PPCA tells CRA to cough up the cash

The PPCA, representing Australian record companies, has today applied in the Copyright Tribunal for a timetable to pursue a final scheme for a fee structure for the online streaming of radio stations.

The interim scheme was introduced from 31 January, and has been taken up by 42 commercial radio stations, with almost 200 opting to shut their streaming down rather than take the risk of excessive fees being backdated.

It has been speculated that metropolitan radio stations streaming would also have been shut down were it not for the ARN investment in iHeartRadio making the group unwilling to turn off their streaming, thus meaning SCA and DMG, understandably, retained their metropolitan streams for competitive reasons

A key concern for the radio industry is that the PPCA has said that the interim fee structure presently in place should not be regarded as an indication of what it would like the final fee structure to be, and that it believes the interim structure is inadequate.

Furthermore, any higher fees imposed, will be likely to be backdated.

CRA CEO Joan Warner was unimpressed with the PPCA's position, commenting;

“In spite of the PPCA’s public statements that they are willing to engage in open and amicable negotiation, they are obviously not satisfied with the interim scheme and at the first opportunity have once again taken the legal route through the Tribunal.

The interim scheme itself is not the issue, in spite of the PPCA trying to set it up as some sort of smokescreen for their real agenda. The issue is the significant financial risk an interim licence imposes on a station.

If the record companies are successful in having the high cost scheme imposed on radio, and it is backdated, the financial liability accrued could be crippling. In addition, stations will be hit with another cost – the cost of setting up a complex reporting and compliance system.

The reality of the interim scheme is that it is not “just a $100 a month” as the PPCA persistently and incorrectly states. The interim scheme for a radio station in Sydney, Melbourne, Adelaide, Brisbane, Perth, Geelong, Sunshine Coast, Gold Coast and Newcastle is up to $3,125 per quarter per station and in other smaller regional areas is $312 per quarter per station – plus a requirement for three separate sets of reports being kept so fees can be backdated for their preferred high cost final scheme.”

So to be clear, here is what that means:

Under the interim scheme, which the PPCA has stated they believe is inadequate; a station, for example, in Longreach would pay around $1,200 annually, a station in Newcastle around $12,000 annually and a metropolitan station also $12,000.

Notwithstanding the somewhat bizarre scenario of a Newcastle station paying the same fee as a Sydney station, or the CRA position that any fee is double-dipping; CRA's key concern is that should the PPCA set the final fees significantly higher, then the fee structure is likely to be backdated to 31 January, leaving stations liable for a significant and at this time unknown cost.

This means that the interim annual fee of $1,200 for Longreach, or $12,000 in Newcastle is highly likely to be far greater than that, and backdated.

Not to mention the cost of compliance, which is no small commitment.

The final hearing as been set for March 2015, so it doesn't appear as though a resolution will occur anytime soon, so it seems for those who like to stream radio around the country, for now it will have to be metropolitan commercial, community or ABC stations.