Trade bodies UKHospitality and the British Beer & Pub Association (BBPA) are to take the proposed increase in recorded music tariffs by music licensing company PPL to the Copyright Tribunal, The new specially featured entertainment (SFE) tariff, which relates to playing recorded music in public at hospitality & licensed premises is set to take effect on Monday, 1 July.
In 2018 PPL collected a total of £246.8 million for performers and recording rightsholders; an increase of £28 million (13%) from 2017. Growth was achieved across all three of PPL’s revenue streams; broadcast and online by 5%, public performance and dubbing by 3%, and international collections by 43%.
The new tariff relates to the playing of recorded music in public at events such as discos and DJ nights and applies to nightclubs, pubs and bars, cafes and restaurants, and hotels.
The announcement follows a formal period of consultation with PPL’s SFE licensees between July and October 2018, covering the scope, structure, fees and implementation of a new SFE tariff. The current tariff has been in place for around 30 years, and PPL’s view, supported by economic analysis, is that the fees in it are too low to be an appropriate reflection of the value to businesses of using recorded music at SFE events.
The new SFE tariff will therefore see a number of changes and clarifications, including:
- Measuring the audience at an SFE event by using the total number of admissions to the event.
- A change so that the fee will increase in direct proportion to the size of the audience (measured in bands of 25 persons). This will help to ensure SFE events with different audiences are treated fairly and consistently.
- The introduction of two new smaller tariff bands, for SFE events with attendances of 1-25 and 26-50 persons. In many cases, this will help to ensure that licensees with small SFE events will initially pay less for such events than they are paying under the current SFE tariff.
- The phased introduction of increased fees over a 5 year period from July 2019, based on an initial rate of 4 pence per person per hour (up slightly from the current average of 3.9 pence per person per hour). This will move to fees based on a rate of 9 pence per person per hour by 2023 (subject to annual indexation), giving licensees time to adapt to the increases.
The challenge by UKHospitality and the BBPA was revealed as Lord Smith of Hindhead, Best Bar None chairman and Association of Conservative Clubs chief executive, took PPL to task in parliament over its “outrageous” fee hike. Lord Smith said: “PPL collected £250m in fees last year, raked off some £35m in administration fees and paid its chief executive a package worth £786,000. If PPL wants to provide copyright holders with a better return, it should perhaps look at cutting its own expenditure. The proposed new SFE tariff fee is frankly outrageous, and potentially damaging.
UKHospitality and the BBPA are to refer the increase to the Copyright Tribunal for independent review. The Copyright Tribunal aims to resolve UK commercial licensing disputes between copyright owners or their agents and people who use copyright material in their business. BBPA chief executive Brigid Simmonds said: “BBPA and UKHospitality have been discussing changes to this tariff with PPL for 18 months. Unfortunately it’s now pushing ahead with increases in excess of 120% over the next four years, which we believe are unjustified. As a sector it is only right we challenge this and the support of Lord Smith is extremely welcome.” UKHospitality chief executive Kate Nicholls said: “Squeezing venues and squeezing customers out of venues does nobody any favours – hospitality businesses or PPL. We all need to be working harmoniously and that means not gouging venues unfairly.”