Music venue slapped with unexpected $12,000 bill

A live music venue had just started to turn a profit after five years of trading when a bill for $12,000 landed.

The Dive bar in Dunedin received a legal letter sent on April 11 from the Australasian Performing Right Association (APRA) demanding payment of $12,247 for royalties.

It said if payment wasn’t received the association may apply for the business to be placed in liquidation.

Owner Michael McLeod said the demand for payment was for a period when the industry was heavily impacted by Covid-19. He had detailed to APRA all the gigs which were cancelled, but said the organisation lost the information.

READ MORE:
* As Neil Young boycotts Spotify, local artists struggle to earn royalties from platform
* Dunedin’s Captain Cook pub renamed ‘Dive’
* Coronavirus: Creative NZ announces multimillion-dollar help for artists

He had all but forgotten about the account when a person knocked on his door demanding payment.

‘‘This is the first written piece of paper that I’ve received.’’

Australasian songwriters were entitled to receive a payment of royalties when their copyrighted works were broadcast, streamed, or performed at a live concert, such as at Dive, he said.

The APRA model for live concerts used a cut-off figure of $35 for tickets, which effectively meant gigs with ticket prices higher than that became the responsibility of the promoter.

But for those under $35 – the bulk of gigs at a venue like Dive – the onus fell on the owner.

Those smaller venues did not receive any money from ticket sales, but relied on a venue hire fee as well as food and beverage sales.

McLeod had run the venue, previously known as the Captain Cook, for five years, and had only returned a profit over the past two years.

‘‘Hospitality is down, cost of living is really expensive and people are spending less going out for recreational social activities.’’

McLeod, a musician himself with Dunedin band The Shifting Sands, had no issue with artists being paid, but the model used by APRA for live music appeared to be broken.

‘‘It is unfair on small music venues, who are probably the candidate that least deserves to be lumped with a bill that people can’t decide who is responsible for.’’

Small-venues should not be held liable by default for the payment of live performance royalties for events with a ticket price of under $35, he said.

While that view was not popular with artists, as they received the royalty payment, it also led to a recent case highlighting the ‘‘absurdity’’ of the rule, McLeod said.

That came during a nationwide tour by The Beths last year, with tickets priced at $34.90.

If those tickets were just 10 cents higher, they would then have fallen into the category of promoter, effectively cancelling their live performance royalties as copyright holders.

But with the tickets at $34.90 the band was able to claim live performance royalties from APRA, and the small venues would be sent a bill instead.

‘‘It was clever of them, but it also highlighted how ridiculous the whole thing is, that 10c can mean I pay a bill.’’

Greer Davies, director of OneMusic, a brand of APRA, accepted there was potentially a breakdown in communication between both parties.

But it was essential that businesses, such as Dive, were able to provide how many days they had traded in the last 12 months, so they could invoice.

‘‘We need the business owner to tell us what is accurate.’’

It was likely that Dive’s bill would dramatically drop if those days were recalculated, Davies said.

While McLeod would pay a recalculated bill, he believed a fairer system was needed.

He noted the United Kingdom had made live music venues exempt from these fees after a survey found a third of live music venues had closed in the past decade, ‘‘and that these sorts of licencing fees were often the final nail’’.

Dunedin recently lost two live music venues – Dog with Two Tails and Starter’s Bar, while The Crown and Dive faced uncertain futures due to nearby developments.