Playing Music In A Nightclub Just Got Ridiculously More Expensive In Australia

from the and-that's-just-the-start dept

We’ve pointed out in the past how ridiculous it is to have “collections societies” for music, which basically act as big bureaucracies for taxing any kind of music usage. These societies — both the for-profit and non-profit ones — have pretty much one goal and one goal only: to increase how much money they get. So when you hear about new schemes, like Choruss, to set up a new such collection society, you know it’s just a blatant money grab, rather than allowing for real business models to be developed. We’ve seen this all over the world, with SoundExchange in the US sitting on millions of dollars it collected, PRS in the UK trying to charge a stable for horses listening to the radio or calling up small businesses and threatening them if they hear music in the background.

The latest — sent in by a bunch of you — is that the various collections societies in Australia are looking for massive increases in what they can collect. Apparently, the Phonographic Performance Company of Australia is gleeful after the Australian Copyright Tribunal allowed somewhat insane increases to yearly fees. The new fees will almost certainly put some nightclubs out of business while making sure some restaurants no longer play any music at all:

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.

Just look at those numbers for a second. And then try not to laugh as the PPCA defends the numbers by claiming “we are looking to establish a fair return.”

Meanwhile, that may not be all. Thanks to this ruling, the Australasian Performing Right Association, which collects a separate fee for composers and artists, is asking for its own massive increase in fees.

All this really does is highlight another ridiculous aspect to collections societies: their rates aren’t set by the market or any effort to become more efficient/offer a better product. Instead, the rates are set by various copyright boards, courts or tribunals who get pushed heavily by industry interests for such increases. Even so, while we’ve seen crazy numbers from around the world, I’ve never seen percentage increases like those being discussed in Australia. It’s as if the collections societies there don’t want anyone ever playing music again.

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Comments on “Playing Music In A Nightclub Just Got Ridiculously More Expensive In Australia”

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56 Comments
Anonymous Coward says:

If an artist wants his music to be played at some restaurant or online (ie: via a radio station or youtube or file sharing software or whatever) without having some unnecessary third party profit from this then he should have that right. Artists shouldn’t be forced to fund unnecessary third parties with their work if they so choose not to. If the artist wants to then he is free to have the third party collect taxes (though I highly doubt that the party will actually send money to the artist, at least not the way it’s setup now though I have come up with a potential solution in another thread).

Josh says:

Re: They do

I’m pretty sure they do in Australia. If you ask any collection groups they will tel you otherwise, but they are not being entirely truthful. APRA is especially bad at pretending you have to pay fees to them no matter what, but strictly legally speaking that is not entirely true, I think. As long as APRA is not representing the copyright holder of whatever you are playing, you don’t really need to pay them, but they will happily collect anyway. Unless you wrote, performed and recorded everything yourself though, good luck finding out if APRA is representing them or not.

Sean says:

Re: Numbers

It is not to bad when you do the math assuming the diner is open 24×7 with music playing at all times (no commercials)

$19344/(365x24x60x60)=$0.006129 per second
or
$0.36774 per minute
or if the music was fit on an 80 min CD and the disk is free it would cost
$29.4192 per 80min CD

See is could be worse they could have forced everyone to pay for a right to listen and charged a fee to the diner.

lsdigit says:

Re: Re: Numbers

eh’ perhaps the buisness model is all wrong, the tax should be on each and every ear that is capable of ‘*hearing’ and levied directly on the government to pass on to the end consumer in a method much like car registration or dog registration. save the club and club the people.

*no doubt some sub governmental beuracrat will have the uneviable job of creating a suitable classification for the definition of hearing, which will no doubt be passed on to a further sub panel for validation.

BullJustin (profile) says:

What a great opportunity for local artists

Now they have a reason to walk into a cafe and say, “Here’s my CD. Play it as much as you want.” and expect the owners to be agreeable. This should also bolster the local live music scenes, since these clubs won’t have to pay extra for that either. Who knows, the next music wave may come out of Australia, all while those collections agencies and record labels continue to see their profits evaporate.

Anonymous Coward says:

Re: What a great opportunity for local artists

I don’t think it matters. If you play ANY music at all you have to pay the Association. Even if it’s your music, you would have to play them, and they would then distribute the money back to you…if they can find you…which they won’t be able to do…or even attempt.

ram says:

Re: Re: Societies can only collect for members works

There is no ‘universal rights’ society in Australia. Artists must have signed over their rights to the collection society. Most artists have not, so the portfolios of the various music royality collection societies is quite sparse.

I hope they continue to raise their fees. It creates much more business for the independent artists and record companies who retain the rights to their own portfolios.

Whisk33 says:

Re: Re: What a great opportunity for local artists

If big record company’s music cost $19,000 to play…
Indie music costs $10.00 to play
Then more people will be listening to Indie music and more music and unquie music will have a large audience and therefore more exposure. This will allow said “wave” to come and hence opportunity. (note: this is bad if you are already signed on a label…

Hugh says:

If this keeps up all it will do is drive people into not listening to music. Once every public place in the world quits playing music for Year or more these collection societies will just go away.

Or maybe it will be a comeback for live music, I dont see them trying to tax the bands if they play their own music, maybe this will bring about the return of the big bands so you can get different styles of music instead of just one type of music being played.

Josh says:

Re: Re:

Actually, “taxing” the live bands is one thing they ARE trying to do, but by charging the venues.
The way APRA’s licensing works means a venue would have to not play any music that is being represented by APRA. Ever. At all. That’s actually quite a hard ask. Essentially means no cover bands and nothing that lots of people already know and love. Not what people want for the most part (unfortunately.)

jme (user link) says:

As a supplement/replacement to canned music

for cafes, restaurants and the like, maybe it’s time to get busy on a generative music system that can be sold as a durable good rather than artistic work. No licensing, no fees except for maybe software updates.

It could be that the minor problem of developing a sufficiently powerful A.I. to drive the thing is closer than a proliferation of equitable royalty frameworks. 😉

The amusement of a Turing Test for DJs would be, I suppose, offset by genre-infraction wars.

theskyrider (profile) says:

Sigh

@7

Do you even smell the crap you are shoveling? These increases make it so even fewer of the paying customers that the labels are looking for will hear the music they are trying to sell.

Couple that with the Music Industry’s attempts to get radio stations to pay more money to the ‘artists’ and even fewer people will hear the music.

Congrats actually go to the Industry for plugging more ears with their greed – torrents have nothing to do with it.

sambo (profile) says:

it all stinks

I have been watching this since it was announced some time ago. While you could say that there may be some limited scope for local artists, the continous nature of DJ mixing and the need to constantly play new music – which this rise targets means that it will practically kill this off in most venues. How is that going to help the music industry?

This raise was fought for with the aid of some aging (and wealthy) rock-stars who were claiming the same old ‘poor old musician’ theme often mentioned on Techdirt.

Apart from the fact that most of the music that is played comes from small indepedent EU & US and local labels so they have NO right to claim these funds, it’s on their website that they keep 90% of fees that belong to overseas artists – pretty much all of it. As per their counterparts elsewhere in the world, they just pressure venues to pay no matter what and the burden of proof is back on the venue if they claim that they don’t play music that is not licensed by them. Their basic argument ‘We have so many labels it’s not possible for us to be able to check them all so you must be playing some of our music’

The most troubling part of the ruling is that venues now have to pay a license fee for every night they are open of about $1 per approved license capacity regardless of actual. So basically a venue that has a capacity of 1000 people must now pay $1000 per night they want to open, even if there are only 5 people in the actual club.

The non-commercial nature of many dance music styles means that most if not all is relased on the independent labels. The 4 big labels have done little or nothiing to support the house and techno scenes over the years .The digital nature of both the production and now almost exlcusively digital distribution of electronic music now allows many artists to create their own ‘record’ labels.

This is most insensible and disgraceful money grab by an ‘not for profit’institution (whose 4 major shareholders are the big 4 music labels) which really is just an attempt to extort money from dance music venues.

Production is a natural step for many DJ’s. People who play the music constantly often have many good ideas. No DJ’s = less producers.

How is that going to help anybody?

Anonymous Coward says:

Re: it all stinks

“Production is a natural step for many DJ’s. People who play the music constantly often have many good ideas. No DJ’s = less producers.”

Yeah, most of what comes from DJs is let’s take this sample here and get a girl to sing “oh yeah sexy baby do me baby ” over it and we will call it original.

“So basically a venue that has a capacity of 1000 people must now pay $1000 per night they want to open, even if there are only 5 people in the actual club.”

If you have a 1000 limit venue with 5 people in it a night, you have bigger problems than a licensee fee.

sambo (profile) says:

Re: Re: it all stinks

I see you point about capacity but all this does it just eat into what little profits that are available for the venes which means if they stay open they have to employ less staff. Not being able to hire dj’s will give less people a reason to attend a particualr nightclub.

Think about this then. the above mentioned venue can hire a DJ/producer who play nothing but their own music all night. They have to pay the artist, all their staff and then another $1000 to PPCA. Bar staff get paid on average between $17-20 AUD per hour.

There goes 3 staff.

How is that fair?

Anonymous Coward says:

Re: Re: Re: it all stinks

tee-hee. Let me fire up my copy of reason and bang out some “dance music”. Generic crap that has the shelf life of a donut – about 3 hours. Yup, I have heard too much dance music, and I know how little is actually in it.

generic beat, generic drums, generic samples, “oh baby”, trance-style keyboards, call me in the morning.

sambo (profile) says:

Re: Re: Re:4 it all stinks

Yes once again anonymous coward is correct. Any idiot can string a few samples together and make crap. It’s not that hard nor is it creative.

Seemes to work pretty well for all those hip-hop & R&B producers who make a bucket.

Not really all that different to 1 bass, 1 electric guitar, 1 drums, 1 singer, a few basic chords then verse chours verse chorus verse chorus chorus….

If you want to hear how wrong you are just go to beatport.com. All this is legit and legal. Sure theres some boring stuff in here but to claim that it’s all the same, just a few mixed samples and not creative?

slackr (profile) says:

Wait for it...

Some enterprising person could simply find legitimate free content that wasn’t covered by the PPCA. Offer pre-searched, screened and categorised music for cafes and restaurants for a minimal administration fee? Beats a $20k bill.

Regardless of how they get around it, I’m sure there will be opportunities for enterprising folks to help business owners avoid having to fork out this ridiculous price increase.

Anonymous Coward says:

Actually the two non-profit PROs in the US have the main goal of decreasing operation costs. While it might be easy to say if they collect more royalties it will obviously decrease operation costs that is not true, because BMI and ASCAP are terribly inefficient at issuing the royalties.

ASTRA is a government run entity. My guess is that as the technology has changed their capabilities have not and distributing the royalties has become increasingly difficult and costly for them. They are the government what do you expect.

muso says:

ppca is a joke

Maybe this is a good thing, but listen why I think that.

Musicians who are trying to put their names out there will be able to make deals with restaurants, radios and night clubs to play their music and so they will become popular or at least make some money.

Also we won’t have to listen to the crap top 40 “produced by morons who can’t actually play music” any more.

Let them charge money for their crap music, maybe then we will actually hear good music played in night clubs and restaurants…

Oh the thing about DJ’s -> DJ’s are a joke “most of them anyway”, any moron with a computer can create samples or should I say cut and paste rhythms and sounds together.

We should talk about real musicians who practice and take years to learn how to play music properly and not a few dudes who mix music together cause thats a joke.

Tek'a R (profile) says:

Re: ppca is a joke

>Musicians who are trying to put their names out there will be able to make deals with restaurants, radios and >night clubs to play their music and so they will become popular or at least make some money.

The problem with this idea is the Mandatory licensing issues. Basically, these collections agencies (thugs) have bought and paid for enough laws to give them the “rights” to compel membership.

“This is your music? You have to pay us anyhow, And pay another membership fee. We will decide how much you should receive back and send you a check.. if we can find you. And if (when) we give up trying to find you, we will keep all of the money, forever”

Anonymous Coward says:

Seems like a Baloon Trial...

Wouldn’t it be weird if all the nightclubs limited themselves to a mix of Creative Commons, Public Domain and music available under Promotional License?

It seems easier to obtain CC and Public Domain Licensing. Promotional Licensing is tougher to maintain and track– For example, a pub owner needs to qualify an entire playlist and ensure that Promotional license actually applies on a day-by-day basis.

This is really, really stupid and only adds overhead to an already cutthroat business, and will only anger patrons when they find out their own Government sold their pub out.

Don’t mess with angry pub patrons. When they find out who is responsible, you best pack your bags as you’re not getting re-elected.

Anonymous Coward says:

Politicians like to stir the angry pub crowd? Bees nest if you ask me.

It seems like a balloon trial. But wouldn’t it be weird if all the nightclubs limited themselves to a mix of Creative Commons, Public Domain and music available under Promotional License?

It seems easier to obtain CC and Public Domain Licensing. Promotional Licensing is tougher to maintain and track– For example, a pub owner needs to qualify an entire playlist and ensure that Promotional license actually applies on a day-by-day basis.

This is really, really stupid and only adds overhead to an already cutthroat business, and will only anger patrons when they find out their own Government sold their pub out.

Don’t mess with angry pub patrons. When they find out who is responsible, you best pack your bags as you’re not getting re-elected.

Lauretta says:

Fitness industry is also getting slugged by collecting societies

The fitness industry in Australia is currently fighting the local Collecting Society (PPCA) in the Copyright Tribunal after their proposal to massively increase the fees for use of recorded music in fitness classes by over 4,000% in some cases! At the moment, the fee is paid on a per fitness class basis. Now the PPCA wants all members of the gym to pay, even if they don’t attend classes! Over 70% of gym members don’t actually attend fitness classes. They go to exercise and use the equipment and usually listen to their own music via an iPOD. One locally operated gym in Sydney has calculated that this will increase its costs of doing business by over $150,000 per year. Who can afford that? This will just force the fitness industry to find more reasonable and affordable music alternatives, which is what we are doing. We are also fighting this all the way in the Tribunal.

Ty (user link) says:

Music companies are losing!

The big music companies are losing the battle against pirates. Getting things approved by the odd judge here and there won’t change the situation – music companies are going to the wall. In ten years there will hardly be any recording companies left. Restaurants can still pipe music feom radio stations to their customers for free. If they have bought CDs whether personally or through the business they can play them as many times as they like for free.

Or they can get one of their employees to bring a radio to work with them and play it. They can’t prosecute them for doing that. Can you imagine music companies even attempting to confiscate personal property – they would be arrested on the spot.

Sammie Houston (profile) says:

Watunes, The New Music Industry!

WaTunes is a social media distribution service that enables artists, groups, and record labels to sell music, music videos, and audiobooks through leading online entertainment retailers, including iTunes,ShockHound, and eMusic. Artists and labels can sell unlimited music and earn 100% of their profits – ALL FOR FREE!

soko says:

play radio

I have a restaurant and when the ppca will send me a bill for $5000, that’s what I calculated, I will stop plying CDs and switch to a nice internet radio station. No ppca licence needed for radio!
NO cafe or restaurant will pay these $$, they will lose the whole industry of previously loyal, paying customers.
For nightclubs etc I don’t know, though. Music is essential to their business model, however, they can’t afford those fees either. Maybe that is the chance for live music again!
I hope so.

Anonymous Coward says:

What is interesting is that the underlying story:

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

is very short on attribution as to where they got these fees lists from. They aren’t showing if these items are extreme cases (rare) or generalized, they don’t link to the PPCA website, they don’t show a press release or fee schedule link or anything else like that. It almost reads like opinion, with little or no attribution on the cost numbers.

Is it ALL 120 seat restaurants, or only a specific one that happens to charge near $200 a plate for dinner, example? There is no way to tell from the article at all.

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