Businesses Begin to Face The Music, and Pay for It

July 3, 2009

According to Costa Rican copyright law, if a person or business obtains commercial benefit from the communication, performance or playing of recorded or live music, a corresponding fee must be paid.

Businesses that offer music, such as hotels, restaurants, bars and clubs, therefore have begun to pay a fee for their use of music to FONOTICA, the Costa Rican recording industry trade association.

The Costa Rican National Tourism Chamber (CANATUR) conducted a study that analyzed the fees that FONOTICA charges for use of copyrighted music. The fees are based on minimum wage, which is around $11 per day, and capacity of each location.

CANATUR, which has 213 members that offer lodging, found that if all of the businesses in the hospitality sector incurred this fee, they would pay a total of approximately ¢14.145 million ($24,590) per month. Alhough this fee is divided among individual hotels and businesses, the additional cost could cause particular worry for smaller businesses, which already are pinched financially with decreased tourism revenues reported this year.

“Calculating these numbers helps us to understand that smaller businesses will be the most affected,” said Gonzalo Vargas, president of CANATUR. “The added cost will make it increasingly difficult for them to operate, particularly because in the first quarter of this year there was a 12 percent decrease in tourists as compared to last year.”

When CANATUR included other tourism businesses, such as bars, restaurants, clubs, airlines, tour operators, transportation and other recreational organizations, CANATUR estimated that its affiliates would pay a total of ¢17.993 million ($31,281) per month for commercial use of music.

The fee is calculated using a formula based on capacity and minimum wage. For example, if a club has a capacity of fewer than 200 people, it pays a fee of five minimum wages per month. The rate of the fee increases according to capacity.

–Adam Williams

 

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