The Phonographic Performance Company Of Australia (PPCA) has issued a response to the Copyright Tribunal of Australia’s December ruling over broadcast licence rates, which put an end to two years of legal proceedings.
In December, the Copyright Tribunal ruled that the setting of a new commercial radio sound recording broadcast licence rate of 0.55% of gross industry revenue – an increase from the previous 0.4% rate – was a “reasonable and proportionate revision”.
According to the PPCA noted that this new ruling equates to a 38% increase in the total royalties paid due to radio broadcasts, with the new rate to be backdated to July 1st, 2023.
The legal proceedings themselves date back to 2023, when both the Australian Recording Industry Association (ARIA) and PPCA started a petition demanding fairer royalties payments for songs played on the radio, and supporting the Copyright Legislation Amendment (Fair Pay for Radio Play) Bill 2023.
The Bill sought to amend the Copyright Act 1968 and remove restrictions limiting the Copyright Tribunal’s ability to determine the amount payable to rights holders in sound recordings – otherwise known as Radio Caps.
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First introduced back in 1968, the caps prevented the recording industry from actively negotiating a fair rate for royalties regarding sound recordings broadcast via radio. With Australia being the only country in the world to feature such a copyright law, the limitation meant that royalties had been capped at 1% of commercial radio.
The PPCA noted in 2023 that commercial radio annually brings in more than $1 billion in advertising revenue, yet only pays $4.4 million in copyright fees for the use of sound recordings.
However, an increase in fees paid to musicians seemed to pose a problem for the industry, with the Commercial Radio and Audio (CRA) trade body cancelling its annual awards ceremony in 2025. An internal memo cited the need to “reallocate resources” towards “crucial priorities, including significant cost pressures incurred from ongoing legal matters with the PPCA” as the reason for the cancellation.
Per the PPCA, the December ruling reinforces the longstanding concerns that the 1% cap “artificially suppresses the value of sound recordings used by radio and creates a growing disconnect between broadcast royalties and rates applying to other uses of recorded music.”
“The 1 per cent cap has always shaped how the parties negotiate, what they think is possible, and the rates that have actually been paid,” the official ruling states. “Ignoring it for valuation purposes creates a market that does not resemble the real one, and risks producing a number that is detached from commercial reality.”
“While the 1 per cent cap… may be described as ‘arbitrary’, it is longstanding and, for present purposes, a permanent fixture,” it added. “No equivalent statutory cap has been introduced in respect of broadcasts of musical works, but the existence of the 1 per cent cap in relation to sound recordings remains an important consideration in assessing the reasonableness of any proposed scheme.”
While the ruling is undeniably a win for musicians, PPCA says there is still a long way to go, with the end goal being the removal of the statutory cap.
“We have secured more royalties for local artists, but the Tribunal’s ruling proves definitively that we cannot negotiate a fair market rate for artists while the statutory 1 per cent cap remains in place,” PPCA Chief Executive Officer, Annabelle Herd said in a statement. “It is now up to Government and the Parliament to lift this deeply unfair and arbitrary cap.
“The Tribunal’s reasoning makes it clear, in no uncertain terms, that the 1 per cent cap was a decisive factor throughout the decision and has constricted Australian artists’ ability to receive sound recording broadcast royalties comparable to other markets. Caps are referenced repeatedly throughout the decision, at least 140 times in fact, and the 1 per cent cap is described as a fixed and enduring part of the landscape.
Herd continued:
While the Tribunal accepted a number of PPCA’s arguments, including that commercial radio’s promotional value has materially declined and that the use of recorded music by the sector has expanded, the existence of the cap necessarily limited how far the rate could move.
This decision follows many months of engagement and, ultimately, the refusal to meaningfully negotiate an updated rate in circumstances where the market has changed significantly since the original agreement was struck. Our job, first and foremost, is to use every avenue we can to fight for fair compensation for artists when their work is commercialised.
"PPCA will always pursue appropriate legal avenues to ensure artists and rights holders receive fair value when their recordings are commercially exploited.
The full December ruling by the Copyright Tribunal of Australia can be viewed here.
