the amount they currently pay is extremely low and doesn’t fairly compensate the record labels, but if a restaurant’s licensing tab goes from $125 to $19,344 I’ll be amazed if any of them continue to play music, and if they do it’s certain to be added to the price of a customer’s meal (maybe there ought to be a music free option, where if you wear earmuffs you don’t have to pay the fee).

“The rates we have historically charged are barely nominal and we are looking to establish a fair return,” said PPCA chief executive Stephen Peach. “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.”

Bill Healey, Director of national affairs for the Australian Hotel Association, says it’s pretty unfair for the record labels to try and save itself on the backs of businesses such as those in his industry, especially during 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,” he said. “Businesses just won’t play music or they will play music that won’t incur a PPCA fee like classical music.”

One of the more maddening proposals is the $4.54 fee it would add to the price of a gym membership. It had previously been 96.8 cents per class for all the recorded music they play, which works out at just 4.8 cents per person in a class of 20 and 2.4 cents per person in a large class of 40. It now wants $4.54 from everybody.

“For decades, the highly profitable fitness sector has been paying a paltry amount to recording artists and labels for the music that is so crucial to their businesses,” stated Peach in a PPCA press release. “Imagine people working out in a silent fitness class and you can start to appreciate the valuable contribution that sound recordings make to the fitness industry.”

It likens the surcharge to the towel fee members pay, and says music is such an important part of fitness classes that the music industry should share in fitness center revenues, getting a 14% cut based on average membership fees.

“Artists are entitled to earn a fair income from their efforts and they should not have to subsidize a profitable industry,” added PPCA board member and former drummer for the Go-Betweens, Lindy Morrison. “Where music is used to add value, as it clearly does in the fitness sector, it should be recognized and artists properly rewarded. Music should not be considered as something that should be handed over for free, or next to nothing.”

Pretty frightening right? Since when did listening to someone’s music mean it was “handed over for free?” More importantly, as somebody who works out rather frequently, it makes me pretty angry that they’d try to tack on an extra $5 bucks a month to my gym membership, especially since I wear a portable MP3 player and don’t even listen to what it’s playing on the gym soundsystem.

“The PPCA wants a levy on each member, but when you go into a gym most people are listening to an iPod,” said Fitness Australia chief Lauretta Stace.

Exactly.

It’s no wonder that people are trading music illegally online, it seems to be the only way you can get around all the fees and restrictions, and it may just make a world, at least in Australia, where everybody dons iPods while they eat, or drink coffee.

The PPCA just won a in increase in the fee it can charge nightclubs,  up 7 cents a person to $1.05, but is allowed to base the figure on venue capacity, not on the actual number of customers in the club on a given night. The same will be true of restaurants, cafes, gyms and other venues. The fee will be based on how many customers you could have, not on how many actually walk through the door.

The PPCA ought to really be ashamed of itself.

The case against fitness centers is currently being weighed by the Copyright Tribunal, and afterwards will review the cost of playing music in restaurants, cafes, and

Stay tuned.

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