Australian Record Labels' Lawsuit to Increase Radio Royalties to Reach High Court in May
Australian Record Labels' Lawsuit to Increase Radio Royalties to Reach High Court in May

Australian record labels' legal attempt to increase broadcast license fees will reach the country's High Court next month.

On May 10, the Phonographic Performance Company of Australia (PPCA) -- the neighboring rights collection society for labels and recording artists -- will begin its attempt to remove the cap which limits to a maximum of 1% the royalty rate commercial radio pays to play its recordings and 0.5¢ per head of the population paid by the state-funded Australian Broadcasting Corporation (ABC).

With the launch of legal action last February, the PPCA is testing the country's constitution. The cap was introduced with the Copyright Act of 1969, and is mentioned in section 152(8). The rate applied reflects the music programming policy of individual stations, with a full-time music broadcaster paying at or close to the maximum set by the cap.

When the PPCA launched its action, the society said that the commercial radio sector earned revenue of up to a billion dollars a year, but the price cap means that the sector in total paid just $4-million dollars for all the recordings played each year across the market's 261-odd commercial radio stations. Also, the PPCA pointed out that the sum gathered from the ABC translated to little more than $100,000 Australian ($100,000).

The PPCA has long argued that the price cap was "inequitable" and the society says it was seeking a "fair return to artists and labels."

Trade body Commercial Radio Australia (CRA) disputed the claims. CRA CEO Joan Warner accused the PPCA of misrepresenting the amount it pays in copyright fees and countered with an accusation of greed.

The PPCA hasn't announced the cash it is targeting from radio, but it is understood the society is using as a template Australasian Performing Right Association's (APRA) composer tariff, which slides from 0.5% to 3.5% of station revenue depending on each broadcaster's level of music usage

Nevertheless, a win would be a huge windfall for PPCA's bottom line. In 2010, the society's income rose to more than $27.6 million Australian, up by 11.4% from the previous year.

CRA recently reported a slower month for March in terms of advertising revenue, though Warner says the industry was still performing well given its solid growth over the past twelve months.

Australian Independent Record Labels Association AIR said today, "We support (PPCA) 100%." In a statement to its members, AIR noted, "In the end, we're looking for an independent and fair assessment of the value of music to commercial radio and the ABC, which will lead to fair remuneration for musicians and record labels and bring the Australian industry in line with dozens of countries around the world."