Music royalties from businesses are intended to ensure musicians and performers receive income from commercial use of their work. But COSBOA’s chief has claimed “exorbitant fees” are having the reverse effect, and are damaging other SMEs in the process.
In written comments provided to My Business, Peter Strong, CEO of the Council of Small Business Organisations Australia (COSBOA), suggested that SMEs and education groups are being put off from playing music in public spaces because of excessive fees and what he labelled as bullying on the part of the governing associations.
“Music and entertainment is an increasingly important part of our society and economy. Is our music scene healthy as a business? Perhaps not,” Mr Strong said.
The size of the fees are putting copyrighted music out of reach for many SMEs, he contested.
“Businesses have stopped playing music in public places and educational institutions have also stopped using music because APRA AMCOS charges exorbitant fees and are outright bullies of the business and music community.”
The COSBOA chief said that APRA AMCOS — the Australasian Performing Rights Association and Australasian Mechanical Copyright Owners Society (AMCO) — which licenses copyrighted music and collects royalties on behalf of performers, has recently formed a “one-stop shop” under the name OneMusic Australia, in partnership with the Phonographic Performance Company of Australia, to better enforce this process. But according to Mr Strong, the organisation lacks transparency.
“This new system completely lacks transparency in its dealing with licensees (many of whom are small businesses) and has licence fees which are, in the main, the most expensive in the world,” Mr Strong said.
“At the pre-decision conference [held by the ACCC into whether APRA AMCOS should be reauthorised to control music licensing], there was a business owner — a director of successful music festivals — who told how she was cutting back on her business, as she could not afford the APRA AMCOS fees which recently increased under OneMusic Australia.
“The business owner is cutting back play times for the festival and is no longer employing DJs, because she cannot afford the fees. This is a well-established, successful business downsizing due to the behaviour of APRA AMCOS.”
Mr Strong added: “If the business doesn’t employ DJs, that also means waiting staff will not be employed to cater for the people who will now not turn out for the music. It also means some artists won’t get a chance to perform their music.
“They, APRA AMCOS, are slowly destroying the Australian music industry.”
‘Licence fees start at 25 cents a day’
Approached for its response to the COSBOA chief’s assertions, APRA AMCOS contested that its OneMusic platform is predominantly used by smaller businesses, and that its fee structures are affordable.
In a statement provided to My Business, it said that “most of the 100,000 music creators whose music is licensed from OneMusic are SMEs” and that “OneMusic licence fees start at 25 cents a day”.
“OneMusic is an initiative of APRA AMCOS and PPCA to cut red tape for businesses. It has already been successfully launched in New Zealand,” it said.
“OneMusic consulted with over 100,000 licensees and hundreds of industry bodies for over two years with meetings, showcases and briefings. This consultation included providing licence proposals and consultation papers for feedback.
“Final consultation papers were issued, sometimes after three or four revisions, each time we extended another invitation to give feedback.”
APRA AMCOS also hit back at claims its system lacks transparency.
“OneMusic is an open book and encourages customers to read more about how their licence fees are being distributed to music creators and how these organisations manage their finances,” it said.
“APRA AMCOS and PPCA publicly produce financial reports each year. APRA AMCOS and PPCA publicly produce clear information about how they split up licence fees (the royalties) to individual members and licensors (their distribution policies).
“Licence fees are matched to the commercial value of music. Where music has a high commercial value such as in a nightclub, fees are higher. Where music has a lower commercial value, such as background music in a shop, they are lower. There is no fixed rate for music licences across the world.”
‘User groups consulted’: OneMusic Australia
The OneMusic Australia website also emphasises that its fee structure was established in consultation with end users.
“The rates for the use of music under OneMusic licence schemes have been set following consultation and negotiation with user groups,” it states.
The website also outlines that different licence schemes were established to reflect the various ways that music is used by different industries, with unique licence frameworks and fee structures developed for sectors including childcare, cinemas, dining, funerals, accommodation, retail and transport.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.