Australia's cafes and restaurants have until the end of the month to consider whether music will remain a core ingredient to their businesses.

The Phonographic Performance Company of Australia (PPCA) on Dec. 1 will implement a new tariff covering the use of the collecting society's recorded music.

The new R1 rates are "substantially reduced" from previous plans, which were put to a consultation process when the PPCA proposed a new draft licensing scheme in a May 18 letter to the country's 10,000 eating establishments.

The new rules mean some eateries will initially pay as little as 40 cents Australian (36 cents) a day or $146 Australian ($136) a year, while a top-end restaurant will pay no more than $3.20 Australian ($2.90) a day, or $1,200 Australian ($1,080) per annum. Until now, a restaurant or café with a seating capacity of 60 paid PPCA $62.04 Australian ($56) a year. Under the draft proposal distributed earlier this year, however, some establishments would have faced five-figure annual license fees.

"We haven't done an about-face," PPCA CEO Stephen Peach tells Billboard.biz. "What we were seeking to do with the consultation was to work out the structure of the tariff, the rates and to take account of information provided to us," he says. "The main plank of the feedback was to transition to these higher rates. This is a fair mechanism."

For the means of the new licensing scheme, the PPCA will continue to divide restaurants into categories based on the average cost of a main meal and their alcohol licensing status.

The proposed multi-session daily rates have been replaced by a single, reduced daily rate, and eateries' per-seat daily fees will be capped at an amount which represents 50 seats, rising to 75 seats and 100 for the subsequent financial periods.

The PPCA will phase in the new rates from Dec. 1, 2009 to June 30, 2013, and a minimum quarterly fee of $50 Australian ($45) will be introduced on all licensees.

A separate R2 tariff will apply to those restaurants which belong to a hotel or motel, and primarily provide meals to its guests.

The PPCA's R1 tariff won't be to the taste of every establishment. Clubs Australia, which represents clubs, cafes, hotels and restaurants, has slammed the proposals.

Peach admits that some businesses across the food service sector will simply decide to turn off the tunes. "Some will cancel and no doubt either not play music or elect to use broadcast radio for which they don't need a public broadcast license," he notes.

The PPCA is awaiting a Copyright Tribunal decision on a separate challenge for a raised licensing tariff with the country's gymnasiums and health clubs sector.

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