Australian Music Tariff Update

In May 2010, the Australian Copyright Tribunal voted for a significant fee hike (from $0.98 AUS to $15 AUS per class) for fitness facilities that play music in group exercise sessions. The Phonographic Performance Company of Australia (PPCA), an organization that protects sound recordings and music videos, requested the increase. Later that year the appeal courts overturned the ruling, prompting the PPCA to file its own appeal, which was rejected.

Finally, in October 2011, the PPCA and Fitness Australia, a not-for-profit association for fitness businesses and professionals, agreed to a new, much smaller tariff of $2.50 per class. Fitness facilities were also granted a 2-year phase-in period. “Overall, the result is good for the industry, as the increase is much more modest and probably appropriate given the circumstances,” said Ryan Hogan, chief executive officer (CEO) of the Australian Fitness Network. “However, a few issues have arisen in the meantime. Since the original decision in May 2010, many fitness centers have opted to cancel their PPCA licenses and move over to ‘cover’ or PPCA-free music in their classes.” Also, several music companies have developed PPCA-free CDs and MP3s for customers. “The question that is up in the air at the moment is now that there is ample supply of PPCA-free music for both freestyle and prechoreographed classes, why would a fitness center pay anything at all?”

Hogan adds that, anecdotally, only half of facility owners he has spoken with will maintain their PPCA licenses. “It certainly divides the industry and instructors, as teaching at a [facility] where you can use your back catalog of music all of a sudden becomes a distinct advantage.”