A fight over copyright fees and the future of Australian music on commercial radio

Jason Pollock
By Jason Pollock | 7 June 2024
Eric Nopanen via Unsplash.

Australia's commercial radio networks stations have been forced to reveal what their big ticket star announcers get paid.

But whether or not these numbers, expected to be of the eye-watering kind, are revealed publicly remains to be seen. 

This is all part of a legal battle between owners of music - record labels and Australian recording artists - on payment for the use of their creative output on commercial radio.

The music industry is backing this with an advertising campaign, Radio Fair Play.

The Phonographic Performance Company of Australia (PPCA) has taken industry body Commercial Radio & Audio (CRA) to the Copyright Tribunal to determine what they say their members should be paid.

Part of that case seeks to discover details of the top three highest-paid radio presenters at ARN, Nova and SCA.

What broadcasters pay radio presenters is a factor to be taken into account when assessing the reasonableness of the remuneration for music, PPCA told the court.

The tribunal has ordered the pay details be revealed to it as part of its work to determine a fair share for music creators. 

Commercial radio stations pay the Australasian Performing Right Association (APRA) and the PPCA for the music played.

However, royalties are currently capped at 1% of commercial radio revenue.

Although both ARN and NOVA declined to tell AdNews either how much their top radio personalities are paid or how much they pay as networks to APRA and PPCA - and SCA didn’t respond to a request for comment – the judge in the case did order all three networks to provide details to the court.

As part of Kyle & Jackie O’s 10-year extension to their contract with ARN, the broadcasting duo reportedly received a percentage of revenue and millions of shares.

Current legislation working its way through government seeks to amend the Copyright Act 1968 to remove the 1% cap.

An explanatory memorandum to the legislation said: “The removal of these caps has been recommended by at least five inquiries over nearly 30 years, which have generally found that the caps serve no public policy purpose and distort the market in a way that disadvantages Australian artists and rights holders.”

A report by the Senate Legal and Constitutional Affairs Legislation Committee is due on June 20.

A study commissioned by PPCA and compiled by the economics advisory firm Mandala found that removing the caps could lead to an additional $4.8 million paid to Australian artists in royalties in 2024-25.

It also found that artists played on radio could see up to $19,100 in additional income per year, a 78% increase.

PPCA CEO Annabelle Herd said Australian artists are doing it tough at the moment.

“The report shows how a fair rate would deliver additional income for Australian artists, as well as drive increased investment from labels into local artist development and promotion, helping an industry that is a proven economic and social contributor reach its full potential,” she said.

Mandala director Tom McMahon said a clear finding from the research is that the system in Australia is well out of line with other countires.

“The Australian radio industry has some of the highest revenue per capita globally, but the actual royalty rate for sound recordings paid by commercial radio stations in Australia is just 0.4% of broadcast revenue, compared to countries such as Canada, the UK and Germany, which have rates of between 3% and 7.5%.” 

A CRA spokesperson said that the Australian commercial radio industry is already paying almost $40 million a year in music copyright fees and that any increase would threaten the sustainability of stations, particularly in remote and regional locations. 

“To play music, radio pays $30 million to APRA and $7 million to PPCA each year,” the spokesperson told AdNews.

“There are no fees payable to PPCA to broadcast US music. It is also mandatory for commercial radio to play a minimum quota of Australian music, up to 20-25% depending on station category. Most stations are in the 20% category.”

The CRA spokesperson said the 1% cap applied to the fees paid to PPCA is “fair” as it balances commercial radio's Australian music quota obligations.

“PPCA’s shareholders are the three major multinational record labels. Without the cap, these record labels could charge whatever they liked for music that radio stations are legally required to broadcast,” said the spokesperson.

“International comparisons are virtually meaningless as no two countries have the same treatment of copyright, royalties and content quotas, with different methods for calculating rates and various exemptions. For example, in one of the key music markets, the USA, no fees are payable by radio stations to broadcast sound recordings.

“Under the Australian system, fees are payable but the 1% cap balances Australian music quotas and must be considered in the context of the significant additional direct payments to artists through APRA.”

Former CRA CEO Ford Ennals previously made statements saying PPCA wants the cap removed so it can increase fees by up to 900%.

“Yet there is no way of knowing how much of the existing fee we pay to PPCA is being distributed to the artists – we believe it could be as little as 10%, while the rest is being pocketed by PPCA’s members who are multinational record companies with combined revenues more than 40 times the size of the entire Australian radio industry,” he said.

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