Phonographic Performance, a British music industry body that collects royalty payments for musicians, is planning to more than double the fees paid by pubs, bars and nightclubs to play recorded music.

By 2023, venues hosting DJ events – also including cafes, restaurants and hotels – will pay 9p per person per hour, versus an average of 3.9p today. This money is collected by Phonographic Performance (PPL) and distributed to the artists and record companies whose music is being played; the changes don’t affect venues that use music only in the background. Announcing the changes, the PPL stated: “The current tariff has been in place for around 30 years, and PPL’s view, supported by economic analysis, is that the fees in it are too low to be an appropriate reflection of the value to businesses of using recorded music.”

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The fees paid will be in proportion to the number of people at a venue, “to ensure events with different audiences are treated fairly”, according to PPL. Smaller venues will not face the same rates as larger ones and may have to pay less than they do currently.

There has nevertheless been a backlash from the hospitality industry. “The margins for music venues are being repeatedly squeezed, and this is yet another nail in the coffin – some venues will undoubtedly be pushed over the edge by this increase,” said Steve Ball, the chief executive of the Columbo Group, which runs London venues including XOYO and the Jazz Cafe. He told the Guardian that the move could lead to job losses at venues, and therefore limit opportunities for up-and-coming musicians. “This greed will devastate the music scene in the UK, not only for those in the industry but for punters too … There is absolutely no benefit to PPL’s proposals.”

“It is only going to force more and more venues out of business,” said Kate Nicholls, chief executive of UK Hospitality, which represents 700 companies across the sector and estimates the increase in costs to the industry at £49m.

She argued the changes would “wring the last life out of venues … It is not just nightclubs and large venues that will be hit. Village pubs that host weekly discos will be strangled by the charge and there is every chance that such events, upon which many pubs rely, will be forced out altogether.”

Peter Leathem, the chief executive of PPL, has responded to the criticisms by saying the changes are on behalf of over 100,000 artists and record companies. “These are not just established and well-known names; they include session musicians, orchestral players, self-releasing artists and small independent record companies,” he told the Guardian. “It is important that they are paid fairly when their music is played.” He argued that current rates “significantly undervalued” artists’ work, and added: “We do not recognise the £49m figure cited by UK Hospitality.”

The changes to the fees will come into force on 1 July, with fees gradually increasing until 2023.