What is happening with the PPCA Nightclub, Dance and Dance Party tariff review?

On 8 October 2004, PPCA referred to the Copyright Tribunal its proposed licence scheme, relating to the granting of licences for the use of protected sound recordings in nightclubs, and at dances and dance parties. The reference has been given the file number CT2 of 2004. Click here to view a copy of the proposed licence scheme which PPCA has referred to the Tribunal.

In May 2004, PPCA wrote to its nightclub, dance and dance party licensees, and trade organisations representing these licensees, informing them of its intention to review the structure of its current Tariff "E" and the rate payable for the use of protected sound recordings in nightclubs, and at dances and dance parties. PPCA invited the licensees and organisations to participate in a consultation process in respect of its review of Tariff "E". PPCA reviewed around 35 written responses, and licensees raised issues such as their capacity to pay an increased rate, and the fact that not all licensees are operating similar businesses, with factors such as opening hours, cover charges and style of venues varying from one licensee to the next. The submissions did indicate that some licensees are unclear about the nature and scope of the PPCA blanket licence, and uncertain about how it applies to so-called " US recordings". Click here for an overview of the coverage provided by the PPCA blanket licence .

Overall, only a small number of licensees responded, and the process did not lead to any clear consensus as to what an equitable tariff for the use of protected sound recordings in dance venues would be.

Consequently, PPCA formed the view that, before any change should be made to the tariff, a much more comprehensive review, in which all points of view are considered, should take place in order to determine a rate that is reasonable in the circumstances. PPCA considered that the most appropriate and fairest way to progress the review for all parties concerned was to have it conducted as formal proceedings in the Copyright Tribunal, as provided for under the Copyright Act. At the end of September 2004, PPCA wrote to its nightclub, dance and dance party licensees and their representative organisations advising them of the proposed Tribunal proceedings.  

The Copyright Tribunal is a specialist administrative body established under the Copyright Act. It has the function of determining equitable remuneration or reasonable licence fees for a wide variety of uses of copyright protected materials, and has the authority to conduct a review and make an order which sets a reasonable licence fee.

PPCA has formulated a schedule of proposed rates based on an expert economic analysis of the fees that should be paid by nightclub and dance party operators. The fee proposed for nightclubs begins at $1.12 per person per night of operation and is calculated on the basis of the venue capacity. For dances and dance parties, the proposed rate is $5.10 per person per event and is based on the number of attendees. For further details, the schedule of proposed rates appears at Annexure B of the proposed licence scheme which can be viewed above.

As you can see, PPCA's proposed licence scheme contemplates that the licence fee payable will be based on a system in which the fee is referable to venue capacity for nightclubs and attendees for dance parties. PPCA considers this to be a fair and reasonable application of licence fees and the purpose of commencing proceedings in the Copyright Tribunal is to seek confirmation of this in an experienced and regulated forum.

A full (three member) Copyright Tribunal heard the matter over a two week period in June 2006. During the hearing the Tribunal was presented with a range of industry and economic evidence. The industry evidence dealt with the nature of the nightclub and dance party industries and illustrated the diverse range of nightclubs and dance parties which operate dance music events in Australia. The economic evidence concerned the expert economic analysis undertaken in setting the proposed PPCA rates for recorded music use in nightclubs and dance parties.

Given that this issue is now before the Tribunal, we also ask that if you want to send us any correspondence about the issue, that you send it to PPCA's solicitors, Gilbert + Tobin. Gilbert + Tobin will be able to respond to any questions you may have about the Copyright Tribunal proceedings.

What does the PPCA blanket licence cover?

PPCA has also become aware that there is some confusion amongst its nightclub, dance and dance party licensees as to the nature and scope of the licence PPCA offers.

The licence which PPCA grants to nightclub, dance and dance party licensees authorising their use of sound recordings for dance purposes covers the very wide range of sound recordings that meet two criteria. First, the licensed sound recordings must be owned or controlled by copyright owners that are licensors to PPCA and second, the licensed sound recordings must be protected under Australian copyright law.

As to the first requirement, that the record be owned or controlled by a PPCA licensor, you can check whether a particular copyright owner is a PPCA licensor by looking on the PPCA website at www.ppca.com.au/current_licensors.htm .  That web page also provides a click through to the list of labels controlled by PPCA licensors and covered by PPCA's blanket licence. PPCA licensors include all the major record companies and over 400 other copyright owners.

As to the second requirement, that the record be protected under Australian copyright law, the law in this area is complex and there is no simple test for determining when a sound recording is protected under Australian copyright law.  PPCA is aware that some licensees are under the misapprehension that all US artist recordings are unprotected, and can therefore be played without the need for any licence. This is not correct, and in fact many recordings made by US artists may be protected, because of the way that specific aspects of the legal requirements are applied.

In general terms, copyright protection applies to the playing of a sound recording in public in Australia if that recording was made by a citizen, national or resident of, or body corporate incorporated in, a "protected" country.   (Click here to see a current list of protected countries).  The US. is not a "protected" country at present, but as we explain here, that does not mean that all recordings by US artists or made in the US are necessarily unprotected under Australian copyright law.  

First, determining who "made" the recording (and hence where their base or residence is) can, in itself, be difficult.   At the moment the "maker" for most recordings will be the record company, but after 1 January 2005, because of changes to the Copyright Act as a result of the US Free Trade Agreement, every performer contributing to a recording (including backing and session musicians) will also be a "maker" of that recording.

Quite apart from the nationality of the artists  or the place of incorporation of the record company, copyright protection for public performance also applies if the recording was made in a "protected" country.  Some US artists, for example, have recorded outside the US, making those recordings protected.

In addition, overseas recordings may attract a period of interim protection following release, and may be protected (wherever they were made) from the date of first commercial release until the earlier of 7 weeks after release, or the date of release in Australia.

Putting these rules together and applying them to a specific sound recording is very difficult.  In order to determine whether a particular sound recording is protected or not the following info rmation may be required:

• who "made" the recording, and if it was a record company, their place of incorporation;

• the place where the track was recorded (i.e. the location of the recording studio);

• the release date of the track, the country of first release and if released in Australia, the date of first release here; and

• after 1 January 2005, the names of everyone who performed on the recordings and their citizenship or residency at the date the recording was made.

PPCA does not believe the law should be this complicated and difficult to apply, but of course PPCA has no control over copyright legislation. PPCA can assure you that PPCA licences allow your business to avoid having to undertake any of this complex analysis of whether a recording is or is not a protected sound recording, as long as that recording is controlled by one of the many copyright owners that license their repertoire to PPCA.

PPCA urges anyone wishing to determine whether or not a particular recording is or is not protected to obtain their own independent legal advice.