Licensees urged to hold back PPL payments
Scots licensees are being urged to hold back their PPL fees in protest against proposed licence hikes. PPL, the organisation that collects royalties on behalf of performers and record companies, is proposing to charge pubs and clubs that put on Specially Featured Entertainment (SFE) exorbitant fees and this includes DJ’s.
The proposed price rises, which would see an average pub currently paying £30 for a 4-hour SFE, now having to pay £380 for its PPL license, excluding the cost of the DJ. While club owners, with a 5-hour SFE, and a 2,500 capacity, would see their fee increase from £129 to more than £4,000.
It will affect pubs, clubs, hotels, and cafés, in fact anywhere that does more than use background music. It could spell the death knell for DJ’s, who get most of their income from the licensed trade, but it could mean a boon for live music bands. Live music doesn’t come under the PPL remit.
The PPl have said that they don’t consider the fees currently paid a “fair reflection” of the value of the licence, but industry insiders say that it is merely a way of clawing back cash following a decrease in income from traditional channels.
Although the fees are only at the consultation process, organisations such as the British Beer and Pub Association and Noctis, have already said they are “not feasible”.
BBPA chief executive Brigid Simmonds said, “These proposed increases for playing music are unacceptable and off the scale. They would be a huge burden.”
The BBPA estimates that a small pub company with six venues running two to three events a week could face huge fee increases. If between 250 to 400 people attended each event, a current bill of £22,300 could become £220,000 annually.
Donald Macleod, MD of CPL, which owns The Garage and The Tunnel nightclubs in Glasgow, is incensed. He told DRAM, “We should organise a boycott of the PPL. These prices increases are insane. Do they not know what is going on in the licensed trade at the moment? This could cause bars goes out of business and jobs being lost.
He urged, “We all need to get together on this. We need to speak to our politicians and we need to respond vigorously to the consultation. A campaign to oppose these prices needs to be organised. We should all hold back our fees.” He continued, “That might seem drastic, but it would certainly make PPL sit up and take notice of our concerns. If we don’t take action we will see more bars and clubs going out of business and jobs being lost.”
Eddie Tobin agrees, “We should run a ‘Hold back the money campaign’. This is an insane increase.The price increases being suggested are a disgrace and they could sound the death knell for the pub and clubbing scene in Scotland.”
Licensing law specialist Stephen McGowan, of Lindsays, says “PPL lost a significant case last year in which they were forced to issue refunds to the licensed sector of around £20m, so they may be trying to mitigate that loss. The licensed industry has been bled dry over the last few years and established operators are going bust. This new fee increase will put people out of business. Ministers like Andrew Griffiths, who has acknowledged Government had let the industry down, need to step up”.
PPL has defended the consultation. But even it admitted in its 2010 accounts, “The economy continues to play a part in our ability to collect licensing income and 2010 proved particularly difficult in some markets; such as the retail and pub industry where business closures resulted in less venues playing music.”
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The same accounts also show that PPL increased its revenue from licensing from £111.4m in 2009 to £143.5m in 2010. Says Eddie Tobin, “How can PPL justify raising licensing fees?”
PPL wants to phase in the new rates over three years from April 2012. Operators would pay 25% of the charge in year one, 50% in year two and the full amount from 2014 onwards. To see the consultation document go to dramscotland.co.uk