Music Licensing Organization Attacks Fitness Industry Canada
EDMONTON – The gloves are off in Canada’s music licensing battle. The Neighbouring Rights Collective of Canada (NRCC), the association representing artists and the record companies for their performance rights, are now attempting to remove Fitness Industry Council of Canada (FIC) from representing the fitness club business in its attempt to negotiate a fair rate structure for Canadian clubs.
NRCC’s strong arm tactics are evident from even a brief review of events to date:
• Tariff No: 6 was filed on March 20, 2007, and FIC sought intervener status to dispute the tariff on May 30 2008. Granted full intervener status in February 2009, FIC has since been engaged in a lengthy legal process to alleviate the potentially devastating impact of this tariff on the fitness industry.
• If approved as currently proposed, Tariff No: 6 requires club owners to pay $3 per group exercise class plus 5 percent of gross sales per month for the use of copyrighted music. In addition, the tariff would be retroactive to Jan. 1, 2008.
• FIC provided questions to NRCC to build a defense against the tariff. Without these answers, FIC would have to wait for the NRCC to file its case on January 29, 2010 leaving only a few months to commission the studies necessary to build a defense. NRCC has refused to respond to the questions, and in response FIC has filed an objection to force it to answer.
• NRCC has issued a 46-question questionnaire to every Canadian fitness provider. This set of questions requires an extremely detailed response about their club business profiles and operations. Not surprisingly, the response rate has been low. NRCC is saying that this low response means that club owners do not find that the proposed tariff costs to be excessive. As a result, the NRCC is attempting to remove FIC from contesting in this legal proceeding.
The alarm bells are ringing loudly for fitness club operators across Canada. While paying a reasonable amount for the use of recorded music is not being contested in these proceedings, the current tariff proposed is clearly excessive and could prove to be disastrous for facility operators in Canada.
The total legal costs that FIC is incurring to fight the tariff is estimated to be upwards of $500,000. To date, FIC has received $250,000 for its legal defense fund. FIC is reaching a critical stage of the hearing process, where it will need to spend significant amounts of capital to appropriately defend all Canadian club owners.
If you have not yet contributed to the Tariff Defence fund, please contact Fitness Industry Canada at: 1 (877) 504 – 2033 or simply fill out an online pledge form at: www.ficdn.ca .
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