Anger at PPL royalty fee hike
Senior industry figures have called plans to increase music royalty fees by up to 4,000% as "devastating" and "unsustainable".
PPL, the organisation that collects royalties on behalf of performers and record companies, is proposing that music royalty fees for special events such as discos be increased as it considers the current charges are not a "fair reflection" of the value of the licence.
The Association of Licensed Multiple Retailers (ALMR) pointed out that an average pub, with a capacity of 200-250, hosting a four-hour Specially Featured Entertainment (SFE) event would see their SFE fee rise from £30 to £380. For a nightclub or hybrid bar that attracts 2,500 customers, the charge for a five-hour event would rise from £129.21 to £4,004.88.
ALMR strategic affairs director Kate Nicholls said: "This is nothing less than a dawn raid on an industry that is already suffering a squeeze on margins. These fees are Alice in Wonderland in their complexity — you need a degree in economics just to understand the formula. These planned fee increases are nothing short of unsustainable.
"The traditional pub is going to be treated like a nightclub whenever it has a DJ or band playing."
The ALMR is planning a "detailed response and rebuttal" to the proposal as part of its newly-formed Late Night Forum.
The British Beer & Pub Association is set to meet with PPL today (21 July) to push for more "realistic proposals". BBPA chief executive Brigid Simmonds said: "These proposed increases for playing music are unacceptable and off the scale. They would be a huge burden."
Jon Collins, executive chairman, Noctis, added: "Noctis and PPL have a long history of reasonable negotiation in relation to the SFE tariff, which stretches back many decades. This consultation falls out with that tradition, is based on flawed assumptions and would make a large proportion of the country's nightclubs and late-night bars unviable."
A PPL spokeswoman said: "The provisional tariff proposals detailed in the document have been determined on the basis of substantive, third-party research into the value that consumers attribute to music for such events and remain subject to consultation with our licensees at this stage. We look forward to a constructive dialogue with all our licensees and trade associations."
The consultation ends on 14 October 2011. It can be found at
www.ppluk.com/en/Music-Users/SFE-Consultation/
What are the charges for?
The proposed changes in PPL's pricing structure are for its Specially Featured Entertainment (SFE) tariff, which applies to events where sound recordings are a "main or special attraction" rather than background music, such as DJ sets or discos.
SFE fees currently vary between £1.85 and £166.57, based on average attendance and duration of events.
The proposed new charges are based on a calculation of how much extra customers are likely to spend when an SFE event takes place.
It assumes customers are willing to pay more for drinks and factors in admission charges.
The tariff is based on average attendance, banded into groups of 25, plus the number and duration of SFE events.
PPL wants to phase in the new rates over three years from April 2012. Operators would pay 25% of the charge in year one, 50% in year two and the full amount from 2014 onwards.
