Australia: Music licensing rules sound warning note for retailers

10 October 2016

Troy Gurnett

Retailers that allow sound recordings to be broadcast in their store without being licensed to do so risk facing the music.

Reasons often advanced by those who believe music licences are unnecessary for retail premises include 'I just play the radio', 'it's just on in the background' and 'I'm doing the artist a favour by playing their music'.

In order to understand why a retailer must obtain a music licence (and often more than one) requires a brief foray into copyright law. 

The situation is complicated by the fact that, in Australia, two companies issue licences: Australasian Performing Right Association Limited (APRA) and Phonographic Performance Company of Australia Ltd (PPCA) – neither of which is a government organisation.

Relevantly, the Copyright Act 1968 (Cth) (Copyright Act) provides that copyright subsists in musical works (that is, the work product of the composer/songwriter) and sound recordings of musical works. The Copyright Act also provides that the copyright owner has the exclusive right to 'perform' a musical work in public and 'cause' a sound recording to be heard in public. 

In practice, ownership of copyright in a musical work is carved up. The composer/songwriter typically retains some rights (for example, the right to reproduce the musical work) and other rights (for example, the public-performance right) are 'assigned' to APRA. Copyright in the sound recording is typically (but not always) owned by a record company. 

Copyright infringement occurs where a person "does or authorises the doing of an act comprised in the copyright, withouth the licence of the owner". In the retail context, this occurs where the retailer 'performs' the work in public, without an appropriate music licence. In this context, 'performance' is not limited to a live performance: it includes performance of a recording licence. 

So do I need a licence?  

The short answer is: yes, you do.  A retailer that 'performs' music or 'causes' sound recordings to be heard in public must obtain a licence from APRA and a licence from PPCA. 

The consequence of not having a licence is that the copyright owner or the person who controls the copyright is likely to have a cause of action against you. To be blunt, you might get sued. These days, such cases are brought in the Federal Circuit Court of Australia. If APRA or PPCA are successful (which is almost always the case) the court is likely to order an injunction (you have to cease the infringing act or you will be in contempt of court), damages (you will have to pay a sum of money as compensation for the wrong) and costs (you will have to pay APRA/PPCA's legal costs). 

You may argue that you bought the musical legally. That's great. It means that you have not engaged in copyright infringement by 'reproducing' musical works and/or sound recordings without the licence of the copyright owner. However, you still have to obtain a licence from APRA and a licence from PPCA for 'performing' the musical works and 'causing' sound records to be heard in public. These are different rights.   

When you buy and download music (or when you buy a record or CD, if you're a little old-school), what you are in fact buying is the right to play that music in a private, domestic environment. If you examine the terms and conditions of your music supplier, or if you examine the record or CD, you will find words along the lines of 'Unauthorised public performance is prohibited' or 'You are authorised to use this product only for personal, non-commercial use'. Such words are carefully crafted and binding. 

So how does the licensing work? 

APRA and PPCA are part of a group of organisations known as copyright collecting societies. The primary function of a copyright collecting society is to collect licence fees on behalf of its members. Most such societies, including APRA and PPCA, are not for profit. 

From the perspective of music users, copyright collecting societies provide a useful service. In essence, they provide a one-stop shop (or two-stop shop as the case may be) for music users to obtain a licence for substantially all of their music usage. The alternative would be for music users to contact individual copyright owners to obtain licences directly from the source. While this occasionally happens for very specific purposes, it is of course highly impractical for the vast majority of music users. 

Both APRA and PPCA have a range of licences for different purposes. These are described on their respective websites: apraamcos.com.au and ppca.com.au 

Helpfully, APRA and PPCA in association with the Australian Retailers Association now offer a joint music licence scheme for retail shop owners with premises under 500sqm (see http://retail.org.au/news-posts/ara-music-licence-scheme-benefit-thousands-retailers/).  

The licence fees payable under the various licensing schemes vary depending on the nature of the use. In principle, prominent music use will attract a greater fee than that of background music. 

Importantly, APRA and PPCA's licensing schemes fall within the jurisdiction of the Copyright Tribunal of Australia, which has the power to confirm or vary a licence scheme or proposed licence scheme. The copyright collecting societies can (and sometimes do) refer particular licensing schemes to the Tribunal. Music users (or organisations who represent them) are also free to refer licensing schemes to the Tribunal. 

Ultimately, having the right music 'performed' in a retail context can be very powerful in terms of attracting customers and boosting sales. Viewed in this way, the licences offered by APRA and PPCA offer good value.

This article was first published in the October edition of Retail World magazine.

Authors

Troy Gurnett

Troy Gurnett

Special Counsel
Australia

Call me on: +61 2 9226 9888