Caps limiting amount stations pay artists could be scrapped

There has been a push to remove caps that limit how much stations must pay artists to broadcast their recordings.

Pressure is set to ramp up on the nation’s radio networks when ACT independent senator David Pocock’ introduces a bill on Wednesday to remove caps that limit how much stations must pay artists to broadcast their recordings.

Under copyright law, Australian-owned radio stations – both public and commercial – are required to pay no more than 1 per cent of their gross annual revenue to broadcast sound recording.

The rules, established 55 years ago, bar the recording industry from brokering their own broadcast deals, who are instead beholden to the legislated caps, and the limited revenue stream they provide.

Senator David Pocock will introduce a new bill that proposed to remove caps that limit how much radio stations pay artists and record labels. Picture: NCA NewsWire / Martin Ollman

In the 12 months to June 2022, Australia’s 260 million commercial stations paid $4.4 million in royalties to composers, musicians and rights holders, equating to 0.4 per cent of gross earnings.

The ABC paid even less, with total royalties fees across its network of local and national stations equating to almost $130,000 in the 2022-23 financial year.

Through amendments to the Copyright Act, senator Pocock will seek to abolish the cap, and alternatively require radio stations and artists to negotiate “fair remuneration” over broadcast deals.

“The mere presence of the cap is distorting the market to the disadvantage of artists, who we must remember are small businesses, often operating on a shoestring to brand, and market and distribute their product,” Senator Pocock said.

“Removing these caps also won’t automatically change any royalties. But passing this Bill will allow the market to decide a fair rate and always with the safeguard of the Copyright Tribunal.

“I urge the major parties to consider supporting this small, sensible, practical change that will make a difference to artists and ensure we continue to have a strong and vibrant Australian music industry in the future.”

Phonographic Performance Company of Australia chief executive Annabelle Herd has been leading a similar push to senator Pocock. Picture: Supplied.

The push follows the recent launch of legal proceedings by the Phonographic Performance Company of Australia (PPCA) – which represents artists and record labels – in the Copyright Tribunal to increase royalties of its members.

The PPCA has also lobbied Attorney-General Mark Dreyfus to abolish the caps on payments for both public and commercial radio, labelling them “unfair and uncompetitive”.

In the longer term, the PPCA wants to align royalty rates with countries like Canada, France, Japan and the United Kingdom, where royalties range from 1.5 to 5 per cent of stations’ revenue.

Responding to the PPCA’s push in June, chief executive of Commercial Radio Australia Ford Ennals, opposed the change, arguing that the industry already paid almost $40 million in separate royalty fees to songwriters, composers and publishers through fees to the Australian Performing Rights Association.

Originally published as Caps limiting amount stations pay artists could be scrapped