Clubs react to fee increase.

Phonographic Performance Company of Australia (PPCA) has proposed a massive hike in the licensing fees nightclub and hotel owners must pay for public performances. The PPCA licenses the broadcast and public performance in Australia of all sound recordings and music videos for its registered record companies and artists.

In a letter issued over the past fortnight, the PPCA says it plans to increase the tariff to A$1 ($0.68) for each person the venue is licensed to hold, with effect from mid-2005. Venues currently pay the PPCA a rate of A$0.0704 ($0.048) per person.

"The last increase in this tariff was in 1996 when it was raised from A$0.05 ($0.034) to A$0.0704, so how can they justify, eight years later, a jump to over A$1," says Henry Motteram, managing partner at the Savvy Bar Lounge in Adelaide. Motteram says he will meet with other venue owners to make a stand against the fee hike. "The high cost of liability insurance, marketing and promotion, and high penalties for staff makes clubs low margin operations," Motteram adds.

David Wallace, state president of the Cabaret Owners Association, says his club, the Metropolis in Fremantle, would have to pay A$140,000 ($96,000) compared with the current A$8,000 ($5,500) a year.

Charles Mancuso, owner of Candys, estimates fees for his Sydney venue would rise from A$73.50 ($50.5) a year to A$1,050 ($722). "Many clubs will close as a result, and where will record companies go to find places for their new acts to play," says Mancuso.

PPCA CEO Stephen Peach says that the association is holding consultative discussions with the live sector, including the Australian Hotels Association, over the next 12 months. However, he emphasises that "music is the key attraction at a club. Yet entry fee can often be A$20 ($13.7) and drinks start at A$5 ($3.44). Paying just A$0.07 for the music is out of whack."