A nice ruck is brewing between the commercial radio sector, particularly its highly profitable FM music brethren, and the Phonographic Performance Company of Australia (PPCA), the people who collect the copyright fees for the music broadcast on radio.

Very few people realise that the fees paid by commercial radio for broadcast of copyright music (and that’s just about all of it) are protected by a federal statutory cap at levels substantially lower than comparable markets overseas — 1% in Australia, between 2% and 4% overseas. It’s been like that for 36 years as part of the Copyright Act, and don’t the FM radio networks love it!

No such thing as a fair market price for the Australian-produced music pumped across the airwaves by the likes of the British-owned DMG. This is the very music that underpins DMG’s ability to pay stratospheric prices for Australian FM licenses at auction. ($A155 million for its first licence in Sydney, $A106 million for its second Sydney licence and tens of millions for licences in Perth, Brisbane and Adelaide)

Today, PPCA, the record companies it represents and a bunch of Australian musicians and recording artists announced their plans to persuade the Federal Government that the time has come for commercial radio to pay the rent — or at least a fair market rent.

Half of what is collected goes straight to the artists who create the music. The other half goes to the copyright holders.

So for 36 years, it’s argued, Australian musicians and recording artists have been paying a direct subsidy to the FM music industry. Names likes Spiderbait, Kasey Chambers, Powderfinger, Paul Kelly, Missy Higgins, Olivia Newton John and The Cat Empire have backed their labels and the PPCA to challenge the cost-protection shield given to the radio industry. While some of these names sound very bankable, the artists claim that only 7% of PPCA registered artists receive more than $1000 a year in fees for the transmission of their music.

Someone is making a killing — and it isn’t the artists. Crikey notes with some bemusement that Australian Broadcasting Authority data and information supplied by commercial radio’s own lobbying outfit, Commercial Radio Australia (CRA), shows that the FM slice of commercial radio is now a $540 million a year revenue business. The entire radio sector generates $770 million a year in revenue, but commercial radio’s yearly bill for broadcasting the music that sustains it is only $2.75 million. Nice work if you can get it.