Copyright Law

Aussie Gyms Fight Music Tax Hike, Switch to Cover Songs

By Jared Moya

Facing a dramatic rise in performance fees, from around $1,300 to more than $19,000 annually in some cases, fitness clubs begin phasing out original music and plan to switch exclusively to cheaper cover songs by late next month, no doubt resulting in an overall loss of royalty revenue for artists that the increase had hoped to benefit.

A few days ago the Phonographic Performance Company of Australia (PPCA), a royalty collecting society, announced the country’s Copyright Tribunal had awarded it a 1500% increase in royalty collection rates for fitness centers, the new rate rising from 96.8 cents per class to $1.00 (85 cents USD) per attendee with a cap of $15 ($13 USD) per class.

The PPCA hailed the decision as an “important improvement for artists and labels whose music is widely used in fitness classes to attract and motivate participants,? and criticized the previously lower tariff for “undervaluing” the “contribution music makes to the fitness industry.?

Fitness Australia, an umbrella organization that represents thousands of fitness centers and exercise professionals throughout the country, responded with news that many of its members plan to switch to less costly music alternatives, including the use of music free of PPCA copyright fees.

In fact, one chain of fitness centers, Fitness First, says that it has already started playing cover versions of songs and plans to play covers exclusively, beginning June 1st.

?Fitness First has been using PPCA-free music in our clubs for several years, however as a precaution against a possible significant PPCA increase, we took a decision earlier this year to move to 100% PPCA-free music in our clubs from June 1st 2010,” it says in a press release.

It’s no small matter because Fitness First is the world’s largest privately owned health club group, with 1.4 million members across Europe, the U.K., Asia, Australia and the Middle East. If the PPCA had hoped to increase revenue from declining CD sales they may have, as Lauretta Stace, Fitness Australia Chief Executive Officer says, “shot themselves in the foot.”

It’s even escalating the fight by issuing a challenge to prospective and existing customers to go to one of their clubs on Saturday, May 29th and “experience PPCA-free music in group fitness classes” to “judge for themselves.”

?Our priorities are making fitness accessible to all Australians whilst maintaining the quality of our services for our members,? said Stirling Benson.

With around 68% of Australian men and 55% of women either overweight or obese, the fitness industry also thinks its ridiculous to make gym memberships more expensive.

The PPCA says that eventually they’ll be forced to switch back, that it’s research shows gym users wanted to hear original music, not cover versions, and that those gyms playing exclusively PPCA-free music will see a decline in customers.

?I am completely confident in the quality of our PPCA-free group fitness classes and welcome anyone to come and experience this for themselves,” Fitness First says in response to this argument.

Either way, the real loser in all of this is once again the artists groups like the PPCA claim to represent. With people being forced to pay a hidden music tax everytime they go to the gym, sip coffee in a cafe, eat a meal in a restaurant, or go to a nightclub, it won’t be long before people come to resent them for being overly greedy. More still, many establishments will either turn off the music or switch to PPCA-free music like Fitness First, further eroding their revenue stream.

Stay tuned.

jared@zeropaid.com

Full post as published by ZeroPaid on May 21, 2010 (boomark / email).