PPCA loses appeal on music fees

The PPCA has lost an appeal aimed at increasing the licence fee required from commericial radio stations. The music copyright collecting agency lost its appeal against the validity of a licence fee cap, which limits the amount of fees it can demand from commercial radio stations to 1% of revenue.


The court case has been going since 2010, when the Phonographic Performance Company of Australia launched a constitutional case in the High Court challenging 40 year old legislation which it said “unfairly limits the price that the commercial radio industry pays for the recordings it broadcasts.” CRA disputed the claim and challenged the PPCA in court.  radioinfo reported the story and explained the issue here in 2010.


The PPCA argued that the Copyright Act was invalid because it amounted to an acquisition of rights protected under an earlier 1911 act without just compensation. But the High Court said the 1968 act terminated all copyright that existed prior to it coming into force and upheld the original court decision dismissing the case.


The High Court was not required to consider whether the amount paid was fair or not.


The ABC has a similar clause, set many years ago, where it pays 0.5c per head of population as a fee for broadcasting music.


PPCA fees are not the only fees paid by radio stations to recording artists and record companies. Stations also pay fees to APRA and AMCOS, which increase the total fees paid significantly.


As revenue from hard copy music sales on records and CDs declines in the face of the (legal and illegal) online music tsunami, record companies are trying to reinvent their business model and getting a bit more from radio stations for the music they play is one of their aims. Rado stations, in reply, say that radio airplay helps artist exposure and increases sales.


The PPCA says it will continue lobbying the government to get the rules changed. Responding to the High Court’s decision, CEO Dan Rosen said:

“We can see no good reason why commercial radio operators deserve ongoing protection from government – allowing them to avoid paying a fair rate for the music that is so essential to their business.

“The legislation enacted in 1968 restricts the amount of royalties paid by radio to one per cent of a broadcaster?s gross income. It is simply outdated and unjust and has allowed a situation where artists and labels have, for far too long, subsidised the commercial radio industry. The existence of this anachronistic price cap has seen Australia fall well behind other countries such as New Zealand, Canada and the UK where artists and labels receive significantly more from radio broadcasters. Music is vital to driving radio industry profits and there should be fair return.”