The fee paid to the music industry by French public establishments that play recorded music will be significantly raised from Feb. 1, 2010, a government-led commission has ruled.

The Jan. 5 ruling covers establishments such as bars, restaurants and shops but not nightclubs, which have a separate agreement.

Neighboring rights licensing fees are collected by umbrella group SPRE and then distributed to artists and record labels through their respective collecting societies: Spedidam and Adami for the artists, SPPF and SCPP (whose membership includes the four major labels) for the record companies.

Rates are set by a dedicated commission chaired by a government representative with the casting vote.

Establishments are subject to separate fees for performance rights licenses for authors/publishers (collected by Sacem) and artists/labels. Since 1987, the neighboring rights rate was based on a proportion (18%) of the performance licensing fee obtained by authors, according to independent labels body SPPF, which expressed its satisfaction in a statement that the new rate system is now set independently for neighboring rights.

With the new rates scheme, SPRE's related income should pass from €21 million ($30.3 million) in 2008 to €75 million ($108.1 million) in 2013. The new rates system will be implemented gradually, with a 45% discount in 2010, 30% in 2011 and 15% in 2012.

SCPP and SPPF both praised the commission vote in separate press releases, although SCPP stressed the new rate is below their expectations, as neighboring rights will represent 65% of the corresponding revenue for authors and publishers.

Jérôme Roger, director general of SPPF, stated: "The growth of the neighboring rights, be it limited, allows us to maintain the activity [of record labels] and to preserve investment in music production in France."

This new rate completes a round of negotiations on neighboring rights that started in 2007 and has already led to a rise on fees paid by privately-held and state-owned French radios stations.

Both SCPP and SPPF have yet to issue a detailed breakdown of the costs of new licenses, but they compared the new fee a bar will have to pay as being equivalent to the price of almost two coffees a week.