Proposed copyright changes threatened local radio, CRA warns

The commercial radio industry is warning that the proposed removal of the long-standing 1% cap on copyright fees for music broadcast on Australian radio puts local regional radio stations at risk – and won’t even increase financial support for local artists.

CRA and Senate logos

The cap was introduced in 1968 to protect the industry from exorbitant charges by collecting agencies like the PPCA, a not-for-profit that serves as a middleman to provide Australian businesses with recorded music rights.

The commercial radio industry has argued that the removal of this safety guard puts the sustainability of Australia’s 220 regional and remote radio stations at risk.

Senator David Pocock, who introduced the bill, argued it supports market-based negotiations and removes market distortion effects the legislation has caused. Over the past three decades, 5 different reviews have been conducted on the cap.

The review in 2019 determined that since the cap’s introduction in 1968 circumstances had changed and the legislation has lost its purpose. It stated: “The Committee sees no public policy which is served by the cap and is concerned that it distorts the market in a way that disadvantages Australian artists.”

Ford Ennals, CEO of the industry body Commercial Radio & Audio, disagrees. He states that instead of increasing financial support for Australian artists the bill will send more funds to multinational record labels.

He argued that reform of the distribution mechanism for existing fees rather than an increase in the overall rate would lead to the same effect but without the potentially damaging effect on local radio. PPCA is not transparent about how much of its royalties are distributed directly to artists versus labels and fees.

Ennals noted the PPCA’s public desire to see fees increase by up to 4% of gross industry revenue.

“As the rate is calculated on revenue, such an increase would cost the local radio industry millions of dollars more a year, with no consideration regarding an individual station’s profitability or viability,” he said.

As Australia has legislated content quotas where stations must play up to 25% Australian music, Ennals fears stations will be forced to play songs without any limit on how much the record labels could charge for the right to do so.

However, with the PPCA rate currently at only 0.4%, less than half of the amount they’re capped at, it is questionable how much of an impact the legislation will make.

Additionally, the bill retains the safeguard of the Copyright Tribunal, which has jurisdiction over equitable licensing arrangements considerate of a radio station’s region, economic situation, expenditures, and market forces.

The bill was introduced on August 3; whether it will pass remains to be seen.


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