Music Community Welcomes Proposals to Scrap the Radio Cap, Commercial Radio Warns of ‘Threat’
A 55-year-old “cap” on the copyright fees the creative industry and rights holders are entitled to from sound recordings played on commercial radio is finally back on the political agenda.
David Pocock, the former Wallaby star-turned independent senator, has tackled the thorny issue, by way of the Fair Pay for Radio Play Bill, unveiled in Canberra.
Pocock’s Bill is an attempt to rectify what the recording industry has termed an “anomaly,” initially legislated as a “temporary” measure in the 1968 Copyright Act.
???? Recording artists, managers and peak industry bodies welcomed Senator David Pocock’s bill Fair Pay for Radio Play in Canberra today ????
— PPCA (@ppca) August 9, 2023
???? https://t.co/HjFjVoslkR#PPCA #RadioFairPlay #DavidPocock #JohnWilliamson #AusMusic pic.twitter.com/1gWDcMZEeL
The cap prevents the recording industry from negotiating a new, higher rate on those sound recording royalties paid by radio, which, currently, is set at 1% of commercial radio revenue.
Also, ABC Radio is legislated to pay 0.005c per head of population — a sum that amounts to roughly $130,000 per annum.
Australia is the only country in the world with this sort of copyright law, according to ARIA and PPCA, a situation that has resulted in tens of millions of dollars potentially lost over the decades.
The industry has advocated for a fresh rate somewhere in the 2-4% range, which would reflect those seen in the U.K., New Zealand, Canada and elsewhere.
Fairplay for Pay panel session at Indie-Con 2023 (l-r): Lars Brandle, David Vodicka, Lynne Small, Catherine Haridy, Josh Pyke.
Australia’s music industry has welcomed Pocock’s power move.
“Political will is all that stands in the way of change that will see real results for our recording artists,” comments ARIA and PPCA CEO Annabelle Herd.
“We thank the Senator for his ongoing support of Australian music, and for his acknowledgement that legislation should not restrict the value of a sound recording, particularly when it puts our local recording artists at a disadvantage in their home market. The time for change is now.”
The issue, Herd continues, “does not need to be kicked down the road and lost in yet another review or enquiry. Numerous reviews have recommended the existing restrictions are unjustified and unfairly disadvantage Australian recording artists.”
Annabelle Herd
AIR CEO Maria Amato added: “We support commercial radio and it is great to see strong revenues of over $685 million in FY23 outlined in last week’s report from Commercial Radio Australia and Deloitte, as well as 14% audience growth over the past five years. But with that in mind, we must be given the opportunity to negotiate a fair rate for radio’s core product – recorded music – that is in line with the rest of the world.”
A cadre of Australia’s leading artist managers and industry professionals support Senator Pocock’s Bill, including John Watson, Jaddan Comerford, Cath Haridy, Greg Carey, Maggie Collins, Adrian McGruthor, Jodie Regan, Katie Besgrove and Nick O’Byrne, Simone Ubaldi, Claire Collins, Charlotte Ried, Jane Slingo, Jess Beston, Ricky Simandjuntak, Andrew Stone, Paul Piticco, Danny Rogers, Bill Cullen, Tim Levinson and Leigh Treweek.
The National Cultural Policy, the Revive document which launched in January 2023, included a commitment from government on intellectual property to maintain “a strong copyright framework that works in concert with other legal and policy mechanisms,” points out Maggie Collins, executive director of AAM.
“We urge the Government to seriously consider its position on supporting our local talent,” she continues, “and take action to remove an antiquated law that the music industry has spent decades trying to repeal.”
Commercial Radio & Audio (CRA), which represents the interests of the commercial radio sector, has 0ther thoughts.
The lobby body has warned that the Bill was a “threat” to the sustainability of regional radio, and took aim at PPCA.
According to Ford Ennals, CEO of CRA, killing the cap “could backfire” by funneling more money to the record labels while “simultaneously undermining the health of the radio industry, which provides a major platform for Australian artists.”
Ford Ennals
In a statement issued Wednesday, Aug. 9, Ennals and the peak body fired a shot over the bows of the recording industry, one that could trigger a full-blow battle.
“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 said.
“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.”
Each year, the Australian commercial radio industry pays royalties and fees totalling about $37 million to Australian music artists, the CRA reports.
Just prior to the presentation of the Bill, CRA reported that its members contribute $1 billion to GDP (including $320 million to regional Australia) and generate 6,600 jobs.
Commercial radio's turning 100! We've just published a Connecting Communities report, revealing our annual economic and social impact.
— Commercial Radio & Audio (@ComRadioAU) August 3, 2023
– $1 billion to GDP
– $320 million to regional Australia
– 6,600 jobs
– 42,000 hours of news
– 2.7 million Aussie songshttps://t.co/mDtPELUrrB pic.twitter.com/2pZ0EWN2U9
“There are 260 commercial radio stations in Australia, 220 of these serve communities in regional and remote areas, providing hyper local news, entertainment, information and emergency warnings to listeners free of charge,” Ennals continued.
“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.”
The PPCA, he claimed, has flagged that “it wants to see fees increase by up to 900% to as high as 4% of gross industry revenue – a level that combined with existing APRA royalties would be unprecedented in any major jurisdiction. 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.”
The radio cap was explored last Friday (Aug. 4) with the Fairplay for Pay panel session at Indie-Con 2023, held in Adelaide’s Mercury Cinema, with speakers including Lynne Small (PPCA), David Vodicka (Media Arts Lawyers), Catherine Haridy (Cath Haridy Management and Australian Music Centre) and artist Josh Pyke.
“As an artist,” says Pyke, who also serves as chair of PPCA, “I fully support the campaign to remove the radio caps from the Copyright Act.”
The regulations “are very outdated and limit the royalties that broadcasters pay to rights holders and artists for the use of sound recordings. Put simply, radio is not paying a fair market rate to use the music that they’ve built their product around,” he adds.
“This seems entirely unfair and it’s certainly not the case in other countries. Removing these caps will ensure that we are fairly compensated for our work, and that the Australian music industry can continue to thrive and grow.”
Pyke, the PCCA, and other music industry figures led the Radio Fair Play campaign, presented earlier this year and which culminated in a petition that called on Parliament to remove the caps from the Copyright Act.
Former CRA CEO Joan Warner added support for the project, which deemed the caps to be “artificial,” “unfair” and “anticompetitive,” and, in the words of Herd, “indefensible.”
For the music industry, a sense of déjà vu.
Under then-prime minister John Howard, the Attorney-General Phillip Ruddock in 2006 announced the caps would be removed. It never eventuated.