Radio lobby Commercial Radio Australia yesterday fronted the Copyright Tribunal for the first five days of what will be three separate hearings into the royalty regime surrounding live radio streaming in Australia.

The hearings, expected to drag on for most of this year, follow a dispute between CRA and the Phonographic Performance Company of Australia, which represents record companies, over whether and how radio stations should license the music played on their  streaming services. Commercial Radio Australia argues that given it already pays to license the music for radio, it shouldn’t have to pay again for playing that music on a stream of the radio service. PPCA, meanwhile, wants radio stations to pay per stream, as is common with online music players such as Spotify and Pandora. The body argues that the provision of radio through the internet is an entirely different service, unbound geographically and capable of reaching far more people. Because of this, it contends, radio stations should pay an extra free for online streaming calculated on a per-listener, per-stream basis, as it claims is the norm internationally. “What PPCA is seeking is no different to every other major Australian sporting code or content industry which has a traditional and digital revenue stream,” the body said last year. But the CRA responds that the analogy is flawed, as the radio industry faces unique regulatory burdens.

This week’s hearings before the Copyright Tribunal follow extensive attempts by both parties to reach an agreement over an appropriate payment schedule. It also follows a court case — first won by CRA then by PPCA on appeal — around whether a radio streaming service could legally be considered a separate service to the radio broadcast it replicates.

The dispute has already had casualties. Last year, 200 regional radio stations stopped streaming over the internet, following the success of the Federal Court appeal that held a radio broadcast and a radio station’s online stream were separate broadcasts. A interim payment schedule was agreed upon between radio stations and the PPCA, but the latter body is pushing for a new, higher payment schedule that would be backdated to the start of the interim licence — January 31, 2014. Fearful of the risk that the final payment schedule could be much higher than they could reasonably afford, 200 regional radio stations instead opted to switch off their broadcasts at the start of last year.

Many commercial radio operators already chafe at the greater costs they bear compared to online-only services such as Spotify. They already pay a spectrum licence fee to the government, which on average is 3% of their gross revenues. They have quotas for the amount of Australian music they must play. They carry significant advertising restrictions. They’re regulated by the Australian Communications and Media Authority, which requires them to meet an industry code of practice or risk penalties. And they have emergency broadcast obligations — in emergency situations, a wireless radio run on batteries is often the only way authorities have of reaching those trapped and in danger in disaster zones.

“Let’s be clear that commercial radio stations already pay a fee to the record companies for the music we play,” CRA chief executive Joan Warner said last year. “In addition, we pay copyright fees to the composers’ collecting body [APRA]. Aside from the two lots of copyright fees we already pay for music played, we pay a spectrum licence fee to the Government for our broadcast licence, we are heavily regulated, we have local content requirements and high transmission costs for the broadcasts.

“Regional commercial radio stations are not as the PPCA describes a ‘billion dollar commercial radio industry’. They are locally run, are integral parts of their local communities and provide local news, information and entertainment to communities.”

These are all arguments CRA has made to the government, in an attempt to encourage Communications Minister Malcolm Turnbull to minimise further costs placed on the industry by clarifying the legislation around what is and isn’t a broadcast in such a way as would allow radio stations to put their streams on the internet. But the government is reluctant to wade into the dispute, viewing it as a commercial issue — a view the PPCA has also advocated. “This is simply a matter of commercial negotiation between the billion dollar commercial radio industry and the thousands of Australian artists and record label that PPCA represents,” the body said when the 200 regional stations halted their online streaming.

The PPCA has in recent years secured a number of licensing agreements with others that use its recordings to try to shore up music industry revenues after the disastrous impact online music piracy had on the sector. These include new payment schedules for nightclubs and music venues that play recorded music, and an agreement with the gym industry.

Peter Fray

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