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Distribution information guide: Background music

This information guide explains how the licence fees we collect from businesses using background music are paid out as royalties.

Background music in restaurants & cafes, hotels, clubs, retailers & service providers, live adult entertainment, places of interest & amusement, councils, public vehicles & vehicles for hire

Where does the money come from?

APRA AMCOS collects licence fees from a large number of small and large businesses in Australia and New Zealand for the use of music on devices such as radios, background music systems, smart phones, tablets and televisions on their premises.

What information does APRA AMCOS use to determine who should be paid?

Given the wide range of businesses that are licensed for this type of music use, it would be inefficient and unfeasible to collect detailed music use reports from all these licensees. For the largest retail chains (e.g. Coles and Woolworths) APRA will distribute directly to the music played in those stores, and for retailers, service providers and dining establishments where APRA AMCOS has an agency arrangement with a background music provider, licence fees are paid according to usage reports from that service provider (see separate Distribution Information Guide). Generally, however, APRA distributes these licence fees by using analogous data sources.

To adequately represent the wide range of music played by businesses where there is not a direct allocation, licence fees, according to the scope of each specific licence scheme**, will be distributed using data from one or more of the following sources:

  • radio (commercial & community radio in Australia; and commercial & student radio in New Zealand);
  • television (commercial & government funded stations);
  • music streaming services, and
  • live music performance reports from members (for music in the workplace cover only).

** For example, if a retail store has a licence which only covers them for playing music through a radio and/or television screens, then their licence fees will only be split between radio and television. Likewise, if a restaurant uses Spotify or a similar service, their licence fees will only be distributed using data from Spotify and Apple (in these cases, in order to appropriately manage the large data volumes, a 1,000-stream threshold is applied).

APRA recognises the use of foreign language music used in restaurants by distributing some revenue from restaurant licences to affiliate overseas societies who represent the most commonly used foreign languages in Australian restaurants.

How are songs matched to the data APRA AMCOS receives?

For the largest retail chains, the reports provided to us are directly matched to the vast repertoire of songs in our database. Where we make payments via analogy, the song matching process has already taken place within the different distribution pools that this revenue is allocated to.

Key terms used in our Distribution Rules and Practices documents

Songs:
The Copyright Act refers to compositions, musical scores in the form of sheet music, broadsheets or other notation as musical works. Lyrics or words to a song are considered literary works. When we refer to songs, we are referring to all the elements of a musical/literary work protected by copyright.

Analogy:
Royalties are distributed via distribution pools (or by copying datasets) that are most similar in terms of a licensee’s music content. This method is used when Direct Allocation or Sample reporting is impractical.