In an effort to streamline the complex maze of music licence fees being paid to both APRA AMCOS and PPCA, the two organisations are in the middle of merging into one organisation, OneMusic Australia.

As part of this process, the music licencing fee structures for hotels for everything from background to live music to music played in dining areas, is in the middle of being reviewed and overhauled. Hoteliers and the AHA are taking part in consultation on the new fee structure across Australia, with AHA CEO Stephen Ferguson stating that the aim is to create a simpler fee structure that is fair for both hotels and artists.

“Our main concern is that hotels don’t pay more than they’re required to. It’s important to ensure that hotels are encouraged to play music and support Australian music, and it not be so expensive that people don’t put live music on.

“After seeing venues such as The Basement [in Sydney] close, we don’t want venues discouraged, especially from playing live music.”

Capacity concerns

While the industry and organisation consult and compromise on the new fee structure, the greatest concern raised by both the AHA and hotel operators in the first round of consultancy was the proposed change to charge live and featured music fees based on capacity of the venue, rather than attendance. This immediately raised red flags across the industry, as very few gigs are filled to total capacity of the venue or of the venue’s live music area.

“Our concern on that is it simply doesn’t take into account the volume of people through. So the hotelier’s profitability is driven by the number of people through the venue, and just because you’ve got a venue licence to hold a 100 people, doesn’t mean you’ve got 100 people there, so you shouldn’t have to pay 100 times the fee to do that. So that’s an issue. I think that’s the greatest problem we have,” stated Ferguson.

The worry is that if the charge on capacity were to go through, venues would minimise the number of live music acts they put on throughout the week. While headline acts on Friday and Saturday night may continue, smaller gigs during the week may be culled to avoid a fee that doesn’t match the event’s profitability.

Matt Mullins, director of the Melbourne pub group Sand Hill Road, said the company was following this issue very closely, and is apprehensive about how it will impact business, but also the country’s live music scene.

“We are very worried about the risk of unsustainable licencing fees and the impact they could have on the viability of our pubs. More than that, we’re worried about the impact they could have on our music programs.

“A lot of pubs like ours run live music and DJ programs because we believe in supporting live performance, not because live performance makes us money – sad to say, in our industry, live performance rarely pays for itself. An increase in licence fees, albeit inadvertent, could put an end to a lot of live music in the first instance, and a lot of live music venues in the second.”

A spokesperson for APRA AMCOS said that OneMusic representatives have heard this concern from the industry, and are hoping to amend the fee structure in the second proposal it puts to the industry, but suggested that capacity structure is based on ease and fairness.

“The reason we suggest pegging fees to a capacity figure is for simplicity – it saves licensees keeping track of nightly attendance and gives us an indicator of the scale of an operation so larger and smaller hotels are treated equitably.”

“Fair and equitable”

The other major hurdle is that with so many pub businesses differing in scale, entertainment options and business models, there is a concern that any fee structure will not be equitable to all pub businesses, and that many hotel operators will actually see their fees increase under the new OneMusic proposal – an added cost that will not be sustainable for a lot of operators.

“Australia has one of the most expensive licence regimes on earth. A similar scheme in New Zealand for instance, sets fees at a fraction of Australia’s. We’ve spent our entire professional career supporting live performers. We think a licencing regime is a key way to continue that support. We just hope that regime doesn’t end up costing live performers gigs,” stated Mullins.

With the growth of the live music sector being a key motivator for OneMusic, the APRA AMCOS spokesperson reiterated that it is willing to work with industry to find a satisfactory outcome.

“We’ve done what we can to minimise any huge variations for hotel operators and we have amended the fee structure in the second consultation paper. This is why feedback to us is so important.”

Ferguson said that while OneMusic Australia may want to get the new structure rolled out by the end of the year, the AHA would continue to push for a proposal that would not only benefit artists but also be just and sustainable for the pub industry.

“The day it’s fair and equitable, that’s the day we’ll close the deal.”

The second consultation paper should be released by OneMusic Australia shortly.

This article is an excerpt of a larger feature on entertainment in the July issue of Australian Hotelier, which will be published shortly. Keep an eye out for it!

Vanessa Cavasinni

Vanessa Cavasinni is the managing editor of Australian Hotelier and Club Management, trade publications for the pub and club sectors respectively. Vanessa has been at the helm of Australian Hotelier since...

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