Huge Show of Support at IHRSA as FIC Fights Impending Music Tariff
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SAN FRANSISCO – It was a full house for this year’s “Canadian Forum” held on March 18 at the International Health Racquet & Sportsclub Association (IHRSA) conference in San Francisco.
Fitness Industry Canada (FIC) hosted the annual event, which typically focuses on one key issue. This year’s topic was, not surprisingly, Tariff No. 6, the proposed tax that experts believe will cripple our industry if passed into law. |
The 90-minute presentation (a reception followed) attracted over 80 Canadian fitness club owners, executives and managers as well as representatives from several commercial fitness equipment companies.
The crowd unanimously supported FIC and pledged to support the fight financially. Many clubs have already made significant financial contributions, and others quickly agreed to do so at the meeting.
The industry needs to raise $500,000 for its legal representatives to carry on with the case.
Tariff No. 6, if made law, would charge fitness clubs for “neighbourhood rights” (see sidebar). The Neighbouring Rights Collective of Canada (NRCC) is proposing that clubs pay 5% of gross revenue per month and $3 per group exercise class to use copyrighted music. This fee would be in addition to fees that fitness facilities currently pay to the Society of Composers, Authors and Music Publishers of Canada (SOCAN).
During the presentation, the president of Fitness Australia, Susan Kingsmill, updated the audience on Fitness Australia’s current status in its battle against a similar tariff. Fitness Australia is currently a few steps ahead of Canada in its legal proceedings; it is in arbitration and the courts are determining if the tariff will become law.
David Patchell-Evans, IHRSA’s board chairperson, thanked Kingsmill for leading the fight, which will now likely happen in several countries.
Other speakers included Helen Durkin, IHRSA’s executive vice president of public policy, and Brain Gilbank, FIC’s association manager.
“The proposed tariff is the biggest threat our industry has ever faced,” said Gilbank. “Canada – along with Australia – is a front runner in this type of royalty entitlement analysis.” If the Canadian Copyright Board approves it, the proposed tariff would almost certainly have implications outside of Canada, he added
A secondary threat is that SOCAN will ask for a similar increase if Tariff 6 passes, adds Gilbank, bringing the potential cost to the industry to $300 million.
He also emphasizes that groups such as DMX Music, Body Training Systems (BTS) and the Les Mills programs do not pay royalties on behalf of fitness clubs.
According to Gilbank, these companies pay SOCAN fees for the right to manipulate the original music for fitness club group exercise classes. And, once the music is played in a club it becomes a public performance of music which requires the club to also pay SOCAN.
This situation will be the same if Tariff No. 6 is passed: both the companies who create the music (DMX, BTS, Les Mills, etc.) and the fitness clubs who play their music will pay Tariff No. 6 fees.
The United States is still considering whether performers and sound recording owners should receive royalties when their music is broadcast. If the U.S. passes legislation allowing for royalty payments of this type, its next step would be to determine the amount of the royalty to be paid. (This is where the debate currently sits in the Canadian and Australian arenas.)
Currently, U.S. fitness organizations are lending input and support to their Canadian counterparts and have a vested interest in seeing the Canadian fitness industry succeed. Canada’s experience with Tariff No. 6 will undoubtedly be reviewed and considered as a reference point by all U.S. parties as their situation develops.
FIC can only move forward with financial support from our industry. As an organization funded completely by donations, FIC needs to raise $500,000 to successfully defeat this proposed tariff. Failure to defeat it could mean that many commercial clubs will close their doors.
Can we count on you?
To learn more and to pledge your club’s support, visit www.ficdn.ca. Or contact association manager Brian Gilbank at 780-732-5019/866-402-3422 ext. 3 or bgilbank@ficdn.ca.
Neighbouring rights (aka public performance rights): a term used to indicate rights of producers and performers to be compensated when their sound recordings and performances are broadcast, performed publicly, reproduced, rented out or commercially distributed. These rights are independent of any composers’ rights which may also exist.
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April 17th, 2009 at 6:01 am
We are very concerned about this tariff and are trying to get the wrod out to everyone that we know. This tariff could kill business! what are they thinking?
Nikki Layton
www.myvolo.com