Inquiry on Radio Caps Recommends Another ‘Frustrating’ Review

The recording industry’s campaign to remove radio caps will drag on as a parliamentary report triggers another phase of scrutiny.

Ten months after it was commissioned, the Senate Standing Committee on Legal and Constitutional Affairs last week published its report into the long-standing caps.

The document boils down to two recommendations: that the federal government conducts a cost-benefit analysis examining the impacts of removing the current caps on licence fees for the broadcast of sound recordings on radio, and that the Senate does not pass the Bill.

“We are pleased that the Committee has recognised that this is a real issue for Australian artists and labels that warrants further consideration,” comments PPCA CEO Annabelle Herd, “but the recommendation to require yet another review is frustrating.”

David Pocock, the former Wallaby star-turned independent senator, tackled the thorny issue by way of the Fair Pay for Radio Play Bill 2023, activating the inquiry on whether to approve amendments to copyright legislation.

Adds Herd, “how many reviews will it take to remove these deeply unfair provisions and put Australian artists on a level playing field with all other copyright holders and with profitable commercial radio networks that rely on music to bring in revenue of over $1 billion annually? All six reviews completed to date have found that the caps should be removed so PPCA can negotiate in a fair and free market.”

Commercial Radio & Audio (CRA), which represents the interests of the commercial radio sector, is opposed to the changes, and has, in the past, warned that the Bill was a “threat” to the sustainability of radio stations, particularly those regional and remote communities.

CRA chair Ciaran Davis is claiming a victory from the second of those recommendations.

“This is good news for the 260 radio stations across Australia that CRA represents, as this Bill would have had dire consequences for our industry,” notes Davis.

“Commercial radio provides an essential service to communities across Australia, delivering local content, news and information in a challenging economic and regulatory environment.

Davis and the CRA “expects that the cap debate can now be put to rest, to allow radio to sustain itself as a critical part of Australia’s media landscape and cultural identity.”

The cap, written into the 1968 Copyright Act, 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.

Earlier this year, the PPCA published the results of separate research conducted by advisory firm Mandala which found that, by removing the caps, creators and the industry could unlock a stream of royalties tallying close to $5 million for a single year. The association channeled its opposition to the caps through its Radio Fair Play campaign.

Herd thanks Pocock “for championing Australian music and bringing this issue before the Parliament. With Australian artists doing it tough at the moment, it’s never been more important to get the policy settings right for our homegrown talent, and Senator Pocock quite rightly saw this as a cost-neutral way to get artists paid fairly.”

She adds, “we also want to thank Senator Hanson-Young and the Greens for being great supporters of Australian music and for supporting this Bill.”

Read the full report here.