Restaurant and Café Tariff

 

              restaurant

Background

 PPCA             

PPCA is a non-profit organisation which collects licence fees and distributes the net proceeds to record labels and Australian recording artists.

 PPCA licenses restaurants and café operators to play sound recordings in their premises, which applies to all those recordings (both Australian and international) which are protected under Australian copyright law.

 

Artists and labels are entitled to receive a fair return for their work, particularly when it is used to help drive profits in commercial enterprises.

In early 2007, following discussions with Restaurant and Catering Australia, PPCA commenced a review of Tariff R (restaurants, cafes & similar establishments) in line with its broad-based review of tariffs applying to businesses which use recorded music to add value to the services they offer to the public.

As a result of the review, it was decided that Tariff R should be updated to better reflect the value of the recorded music being used across the restaurant and café sector.     

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Consultation

 In May 2009, PPCA put forward a draft new scheme and began comprehensive consultation on the proposal with the broader restaurant industry.

 PPCA received and considered various submissions from individuals and representative bodies including:

  • Restaurant and Catering Association;
  • Australian Hotels Association;
  • Clubs Australia;
  • RSL and Services Clubs; and
  • Hotels and Motels Association of Australia.

After completing consultation and after careful consideration, PPCA finalised a new scheme comprised of two new tariffs (R1 and R2) which came into effect on 1 December 2009. The new rates were substantially reduced and the terms modified from the scheme first proposed by PPCA in May 2009. These changes were made to take into account the concerns raised and information provided by restaurant operators and industry groups during the consultation period. As previously proposed, for the purpose of applying the tariff, restaurants will continue to be divided into different categories based on the average cost of a main meal and their liquor licensing status.

  Important adjustments to the scheme initially proposed resulted in daily fees that were:

In addition there are now:

Restaurant categories which provide for a "low end" bracket (where the main meal price is $7.50 or less) to account for coffee houses and similar businesses. The high end category initially proposed (ie main meals of $35.01 or more) has been removed so that the top category is now those restaurants with main meal prices over $25.00.  

View Tariff R1 

Hotels/Motels Tariff (known as Tariff R2) with lower fees applying to those restaurants which are part of hotels and motels (ie accommodation businesses) where the primary focus of the restaurant is providing meals to guests, and the service is not promoted to the general public.

View Tariff R2   

Changes as at 1 July 2013:

As noted above, when the new Restaurant and Café Tariffs (R1 and R2) were introduced in 2009, a 5 year phase in period was implemented in order to ease the transition to this new tariff.  Part of this phase in schedule was a Seating Capacity Cap which meant that regardless of the seating capacity of the venue, there was a maximum daily rate applicable.  This Seating Capacity Cap was due to increase to 75 seats on 1 July 2013.
PPCA has decided to further stagger the Seating Capacity Cap and reduce the 1 July 2013 scheduled increase to 60 seats, rather than 75 seats.  The reduced seating capacity of 60 is accessible to all licence holders who have provided PPCA with details of their restaurant operation (ie; average mail meal price, days per quarter using recorded music) since the new Restaurant and Café Tariffs (R1 and R2) were introduced in 2009.

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If you are a PPCA Restaurant licence holder affected by the review of Tariff R and need to provide PPCA with information regarding the continuation of your licence, please visit the Restaurant and Cafe Confirmation Form  

 

The Value of Music 

To find out the value of playing real, recorded music in your café or restaurant, read two articles from Professor Charles Areni of The University of Sydney, who has carried out detailed studies on how music affects customer behaviour.  

 

Restaurant patrons dine in time with the tune

By Charles S. Areni

 Professor of Marketing, University of Sydney  

Radio                               

Restaurant managers understand that demand varies. Sometimes your restaurant has a lot of empty tables and other times it is packed. But there is usually a pattern. If your restaurant is open for lunch and dinner, for example, you can expect to see a surge of diners starting at around noon and beginning to decline at around 2.30. Then nothing much will happen until around 6.30, when the dinner crowd begins arriving, and a good restaurant on a good night may operate at full capacity until about 10.30 when the crowd finally begins to thin.

 

With respect to the day of the week, another fairly obvious pattern emerges. The typical restaurant is likely to struggle to fill tables for dinner early in the week. Monday through Wednesday is a difficult period of the week, but on Thursday the dinner crowd picks up considerably, peaks on Friday and Saturday nights, and remains strong on Sunday nights. (Lunch business is more immune to this weekly pattern).

So you have a pretty good basis for predicting when you will have more diners than tables and vice versa. During periods of high demand, “turning over” tables quickly to seat the next party as quickly as possible becomes the objective, whereas during periods of lower demand, the focus changes to getting existing diners to spend as much as possible on things like additional bottles of wine, coffee, dessert, etc. So how can music help?

Research consistently shows that many human processes and behaviours follow the tempo of music. From automatic processes like cardiovascular and respiratory rates, to deliberate behaviours like dining, humans do things faster when the music is “up tempo”. Studies have examined multiple restaurant categories from cafeterias to fine dining, and the results are basically the same. Diners eat more quickly – literally bring their forks to their mouths more frequently – when the music is fast rather than slow.

The implications are clear. During periods of heavy demand, you should play faster music to speed up diners and increase table turnover, but during periods of limited demand, the music should be slower, to keep diners at their tables, and increase revenue from coffee, dessert, and alcohol purchases. The financial rewards for getting this right can be considerable. One study found that diners extended their dining time by almost 25%, ordered 41% more alcohol, and made a 15% higher contribution to gross margin when the atmospheric music was slow (< 73 beats per minute) compared to when it was fast (> 91 beats per minute).

Given the new software programs available for sorting through huge music catalogues, you can easily do this, even if your restaurant plays a specific kind of music based on cuisine (Italian, Chinese, etc.) or price point (light classical for fine dining). Commercial music services can offer even more precision, sorting through thousands of songs and selecting only those that fit specific criteria. So restaurants that manage the tempo of their atmospheric music to mimic the daily and weekly variation in demand for tables can reap huge financial rewards.

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Café Tunes Set the Tone

By Charles S. Areni

Professor of Marketing, University of Sydney

What is it that makes up the “coffee culture” in Sydney, Melbourne, and the other metropolitan areas of Australia?  Well, the coffee of course.  But it’s more than that.  There is something about the very idea of going to that quaint little cafe on the corner by the water.  It’s the total atmosphere of the experience not just the stuff in the cup. How does music play a role?  Well, a variety of ways really.

First, the style or genre of the music adds to the experience.  The tune sets the tone so to speak.  For example, playing music that customers like will get them to stay longer, which may translate into a second cup or sweet cake purchase to accompany the java. 

How do you know what music your customers will like?  Well, age has a lot to do with it.  Research suggests that people tend to prefer music that was popular when they were young adults.  If your customers are in their 40s, popular hits from the 1980s will work; if they’re in their 20s, play what’s popular now.  If the ages of your customers vary considerably at any one time, all-time classics by popular acts like the Beatles and Elton John are probably a safe bet because they appeal to multiple generations. 

Picking the right genre has additional benefits.  It can also influence the perception of your café.  Contemporary jazz, for example, creates an up market impression and suggests sophistication.  Italian music will add an air of authenticity given that you’re selling coffee.      

But playing music that your customers like isn’t the whole story.  The tempo of the music is also important.  Research has established that people eat and drink in time with the music.  Up tempo music makes them drink faster, whereas slower tempo music will get them to sip more slowly, stay longer, and yet, feel like they’ve spent less time in your café. 

That’s the wonderful thing about slow, enjoyable music; customers spend more time in your establishment, yet think they’ve spent less time because the music distracts them from thinking about the duration of their stay.  Up tempo music has the opposite effect.  Customers actually leave more quickly, but feel like they’ve spent a longer time in an establishment.

This can be important if you’re trying to manage table turnover.  During periods of heavy demand, up tempo music frees up tables and allows you to seat additional customers, but during periods of lower demand, slower music gets people to stay, and hopefully, to order more.

Commercial suppliers of atmospheric music have incredibly sophisticated systems for customizing the music delivered on a large number of dimensions, but even if you’re playing music from a personal computer, software is available that allows you to select the style, the specific act, and importantly, the tempo of what plays when.

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