Music Industry

by Mike Masnick

Filed Under:
australia, gyms, royalties

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.

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  1. icon
    Henry Gray (profile), 19 May 2010 @ 9:06am

    Welcome to the club

    When I worked for a movie theater (sorry, theatre) long ago, we were only allowed to play ASCAP-licensed music before the film. Granted, this was last century before the never-ending commercials that were interrupted only to play the film.

    The chain I worked for had negotiated a deal with ASCAP, so we were allowed to play their music. All the stuff we wanted to play by BMI was verboten. Too bad.

    The reason why this was so was because people had to pay to get in, so ASCAP argued that the theater patron's experience was enhanced by the music.

    Presumably, if we didn't charge admission, we wouldn't need a license, but that is wrong too: public performance is a copyright violation. Better keep the windows to your car rolled up with your rockin' the ipod on the boulevard, bub.

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