Music fees: New structure released for cafes and restaurants amid cost concerns

Australia’s two big music licensors have released a new set of fee structures ahead of the planned launch of combined platform One Music next year.

An updated music licensing scheme for dining establishments, including restaurants, cafes and takeaway shops was published on Thursday afternoon by the Australasian Performing Right Association and the Australasian Mechanical Copyright Owners Society (APRA AMCOS) and the Phonographic Performance Company of Australia (PPCA).

It follows the release of proposed fees for retailers last month and is slated to be the final stage of consultation before new fees are locked in.

Amid industry concern over fee increases for many retail businesses and the capacity of SMEs to switch over their existing licensing arrangements, the licensors have reduced maximum annual fees from their first proposal.

But concern remains businesses switching over to the new licensing regime next year will cop a cost increase under the tiered system, which separates businesses by venue capacity.

Slated to launch mid-way through next year, One Music has billed itself as a “one-stop shop” for music licensing which will replace what’s currently on offer via APRA AMCOS and the PPCA.

Businesses using music for commercial purposes were already required to obtain licenses under the Copyright Act, but the combined platform has promised to bring an end to years of complaints about system complexity.

Currently, most businesses need to have licenses for music they play for commercial purposes with both APRA AMCOS and PPCA (who license out work on behalf of copyright owners) whereas One Music would streamline those obligations to one platform.

Under the restaurant fee scheme released yesterday, fees vary based on liquor licensing, seating capacity and whether music is live, streamed or played from a CD.

One Music has released an online calculator to help businesses navigate the proposed structure.

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.

This includes a $400 fee for “copying music”, which applies to streamed or downloaded music.

Under a current APRA AMCOS license, businesses are charged $288.13 annually for background music, while the PPCA charges a liquor licensed business $0.1882 per seat each day if an average main meal cost is between $15 and $25.

A PPCA licensee operating under those conditions with 25 seats currently pays $4.705 a day, or $1,717 for 365 operating days.

Fees vary depending on individual business conditions, but One Music said in its consultation paper the new structure would, on average, be cheaper for businesses.

However, Juliana Payne, chief executive of the Restaurant and Catering Industry Association, says she remains concerned many of her members, 90% of whom are small businesses, will be unable to pay the new fees.

“Our small business members are on about a 2% profit margin at the moment on average, they’re not awash with funds,” she tells SmartCompany.

Lynne Small, head of licensing at PPCA, says the new scheme will eliminate the need for businesses to go to two separate providers, saving time and money.

“One Music will simplify licensing and make it more accessible, particularly for small business,” she tells SmartCompany.

Small says those comparing the new fee structures to the old ones should remember One Music is a combined platform, making an “apples to apples” comparison difficult.

“[There are] modest savings for dining,” she says.

Earlier this month Council of Small Businesses of Australia (COSBOA) chief executive Peter Strong raised a series of his own concerns with One Music’s proposed fee structure for retail businesses, after it came to light many traders will suffer a cost increase.

Retail and service provider 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.

Many retailers and service providers, including restaurants and cafes with a capacity of six or less, can expect an average fee increase of just over 10% under the current proposal, although it is estimated one in 10 businesses will save money.

One Music has argued the fee increase was necessary, because PPCA has not re-evaluated its retail fees for some time to bring them up to market.

Other fee structures, including those for nightclubs and hotels, were released on Thursday, while there are a myriad of other ongoing consultations for fee changes under the new system.

Small explains One Music is trying to balance a desire for simplicity with making the licensing scheme fit for purpose.

“There’s tension between making licenses extremely accurate against simplicity,” she says.

“We’ve been looking at finding that sweet spot over the last 12 months to keep everyone happy.”

One Music is working to make the transition process from APRA and PPCA licenses over to the new regime as easy as possible for SMEs.

More than 100,000 license holders need to be moved over to new agreements, which will require signing additional paperwork, but APRA has been working with the PPCA in recent months to align license renewal dates, in the hope it can all be done at once.

An online system is also being built so new licenses can be paid for through an e-commerce portal.

Fee structures will be finalised over the next few months, with an indicative launch date of July 1, 2019.