Fitness Centre’s to pay higher rates for the use of commercial recordings in fitness classes.

Recording artists, record labels and the PPCA have long argued that the rates fitness centres pay for the use of commercially available sound recordings in fitness classes were far too low.

On 17 May 2010, the Copyright Tribunal agreed. Its decision saw the licence fees for use of PPCA controlled sound recordings in fitness classes jump from 96.8 cents per class of 25 attendees to $15 per class or $1 per attendee.

In a market which appears to be continually forcing the price of music down, this ruling made the clear statement that the use of recorded music in fitness centres has been severely undervalued.

The ruling is not necessarily an out-and-out win for recording artists and owners of recordings, because the licence fee will only be payable if the fitness class uses sound recordings owned by members of PPCA (the Phonographic Performance Company of Australia) – who are generally record labels or independent artists.

Indeed, it is reported that Fitness First (the largest chain of fitness centres in Australia) has threatened to enforce a ‘cover-recording only’ policy which will circumvent the hike in licence fees. There are also available alternatives to fitness centres using PPCA music. Such alternatives have already grown in anticipation of the Copyright Tribunal’s decision, and it now seems likely that the market for such music will continue to grow significantly.

The Copyright Tribunal is empowered to make such decisions on licence fees through section 154 of the Copyright Act 1968. The Copyright Tribunal has previously stated (in a case relating to licences for playing music at nightclubs) that when considering and implementing licensing schemes “it must make a value judgment as to what it considers reasonable in the circumstances”. In this case, much evidence was presented in relation to the potential or reasonable value of the music being used in fitness classes. Surveys, questionnaires, estimates and comparisons to other markets were all analysed in the case and explained in the nearly 100 pages of the written judgment.

After the long process of applying for the implementation of the licence scheme (which commenced back in December 2006), the PPCA, record labels and independent recording artists can be understandably delighted with the result.

You can download a copy of the Copyright Tribunal’s decision here:

PPCA Fitness Centre Licence Scheme Decision

Click here to find out more information about the PPCA and click here to find out more about the Copyright Tribunal.