A decision from the organisation responsible for collecting music royalties could place unsustainable pressure on the UK’s hard-pressed night-time economy, say trade chiefs.
Stakeholders in Britain’s hospitality trade have reacted with dismay to a decision by Phonographic Performance Limited (PPL) to hike the cost of playing recorded music at live events.
UK Hospitality chief executive Kate Nicholls said PPL’s decision to more-than double the average cost of tariffs it collects under the terms of its Specially Featured Entertainment (SFE) licence could have a “potentially devastating” impact on music-reliant entertainment destinations.
“This new tax will see venues hit with an average 130 per cent increase, which we estimate will cost the hospitality sector upwards of £49m,”she remarked.“Hospitality businesses are already being bombarded with constantly increasing costs…this additional massive cost is not going to help, it is only going to force more and more venues out of business.”
Established in the 1930s, PPL collects royalties on behalf of the major record labels for the use of recorded material within public settings. The tariff structure of its SFE licence has remained largely unchanged since the 1980’s, and the company has said that its update was in response to consultation with its licensees.
“We have listened to their views as part of finalising our new SFE tariff,” said its CEO Peter Leathem. “Recorded music forms a very significant part of SFE events and we believe the new SFE tariff delivers a fairer return for our members who create that music.”
But Nicholls wasn’t alone in expressing her disapproval of the new fees. Her peer at the British Beer & Pub Association Brigid Simmonds also levelled criticism – calling PPL’s latest decision “extremely disappointing.”
“The night time economy is vital to the future of our high streets, but businesses that are crucial to that night time offer like pubs are already struggling, with on average three pubs a day closing their doors for good,” she said.“This decision will be another big blow to hospitality businesses that are struggling to survive.”
According to Simmonds, her trade association had been in discussions with PPL for “the past 18 months”as its consultation process was ongoing,and had raised concerns that the newly proposed levy – which will be based on the approximate number of attendees at each event – was “disproportionate and unwarranted.”
“We will consult with our members and the wider hospitality industry in more detail on these unreasonable increases,” she added. “Copyright charges are established by law, but average increases of 130 per cent that undermine the viability of pubs, clubs and the night time economy are not justifiable.”