Aussie radio industry slams ‘unfair fee hike’ proposed by record labels

The commercial radio industry has made a submission to the Senate inquiry, arguing against an “unfair fee hike” proposed by record labels that would see radio stations pay higher royalty rates to the Australian musicians whose music they play.

Commercial Radio & Audio (CRA) says the industry already pays around $40 million a year in fees, and “any increase would threaten the sustainability of local stations”, who pay fees to the Australasian Performing Right Association (APRA) and to the Phonographic Performance Company of Australia (PPCA).

The PPCA fee is currently capped to ensure a limit on the royalties record labels can charge radio stations. The stations are bound by a legislated quota of Australian music they are required to pay, and therefore the cap stops any price gouging.

Ford Ennals, CEO of CRA, says the removal of such a cap is untenable.

“No one argues that Australian musicians should not be paid for their talent and hard work but commercial radio is already paying a full and fair amount of around $40 million a year in music fees and is a vital promotional platform for Australian artists,” Ennals said.

“It would be unfair to force radio stations pay more to play the Australian music they are legally required to play. Doing so would it threaten the sustainability of local radio stations, and the Australian music industry would suffer as a result.

“PPCA wants the cap removed so it can increase fees by up to 900%. Yet there is no way of knowing how much of the existing fee we pay to PPCA is being distributed to the artists – we believe it could be as little as 10%, while the rest is being pocketed by PPCA’s members who are multinational record companies with combined revenues more than 40 times the size of the entire Australian radio industry.”

The CRA’s submission to the government outlines the crux of its argument, that the local content quotas are already enforcing a commercial cost on the stations, whereas the artists who forgo higher royalty rates benefit from the increased exposure.

“Through the Australian music quotas, the legislation has set up a situation where Australian music is promoted on commercial radio. The 1% Cap prevents the record industry from charging excessive amounts for the broadcast of their songs, particularly when it already obtains a substantial commercial benefit from radio airplay, which promotes the profile and discoverability of Australian artists across the country,” the submission reads.

CRA notes that the commercial radio and audio industry supports 6,600 full-time equivalent jobs, with 38% in regional areas.

Ennals points to the responsibilities of multinational record labels to pay their artists fairly – not the Australian radio industry.

“If PPCA wants more money in the pockets of Australian musicians, then it should pay them a bigger share of the fees it is already collecting,” he said.

“Why should stations be forced to pay more when multinational music giants worth more than 40 times the Australian radio industry refuse to hand over the full amount to their artists?”


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