Venues around Australia are about to have to pay a whole lot more for the right to play recorded music, and not surprisingly dance music promoters around the country are more than a little concerned about being hit with such a massive rise. As reported on inthemix HERE, a ruling made by the Copyright Tribunal of Australia will see fees paid by venues that play recorded music rise from the former flat rate of seven cents per patron, per song. Clubs will now pay a licence fee of $1.05 a person based on the club’s capacity, which means that a venue which holds 1,000 patrons will pay $1,050, even if the club is only half full. The rate paid by dance party organisers will also rise from 20 cents to $3.07 cents per person.

Not surprisingly, dance music promoters around the country have expressed concerns over being slugged with such a hefty rate rise. First things first, will any of this money actually end up filtering down to the producers who are making dance music in Australia? Melbourne promoter Richie McNeil from Hardware, one of Australia’s leading promoters, doesn’t seem to think so. “I’ve had a record label for many years, and the way the money is distributed, none of it really gets back to the appropriate people anyway.”

He claims a lot of it is absorbed in administration fees of organisations like APRA (Australasian Performing Right Association) and AMCOS (Australasian Mechanical Copyright Owners Society), some is never actually claimed by the musicians themselves and further still, unless a DJ is especially vigilant about submitting a playlist after a gig then it’s difficult to determine what music is played at a nightclub on any given evening. The end result being that the money doesn’t go where it should.

“I’m all for supporting Australian music, but the problem is that people receive money for their music just because they’re registered with APRA,” he says. “If you look at the list of labels that are represented by organisations like that then there’s barely even one label on there that actually releases the sort of music that gets played at our events.

“If the money was legitimately going to the artists that are being played at our events then I’d be happy with it, but I know that only around 10-15 per cent of that money actually reaches them.”

Richie says it will definitely impact the events put on by his company, particularly when it comes to the smaller, more underground parties where punter patronage is not necessarily guaranteed. “There’s those borderline gigs that you do where you don’t make much money but you’re doing it to support an artist or a particular style of music,” he says. “There’s probably four or five of those gigs a year that we do with borderline margins that we’d probably just end up not bothering with anymore. If you’ve gotta go from paying APRA $500 to $2,500 then it’s just ridiculous.”

The biggest cries of injustice are being made over the fact that the ruling is slugging the exact people who are helping break new dance music; the DJs, who offer exposure to up-and-coming producers. “If it wasn’t for club play then this music wouldn’t be getting exposed in the first place,” says Richie. “If you look at the ARIA Club Charts and then look a couple of weeks later at what’s in the Top 40, then you’ll see that it’s the clubs that are generating the initial interest and groundswell that helps these tracks chart. If it wasn’t for these events playing their music then it probably wouldn’t break in the first place, because radio stations won’t play it until that initial buzz is created.

“Clubs, dance parties and festivals are an integral and key part of record label’s strategies to get their music to cross over to the mainstream, which is where they make their real money. This is the frustrating thing, they want to burn the people that are basically trying to help them promote the music in the first place.”

For Tim Hardaker, National Editor of inthemix, the aspect of the ruling that needs to be considered closest is that clubs will be charged according to capacity of the venue, rather than how many people are actually inside. He claims it demonstrates a lack of understanding of how club culture operates. “The patrons at a club will fluctuate pretty wildly from week to week. It could be a particular DJ or the end of uni and the club will be packed. And then it could be raining and the club will have 15 people inside,” he said in an interview with the Sydney Morning Herald.

“I don’t know whether it will force them to shut down but… within the nightclub culture there is a tendency to go to two or three nightclubs, whereas now you might only go to one club. The punters are price sensitive, they are university students and people who have just entered the workforce. The margins between profit and loss are so fine already.”

But not everyone is labeling it as all doom and gloom. John Wall from Fuzzy in Sydney says that he takes issue more with the steepness of the rate rise, rather than the fact that it’s gone up in the first place. “I never had any argument with the fact that producers should get paid for their work, but I think that the price rise is a lot. It’s big enough to have a noticeable impact on how competitive DJing is when compared to other forms of entertainment out there.”

And John believes DJing has already taken a hit as far as popularity goes. While ten years ago punters may have been more excited about seeing a DJ play than a rock band, it seems they’re getting more excited about seeing the live acts these days. “When you get an event as big as Field Day the amount comes to something like $75,000, which is a pretty big incentive to favour live acts over DJs. And if it has a negative effect on how many DJs are getting booked and how many dance events are held, then obviously it can also have a corresponding negative effect on the promotion of dance music that happens in that context.”

Looking beyond the obvious impacts the ruling will have, there are other factors to take into consideration. For instance, what about organisations like Mardi Gras who operate in a non-for-profit fashion? They put on the world renowned gay and lesbian parade and associated dance party every year in Sydney, and they’ll be slugged in a massive way because of the scale of their events. But as Mardi Gras chairman Marcus Bourget argues, they’ve got little means of making that money back.

“We’re a not for profit organisation, but unfortunately we won’t be able to get an exemption for this. For a 10,000 person party that means it’s an extra $30,000 that we’ll have to cover. It means juggling to keep ticket prices competitive but also provide the production values that people want. We don’t get opportunities like other promoters to make that revenue back. For instance, our coat check is run by a charity, so we don’t get any of that money.”

What does the PPCA have to say?

Looking to the official statement made by the Phonographic Performance Company of Australia (PPCA) who won its legal battle yesterday, board member Paul Christie claimed that, “An increase in these tariffs is long overdue and will help compensate artists who create the product which is the foundation of the nightclub and dance party industries. Artists are entitled to a fair day’s pay for a fair day’s work and this will go some way towards compensating us for our creative output.”

Another board member Lindy Morrison emphasised the impact decision will have on making music a sustainable career choice. “... Many of our recording artists have very little finance to fall back on as they grow older,” she says. “In my experience the community recognises that musicians have been given a poor deal and that’s why these tariffs are important. Music bestows a cultural bond between us all and artists should be valued for this.”

But both statements were taken from board members with a background in rock music – Paul Christie is a musician for Mondo Rock and Lindy Morrison is the former drummer for the Go-Betweens. With the agendas of the organisation’s being delivered from such a perspective, it makes you wonder exactly how much this decision was tailored to Australian dance music and nightclub culture, and whether it takes into account the different dynamics that are involved in both DJing and dance music production.

There’s evidence that some considerations were left out of the Tribunal’s ruling. For instance, the emphasis on a role of a DJ in creating the vibe of an evening. “Leading DJs earn substantial sums for their services,” the ruling says. “Good DJs work with sound recordings with great creativity to entertain the crowd and produce the experience at the nightclub. However, no one would pay anything to see a DJ without the sound recordings.” What this fails to consider is that many dance music producers use DJing as a way of promoting their music productions, and that DJing and music creation go hand in hand in a great deal of cases.

But the ruling does take into account the fact that in many cases, nightclub promotion can be a rough business. Looking at Sydney’s Home Nightclub as a case study, it showed that for about 90 per cent of the time the venue is at about 50 per cent below capacity. But this concession is at odds with the Tribunal’s decision to charge the rates depending on the venue’s capacity rather than the amount of people through the door on any specific evening, which means a promoter will get slugged with the same fees regardless of whether they pack the venue out or the night is a total bomb.

The Tribunal does concede that the ruling could have some fairly hefty financial consequences, looking again at Home Nightclub. “The fee payable in respect of Home Nightclub would be in excess of $480,000 per annum. That sum would exceed the net profit derived by Home for the financial year ended 30 June 2005. The proprietor of Home asserts that it would have no option but to transform the present venue into a big hotel with background music.”

But one of the main affirmations of the ruling is that even though Australian nightclubs may not be able to afford the price hikes, that’s no reason that those who are producing the music should be denied the payment that they are due. “If it be the fact that the right to play recorded music has the value claimed by the Society, the fact that many nightclubs presently operating cannot afford to pay for that privilege is not a reason for them to be subsidised by those whom the Society represents.”

What do you think? Take a look at the ruling yourself by clicking HERE or discuss it in the forums HERE.