Massively Increasing Music Licensing Fees For Clubs Down Under Massively Backfires

from the finding-non-covered-music dept

Fri, Nov 13th 2009 7:28am — Mike Masnick

We've noted the ridiculous and self-defeating efforts by many music collections societies around the world to jack up their rates by ridiculous amounts. None was more ridiculous than the attempt in Australia by the PPCA where some of the rate changes would rocket up from figures like $125/year... to $19,344/year. Well, it looks like it's already backfiring badly. Reader Dan alerts us to the news that the organization that represents night clubs and similar businesses in Australia, appropriately named Clubs Australia, has set up a system whereby the organization will specifically go out and seek music by artists not covered by the collections effort, and distribute that music to clubs and other establishments. Then, these clubs, gyms, restaurants and the like can tell the PPCA to take a hike, and still play music. We'd already seen that some clubs had started doing this on their own, but now they've teamed up to share such music with each other in order to get out from under the PPCA entirely. So, nice job PPCA. Once again, in your effort to get people to pay more for every single use, you end up making it that much more difficult for anyone to actually hear -- or care about -- the musicians you supposedly represent.

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Filed Under: australia, clubs, collection society, licensing, music
Companies: clubs australia, ppca

40 Comments

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Xyro TR1 (profile), 13 Nov 2009 @ 6:54am

Wow
I don't see how big organizations like the PPCA expect people to blindly conform to their will and accept these outrageous fees. They had to know that there was at least a possibility of it backfiring...
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Anonymous Coward, 13 Nov 2009 @ 7:38am

The PPCA's next step
The PPCA will borrow a page from the Ankh-Morpork Guild of Musicians playbook. Namely to start by breaking the fingers of non-guild members who play music. Those that persist won't do so for very long. Kind of hard to whistle when you don't have any lips, eh?
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Robert Ring (profile), 13 Nov 2009 @ 7:39am

Didn't see that coming 30 million miles away.
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Crosbie Fitch (profile), 13 Nov 2009 @ 8:01am

Jamendo
Jamendo could be a useful source of license free music.

Also see The Patron's Jukebox for my suggestion of how the future will probably play out positively for those who set their music free, compared to those who erect paywalls around it.
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Anonymous Coward, 13 Nov 2009 @ 8:14am

Re: Jamendo
It is not stated that this end-around traditional licensing organizations is based upon a "free" model.
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Headbhang (profile), 13 Nov 2009 @ 8:30am

Quite beautiful, actually.
I just love it when clearly stupid and insane money-grabs backfire so spectacularly.

What we need next is the outrage of artists about not getting played in discos due to the inanity of the measure, and their consequent mass exodus from their label.
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Headbhang (profile), 13 Nov 2009 @ 8:31am

Re: Wow
Amazing, isn't it? It looks like they are run by the most absolute of morons without a single drop of common sense.
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jenski, 13 Nov 2009 @ 8:40am

sena
I just received a similar letter from Sena, one of many music licensing collecting agency's around here in NL, and I think this is a brilliant idea for a party. "free music night" or perhaps some better title... ps. bout CC-ed music/jamendo, 'there's an app search engine for that'
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Call me Al, 13 Nov 2009 @ 8:44am

Hopefully this will gain sufficient traction that when the PPCA backdown this new body is in a strong enough position to force them to decrease costs further. Bodies such as this should be punished for their greed wherever possible.
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ikonoclasm (profile), 13 Nov 2009 @ 8:44am

This is great!
How ironic is it that the organization whose purpose is to make sure (its) artists are compensated for their work is the driving force for all those venues to seek out new musicians that they wouldn't have otherwise discovered?

I think this is a great thing. I can only imagine how diverse the selection of music in those affected Australian venues will be in the near future. The established artists that are members of the mind-bogglingly short-sited and greedy PPCA are losing listeners and those that didn't sign on with such a soulless organization are now in a prime position to pick up a ton of listeners. Brilliant job, PPCA!
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Anonymous Coward, 13 Nov 2009 @ 8:48am

Re: The PPCA's next step
Thus was born Dwarven Drum Metal. Headbanging at it's finest.
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Hephaestus (profile), 13 Nov 2009 @ 8:50am

like this wasn't expected ....
I hate to do this, I am quoting myself ...

"It causes greater losses at the record labels as people migrate to alternate sources for music (P2P, anon P2P, new artists, CC, etc). This forces the labels to seek out other new revenue streams. Its a never ending cycle until a Catastrophic failure occurs. In this case it will be caused by the labels themselves."

The labels continue pushing the limits, and in the beginning people didn't push back, Now we are seeing the beginnings of a backlash. The Pirate Party, the Canadians against the proposed copyright laws, this joining of forces to combat the PPCA. With the Aussie's joining together they have created a model and resource for others to use in other countries. The record labels actions have just caused people to realize there are alternate sources for music.

The unintended consequence of this is a question that will be asked in the restaraunts and clubs of australia, one that will strike fear into the hearts of record execs every where.....

Who is the artist?
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Headbhang (profile), 13 Nov 2009 @ 8:54am

A little math...
To illustrate just how absurd the fees are.

$19,344/365 amounts to $53 per day (with the assumption that this restaurant works every day of the week)

Now, most restaurants are not open all day and will have, what, 6 hours of real business per day? That makes almost $9 per hour, which is about the price of a (cheapish) CD, that normally lasts for about that same hour too.

So, essentially, PPCA is asking restaurants roughly the equivalent of what they would pay if every CD they played got destroyed after a single listen. Yep. Makes a lot of sense.
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Anonymous Coward, 13 Nov 2009 @ 9:11am

This will be all fine until the musicians in this group decide that they too deserve to get paid, for the PPCA2, and start charging for their service.

it's just a matter of time.
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Hulser (profile), 13 Nov 2009 @ 9:15am

Re:
No no no. You've got it all wrong. Hopefully the PPCA will see this effort as a mere nuisance and not back down at all. Then, only after it's too late and the clubs, gyms, and restaraunts have been weaned off of the labels represented by the PPCA, they'll realize their horrific blunder. In your scenario, they'd still have a dictator, albeit a benevolent one. In the omg-what-have-we-done scenario, they'd actually end up with a freer market for music.
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Free Capitalist (profile), 13 Nov 2009 @ 9:20am

Re: Re: Jamendo
It is not stated that this end-around traditional licensing organizations is based upon a "free" model.

I do not see where this can be described as an "end-around" at all. They are simply cutting out a particularly greedy collection society by choosing not to play the music they license.

They would have to somehow arrive at the same product for this to be an "end-around"... unless you're saying this collection society has the right to collect on all music everywhere... which is exactly what some of these self-righteous, navel-gazing beggars seem to think.
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Joel Coehoorn, 13 Nov 2009 @ 9:26am

Short-term win
The sad thing is that this will still end up as a short-term win for the PPCA, as every 1 Club that concedes to the new rate covers the old fee for 153 clubs that decide to drop out. That will allow the PPCA to declare a "win" to their constituents after year because it brought in more money. So even if 99% of clubs switch to non-PPCA music, the 1% left over still provides a nice revenue bump.

Long term of course, things are worse. It means more people will listen to music by non-PPCA artists, eventually becomes fans of those artists, buy more music or other items from those artists, and spend less of their money with PPCA artists. Unless, of course, all of the non-PPCA music is just that bad.
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Anonymous Coward, 13 Nov 2009 @ 9:28am

Re:
And if it's unreasonably expensive then I am sure the gyms and the restaurants will start playing music, like classical, that was created before the 1950s.

Maybe a computer program will replicate the performances of Some Dead Artist whose work is in the public domain.

You cannot collect on works from the public domain.
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Anonymous Coward, 13 Nov 2009 @ 9:29am

Re:
I think it would take a long time for them to bite the hand that feeds them, and a few generations down the road. For quite a while they will be overjoyed that people are listening to their hard to get music and will be making more than what they have with their one off singles and small gigs in their parent's basement.
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Anonymous Coward, 13 Nov 2009 @ 9:32am

If you stopped downloading music without paying for it then they wouldn't have an excuse anymore. Just saying.
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The Infamous Joe (profile), 13 Nov 2009 @ 9:45am

Re: Re: Wow
without a single drop of common sense.

Why is common sense always a liquid? Can it be concentrated? Or better yet, carbonated.

Just wondering.
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The Infamous Joe (profile), 13 Nov 2009 @ 9:51am

Re:
Oh, Hi?

I think you've trolled the wrong post. This post isn't about file sharing, it's about collection agencies. You want this one. I know, wicked embarassing, right? We all make mistakes though, so don't let it get you down.

Have a great weekend!
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Anonymous Coward, 13 Nov 2009 @ 9:52am

Re: Short-term win
Your analysis suggest that PPCA will have to learn to compete-- like every other business on the planet.
Set a high price, get fewer customers. But get more revenue per customer. No doubt someone will see if this results in increased revenue. If it does, then they'll stick with their new price. Good for them, I suppose.
If it doesn't (say only one customer willing to pay for every 1530 that doesn't), they may hit upon the idea of reducing prices to get more customers and perhaps more revenue.
Because of the high prices, the customers for their part are doing the obvious and looking at the competition. The quality of the product will come into play here...
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Anonymous Coward, 13 Nov 2009 @ 10:16am

Re:
I download music without paying for it all the time. Of course, the artists willingly give their music away online for free via various CC licenses and whatnot.

Oh who am I kidding. I stopped listening to music a long time ago thanks to the draconian way the music labels were acting. Are acting.

"Why don't you just boycott the recording industry?"

Because if you want to send a message you should throw out the baby (music industry) with the scummy bathwater (recording industry).
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Hephaestus (profile), 13 Nov 2009 @ 10:34am

Long time since I did one of these .....

281 note/entry) set up a system where music played in public can be downloaded for free.

282 note/entry) set up an area for playlists by type of music.

283 note/entry) set up a comments section for each playlist.

284 note/entry) allow moding of playlists with history of playlists.

This place gives me some really great ideas.... thanks!!!
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Hephaestus (profile), 13 Nov 2009 @ 10:36am

Re:
oops already came up with that one ....

here
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Anonymous Coward, 13 Nov 2009 @ 10:40am

Re: Re: Short-term win
The issue with this, of course, is that even if they're still making more money on licensing (due to increased rates)... Fewer people at clubs are hearing their music now. It seems like having your music play at clubs is beneficial to you, since someone might decide to purchase a CD of the artist(s) that they heard there.
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batch, 13 Nov 2009 @ 10:40am

Re:
Finally! AC, I read all these comments waiting for one of you to make some irrational and ridiculous claim to justify the price hikes, and this is the best you can come up with?
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Vic, 13 Nov 2009 @ 10:47am

Bravo Aussies!
Finally! Great job supporting independent musicians!

(Oh, and dumping PPCA at the same time, of course)
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Anonymous Coward, 13 Nov 2009 @ 10:52am

Re: Re:
Or even better! Maybe the restaurants will have each table set up with a personal music playing device that the customer can plug their mp3 palyers into and listen to their own music at an acceptable volume?

Or is that illegal too?
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Anonymous Coward, 13 Nov 2009 @ 10:53am

Re: Re:
It's 2009. It's all they have left.
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John Fenderson (profile), 13 Nov 2009 @ 11:07am

Re: Re: Re: Jamendo
"unless you're saying this collection society has the right to collect on all music everywhere... which is exactly what some of these self-righteous, navel-gazing beggars seem to think"

And this is the end that is being got around. Lots of these agencies demand payment from any business that plays music at all, even when the businesses aren't playing any of the covered music. This provides a simple way for businesses to prove in court that they aren't playing the covered music.
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Sean T Henry (profile), 13 Nov 2009 @ 11:46am

Re: Re: Re: Wow
Yes and yes. If its concentrated the person has a lot of common sense. If its carbonated the person has common sense and has a bubbly personality.
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Tony T, 13 Nov 2009 @ 12:31pm

Moo Moo Music
Looks like one smaller Aussie record label is already sticking it to the PPCA. www.moomoomusic.com
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KevinC, 13 Nov 2009 @ 1:47pm

I used to own a bar and I got harassed by the two major fee collecting entities in the US none stop.
I explained that we did not play any of their music, we had local bands playing only, and they actually had the balls to say it did not matter. They (tried) contacting us and threatening us for the entire time I owned the bar. I never gave them a cent. Jackasses.
-K
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Anonymous Coward, 13 Nov 2009 @ 3:17pm

Re: Re: Re:
If it isn't already illegal, I'm sure it will be after a few well-placed bribes (or dinners).
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Anonymous Coward, 14 Nov 2009 @ 8:15pm

Re: Re: Jamendo
He said it could help them, he did say they wore using it.
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Dink, 15 Nov 2009 @ 4:22pm

Defining Clubs
The defenition of clubs in this article is different to what you might think they are. Clubs here are social institutions that are not for profit and are run by community organisations. They are run by Sport Clubs, Returned and Services League of Australia and other local community groups. These groups get special licencing arrangements from the government allowing them to provide cheap alcohol and poker machines. These clubs normally provide a restaurant/bistro/steakhouse, a bar, bingo, poker machines and other local community services.

They are not talking about night clubs.
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Anonymous Coward, 15 Nov 2009 @ 6:04pm

I suspect the PPCA will now file for anti-competitive behavior because the clubs are deliberately and specifically colluding to exclude the musicians they represent.
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Eldakka (profile), 15 Nov 2009 @ 6:36pm

Re:
But then as part of the agreement to play that bands music, wouldn't you (as the venue) put it into some sort of contractual arrangement that gives you the right to play that bands music (in the specified venue) for an extended time? i.e. many years. Therefore if you have a pre-existing contract that allowed you that artists music for 10 years, then it doesn't matter if that artist joins some organisation like the PPCA 2 years later. And hopefully as the venue operator you'd always be on the lookout for new such artists/agreements, so that once the 10 year license is up you should already have lined up (if not already started using and been gradually reducing artist 1's playtime) a replacement set of music.
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