I buy the music legally and should have the right to play it to whom I choose. I don't gain any monies from playing the music. It is only used to create a certain ambience. It would save me hassle from the aggressive PRS and having to remember to re-apply for the licence each year and I would still pay it on what I actually buy.
I currently have to buy a licence to play background music from both PPL and PRS representing both sides of the industry. Also i wanted to have DVD in hotel rooms then another licence comes into play. To generate revenue, stop red tape and give the monies to those really concerned you could as a government add the fees at a standard rate to the purchase price of the music/DVD. Surely this would cover the current monies generated and give you an opportunity to collect direct from the people using the music and the respective bodies benefitting through the collection in the form of corpration tax.