“It’s a scam”: Music licensing scheme faces revolt as senators take a look

The stakes are rising around an Australasian Performing Rights Association (APRA) bid to get a tick of approval to administer music licensing services, as heads start turning in Canberra.

Competition watchdog, the Australian Competition and Consumer Commission (ACCC), is currently mulling over whether to re-authorise APRA, and by extension, its new licensing regime One Music, to act as a middle-man between musicians and businesses playing their music in a commercial setting.

APRA and the One Music scheme, operated in conjunction with the Phonographic Performance Company of Australia (PPCA), started selling licences to businesses enabling them to legally play music in their shops, restaurants, clubs and offices at the start of July.

But the new One Music service, created in response to years of criticism about the operation of the old model, where APRA and PPCA sold licences separately, is already facing calls for a review as advocates from business and music circles lay criticism on the administrators.

Now Centre Alliance is taking a look, saying it understands why businesses have concerns about the operation of music licensing in Australia.

“We appreciate the significant angst many businesses have with the APRA AMCOS licensing scheme,” Centre Alliance Senator Sterling Griff said in a statement.

“[We’re] currently looking into the operation of equivalent overseas organisations, to better inform our view on ways in which the licensing regime will best serve Australian business and artists.”

While retailers have been preparing for a slated increase in fees under the new One Music system for some time, dance clubs and other related venues have expressed serious concerns, complaining fees are much higher than those in other markets across the world.

Under the One Music scheme, businesses utilising music for dance purposes are required to pay $1.3 multiplied by the capacity of their dance area, as well as an additional 90.1 cents for every person admitted to the area for each day of operation.

The Australian Venues Association has argued the fee structure leads to costs in excess of annual rents, over $100,000 in many cases, depending on venue capacity.

It says these fees are in stark contrast to those in other markets, where a similar licence would set a UK-based business back just over $33,000.

APRA has argued the One Music scheme, representing a one-stop shop for businesses, is a significant simplification on Australia’s previous music licensing framework, arguing fees are broadly unchanged.

But aspects of One Music’s web of products have raised concern, including a $2 per full-time equivalent employee charge for listening to music in the workplace via streaming services like Spotify, even if workers have earphones on.

Businesses also face an additional $500 charge if music originating from their operations can be heard in car parks associated with their shops, restaurants, cafes or clubs.

Council of Small Businesses Australia (COSBOA) boss Peter Strong has been pushing for a possible Senate inquiry into music licensing in Australia and has called for the ACCC to force APRA to conduct a root and branch efficiency review of its operations.

“It’s a scam,” Strong says.

The Association of Australian Musicians, led by Matt Finish band member John Prior, has also been critical of APRA, complaining in an ACCC submission uploaded by the watchdog last week that the organisation is dominated by “the cartel” of three major US-based publishers.

Referencing Strong’s critique of APRA, including his designation of the body as a “shadow regulator” which needed better oversight, Prior said many musicians agree.

“Re-authorising a foreign cartel of major publishers to control the monopoly music royalty organisation in Australia has been to the detriment of almost every other stakeholder group, including APRA writer members and every Australian business that licenses music,” he said.

Prior has criticised APRA for spending $98 million annually on administration costs, but in his view failing to collect “sufficient playlist data” to be able to identify composers to which it should pay royalties.

“There is concern regarding conflicts of interest for directors and staff members.

“Members claim APRA has lost song registration data. APRA hasn’t kept any records of complaints. When composers don’t receive royalties they should have received, they can’t vote,” he said.

APRA has vigorously defended its operations in a submission to the ACCC’s ongoing consultation process, saying it has already made efforts to improve transparency and conducted detailed and lengthy consultation on the fee models underpinning One Music.

The organisation did not respond to a request for comment on Tuesday morning.

COSBOA had a chance to say its piece at a pre-determination conference adjudicated by ACCC officials earlier this month, which was attended by APRA representatives and other lobbyists.

Minutes from the meeting, reviewed by SmartCompany, detail questions about apparent confusion about aspects of the One Music scheme, particularly in relation to streaming services.

While One Music charges businesses extra for the ability to source music from “online stream or music download” such as Spotify, it cannot guarantee its licence will actually satisfy the streaming giant’s own terms and conditions.

Attendees noted this discrepancy, saying Spotify has shown no interest in creating a commercial music licensing service itself and is likely unaware APRA is creating licenses which cover its services.

The ACCC is due to decide whether to reauthorise APRA in August, at which time it will also consider several proposals, including forcing the organisation to undertake an efficiency review.

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