05 Mar 2013

Court changes its tune on internet-streamed radio

by Mary Still, Ben Klug

Copyright owners will be able to claim a separate royalty for their songs played in a radio program that is simulcast over the internet, following a decision by the Full Federal Court (Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11).

An earlier decision had found that radio programs simulcast over the internet fall under the definition of "broadcasts" and therefore broadcasters do not need to pay extra royalties for using copyrighted music.

The primary issue was whether a simulcast is a communication to the public delivered by a broadcasting service within the meaning of section 6(1) Broadcasting Services Act 1992 (as affected by a Ministerial Direction) and thus within the terms of a broadcasting licence.

Commercial Radio Australia contended that the broadcasting service is the radio program itself; the means by which the program is delivered is irrelevant.

In contrast, Phonographic Performance Company of Australia said "service" refers to the radio program "wrapped up in a delivery mechanism". Delivering a radio program using the broadcasting services bands is one service; making it available online is a second service.

The Court summarised that "the word service signifies something other than the radio programs… [it] is the provision, by other means or another, such as the internet or terrestrial transmitters, of that radio program. The same radio program may be delivered by different services… The delivery of the radio program by transmission from a terrestrial transmitter is a different broadcasting service from the delivery of the same radio program using the internet."

It then went further; a radio broadcasting licence is subject to a condition that the licensee will not broadcast outside the licence area which constitutes a specific geographical area within Australia. As access to the internet can be gained from anywhere in Australia, it would be a breach of the licence to broadcast on the internet.

This is a significant decision, as it gives rights-holders another revenue stream. For broadcasters, it means of course higher operating costs. There is no word yet on whether the Commercial Radio Australia will seek leave to appeal to the High Court.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.