CRA warns proposed copyright fee changes pose threat to local radio

The commercial radio industry is warning that removal of the long-standing 1% cap on copyright fees for sound recordings broadcast on air would put the sustainability of local regional radio stations at risk.

It also warns it may undermine attempts to increase financial support for Australian music artists.

Last week, Senator David Pocock introduced a private member’s bill seeking amendments to the Copyright Act that would remove the cap, which limits the amount multinational record labels, represented by the PPCA, can charge Australian radio stations for the right to broadcast their music.

Ford Ennals, CEO of industry body Commercial Radio & Audio, says rather than increasing financial support for Australian artists, as promised, the proposed removal of the cap could backfire by simply directing more money to the record labels while simultaneously undermining the health of the radio industry, which provides a major platform for Australian artists.

“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 says.

“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.”

Mr Ennals says the cap was established to provide a safeguard for local radio to ensure that fees collected by the PPCA did not rise to unsustainable levels.

“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.”

“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.”

A recent report by Deloitte estimated the Australian commercial radio industry contributes $1.1 billion to the national economy each year, including $320 million to regional Australia.

“No one, least of all the Australian commercial radio industry, disputes that Australian musicians, songwriters and composers deserve more support, particularly during the current cost-of-living challenges,” Mr Ennals says.

“However, increasing the financial burden on radio stations with a fee increase that mainly benefits global record labels is not fair or equitable. It risks harming Australian music by harming the valuable platform that is Australian radio. Simply asking the record labels to improve the distribution of the existing PPCA fees could have the same effect as a rate increase.”