Fitness industry welcomes Federal Court ruling to reject Copyright Tribunal broadcast fee hike

The fitness industry has welcomed a decision from the Federal Court to reject a claim from the Phonographic Performance Company of Australia that would have increased the fees used to broadcast music in fitness classes by over 1,500%.

But the Phonographic Performance Company of Australia rejected the decision in a statement, saying that it does not deliver a “cheaper” rate, but simply sends the decision back to the Copyright Tribunal – which made the original decision to lift fees in the first place.

The decision comes after months of debate between the music and fitness industries, with the Copyright Tribunal arguing that prices for using music in fitness classes were too low.

Fernwood chief executive Di Williams says the decision will deliver benefits for plenty of independent operators.

“We are absolutely delighted about this decision. Fitness Australia did a wonderful job of putting the case together, and we think it’s a wonderful thing for the fitness industry.”

“Had the decision gone through it would have been hugely damaging, and it would have meant that small independent operators wouldn’t have been able to use this music. This means that owners can now go and run their classes and enjoy them.”

But the PPCA has rejected the decision, saying artists are entitled to their royalties.

“Artists and labels deserve a fair return when their music is used as a resource in commercial businesses and are currently being significantly underpaid by the fitness industry. PPCA will consider its position following the Federal Court judgment, but will not step away from securing a fair price for its members,” PPCA chief executive Dan Rosen said in a statement.

The Tribunal ruled in May that tariffs for fitness classes using original music should increase to $15 per class or $1 per attendee. But this represents a 1,500% increase from the original fees, and independent gym owners said they would struggle to pay for licenses.

Fitness Australia mounted a campaign to challenge the ruling, with the Federal Court ruling the decision be sent back to the Tribunal.

“This decision will ensure that gyms, fitness and recreation centres remain viable and affordable for all Australians, helping them to maintain a healthy lifestyle,” Fitness Australia chief executive Lauretta Stace told Fairfax.

“We are pleased that commonsense has prevailed and that the Federal Court has seen fit to overturn the Copyright Tribunal decision which would, if successful, have had a detrimental effect on group exercise in the fitness industry.”

But the debate isn’t over quite yet. The PPCA points out that the decision over charging $15 per class wasn’t a main part of the Federal Court’s decision. Instead, the Court took umbrage with the PPCA’s methods in determining the $15 figure.

“This Court is not in any way concerned with whether the $15 figure is correct, which is solely for the Tribunal to determine,” the court said in its ruling.

“This Court’s role is only to assess whether Fitness Australia’s challenge to the processes adopted by the Tribunal is sound. For reasons which follow, we are of the opinion that it is and that the Tribunal did conduct itself in a way which was procedurally unfair to Fitness Australia.”

The PCCA has been ordered to “perform its function again according to law”.

But the PCCA isn’t giving up. Rosen says that, “the billion dollar a year fitness industry should pay a fair price for licensed music used in fitness classes”.