Australian Radio Royalty Rates Set to Jump by 38%

Australia’s Copyright Tribunal has determined that the royalty rates paid by the country’s commercial radio broadcasters will rise by 38%.

Why it matters:

• Royalties paid by broadcasters will rise from 0.4% of the broadcast radio industry’s gross revenue to 0.55%.

• The new rate is applied retroactively to July 2023.

• As per Music Business Worldwide, the 0.4% cap in 2023 yielded around AUD $4 million (USD $2.7 million) in revenue for recorded music rights holders.

• That figure would have been AUD $5.5 million (USD $3.7 million) at the new rate.

The reason:

• One key reason for the tribunal’s decision is that in an era of streaming, radio is no longer a key driver of sales.

• In the past record companies accepted a discount royalty rate because of radio’s promotional value, but it no longer has the same impact.

Sticking point:

• Recorded music industry group the Phonographic Performance Company of Australia (PPCA) responded by saying the ruling reinforces its concerns about the 1% cap on radio royalty rates under Australian law.

• It says the cap “necessarily limited how far the rate could move,” and it will continue to push for its removal.

What they said:

• Annabelle Herd, PPCA Chief Executive Officer: “The Tribunal’s reasoning makes it clear, in no uncertain terms, that the 1% cap was a decisive factor throughout the decision and has constricted Australian artists’ ability to receive sound recording broadcast royalties comparable to other markets.”