Australia's Federal Court Rules On Internet Simulcasting

Australian labels and artists should earn a fee from radio stations who streamed music via online simulcasts, the country’s Federal Court today declared.

The case is an important one for copyright holders here in Australia, one which establishes a new online revenue stream. It’s also a rare example of music industry organizations going into battle with one another, on this occasion the recording companies' collecting society PPCA squaring up against the commercial radio sector.

The PPCA had sought a declaration from the court that Internet streaming of radio programs - or simulcasting -- should not be regarded as a "broadcast" under the country's Copyright Act and should be subject to a separate music tariff.

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Trade body Commercial Radio Australia had argued that such a transmission formed part of the existing broadcast license and doesn't require any additional payment. In a February 2012 ruling decision, the court found in favor of CRA and said that simulcasts were broadcast within the definition of that term in the Copyright Act.

The PPCA subsequently appealed. And today, the court overturned the earlier ruling and agreed with the neighboring rights body.

The declaration means PPCA can now seek a separate rate for simulcasting. The PPCA can pursue a rate not bound by the controversial statutory cap which since the 1960s has limited the sum commercial radio operators can be asked to pay for broadcasting music to a maximum of just 1% of their gross income.

The PPCA and CRA are no strangers to jousting in the country's courts. The PPCA last year lost a constitutional case in Australia's High Court challenging the price cap.

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According to the PPCA, the new decision also paves the route to a “fairer, level playing field for innovative music streaming companies who compete with commercial radio.”
In a statement, PPCA CEO Dan Rosen described the outcome as “an important win for artists and labels whose music is used widely on the internet to help drive profits for Australia’s radio industry.”

Rosen says both parties can now move forward to establish “an appropriate commercial rate for this simulcast activity,” though such a rate has yet to be made public.

At deadline, Commercial Radio Australia had yet to respond to the ruling.

The appeal hearing centred on the interpretation of a legislative determination made by the Minister for Communications in 2000 that a “broadcasting service” does not include a service that makes radio programs available using the Internet.

Recently, the PPCA reported that it had distributed more than Australian $29 million ($30 million) to members last December for its 2011/12 financial year, up 13% over the previous year. CRA reported a small decline in advertising revenue in January compared to the same month last year, with the five metropolitan markets generating a total of just over Australian $44 million ($45 million).