Music in stores: ACCC demands music licensing reform as complexity complaints pile up

music licensing

Music licensing body the Australasian Performing Right Association (APRA) is facing calls from the competition regulator for improved transparency after concerns were raised about its dealings with small business.

The body, which negotiates music licensing deals with businesses on behalf of songwriters and publishers, is likely to be authorised by the competition regulator for another five years.

There won’t be any rubber stamping though; the Australian Competition and Consumer Commission (ACCC) says it has heard concern from industry bodies such as Council of Small Business Organisation Australia (COSBOA) and small business ombudsman Kate Carnell about Australia’s music licensing regime.

Criticisms centre around the price of music licensing for small businesses and the complexity of APRA’s operating model, which designates fees based on a myriad of factors, such as venue size, business category and patron numbers.

For example, under the current system, licence fees range from about $80 annually for music playing on one device in a 150 sqm store to over $2000 annually for half a dozen devices set out in a larger 2000 sqm store.

In response, the ACCC has proposed several changes to APRA’s operating model, including forcing it to reveal how it calculates licensing fees and requiring it to publish a plain English guide detailing its operational model.

“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance,” Keogh said in a statement circulated on Wednesday.

“However, APRA already has a near-monopoly, and the exclusivity provisions it has with artists makes its position even stronger. This raises a risk of higher prices for businesses that play music and other inefficiencies or restrictions for APRA members.”

ACCC must “go further”

Carnell said she’s encouraged by the ACCC’s proposal but believes the requirements need to “go further”.

“APRA must also be required to disclose in detail exactly what licence fees cover, for example, artists on streaming services are not necessarily covered by APRA’s licence,” Carnell said in a statement circulated on Thursday.

“In our follow-up submission to the ACCC, we will again raise the need for comprehensive community radio coverage, so that emerging Australian artists whose airplay is mostly through alternative channels such as community radio, internet radio and other broadcasters, are paid the royalties they are entitled to.”

Carnell says she’d also like to see APRA ensure its license fees are “tailored for actual use” rather than the capacity of a specific venue.

COSBOA boss Peter Strong says the proposed changes are “excellent” but “fail to address the real issue”.

“APRA cannot be trusted to implement these proposals in good faith,” he tells SmartCompany.

“They have been told previously to provide information in plain English and to be transparent in their dealings.”

Strong would like to see the ACCC approve APRA’s licence on a year-to-year basis.

“[APRA] must only be given a licence for one year and told to prove to industry, to the music industry in particular, that they have actually changed, that they are truly transparent and in touch with their members,” he says.

One Music launch looms

The proposed changes come at a disruptive time for APRA, which together with the Phonographic Performance Company of Australia (PPCA) is preparing to launch a new platform called One Music, designed to improve the licensing process.

Launching in the coming months, One Music has spruiked itself as a “one-stop shop” for music licensing and is slated to replace what’s currently on offer via APRA and the PPCA — effectively turning two platforms into one.

Businesses using music for commercial purposes already needed to obtain licences under the Copyright Act, but the combined platform has been designed to end years of complaints about system complexity.

Under the new One Music system, a liquor-licensed business with a seating capacity of 25 will be required to pay $4.11 each day for streamed background music, or $1500 each year for 365 days of operation.

An APRA spokesperson said the body welcomes the ACCC’s draft determination and sees the re-authorisation process as a “valuable exercise in corporate governance”.

“We’re obviously still considering the detail of those proposed conditions and will respond,” the spokesperson said.

“APRA is always very willing to work with the ACCC to address concerns.”

NOW READ: You can’t stop the music: How sounds in retail stores divide shoppers

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John Ferris
John Ferris
2 years ago

This article is confusing, firstly I’m an Apra member (songwriter) and I appreciate what Apra does. Sure there are areas where more can be done to properly paid through when music gets played, but I don’t quite understand what the head of the Small Business council that Apra doesn’t have the trust of the music industry? I think he means to say that he just doesn’t want to support music artists.
Quote “[APRA] must only be given a licence for one year and told to prove to industry, to the music industry in particular, that they have actually changed, that they are truly transparent and in touch with their members,” he says
That makes no sense.
Also Kate Carnells quote – is this out of context? That an Apra license doesn’t cover songwriters on streaming services? Which Apra license are we talking about and which streaming service? Spotify pays songwriters right and Apra have licenses for Spotify. Right. And Itunes Music and many otrher streaming services. Please clarify?

Ed Shyed
Ed Shyed
2 years ago

They should also be looking at MOH…. its why we use royalty free stuff now, and there is some pretty good instrumentals out there now days.

and I never understood why there is 3 licensing requirements for this rip off scheme. although APRA and AMCOS have merged few years back, there still exists the AMCOS extra payments component, just its now on your APRA bills, then there the PPCA separate bills, talk about double dipping.

There is a need for a dealing with one single entity, not before time,. but my concern about “one music” is, it will still be an over priced cash cow for them – not the artists.

for eg: If you have a business with 50 lines, even though you have enough staff and its rare anyone gets on hold, you have to pay APRA/AMCOS a maximum value based on your total lines – THIS is wrong, if you can show out of 50 lines you have only 5 of them on hold concurrently at most – then you should only ever be paying APRA for 5 lines MOH, not the 50 these extortionists demand now.

And they can regulate this, they do this now with community radio where the stations submit 3 times a year, logs of music playlists for a period of one week. MOH just gets modified to show call stats instead of playlists.

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