The Australian radio industry has had mixed reactions to independent ACT senator David Pocock’s proposed bill to overturn laws that limit radio station payments to artists.
The bill – due for parliamentary debate for the first time on Wednesday, August 9 will remove the royalty caps and enable artists and their agents to negotiate fair remuneration.
“The mere presence of the cap is distorting the market to the disadvantage of artists, who we must remember are small businesses,” Senator Pocock said.
“At the moment, we have odd examples where if a station plays ‘Khe Sanh’, songwriter Don Walker will be paid a greater royalty than Jimmy Barnes.
“Removing these caps also won’t automatically change any royalties, but passing this bill will allow the market to decide a fair rate.”
Canberra City News reports that a combined 260 commercial stations paid artists and rights holders around $4.4 million in royalties in the past financial year.
Commercial Radio & Audio (CRA) have reacted to the news stating that the removal of the long-standing 1% cap on copyright fees will put the sustainability of local regional radio stations at risk and may undermine attempts to increase financial support for Australian music artists.
Ford Ennals, the chief executive officer of CRA said 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.
“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 said. “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.”
The CRA states that songs from the US do not attract royalties and it costs local stations more to play Australian music. They argue that without the cap, the radio industry would be forced by legislation to play Australia artists without any limit on the amount that the record labels could charge for broadcasting those songs.
Ennals said 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,” he said. “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.
“The PPCA itself has already flagged publicly that it wants to see fees increase by up to 900% to as high as 4% of gross industry revenue – a level that combined with existing APRA royalties would be unprecedented in any major jurisdiction. As the rate is calculated on revenue, such an increase would cost the local radio industry millions of dollars more a year, with no consideration regarding an individual station’s profitability or viability.”
On the other side of the debate, recording artists, managers and various industry bodies have welcomed the Fair Pay for Radio Play Bill.
A PPCA spokesperson told Mediaweek:
“Despite CRA’s hysterical claims, the rate paid is negotiated and decided upon by both CRA and PPCA. International record labels cannot charge whatever they want as is being falsely claimed. If the rate isn’t agreed upon, it is instead settled by the Copyright Tribunal, who also set the rate for TV and many other industries who require copyright: none of whom have gone out of business. There are substantial measures in place to prevent an extortionate rate being applied to commercial radio.
“It is also factually incorrect to say songwriting royalties paid through APRA go to Australian artists while sound recording royalties go exclusively to international labels. It’s simply not true. APRA royalties go to whoever has written a song – a significant portion of which goes to overseas artists like Taylor Swift and Paul McCartney – but may not go to the artists performing on a song if they haven’t written it. PPCA royalties go to the registered artists and rights holders of the sound recording itself. It’s as simple as that. Senator Pocock demonstrated this disjuncture perfectly: At the moment, we have odd examples where if a station plays ‘Khe Sanh’, songwriter Don Walker will be paid a greater royalty than Jimmy Barnes.
“This is not an example of bullying from international record labels. It is a push from Australian recording artists and industry professionals for fair pay on par with legislation around the world, when around 50% of Australian artists are signed to independent labels it is simply isn’t fair to claim this is a matter of large global businesses running interference in local affairs.”
PPCA CEO, Annabelle Herd, said: “Political will is all that stands in the way of change that will see real results for our recording artists. We thank the Senator for his ongoing support of Australian music, and for his acknowledgement that legislation should not restrict the value of a sound recording, particularly when it puts our local recording artists at a disadvantage in their home market. The time for change is now.
“This issue does not need to be kicked down the road and lost in yet another review or enquiry. Numerous reviews have recommended the existing restrictions are unjustified and unfairly disadvantage Australian recording artists.”
AIR CEO, Maria Amato, said: “We support commercial radio and it is great to see strong revenues of over $685m in FY23 outlined in last week’s report from Commercial Radio Australia and Deloitte, as well as 14% audience growth over the past five years. But with that in mind, we must be given the opportunity to negotiate a fair rate for radio’s core product – recorded music – that is in line with the rest of the world.”
Adam Hyde from Peking Duk said: “Radio is not the real issue here. The issue is an out-dated limit set by Government over 50 years ago. Times have changed a lot and it is so important to get this right for all recording artists to be fairly paid for their music. In a world where it seems creativity is constantly being overlooked financially, it is time we take a step towards making things right, or at the very least a tiny bit better than they are at the moment.”
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Top Image: David Pocock