The last two years have not been great for the PPCA who have now lost another crucial battle in the courts, this time against commercial radio in Australia.
Major record labels EMI, Sony, Universal and Warner were also part of the legal action against the government, the ABC and Commercial Radio Australia.
The PPCA had been fighting to remove the cap set on royalty payments by the government that says commercial radio can pay no more than 1% of total revenue in royalty payments, and that the ABC is to pay 0.5 cents per head of population for the right to broadcast recorded music.
According to The Australian, the PPCA had argued in their high court challenge that the law was archaic and unconstitutional and that artists and labels, which have been struggling with falling revenue from record sales, are underpaid by the booming radio industry.
Part of the Australian Constitution requires that any law affecting the acquisition of property, such as a licence of copyright, be on “just terms”. The PPCA, who represents Australian record labels, argued that the 1% cap fails the ‘just terms’ test.
But in a major setback for the industry body, the full bench of the High Court unanimously found the cap was constitutionally valid and should not be changed.
The cap was originally set set in 1968 after laws passed by the Liberal government of Prime Minister John Gorton and have remained unchanged since despite numerous advances in technology and the availability of radio that has seen revenues surge.
The actual rate commercial broadcasters currently pay is about 0.4 per cent of gross revenue according to the PPCA, which is lower than most international rates which vary from 1.5 per cent to four per cent.
But the ruling by the high court won’t stop the PPCA who note that the court only ruled on a narrow constitutional point and have vowed today to lobby every federal MP to have the laws changed.
“We can see no good reason why commercial radio operators deserve ongoing protection from government – allowing them to avoid paying a fair rate for the music that is so essential to their business,” said PPCA CEO Dan Rosen in a statement after the ruling.
“The legislation enacted in 1968 restricts the amount of royalties paid by radio to one per cent of a broadcaster’s gross income. It is simply outdated and unjust and has allowed a situation where artists and labels have, for far too long, subsidised the commercial radio industry.”
“The existence of this anachronistic price cap has seen Australia fall well behind other countries such as New Zealand, Canada and the UK where artists and labels receive significantly more from radio broadcasters. Music is vital to driving radio industry profits and there should be fair return”.
“We will now appeal to all Members of Parliament to support artists and make the necessary change to the Copyright Act. There is no economic, social or moral justification for this price cap.”
“It was examined by two independent reviews commissioned by Government, one in 1995 (Simpson Review) and the other in 2001 (Ergas Review). Both concluded that the cap was unjustified and should be repealed, as did a review by the Attorney-General‟s Department in 2005.”
