Australian Health Club Chain Fights 3000% Hike In Music Royalties

from the gym-members-only-exercise-for-the-free-music dept

We've seen plenty of occassions where, in an attempt to offset falling revenues from music sales, the recording industry chooses to attempt to extract royalties from 'performances' which have actually added value to the music. In yet another such situation, Australian health clubs are faced with a 3000 percent rise in their royalty rates for playing music during exercise classes from the Phonographic Performance Company of Australia (PPCA). Currently, the rate is $0.90 per class, with an annual cap of $2,654 ($0.80/$2,302 USD); the proposed increases are to $31.67 ($26.89 USD) per class with no cap, or a monthly fee of $26.08 ($22.55 USD) per member. The drastic nature of these increases has prompted one Australian fitness club chain has partnered with the International Health, Racquet and Sportsclub Association (IHRSA) to resist the changes.

The chain's president said of the action, "We have no choice. If we don't fight this, we won't have an [Australian health club] industry left to fight for." While an increase of 30 times would undoubtedly negatively impact the clubs, it seems somewhat hyperbolic to suggest the industry would disappear as a result. More interesting is IHRSA president Joe Moore's observation that the change "has serious implications for clubs in other countries" - that is to say the change, if successful, would be used to argue for similar rises in performance royalties across the world - a tactic we have already seen from bodies purporting to represent musicians.

One factor neither side is really discussing (beyond the "our industry will collapse" rhetoric) is the potential consequences of these royalties being sufficiently high to cause health clubs and similar businesses to seek out alternative sources. Their core business is not to provide licensed music for their customers, so there's no reason why they couldn't play royalty-free music instead, simultaneously lessening the control the PPCA exerts over the music business, cutting off the existing income from royalties and promoting the competitors of the artists it supposedly represents. Perhaps the health clubs might lose some business through customers disliking the change of music in their classes (although that seems unlikely), but it would at least be a more powerful way to convey their message to the PPCA than to plead complete dependence.

Filed Under: australia, health clubs, royalties