Dissenting report by Senator David Pocock

1.1Australian artists deserve fair pay for their work.

1.2This is a core principle expressed in the Albanese Government’s National Cultural Policy—a statement I wholeheartedly agree with.

1.3And yet, when presented with an opportunity to help realise this goal, to make a simple change that would allow recording artists to negotiate fair rates of pay for use of their music, this Government-controlled Committee has decided to kick the can further down the road.

1.4This is the sixth time over the last 30 years that an inquiry has recommended in one way or another that the caps either be scrapped or further reviewed.

1.5It seems that politicians are happy to sport their favourite artists during Ausmusic T-Shirt Day and post photos from gigs they attend, but are apparently unwilling to make the decisions that would support those same artists to derive a fair income from their work.

1.6In this inquiry, the Committee received 56 high quality submissions from across the industry, from artists, radio broadcasters, labels, collecting societies, copyright experts and unions. It even received an open letter signed by more than 500 artists, including #1 Dads, Alex Lahey, Alex the Astronaut, Alter Boy, Amy Shark, Asta, Ball Park Music, Big Scary, Courtney Barnett, Daryl Braithwaite, DMA'S, Dom Dolla, Hoodoo Gurus, Gang of Youths, Gordi, Jack River, Kate Ceberano, Kate Miller-Heidke, Katie Noonan, L D R U, Middle Kids, Nina Las Vegas, Skyhooks, Something for Kate, Tones and I, The Cruel Sea, The Rubens, Urthboy, Gold Fang, Holy Holy, Faker, Hunters and Collectors, Josh Pyke, JOY, Kita Alexander and Winston Surfshirt.

1.7While the evidence gathered cut across a broad range of perspectives, it overwhelmingly landed on supporting the removal of these anachronistic caps, so that artists and their agents could be allowed to negotiate a fair rate of pay for the use of their creative works—their property.

1.8These caps currently distort the market; devaluing music by capping, and therefore potentially artificially lowering, an input cost to radio. A global survey conducted by the International Federation of Phonographic Industry, which included a demographically representative sample from Australia, found that 63% of people wouldn’t listen to radio without music.[1] While there are shows that buck the formula, an analysis of a radio monitoring platform published in Radio Info shows music still accounts for over half the airtime on the major commercial FM and music-based AM stations.[2] Artists, and their music, contribute to the profitability of radio and should share in its prosperity.

1.9A cost-benefit analysis, as recommended by the Committee, is not unwelcome, but it is not necessary to make a decision given the evidence received through this Inquiry.

1.10The Government and the Parliament should fundamentally not be setting how much recording artists should be paid by radio broadcasters in legislation. It does not do this for any other form of copyright. Indeed, there is no similar cap for music played on TV by broadcasters.

1.11The market can decide, as it does for every other form of copyright. Where an outcome can’t be reached by parties, the Copyright Tribunal can set a fair rate and, as we heard throughout this inquiry, the Tribunal is empowered to receive commercially-sensitive information in-confidence and can take into account the industry’s capacity to pay any proposed increase to the licence fee.

1.12I recommend the Bill be passed, that we scrap the caps and finally end this 56 year old saga that has resulted in devaluing the work of artists who should have every right to negotiate fair pay for radio play.

Artist pay

1.13Currently, recording artists receive very little remuneration for their work.

1.14According to a recent analysis conducted by economic modelling firm Mandala Partners, the average income of Australian artists who receive music royalties was $59,800 in 2022, which is forecast to grow to just $60,390 in 2025.[3]

1.15Most of this is not from income earned through art or creative work. David Throsby and Katya Petetskaya in their publication Getting Back to Making Art Work: an Economic Survey of Practising Professional Artists found that Australian artists who are played on radio still rely on jobs outside of music for 59% of their income. According to a survey of artists conducted by Triple J, 83% of artists have multiple jobs.[4]

1.16At such low rates of pay, every income stream is important for artists, and even more so at a time when the live music industry is in a state of collapse.

1.17Nearly 50% of artists are considering leaving the industry, with one of the key reasons being financial pressures.

1.18The situation for Australian music is dire. If we want a future for Australian music, to cultivate new acts and to maintain an Australian sound on the worldstage, we need to move beyond the endless cycle of inquiries and reviews and actually take the actions we know will help artists to secure living incomes for producing creative work.

1.19The Mandala study shows that if the caps were removed, and the industry was able to negotiate a higher licence fee, the top 160 Australian artists could receive up to $19,000 per year, increasing their music income by 78%. At the same time, artists who have less radio play, for example those with songs not in the charts, could receive an additional $3,930 or about a 16% increase.

1.20While the Mandala study makes assumptions on the licence fees that can be achieved, the report shows clearly that increases to licence fees unequivocally strengthen much needed income streams to Australian artists.

Arguments against removing the cap

No changes should be made until the current rate reaches the 1% cap

1.21I’ve heard it argued that there is no need to remove the 1% cap because the current rate is currently well below the cap—it currently sits at 0.4%. This misrepresents how the cap has been interpreted and applied by the Copyright Tribunal in their determinations over the past 50 years.

1.22As explained by Media Arts Lawyers in their answer to a question on notice:

The 1% cap was firmly in place when the Tribunal made its first order with respect to setting a rate for the payment of broadcasting fees in Re WEA Records Pty Ltd & Ors v Stereo FM Pty Limited [1983] FCA 89 (‘Triple M Case’). Quite simply, the Tribunal was bound by the 1% cap and had no choice but to have it shape their considerations. In no circumstances could they set a rate higher than 1% and consequently, 1% was deemed the ‘full’ or ‘highest’ rate that could be determined. Any other factors or ‘relevant matters’ put forward by the parties for the Tribunal’s consideration in determining the rate, were naturally going to be deemed as grounds for a corresponding reduction to the statutory ceiling. The 1% cap by its very nature creates a skewed foundation for negotiations.[5]

1.23Clearly, the 1% cap has shaped negotiations. Given previous determinations of the Copyright Tribunal, it’s hard to see how artists could ever hope to reach 1% unless the cap is removed.

Removing the cap would decimate regional radio

1.24The radio industry has argued that the removal of the cap would decimate regional radio. I don’t dispute that regional radio may be facing greater headwinds than their metropolitan counterparts. However, it must be noted that a different licence rate can be set for regional stations, based on their capacity to pay.

1.25As stated by Media Arts Lawyers in their answer to my questions on notice:

In our view there is nothing in the Act or in the current Bill that would prevent parties or the Tribunal from determining different rates for regional and metropolitan radio commercial stations.[6]

1.26And from the Copyright Council:

There is nothing in the decision of the Copyright Tribunal in the Simulcast case that suggests that a licensing scheme cannot include different rates for regional and metropolitan based broadcasters.[7]

1.27And directly from the Phonographic Performance Company of Australia, who are party to negotiations on licence fees:

...a fair negotiation or the Copyright Tribunal could and would take into account any impact of a different rate on regional radio broadcasters and, easily, we could negotiate a different, lower licence fee, if warranted, as has been done in the past.[8]

1.28If the regional radio stations are facing different headwinds to metropolitan stations, clearly this can be taken into account in negotiations and by the Copyright Tribunal, as it has in the past. Nothing in the current Act or in this Bill would mandate a one-size-fits-all approach to setting a licence fee for all stations in Australia.

The cap compensates the radio industry for its obligations to play Australian music

1.29The commercial radio industry’s argument that the cap is designed to compensate the sector for their obligations to play Australian music is unfounded.

1.30While this might be the industry’s view of the cap, I have not been able to find any statement made by any Attorney-General or any Minister, or in any of the explanatory materials for the Copyright Act that express that this has ever been the intent of the cap.

1.31Linking the two together is a rewriting of history. As we heard in the inquiry, when the Copyright Act was introduced in 1967, it did not include a cap, but was introduced following intense pressure from the radio industry. According to the debate in the Parliament, the cap was proposed as a temporary measure to assist the sector to adjust to a new form of copyright. As explained by Ms Mary Whitehead from Media Arts Lawyers:

Quite plainly, there was an existing status quo in place whereby radio was already playing the recordings for no royalties in exchange for promos, so that was the existing arrangement… Arguably, radio was not in need of the protection then and certainly is no longer in need of a protection now, but I do acknowledge that perhaps they were the special circumstances that motivated them to rally so hard for a protective measure.[9]

1.32This protection was not intended to be permanent. As further explained by Ms Whitehead:

…the original intention here, obviously, was not to have a cap in the first place and that it was going to be a temporary measure to appease the parties who couldn't come to agreement themselves. It was going to be carefully watched, and there was a provision there for it to be increased.

When the second reading debate continued in 1968, in the late hours of 4 June, Mr Bowen, in contradiction to his previous statements, unceremoniously announced that the review provision would be scrapped. The cap has been in this act for 56 years, which was never the original intention.[10]

1.33The Australian music quota system is unrelated to the cap. The quotas are a public interest mechanism to support Australian voices and content to reach Australian audiences. Simply, the quotas are a form of cultural policy, not industry policy. I will note that the radio industry receives support to meet these cultural obligations through virtually free access to spectrum - a public asset.

Conclusion

1.34I thank all the witnesses, artists, broadcasters, experts and unions that contributed to the inquiry on this Bill. This is an opportunity to take a small but meaningful step towards valuing recording artists and the extraordinary contribution they have made, and continue to make, to all Australians and our shared life together. Artists have helped tell the story of where we come from, who we are, and where we want to go as people, communities and as a nation. Their music provides the soundtrack to our lives, enhancing moments of joy and celebration, providing comfort in times of sorrow, fuelling our dreams, and creating a backdrop for memories, turning everyday experiences into lasting, emotional connections. Simply giving recording artists the same opportunity as every other copyright holder—to negotiate a fair deal for the use of their sound recordings—doesn’t seem too big an ask. This parliament has the opportunity to do that.

1.35That the Bill be passed.

Senator David Pocock

Independent Senator for the Australian Capital Territory

Footnotes

[1]International Federation of Phonographic Industry, Engaging with Music, 2022, p. 19.

[2]RadioInfo, 'How much music do music stations really play?', 25 September 2023, www.radioinfo.com.au/news/how-much-music-do-music-stations-really-play/ (accessed 20June2024).

[3]Mandala Partners, 'Economic Impact of Removing Radio Caps for Sound Recordings', 14 June 2024, www.mandalapartners.com/reports/economic-impact-of-removing-radio-caps (accessed 20June2024).

[4]Triple J, 'What's up in Australian music? Social media stress, big DIY energy and multiple jobs', 19October 2023, www.abc.net.au/triplej/programs/program-unearthed/whats-up-in-australian-music-survey-results-feature/102988278 (accessed 20 June 2024).

[5]Media Arts Lawyers, Answers to written questions on notice, 20 March 2024 (received 12April2024).

[6]Media Arts Lawyers, Answers to written questions on notice, 20 March 2024 (received 12April2024).

[7]Australian Copyright Council, Answers to written questions on notice, 7 March 2024 (received 4April2024).

[8]Ms Annabelle Herd, Chief Executive Officer, Phonographic Performance Company of Australia, Committee Hansard, 7 March 2024, p. 12.

[9]Ms Mary Whitehead, Lawyer, Media Arts Lawyers, Committee Hansard, 7 March 2024, p. 35.

[10]Ms Whitehead, Media Arts Lawyers, Committee Hansard, 7 March 2024, p. 36.