Commercial radio industry wants digital radio exempted from Australian Content requirements While digital radio develops in Australia, Commercial Radio Australia is seeking an exemption to the Australian Music quotas adopted by radio stations so that new formats can develop.

CRA has advertised for public comment on the proposal to vary Code 4 of the Commercial Radio Codes of Practice.

The current Code requires commercial radio stations to comply with a sliding scale of Australian music content from 5% to 25% depending on format (see table below). CRA is arguing that the quota system would prevent the development of new formats while digital radio is in its start up phase.

The request has precedents, as the tv codes was recently varied to exempt the new digital tv channels from Australian Content requirements applied to mainstream channels.

The request for quota exemptions does not assume that digital radio stations will not play music aussie content. In fact Radar, the AC/DC channel and other stations play more than the current quota amount, but there will be some formats in then introductory phase of digital radio that will want to do something innovative which does not allow for a lot of Aussie music. This variation seeks to give the industry as much flexibility as possible in the early years of digital radio for it to develop innovation.

It is proposed to insert an additional clause into Code 4 of the Commercial Radio Codes of Practice to read: "[Clause] 4.6 This Code of Practice 4 does not apply to new digital only services." Comments on the proposal can be sent to codes@commercialradio.com.au.

The text of the advertisement calling for feedback explains the proposal saying:

This will exempt new digital-only commercial radio services from Australian music quotas set out in Code of Practice 4.

Digital radio technology gives radio stations the ability to increase diversity of content, including new music formats and genres. The imposition of Australian music quotas on new digital-only channels would prevent licensees from providing a wide range of new and diverse programming and hence would defeat one of the Government's key broadcasting policy objectives.

The exemption will also encourage diversity and thus assist in underpinning the viability of new and innovative services and in driving take-up of digital radio. This provision parallels the current exemption from Australian content obligations provided for new digital-only television channels.

It is proposed that a review of this exemption will take place as part of the review of the Commercial Radio Codes of Practice which are reviewed every 3 years as part of the tri-annual Codes review process.

Comments may be submitted in writing by 19 March 2010 by:

Post: Codes Review, Level 5, 88 Foveaux Street, Surry Hills NSW 2010

Facsimile: (02) 9281 6599 marked Attention: Codes Review

Email: codes@commercialradio.com.au

For further information contact CRA on 02 9281 6577, and to view the current Commercial Radio Codes of Practice, click the link below.

Meanwhile, the PPCA has mounted a court case against the commercial radio industry, aiming to raise the price cap on payments made by commercial radio. The High Court will be asked to examine a price cap contained in section 152(8) of the Copyright Act which was introduced in 1969. The cap limits the amount Australian commercial radio stations can be required to pay to artists and labels to no more than 1% of a broadcaster's gross income.

PPCA Chief Executive Stephen Peach says: "For years now, Australian recording artists and record labels have effectively been subsidising a billion dollar industry because of an antiquated piece of legislation.

"The commercial radio sector now earns revenue of up to a billion dollars a year, but the price cap means that the sector in total pays just $4 million dollars for all the recordings played each year on Australia's 261 commercial radio stations... We have lobbied successive governments in relation to this very important issue...

"Success in the High Court would initiate a process of bringing commercial radio stations more into line with all other users of copyright material, as well as all other users of recordings, who either negotiate a fair market rate or agree to have it set by the independent Copyright Tribunal."