Gym owners, trainers and the countless thousands of people who enjoy the benefits of fitness classes can breathe a collective sigh of relief today – even if only temporarily.

After a hard fought five year battle a controversial tax aimed at gyms, yoga studios, bootcamps and basically every other fitness business has been struck down by a court in Australia. So why should we be interested in what happens in Australia? The answer has to do with the music that drives our classes and gets our clients moving.

Down under, Fitness Australia has been in a fight with The Phonographic Performance Company of Australia. Since 2005, the PPCA has been pushing for a drastic hike in copyright fees for the use of music in fitness classes and gyms. In May of 2010 Australia's Copy Right Tribunal granted the PPCA a whopping 1500% increase in the fees paid by fitness businesses of all levels. Of course Fitness Australia appealed the decision and in December the Federal Court agreed that there were some fairness issues at play. Had the fees gone through fitness facilities in Australia would have gone from paying $0.97 per class to just over $15 per class. But it would not have ended there as another music industry representative body, the Australian Performing Rights Association (APRA), was poised to apply to have their fees raised to equal those of the PPCA.  

And it still might. Currently the ball is back in the Copy Right Tribunal's court. They will now review the judge's decision and reissue their ruling on fee structure, hopefully something more workable than what they came up with last spring.

The same war is being waged here in Canada where Fitness Industry Canada is leading the charge to stop Tariff No. 6. Put forth by Re: Sound (formally the Neighbouring Rights Collective of Canada) Tariff No. 6 would force fitness businesses pay $18.59 per member for the use of music. Regardless of how many of those members take classes where music is played, the gym must pay. Even if you have no music playing at all, you still pay the piper. Paying off the international music industry will just be part of the cost of doing business in Canada.

To add insult to injury, if approved the new fees will be retroactive to Jan 1st 2008. Doing the math that means that if you own a gym with, let's say 1000 members, at the end of the year you'll be handed a bill for $18,590 for 2011 plus the $18,590 you owe for 2010 plus the $18,590 for 2009 and the $18,590 you owe for 2008. Grand total: $74,360 that you had no idea you would have to pay. Money you could not possibly have budgeted for. Money you cannot hope to recoup from your membership. Money for music you may not even have played over the last four years!

And Tariff No. 6 would be on top of the fees currently paid to The Society of Composers Authors and Music Publishers (SOCAN) through Tariff No. 19. In the usual domino effect, SOCAN has already applied to increase their tariff to match Re: Sound's. That could push the cost of music for some gyms to over $200,000 a year.
 
In the US there are not one, not two but three organizations that collect copyright fees on behalf of American songwriters, composers and music publishers (BMI, ASCAP & SESAC). They currently provide a blanket licensing fee to businesses that play music publicly and they all have different repertoires since members can only belong to one organization at a time. All three are watching for the outcomes in Australia and Canada to see what their next steps will be in imposing fees on US fitness businesses. For more on US music licencing please visit the International Health Racquet and Sports club Association (IHRSA) website.

Now before I get inundated with comments about how musicians need to be compensated I would like to say that we in the fitness industry have no problem with artists being paid for their work. What we do have a problem with is the way these fees are to be imposed. Music is an integral part of what we do and how we do it and we're fine with paying a premium for whichever songs we play during our classes. But we need a formula that works for everyone. I would hate to see a business landscape where big chain gyms can afford music and the small independents are left to try and market “Silent Spinning” classes. Or worse still, a world where people are priced out of exercising when these exorbitant music fees are ultimately passed on to consumers.

Bigger than that though, is the problem we have with the proposed payment system. The music industry needs to find a way to collect their fees at the point of purchase and not by embroiling small businesses in invasive and time consuming audits. The last thing any owner needs in this climate is another level of bureaucracy to answer to. And the idea that the new tariffs will be imposed over the industry as a whole is ridiculous. What other group would ask for the right to enforce blanket charges that have no relation to the product consumed? What's next, will the music corporations ask that every household in Canada be forced to pay a head tax of $18.59 per family member on the presumption that probably at some point somebody put on a Loverboy album during a cocktail party?

And the idea that a new fee should be retroactive is absurd. Imagine a gym that tried to hand you a retroactive membership increase. Or if your bank retroactively increased the interest rate on your mortgage.

On a personal note, what I find so insulting about this situation is the adversarial atmosphere the music executives and their lawyers have created. Believe it or not, we didn't open Momentum Fitness with the intent to pinch Cher's retirement fund or to drive Kanye West into the poor house. What they want to talk about is how we're taking their tunes for less than they're worth. What they don't want to talk about is all the free promotion we've given them over the years. They see our class participants as freeloaders sucking up their melodies for free instead of as a captive audience of potential future fans. How many people purchase a particularly uplifting song in order to add it to their personal workout mix after hearing it in one of our classes?

We all know that the recording business is in dire straights. The conglomerates that control album sales have failed to adapt to the internet age and have never found a way to recoup the revenue lost to a generation of elicit downloaders. So it isn't surprising that they've chosen to go after any stationary target they can find to replenish their corporate coffers. Shaking down small business owners is a lot easier than ferreting out every fifteen year old with a laptop and a broadband connection. And make no mistake, this isn't about paying performers. Record sales have always been a lost leader for musicians.They make their money from live shows, which is why the summer concert line up usually reads like the march of the dinosaurs and why Michael Bolton can still be found belting it out down at the local casino showroom.

If push comes to shove the fitness industry may need to hand these organizations a bill for all the free adverting and promotion we've done for them. By my calculations I introduce each of my members to about $18.59 worth of music a year. So perhaps can just call it even and both walk away happy.