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Fitness Centres Hit by Tribunal Decision on Music Fees

Fitness Centres Hit by Tribunal Decision on Music Fees
May 17, 2010

Fitness clubs, recreation facilities and aquatic centres that provide members with popular tunes to move to will have to pay higher fees as a result of decision handed down today by the Copyright Tribunal.

Aquatic, fitness and recreation operators will now slugged with fees of $15 per class or $1 per class attendee for the use of the music. Facilities had previously been charged 96.8 cents a class, with a cap of $2,654 a year.

Fitness Australia, which had led an industry campaign against proposals by the Phonographic Performance Company of Australia (PPCA) to change both the rate and the nature of the licence fee paid for exercise to music has said it is said it is extremely disappointed with the Copyright Tribunal decision.

A Fitness Australia statement read “for an average-size fitness centre with 1,500 members and running 30 fitness classes per week, today’s decision represents an annual cost increase from the current $1,510 per year to $23,400 per year, or an increase of 1,500%.

Fitness Australia Chief Executive Lauretta Stace added that “the international record companies, who are represented by the PPCA, have shot themselves in the foot by demanding outrageously high copyright licensing fees from the fitness industry, the majority of which go straight into record company coffers. To mitigate the impact of such a decision, Fitness Australia members are already beginning to use music in their gyms that is free of PPCA copyright.

“Les Mills, the largest provider of choreographed exercise classes has already developed a product that is PPCA copyright free, allowing gym operators like Fitness First to introduce high quality music that is not subject to PPCA copyright. The reaction from gym members has been highly supportive so we now expect that all gyms will move to alternative music options.”

The Sydney Morning Herald reported that Susan Kingsmill, owner of Hiscoes Fitness Centre had explained “the fitness industry has traditionally provided a great platform for promoting Australian performing artists but the record companies, driven by greed, seem intent on destroying this relationship.

“This decision will lead all fitness centres to seek more affordable music alternatives to the detriment of Australian performing artists, but the artists only have the record companies to blame for this.”

Fitness Australia responded to the claim by the PPCA, which represents the international record companies, on behalf of a united fitness industry, in a fierce battle culminating in a six week Tribunal Hearing in April 2009.

“Fitness Australia’s evidence clearly demonstrated that a substantial increase to the tariff could not be justified under any circumstances, particularly as the fitness industry has access to high quality alternative music that gym goers are perfectly happy with and that is not part of the PPCA repertoire”, Stace added.

The PPCA, which brought the claim, welcomed the decision and said that the new fees were a reasonable increase on "peppercorn" rates the fitness industry had previously paid and that the new rate was fair.

PPCA Chief Executive Stephen Peach, stated that “the tribunal has explicitly recognised that music adds real value to the class, to the participants, and to the fitness centre operator who is, after all, running a business.

The claims made by the fitness industry that it would no longer use original music if it were forced to pay more were "curious", Peach stated, adding “gyms are kidding themselves if they think that cover version music is going to cut it.”

The Deputy President of the Copyright Tribunal, Federal Magistrate Rolf Driver acknowledged the new fees constituted a significant rise in charges for the use of original songs, stating “the tribunal has determined that a substantial increase in the licence fee for recorded music in fitness centres should be made and that fitness centres have the option of electing between a rate per class and a rate for attendee per class.

Driver declined to award costs to the fitness industry, saying it had achieved a "measure of success" after the PPCA had pushed for higher rates than those imposed by the tribunal.

Fitness Australia’s legal advisers are now reviewing the decision to determine whether there are grounds for appeal.

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