Big record labels sue gyms and win big

Gyms that play copyrighted music in Australia are up for a big hike in their licensing fees. Image: Chicagonow.com

Today marks another victory in the inexorable legal campaign for more licensing fee revenue by big Australian record labels, led by their industry body, the PPCA.

As Bellinda Kontminas in The Age reports today, the Copyright Tribunal has ruled that gyms must now pay significantly greater royalty fees to labels for the right to play copyrighted music to exercising gym-goers:

The decision, handed down today by the Copyright Tribunal, means that fitness centres will be slugged $15 each class for the use of the music or $1 per attendee of each class.
Gyms had previously been charged 96.8 cents a class, with a cap of $2654 a year.
Fitness Australia said it was “disappointed” with the decision which it said represented a 1500 per cent increase in music costs for an average-size fitness centre.
Chief executive Loretta Stace said it was now reviewing the decision to determine whether there were grounds for appeal.
She said record companies had “shot themselves in the foot” as many fitness centres were already starting to use music that was not subject to PPCA copyright.
Susan Kingsmill, owner of Hiscoes Fitness Centre, said music artists would would now be disadvantaged.
“This decision will lead all fitness centres to seek more affordable music alternatives to the detriment of Australian performing artists, but the artists only have the record companies to blame for this.”

For those of you not aware of the background of this case, it stems from a similar suit brought by the PPCA three years ago against the nightclub industry, in which the big labels similarly won a massive royalty hike. I covered that decision, and the opaque governance structure of the PPCA, in an in-depth article for Arts Hub in 2007.  Representing around 75% of the recorded music industry by sales, the PPCA is effect a legalized cartel (like APRA, it even has a special dispensation from the Australian Competition and Consumer Commission in order to operate as a monopolistic collection agency).

The decision is something of a win for the big labels, who have run into serious troubles in the past decade owing to high debt loads, falling CD sales, rampant downloading and an industry shift towards touring and merchandise.  It’s also another example of the increasingly skewed nature of copyright law in Australia, which is now titled decisively towards copyright holders, like famous artists and big publishers, and away from rights-users, like libraries, schools and gyms.

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3 thoughts on “Big record labels sue gyms and win big

  1. OK … but isn’t the Copyright Act also protecting not so famous artists? The real issue is not the Act, but the contracts between artists and publishers.

    Time for some smart ‘not so famous’ musicians to produce material sepecifically for the gym market at rates that undercut PPCA? Forget the dance floor, what about spin class driven ‘hits’?

  2. Thanks for this post – first I’ve heard of the PPCA.

    In your previous article – did nightclubs actually end up complying to this highway robbery ? … or does the $5mill that PPCA makes once paying for directors salaries and perks little is left to cover compliance :-0

    as for Lindy Morrison … a Go-Between for whom ! seriously dissillusioned.

    With rent, licence fees, OH&S compliance etc and now PPCA … how the hell is it possible for a music venue to survive in this era..

  3. Zippy, to my knowledge the nightclubs are complying with the ruling. I know of no civil action where the PPCA has sued nightclubs for not paying their royalties, but the agency does have ahistory of being pretty aggressive on pursuing venues, indeed even cafes.

    Peter, I think it is time for reform of the Act, particularly the provisions relating to the collection agencies. Having said that, there is no doubt that there is now a considerable opportunity for artists to sell or license their music to gyms specifically for this purpose. I wonder if it will perhaps ultimately lead to less royalties being paid …

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