Guidelines for use of music in fitness centres and studios released
On 17 May 2010, the Australian Copyright Tribunal handed down a decision to substantially increase copyright fees for the use of protected sound recordings in group exercise classes, following the outcome of a lengthy battle between the Phonographic Performance Company of Australia (PPCA) and Fitness Australia.
The current PPCA license fee for Tariff V is 96.8 cents per fitness class with a capped annual maximum of $2,654. The Copyright Tribunal has decided to substantially increase this to either $15 per class or to $1 per attendee per class, which equates to an increase of 1,500% for the cost of a PPCA license in a typical fitness centre running 30 classes per week.
This decision has several ramifications for the fitness industry and the way in which music is purchased and used now and into the future.
As a consequence of this decision, some members are considering using only sound recordings which are not controlled by PPCA (Non-PPCA Recordings) and are asking for advice in this regard. To assist the industry, Fitness Australia has prepared an Information Sheet for Members with the help of Minter Ellison Lawyers. This document titled “Guidelines for Use of Music in Fitness Centres and Studios” has been developed to explain the way music may be used in fitness centres and to provide some further information on how to gain access to sound recordings that are not controlled by PPCA.
During the determination hearing, the Tribunal stated that they “reject the principle evidentiary basis put forward by PPCA in the form of the gym survey as a reliable indicator of willingness to pay for protected music in fitness classes.” However, the Tribunal relied on other evidence and “judicial estimation” to arrive at the new Tariff rate of $15 per class. The Tribunal also ordered the parties to re-convene prior to 30 June 2010 to ratify a date for the new tariff to become effective.
The new rate - effective date
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Although we cannot confirm this date before the parties re-convene, it is likely that the effective date for the new Licence Scheme and Tariff will be as at the date of determination i.e. the new rate will be effective on a date yet to be set by the Tribunal.
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The PPCA and Fitness Australia are able to negotiate a Phase-In Schedule for the new Tariff which will be ratified by the Tribunal. This process is underway and will be confirmed as soon as possible.
Existing Licence Agreements
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Fitness Australia will obtain greater clarity around the effect on existing licence agreements with PPCA, however, if the effective date for the new Tariff is 17 May 2010, the PPCA will be obliged to refund monies paid in advance for the current Licence Scheme beyond that date and then, will re-issue new Agreements effective on a date yet to be set by the Tribunal
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Fitness Australia has prepared guidelines for the use of music without the need to hold a PPCA licence for Tariff V. We encourage industry businesses to contact their suppliers of pre-choreographed group exercise programs and suppliers of music for exercise classes to discuss these options in more detail.
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An industry leaders group has been convened to review the judgment in more detail and take advice from our legal representatives on whether there are grounds for an appeal. If an appeal was to proceed, it would be held before a full bench of the Federal Court later this year.
Download the Guidelines for use of music in fitness centres and studios
