Regional radio to shutdown streams at midnight
Further to our earlier article about SCA shutting down their regional radio streams, Commercial Radio Australia have distributed the following statement ….
Local regional radio stations switch off simulcasts and metros on notice
Nearly 200 local commercial regional radio stations will stop exact online simulcasts of local live free to air radio over the internet by midnight on 31 January 2014 as a result of record companies’ insistence on radio paying twice for playing music. Local commercial metropolitan radio stations are reviewing their position on a weekly basis and also may switch off in the future.
All radio stations, including the ABC, SBS, community radio and commercial radio already pay record companies each time they play an Australian song on radio. The Phonographic Performance Company of Australia (PPCA) representing, in the main, the multinational record companies is demanding the radio industry pay twice – a payment for music when heard on radio and a second proposed higher payment for the same music played at exactly the same time when it is simulcast on the internet – which means exactly the same content will be levied multiple times.
Commercial Radio Australia (CRA), chief executive officer, Joan 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 hifi 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.”
The radio industry maintains the internet is simply another distribution mechanism for live and local free to air content, as are analogue radios, DAB+ digital radios, car radios and FM radios in mobile phones. As the PPCA fees are already based on a % of gross revenue earned by commercial radio stations, this insistence on a second higher fee long term is more than double dipping and threatens the continuation of listeners being able to access their local stations online when it suits them.
Over 200 local regional radio stations now do not simulcast their local radio station. This is because the PPCA, through action in the Copyright Tribunal, has been successful in imposing an interim scheme on commercial radio stations while it continues its legal pursuit of a high cost scheme for songs played on the internet.
Under the interim scheme, broadcasters were ordered by the Copyright Tribunal to apply for an interim simulcast licence by 31 January to enable them to continue what they have been doing for the last 10 years. However, should the PPCA be successful in having the Tribunal endorse their preferred high cost scheme, radio broadcasters are concerned that simulcast fees may be back dated to the start of the interim licence and the financial liability amassed by radio stations would be cost prohibitive, particularly for regional stations.
“Exact online simulcasts themselves do not attract additional revenue. 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,“ said Ms Warner.
A Ministerial Determination was challenged in 2010 by the PPCA and the issue is still the subject of ongoing legal action.
The issue turns on a Determination issued by Minister Richard Alston in the year 2000 in the infancy of the internet.
The Ministerial Determination was designed primarily to protect internet operators from regulations that applied to broadcast operators, such as the Commercial Radio Codes of Practice and Standards, by providing that an exact online simulcast by a broadcaster operating in the Broadcast Services Bands (BSB) would be considered to be the same as the original broadcast but that internet only services were different and would not be treated in the same way as BSB broadcasts.
The Determination operated in this way until 2010, when the Phonographic Performance Company (PPCA) representing, in the main, the big four multinational record companies, challenged the accepted interpretation that the Minister’s Determination provided that exact online simulcasts by BSB broadcasters were broadcasts and governed by broadcast regulation (thus covered by the broadcast licence) – ie – that the internet was simply another distribution channel for the same content.
The PPCA’s contention was dismissed in the Federal Court and CRA was awarded costs. The PPCA appealed and in February 2012, the Federal Court upheld the appeal.
The Federal Court of Appeal Court took a different approach to the wording of the Determination. It did not agree with the radio industry’s interpretation that the Determination said that an exact online simulcast was considered part of the BSB broadcast.
However, the Court made no judgment or policy statement on whether an exact online simulcast should or should not be considered part of the free to air broadcast offering.
The Federal Court of Appeal outcome means that all radio broadcasters will now be required by PPCA to pay an additional copyright fee for exactly the same content for which a fee is already paid under the broadcast licence.
Soon after the election, the radio industry asked the new Federal Government to re-issue a clear Determination which better reflects convergence policy, today’s media and technological environment and provides certainty regarding the Ministerial Determination that had been in place, and operated successfully, since 2000 by making it clear that an exact online simulcast of a free to air broadcast is part of the broadcast.
Given all the issues confronting it, the current Federal Government has not yet given a final response to the industry’s request to re-establish policy and practice that has been in place for over 10 years.
The industry continues to make submissions to the Government to support local radio stations and their local listeners and address a policy anomaly in a converging world where exactly the same content is levied multiple times even when it is unchanged and it does not itself earn additional revenue for the broadcaster.