Small firms have to face the music

Collection Agencies take shops and restaurants to court for fees

Your cornershop and local Chinese restaurant best be on the look out because they among a host of small businesses being targeted by the music industry for collection of “performance fees”.

Shop owners who play recorded music in their stores are being scrutinised by “music inspectors” from record companies and prosecuted if they do not have a licence to play background music.

Music executives are trying to boost their income as the industry loses out on traditional revenue sources because of internet piracy. Last year both Phonographic Performance Ireland (PPI) and the Performing Right Society for Music (PRS) initiated a policy of taking action against small firms that refused to sign up for its commercial background music licence.

The PPI like it's UK counter part, the PRS, has told its inspectors to examine company directories in all Irish towns and carry out spot checks. The agency collects royalties for record companies and has 15,000 businesses on its books. I

 The director of the Small Firms Association (SFA), Patricia Callan, said she had been inundated with complaints. “Businesses want to be compliant, but costs have increased over the past 12 months, and I know several have stopped playing music,” she said. According to Callan,  “Businesses can’t understand why they have to pay for multiple licences for what is essentially the same thing,” as most of the SFA’s members have already paid a fee to the Irish Music Rights Organisation (Imro), which collects royalties on behalf of composers. But PPI insists that it and Imro are separate organisations and businesses must have licences from both.

In Britain, the Performing Right Society for Music (PRS) has been accused of using aggressive tactics while targeting small companies and has forced more than 350,000 people to pay fees. In the last yeara lone it raked in more than £600m (€628m) in royalties, despite stagnating CD sales and widespread illegal downloading, an overall increase of more than 8% from 2007.

The PRS made calls to small businessmen and sent out 567,000 letters in 2008 seeking fees. Licences can cost from a few pounds to several thousand pounds depending on who is listening to the music. Pubs and clubs are obvious targets but thousands of letters and phone calls have gone to one-man businesses, including dog kennels and catteries, which play music to soothe their animals, and even police stations that help crack down on music piracy.

The PPI is even taking the government to court for granting hotels and prisons an exemption from royalties when they pipe songs into bedrooms and prison cells.