The Phonographic Performance Company of Australia (PPCA) has launched a constitutional case in the High Court challenging 40 year old legislation which it says “unfairly limits the price that the commercial radio industry pays for the recordings it broadcasts.”
But the case may be derailed before it begins if the PPCA does not have its facts right. Commercial Radio Australia says Australian commercial radio stations pay close to $25 million a year in copyright fees, not the $4 million claimed by the PPCA in a statement made yesterday.
The PPCA represents recording artists and recording labels, and is one of three collecting societies which are owed royalties when radio plays music.
The High Court will be asked to examine a price cap contained in section 152(8) of the Copyright Act which was introduced in 1969. The price cap limits the amount Australian commercial radio stations can be required to pay to artists and labels to no more than 1% of a broadcaster’s gross income, which the PPCA says is “well below rates typically paid by radio elsewhere around the world.”
A PPCA statement says:
“The commercial radio sector now earns revenue of up to a billion dollars a year, but the price cap means that the sector in total pays just $4 million dollars for all the recordings played each year on Australia’s 261 commercial radio stations.”
CRA disputes that figure, with CEO Joan Warner telling radioinfo:
“Australian radio stations pay copyright fees twice each time a song is played on radio, firstly to the composers and songwriters through the Australian Performing Rights Association (APRA) and then a second fee to the record companies through the PPCA. We understand only around one third of the copyright fees collected by PPCA are subsequently distributed to the artists. This is all about increasing the profit margins of the multinational record companies at the expense of Australian commercial and public radio stations.
“Comments by PPCA deliberately misrepresent the significant copyright payments made by commercial radio stations each year. In addition the PPCA omitted to mention its constitutional case also challenges the legislation which limits the price the ABC pays for the recordings it broadcasts. The commercial radio industry is and will continue to be a huge supporter of Australian music with on average one in every four tracks played being Australian.”
The Australian Constitution requires that any law effecting an acquisition of property, such as a licence of copyright, must be on just terms. PPCA’s case will centre on an argument that an arbitrary price cap fails to meet the “just terms” test, particularly given the existence of an independent price regulator in the Copyright Tribunal.
PPCA Chief Executive Stephen Peach says:
“For years now, Australian recording artists and record labels have effectively been subsidising a billion dollar industry because of an antiquated piece of legislation. Since this inequitable price cap was introduced in 1969, radio operators have built large and profitable networks based on the music that is played every hour of the day but for which very little is paid. All we are seeking, and all that a successful challenge in the High Court will deliver to us, is the right to make our case to the independent umpire, the Copyright Tribunal, for a fair return to artists and labels.
“Success in the High Court would initiate a process of bringing commercial radio stations more into line with all other users of copyright material, as well as all other users of recordings, who either negotiate a fair market rate or agree to have it set by the independent Copyright Tribunal. There is simply no justification for radio being a special case, protected from the need to pay a fair return to all those who create the recordings upon which they build their very substantial business.”