Music in stores: ACCC demands music licensing reform as complexity complaints pile up

Music licensing body the Australasian Performing Right Association (APRA) is facing calls from the competition regulator for improved transparency after concerns were raised about its dealings with small business.

The body, which negotiates music licensing deals with businesses on behalf of songwriters and publishers, is likely to be authorised by the competition regulator for another five years.

There won’t be any rubber stamping though; the Australian Competition and Consumer Commission (ACCC) says it has heard concern from industry bodies such as Council of Small Business Organisation Australia (COSBOA) and small business ombudsman Kate Carnell about Australia’s music licensing regime.

Criticisms centre around the price of music licensing for small businesses and the complexity of APRA’s operating model, which designates fees based on a myriad of factors, such as venue size, business category and patron numbers.

For example, under the current system, licence fees range from about $80 annually for music playing on one device in a 150 sqm store to over $2000 annually for half a dozen devices set out in a larger 2000 sqm store.

In response, the ACCC has proposed several changes to APRA’s operating model, including forcing it to reveal how it calculates licensing fees and requiring it to publish a plain English guide detailing its operational model.

“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance,” Keogh said in a statement circulated on Wednesday.

“However, APRA already has a near-monopoly, and the exclusivity provisions it has with artists makes its position even stronger. This raises a risk of higher prices for businesses that play music and other inefficiencies or restrictions for APRA members.”

ACCC must “go further”

Carnell said she’s encouraged by the ACCC’s proposal but believes the requirements need to “go further”.

“APRA must also be required to disclose in detail exactly what licence fees cover, for example, artists on streaming services are not necessarily covered by APRA’s licence,” Carnell said in a statement circulated on Thursday.

“In our follow-up submission to the ACCC, we will again raise the need for comprehensive community radio coverage, so that emerging Australian artists whose airplay is mostly through alternative channels such as community radio, internet radio and other broadcasters, are paid the royalties they are entitled to.”

Carnell says she’d also like to see APRA ensure its license fees are “tailored for actual use” rather than the capacity of a specific venue.

COSBOA boss Peter Strong says the proposed changes are “excellent” but “fail to address the real issue”.

“APRA cannot be trusted to implement these proposals in good faith,” he tells SmartCompany.

“They have been told previously to provide information in plain English and to be transparent in their dealings.”

Strong would like to see the ACCC approve APRA’s licence on a year-to-year basis.

“[APRA] must only be given a licence for one year and told to prove to industry, to the music industry in particular, that they have actually changed, that they are truly transparent and in touch with their members,” he says.

One Music launch looms

The proposed changes come at a disruptive time for APRA, which together with the Phonographic Performance Company of Australia (PPCA) is preparing to launch a new platform called One Music, designed to improve the licensing process.

Launching in the coming months, One Music has spruiked itself as a “one-stop shop” for music licensing and is slated to replace what’s currently on offer via APRA and the PPCA — effectively turning two platforms into one.

Businesses using music for commercial purposes already needed to obtain licences under the Copyright Act, but the combined platform has been designed to end years of complaints about system complexity.

Under the new One Music system, a liquor-licensed business with a seating capacity of 25 will be required to pay $4.11 each day for streamed background music, or $1500 each year for 365 days of operation.

An APRA spokesperson said the body welcomes the ACCC’s draft determination and sees the re-authorisation process as a “valuable exercise in corporate governance”.

“We’re obviously still considering the detail of those proposed conditions and will respond,” the spokesperson said.

“APRA is always very willing to work with the ACCC to address concerns.”

NOW READ: You can’t stop the music: How sounds in retail stores divide shoppers

NOW READ: Music retailer Allans Billy Hyde collapses, with administrators blaming a “tough retail market”