UPDATED: Commercial Radio Australia chief executive Joan Warner has hit back at comments made by Phonographic Performance Company (PPCA) chief Dan Rosen accusing CRA of "using regional listeners as pawns" and "treating them with contempt" over the decision to shut down internet simulcasts of over 200 commercial regional radio stations on Friday to avoid having to double-up on licensing payments.
Responding to comments made in the Financial Review today, Warner told AdNews it was the PPCA that was "using regional Australia and the whole radio industry as pawns to get itself an undeserved and higher fee". "They throw up all these smokescreens and say we should pay them more money – we already pay them," she said. "Now they see an opportunity – let's charge them a second and higher fee."
Commercial Radio Australia said on Friday local commercial metro radio stations were "reviewing their position on a weekly basis and also may switch off in the future". The dispute centres around a determination issued by Minister Richard Alston in 2000 which held that exact online simulcasts were be considered to be the same as the original broadcast – and hence not subject to additional licensing fees.
The PPCA, representing the big four multinational record companies, challenged the determination in 2010. The challenge was dismissed in the Federal Court but the PPCA appealed and in February 2012, the Federal Court upheld the appeal. The outcome means all radio broadcasters will be required to pay an additional copyright fee for the same content for which a fee is already paid under the broadcast license.
The radio industry has made submissions to the Communications Minister to issue a new Ministerial Determination to clarify the issue, but speaking in the Financial Review, Malcolm Turnbull said it was an "issue between the rights owners of the music and the radio stations and that is being sorted out commercially now … I don't think the government should be regulating where it doesn't have to".
Warner told AdNews the commercial issue was "simply a manifestation of this policy disconnect". "Regional stations don't want to turn off their simulcasts – they know there are some listeners who depend on them. But they are very concerned about this massive financial liability. One regional operator calculated that it would be 50 to 200 times higher for their online listeners."
She said while she "understand[s] that this government is a deregulatory government, this was a regulation that was overturned by an appeals court ... [Mr Turnbull] has said he's watching to see what happens as we go through the Copyright Tribunal. [The PPCA] is using, or attempting to use radio as a cash cow. We hope the record companies' intentions are very clear [to the Minister]".
In a statement announcing the shutdown on Friday, Warner said: "In a converged world, listeners want the convenience of listening to their local radio station at home, at work and in the car. Record companies now want radio stations pay for how our listeners tune in.
"We don't pay an extra fee when people listen on a car radio, via an FM chip in a mobile phone or via radio chip in a clock radio or hi-fi system but we are now faced with the prospect of paying an extra and higher fee – if the PPCA gets the high-cost scheme it is pushing as a final scheme – if listeners choose to listen to their local radio station online."
CRA says that the over 200 regional stations ceasing their simulcasts are doing so because the PPCA, through the Copyright Tribunal, has been imposing an interim scheme on commercial radio stations while it pursues a high-cost scheme for songs played over the internet.
Under the interim scheme, broadcasters were ordered by the Copyright Tribunal to apply for an interim simulcast license by 31 January to continue as they have, however the broadcasters are concerned that should the PPCA be successful in its bid, simulcast fees may be back-dated to the start of the interim license.
"Exact online simulcasts themselves do not attract additional revenue," Warner said. "Not only would the PPCA's preferred final scheme impose a second and higher fee, it would require local radio businesses to incur significant financial costs to put in place the sophisticated system needed to perform complex calculations to report on PPCA's proposed scheme."
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