Commercial radio in double-dip win on streaming

Monday, May 02, 2016

Commercial radio has had a landmark victory in its fight to limit payments to the record industry for music-streaming rights.

Commercial radio stations will be required to pay the record ­industry a second licence fee for streaming music, on top of existing broadcast fees, but not as much as music companies argued for at the Copyright Tribunal of Australia.

The long-running stoush ­between Commercial Radio Australia, the body representing radio broadcasters, and the Phonographic Performance Company of Australia, representing music ­recording companies, appears to have fallen in the radio sector’s favour, despite its initial argument that paying an additional fee for music streamed on its digital ­simulcasts was double-dipping.

The Copyright Tribunal has ruled that radio stations should have the choice to pay either per stream, as digital players such as Spotify or Pandora (and as the PPCA argued) do, or as a percen­tage of revenue.

Stations may choose to pay for the rights to simulcast beyond free-to-air transmission on digital or other services either as a percentage of gross revenue (0.35 per cent) for the simulcast sound ­recording right or $0.00059 (0.059c) per stream.

Both rates determined by the tribunal were closer to CRA than PPCA claims, and the judgment assesses the PPCA’s arguments and experts more harshly than the CRA’s. The tribunal also dismissed the PPCA’s argument that after five years, the scheme automatically converts to a per stream rate, finding that proposal was ­“unreasonable”, or the PPCA ­argument it should include a ­“selection bias” because stations will opt to pay the lowest amount to the PPCA.

The Copyright Tribunal acknow­ledged the difficulty of ruling on present and future streaming rates and possible commercial revenues. Nevertheless, it said ­“simulcasting is likely to grow, ­although to what extent and at what pace we cannot predict” and “the current advantages of simulcasting will become increasingly important in a digital world”.

Consequently, the value of ­simulcasting will increase over the life of the scheme, it said, and any caution in determining rates could “unreasonably undervalue the simulcast right”.

The CRA would not comment on the judgment by Justice Jagot, deputy president of the Copyright Tribunal, beyond saying it was ­reviewing the decision.

The tribunal ruled both parties must return in 28 days for further negotiations, specifically on the final definitions of “revenue” and “stream” and what length of listening constitutes a stream for which a licence fee is due (the PPCA has argued one second; the CRA 30 seconds).

The tribunal found the present definition of “gross revenue” in the APRA-CRA Agreement for the collection of streaming fees is out of date “and thus an inappropriate model for the tribunal to employ”, though its finding broadens the definition of gross revenue.

It comes after Taylor Swift’s showdown with Apple last year marked an escalation in a battle raging between artists and streaming services over whether musicians were getting a fair deal. Swift said Apple should not force singers to sing for free on its music-streaming service. Hours later, Apple surrendered.


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