Internet Radio: A New Money Stream for Musicians?
The High Court of Australia has agreed with the Full Federal Court’s decision earlier this year that commercial radio stations must pay licence fees in order to stream recorded music on internet simulcasts.
Background
Under an industry agreement from 2000, the Phonographic Performance Company of Australia (PPCA) granted a licence to Commercial Radio Australia (CRA), with the right to “broadcast” the PPCA’s recordings.
As internet simulcasts of radio programs grew, the PPCA launched legal action against CRA in 2010. It argued that the licence only covers the right of CRA to broadcast its recordings over the air, and that CRA must have a separate licence to broadcast on internet simulcasts.
In February 2012, the Federal Court held that this licence allows CRA to broadcast those recordings played on a radio program also transmitted as an internet simulcast.[1]
The PPCA appealed this decision to the Full Federal Court. The Court overturned the original decision and ruled in favour of the PPCA in February 2013.[2] It concluded that internet simulcasts of a radio program are a separate “service” to the delivery of a radio program as a traditional radio broadcast.[3] The Court also stated that internet simulcasts breach the licence, as the licence is restricted to a specific geographical area in Australia and any place in the world can access the internet.[4] Overall, an internet simulcast is not a ‘broadcast’ under the Copyright Act 1968 and is thus not permitted under the licence.[5]
In August 2013, the High Court rejected a leave application by CRA to appeal the Full Federal Court’s decision.[6]
What the decision means for musicians
The High Court decision means the CRA has exhausted all its legal options. In order to broadcast the PPCA’s recordings over the internet, CRA must now negotiate a new licence with the PPCA that is separate from its existing licence to broadcast the PPCA’s recordings over the air. This new licence will require the payment of licence fees to the PPCA on top of the usual licence fees that the PPCA earns when its recordings are broadcasted on radio.
Musicians, as copyright owners of their musical works, currently get royalties from the licence fees collected by the PPCA. The recent High Court decision is great news for musicians. They have a potential new source of income if their songs are featured on online radio broadcasts, because online radio broadcasters can no longer play these songs for free.
Since internet simulcasts are not broadcasts, the statutory cap on the amount commercial radio operators must pay to broadcast music (which is now one per cent of gross income) does not apply to internet simulcast licences.6 Without this cap, musicians may also benefit from a more lucrative revenue stream once internet simulcast licences come into force.
For further information on direct licensing guidelines see
https://www.artslaw.com.au/info-sheets/info-sheet/direct-licensing-guidelines-sound-recordings/.
Andrew Le is a volunteer at the Arts Law Centre of Australia.
[1] Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Ltd [2012] FCA 93 [132] (Foster J).
[2] Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Ltd [2013] FCAFC 11.
[3] Ibid [69] (Emmett, Besanko and Yates JJ).
[4] Ibid [70] (Emmett, Besanko and Yates JJ).
[5] Ibid [71] (Emmett, Besanko and Yates JJ).
[6] Phonographic Performance Company of Australia, ‘Artists and Recording Labels Win in High Court on Simulcast Case’ (16 August 2013).