Review of 1% Cap on Licence Fees Paid to Copyright Owners for Playing of Sound Recordings on Radio

March 11, 2005

The royalty rate paid by the radio broadcast industry to record companies and recording artists in return for the right to broadcast the music recordings in which they hold copyright has been capped at 1% of revenues since the inception of the relevant Act in 1968. The cap was justified at the time by perceived special circumstances in the broadcasting industry, now unknown and most unlikely to apply. The rates paid overseas in comparable countries range from 1.75% to more than 4%. The rate paid in Australia for the right to broadcast musical works is 3.5%.

The Music Council accepts the position of the record companies and recording artists that the cap should be removed, allowing commercial negotiation of an acceptable rate.

It does so for two main reasons:

to afford commercial equity and justice to the copyright owners

to provide funds to the record industry and to recording artists which can be re-invested in the production of recordings of Australian musical works and performers.

The Review is being carried out by the Commonwealth Attorney-General's Department, which issued a discussion paper that can be read on www.ag.gov.au

Read the submission