Australian Gyms Dumping Pop Music After Massive Increase In Royalty Rates

from the backfiring... dept

Last year, we wrote about an effort by the Australian performance collection society, the Phonographic Performance Company of Australia (PPCA) to massively boost royalty rates played by gyms, who often use music in exercise classes. This followed a similar effort with massively boosting rates at clubs and bars, which led those clubs and bars to stop playing covered music. It looks like the same thing is happening in gyms as well. Reader Shadzzy sends over news that the Australian Copyright Tribunal (who knows what they were thinking) has approved the massive boost in royalty rates. Where gyms used to have to pay $0.968 per class, they now have to pay $1 per participant per class. That's a massive increase, and makes it impossible for many gyms to pay those royalty rates.

What it means, of course, is that the music is being played less. The gyms are looking for alternatives, because it simply doesn't make sense to pay tens of thousands of dollars to promote music to its members. PPCA is, of course, in denial. It's claiming that people are complaining about gyms not playing popular music, and that fitness centers who won't play popular music at such extortionate rates are treating its members "with utter contempt."
"We've seen a groundswell of discontent from gym members and fitness instructors who've been ordered to use cover music."
I would imagine that those members would find having to get a massive increase in their membership bill creates a much bigger "groundswell of discontent," and would find that it's actually PPCA that's treating everyone with "utter contempt," by making the situation worse for everyone. The musicians PPCA "represents," now get their music played significantly less. Gyms have to offer a "worse" overall service, and members get a somewhat worse experience. The problem is that PPCA (and the Copyright Tribunal's) view of what is a reasonable royalty rate is simply out of line with reality. But since the entertainment industry has been able to set up this system where the government sets the price, and the industry influences those setting the price, then it gets to set rates that have no connection to reality.

Filed Under: australia, gyms, royalties

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  1. identicon
    Ryan, 18 May 2010 @ 11:42am

    Re: Re: Free Market

    They do it this way because it is overly inconvient for the individual running the class to find the rights holder for each song they want to play and negotiate terms with them.

    Which is why the whole royalty-per-play thing is phenomenally stupid. But if this system of dictating to gyms how much they will pay for goods is allegedly for their own benefit, I'm sure they wish the government would stop being so good to them.

    It is also overly inconvient for the rights holder to determine if individuals running the classes might be using their music without such an agreement.

    How exactly does the government setting rates instead of a contract between two parties have anything whatsoever to do with determining whether music is being played somewhere or not? And why should that make any difference to anybody anyway?

    Let's apply this scenario to something else...say, chairs. The government sets a rate everybody has to pay to sit in a chair...say, $10. Now anybody can go to a store and buy a chair, but the Chair Company of Australia (CCA) is going around ensuring that anytime somebody sits in that chair, the rights holder is paid the $10 he/she is owed. Oops, can't reach your water bottle from the chair? If your butt lifts off the seat, that's another $10 when you go back down!

    Unlike you, I find that rather retarded.

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