Calls to review “ambiguous” One Music licensing scheme, as SMEs face hefty cost hikes

The Australasian Performing Rights Association (APRA) faces calls for its new music licensing scheme to be delayed, as an industry tussle over its ACCC authorisation wages on.

The licensing body is seeking re-approval from the ACCC to continue operating as a middle man between artists and businesses that play their music.

The ACCC proposed re-authorising APRA last month, but COSBOA boss Peter Strong has thrown a spanner in the works, calling for the ACCC to replace its proposed five-year re-authorisation with a one-year term that would also include an independent efficiency review.

Strong, a longstanding critic of Australia’s music licensing regime, has exercised his right to call a pre-decision conference later this month, in which COSBOA will put its case to the competition regulator.

If successful, APRA’s re-authorisation could be delayed and an expansion of its new licensing regime, One Music, could be put on the back burner while a review is undertaken.

APRA and the Phonographic Performance Company of Australia (PPCA) launched One Music earlier this week, bringing both bodies together under a co-branded product with new fee structures.

All businesses with existing APRA or PPCA agreements to play background music in their stores will have to switch over to the new scheme when their current contracts expire.

One Music has been billed as a solution to years of business complaints about the complexity, lack of transparency and general compliance costs associated with legacy music licensing systems.

Previously, businesses dealt with APRA and the PPCA separately, and there were lacklustre online capabilities preventing businesses from securing licences online. The new model opens up online transactions and streamlines the system under a single banner.

In a column published by The Music Network earlier this week, PPCA and ARIAs chief executive Dan Rosen described One Music as an opportunity to create a one-stop online shop for music licensing.

Not so, says Strong, calling the new venture a “disgrace”.

“They should delay the rollout,” he says.

Strong argues the new scheme is, in many ways, just as complex as the old one, and should be subject to any review APRA is made to undertake.

“No organisation should hold its head up and claim credit for this.

It’s a mess and makes no sense, it’s ambiguous,” he says.

One Music’s web of products 

A nine-page pamphlet circulated by One Music to retailers outlines three separate levels of licensing products with varying permissions and 11 further pricing tiers, depending on the size of a particular retail store.

The 33 distinct product offers are complemented by four additional cover options for businesses that want to play music in their car parks or websites, or that feature or exhibit music.

On top of this, One Music will increase fees for silver and gold customers (those that have 22 of the listed products) over the next two years, but bronze customers will only experience an at-inflation increase.

Businesses switching over from legacy schemes can expect a pinch, with One Music clarifying last year that retailers should expect an average cost increase of just over 10%.

APRA has defended the increase in the past, saying the PPCA’s pricing model had not been updated for some time. A portion of customers switching over will also experience a fee decrease, APRA has said.

Only the most expensive gold-tier option offers the ability to source music from an “online stream or music download via a personal digital music service”, although the body says online streaming platforms like Spotify could still be a terms and conditions violation.

“Even with our licence, the use of these services by you in your business may be in breach of the terms and conditions of your end user agreement with that service,” it says.

Nevertheless, there’s a sizable premium on the gold tier, which will set a retail business with a 50-metre squared store back $476 a year, plus $500 if customers can hear from the car park.

The silver tier is comparably cheaper at $136 a year, but is still subject to the $500 cost for car park rights.

One Music also charges businesses $2 per year for each full-time equivalent worker it allows to play music in the workplace via streaming services such as Spotify, even if they have earphones on.

Hold music? You’ll need cover for that too. There are 10 pricing tiers based on “caller capacity” and a further two tiers that cover single or multiple locations. Two callers and one location, the cheapest option, costs $240 a year.

There are discounts available, however. One Music says it believes in a “fair go” for businesses and will offer a “partial rights discount” if clients don’t need every aspect of their licenses.

Microscope on music licensing 

Strong wants the ACCC to force APRA to pay for an independent efficiency review into its own business and the fledgling One Music regime as a condition of its re-authorisation.

The ACCC proposed re-authorising APRA for another five years last month, albeit with conditions around improved transparency attached.

“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance,” ACCC  deputy chair Mick Keogh said last month.

“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.”

Alex Malik, former general counsel for the PPCA/ARIAs and a former senior investigator for the ACCC, is of the view the competition regulator will re-authorise APRA.

However, he says the ACCC has been “very responsive” to concerns about the body’s operation and could still attach additional conditions.

“There’s a realisation the ACCC will grant re-authorisation, but this is a one off opportunity to have an influence on the conditions,” he tells SmartCompany.

Malik says the ACCC has expressed concerns about APRA’s consultation and dispute resolution processes, as well as its governance.

But, he explains, the licensing regime affects hundreds of thousands of business owners and musicians across the country, underlining the need for a transparent consultation process.

Meanwhile,  Strong and small business ombudsman Kate Carnell have urged the regulator to go further, citing concern business owners are being taken for a ride by the licensing body.

“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 June.

SmartCompany contacted APRA for comment but did not receive a response prior to publication.

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