How a drastic increase in licensing fees has just crippled Australia's online radio industry

Art Press Release from Australia. Published by anonymous on Friday 31 January 2014.

How a drastic increase in licensing fees has just crippled Australia's online radio industry image

Nearly 200 local commercial regional radio stations have stopped exact online simulcasts of local live free to air radio over the internet from midnight on 31 January 2014 as a result of record companies’ insistence on radio paying twice for playing music. Local commercial metropolitan radio stations are reviewing their position on a weekly basis and also may switch off in the future.

All radio stations, including the ABC, SBS, community radio and commercial radio already pay record companies each time they play an Australian song on radio. The Phonographic Performance Company of Australia (PPCA) representing, in the main, the multinational record companies is demanding the radio industry pay twice – a payment for music when heard on radio and a second proposed higher payment for the same music played at exactly the same time when it is simulcast on the internet – which means exactly the same content will be levied multiple times.

Commercial Radio Australia (CRA), chief executive officer, Joan Warner said: “In a converged world, listeners want the convenience of listening to their local radio station at home, at work and in the car. Record companies now want radio stations to pay for how our listeners tune in. We don’t pay an extra fee when people listen on a car radio, via an FM chip in a mobile phone or via radio chip in a clock radio or hifi system but we are now faced with the prospect of paying an extra and higher fee, (if the PPCA gets the high cost scheme it is pushing as a final scheme), if listeners choose to listen to their local radio station online.”

The radio industry maintains the internet is simply another distribution mechanism for live and local free to air content, as are analogue radios, DAB+ digital radios, car radios and FM radios in mobile phones. As the PPCA fees are already based on a % of gross revenue earned by commercial radio stations, this insistence on a second higher fee long term is more than double dipping and threatens the continuation of listeners being able to access their local stations online when it suits them.

Over 200 local regional radio stations now do not simulcast their local radio station. This is because the PPCA, through action in the Copyright Tribunal, has been successful in imposing an interim scheme on commercial radio stations while it continues its legal pursuit of a high cost scheme for songs played on the internet.

Under the interim scheme, broadcasters were ordered by the Copyright Tribunal to apply for an interim simulcast licence by 31 January to enable them to continue what they have been doing for the last 10 years. However, should the PPCA be successful in having the Tribunal endorse their preferred high cost scheme, radio broadcasters are concerned that simulcast fees may be back dated to the start of the interim licence and the financial liability amassed by radio stations would be cost prohibitive, particularly for regional stations.

“Exact online simulcasts themselves do not attract additional revenue. Not only would the PPCA’s preferred final scheme impose a second and higher fee, it would require local radio businesses to incur significant financial costs to put in place the sophisticated system needed to perform complex calculations to report on PPCA’s proposed scheme,“ said Ms Warner.

Media contact: Melissa Fleming 0417 499 529 – www.commercialradio.com.au