Fair Pay for Radio Play Bill Aims to Address Inequity in Music IndustryRadio Industry's Power Over Music Industry Revealed in Low Payment Rates. Credit: techxplore.com

Why are musicians so eager to have their music played on the radio? It's not for the money, that's for sure. In Australia, radio stations are paid such low rates that even popular streaming services seem generous in comparison. By law, radio stations can only be required to pay up to 1% of their gross revenue for all the music they play, and after the labels take their cut, the artists receive even less.

This scenario is similar to the legislation that has been put in place to settle disputes between platforms like Facebook and news organizations over payment for news. The underlying message is clear: when it comes to conflicts between platforms and providers, the power lies with the platforms. This has been evident in the case of radio stations.

Dating back to 1968, Australian radio stations have been granted the right to play any music they want as long as they negotiate a payment rate with the relevant collecting society. If an agreement cannot be reached, an independent tribunal steps in, but their decision is limited to awarding no more than 1% of the station's gross revenue for commercial stations and a mere half of one cent for ABC stations per Australian resident per year. This was done in order to appease the concerns of radio stations, and a provision for a review after five years was initially included but was later removed from the final draft of the legislation. However, after half a century, inflation has significantly reduced the value of the ABC's ceiling. Furthermore, the ceilings only apply to radio stations and not to television stations, which pay much more per track.

Additionally, composers, who are paid separately with no limits, receive much more than the performers. This means that while the composers of a popular song may receive a decent pay, the performers may not. The record industry has repeatedly attempted to remove these ceilings, even going to the High Court in 2010, but their argument that the Commonwealth is not allowed to acquire property without just terms was rejected. Now, Independent Senator David Pocock is trying to remove these ceilings once again with his Fair Pay for Radio Play bill, which would allow the radio and record industries to negotiate a fair rate subject to the decision of the Copyright Tribunal.

However, the radio industry claims that if this were to happen, they would play less Australian music and would also request to be freed from the requirement to play a certain amount of Australian music. On the other hand, the recording industry believes that the radio industry is bluffing. Annabelle Herd, the head of the Phonographic Performance Company of Australia, stated in a Senate hearing that even if radio stations were to stop playing Australian music, they would still have to pay for music from other countries. However, this claim may not be entirely accurate.

In 1970, Australian radio stations refused to play any music from the Phonographic Performance Company in response to what they believed were excessive demands. Instead, they played music from independent Australian labels and American music, which was not charged for. This resulted in The Beatles' popular album Let it Be not reaching the top five in Australia, while it did in other countries. After five months, the record companies eventually gave in, realizing that radio play was crucial for exposure and sales. This situation is similar to when Facebook temporarily stopped linking to Australian news sites in 2021, resulting in a 13% decline in traffic to these sites.

The common thread in all these scenarios is that platforms hold a significant amount of power over providers. If major supermarkets refuse to sell a product, farmers will struggle to distribute their produce. Similarly, if radio stations refuse to play a certain artist's music, their reach and popularity will be limited. And if platforms like Facebook decide not to link to news articles, these sites will receive fewer clicks and less traffic. Although Facebook has been paying Australian news sites millions of dollars since the implementation of the news media bargaining code, they have announced that they will not continue to do so when the agreements expire. The code does allow the government to force Facebook to pay, but only if they continue to link to news articles. However, Facebook has indicated that they will not do so.

David Lamy
David Lamy Author
David Lamy owns the Bachelor in Atmospheric Science Degree. He is associated with Industry News USA from last 2 years. With proficiency in his work, David obtained a strong position at Industry News USA and heads the Science section. “Weather forecasting” is the field of his interest. He bags total 5 years of experience in this field. Apart from his routine work, David loves to explore his cooking skills. He has participated in various cookery shows.