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CRA Pushes Back at Copyright Fee Change

Australian senators are considering removal of a long-standing cap on performance rights fees

Australian broadcasters are raising a warning about a proposed change to copyright fees.

Since 1968, the amount the Phonographic Performance Company of Australia, which represents record labels, can collect in copyright fees from commercial radio broadcasters is capped at 1% of the station’s gross annual revenue. A similar cap exists of 0.5¢ per head of population for airplay on the Australian Broadcasting Corp. Stations must pay a separate, negotiated fee to the Australasian Performing Right Association & Australasian Mechanical Copyright Owners Society, which represents composers and publishers.

Sen. David Pocock (Australian Capital Territory) is looking to amend the Copyright Act of 1968 to remove the radio caps and instead to allow the PPCA and broadcasters to negotiate the copyright fee and for the Australian Copyright Tribunal to set a fee if a value cannot be negotiated.

In introducing the second reading of the “Fair Pay for Radio Play” bill, Pocock said “There are over 5,300 registered Australian artists that the collecting society collects for, and I believe they are entitled to a fair go at the negotiating table when looking at the value of their works.”

Ford Ennals, CEO of Commercial Radio & Audio, which represents commercial radio broadcasters in Australia, raised concerns that removing the radio caps would mean more money for international record labels and not greater financial support for Australian artists.

“Unlike the $30 million in APRA royalties that go directly from the radio industry to artists each year, the PPCA fees go directly to multinational record labels — and there is zero visibility of how much is ultimately distributed to artists,” he stated. “Increasing fees to global record labels, which boast revenues many times the size of the entire Australian radio industry, is simply not the best way to support local musicians.”

Ennals also noted that 220 of Australia’s 260 commercial radio stations serve regional and remote areas, providing local news and information through free, over-the-air broadcasts. “Without a cap, there is nothing to stop the PPCA and its members from increasing fees to levels that threaten the viability and quality of local radio services,” Ennals stated.

PPCA CEO Annabelle Herd, speaking on ABC Radio’s “National Drive” program in late June, “All we want is to be able to negotiate a fair market rate for the use of this material, not to have the Copyright Act tell us and tell our artists that they can’t be paid any more that 1% of gross revenue from radio stations who are very profitable.”

According to the PPCA, the Australian radio cap is unique and in other nations commercial broadcasters pay 1.5% to 4% for performance rights.

According to the CRA, the Australian commercial radio industry pays about A$37 million (about US$24.2 million). About A$30 million goes to APRA royalties, A$4.4 million to PPCA for the broadcast fee, and an additional A$2.5 million to PPCA for simulcasting online. Only the PPCA broadcast fee is subject to the cap.

The CRA also noted that Australian radio stations are required to play up to 25% Australian music. Songs from many other countries do not attract royalties, the CRA stated, so “it costs local stations more to play Australian music. Without the cap, the radio industry would be forced by legislation to play Australian artists without any limit on the amount that the record labels could charge for broadcasting those songs.”

“No one, least of all the Australian commercial radio industry, disputes that Australian musicians, songwriters and composers deserve more support, particularly during the current cost-of-living challenges,” stated Ennals.

“However, increasing the financial burden on radio stations with a fee increase that mainly benefits global record labels is not fair or equitable. It risks harming Australian music by harming the valuable platform that is Australian radio. Simply asking the record labels to improve the distribution of the existing PPCA fees could have the same effect as a rate increase.”

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