Record Label Lobby Targets Restaurant Background Music

Record label body, the Phonographic Performance Company of Australia (PPCA) has launched legal action against restaurants and other businesses that fail to pay proper licensing fees for the background music played in their establishments, infuriating many small business owners.

On Friday, the lobby began Federal Court proceedings against Melbourne restaurant The Greek Deli and Taverna, alleging the eatery had failed to pay $12,795 in licence fees over more than four years, seeking a settlement of $60,000 from the restaurant’s owner, James Pothitos.

The PPCA’s lawyers warn that Mr Pothitos could face damages of $200,000 if the dispute goes to court. Mr Pothitos was reached for comment by The Age, but refused to speak while the case involving his South Yarra restaurant was still before court.

The PPCA’s actions has many business owners shifting to music exempt from Australian copyright, such as music by US artists and most classical music, with Restaurant and Catering Australia chief executive John Hart labeling the cost of recorded music in Australia, “totally ridiculous.”

“The reality is that the PPCA licence catalogue is not that large and a lot of our members are looking at other options. The fees they impose on us are just insane and I doubt whether they represent value in terms of a commercial return,” said Mr Hart.

As The Age reports, PPCA chief executive Dan Rosen stressed the importance of protecting the rights of artists and musicians, saying:

“PPCA’s preference is to establish a licence with a business well and truly before it reaches court…those doing the right thing expect there will be some action taken when competitors attempt to gain an unfair advantage by obtaining a business input without incurring the appropriate costs.”

In August, the Federal Court ruled against Collingwood restaurant The Cavallero, ordering it to pay $2000 in overdue licence fees and close to $70,000 in damages, with a PPCA spokesman confirming damages awarded against nightclubs and fitness centres in the last two years.

UPDATE: The PPCA today defended their actions, with Mr Rosen telling his organisation feels music “adds significant value to a customer’s experience when visiting a café or restaurant. We also believe that the cost of a PPCA Licence is extremely reasonable.”

“In most cases,” he continued, “daily PPCA licensing fees for an average café cost approximately the same amount as a cup of coffee or glass of wine, a price that is more than fair when an artist’s music is being used to drive business.” Licensing costs vary depending on the type of business.

As reports, licenses for eateries depend on the average price of their main meals, with varying tariffs and increases for venues that serve alcohol. The various restaurant and cafe tariffs can be viewed at the PPCA website, here.

The licensing funds collected by the PPCA are calculated at the end of the fiscal year and then distributed to copyright holders by December of each year. Admin costs and a 2.5 percent allocation to grants “for charitable, educational and similar purposes” are deducted before being shared.

(Via The Age)

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