APRA required to improve transparency of music licensing and royalties

13 July 2020

Greater transparency about licence fees and royalties is a condition of the ACCC reauthorising the Australasian Performing Right Association’s (APRA) musical works licensing arrangements for a further four years.

APRA and its members, including composers, songwriters and publishers, hold performing rights for almost all commercially popular music played or performed in Australia, and earn royalties from those rights. In most cases, members assign these rights on an exclusive basis to APRA, which collects royalties by imposing licence fees on users of that music.

For many businesses that play music, including most retailers, cafes, bars and broadcasters, their only option is to obtain and pay for a licence from APRA. The fees from these licences are distributed by APRA to its members.

“Collective management of copyright is generally more efficient than songwriters having to independently negotiate and collect royalties directly from each business that plays their songs,” ACCC Deputy Chair Mick Keogh said.

“However, APRA’s exclusivity provisions can mean higher fees for some businesses that want to play music.”

Key issues raised in submissions to the ACCC’s consultations included concerns about the licence fees APRA charges. Respondents were also concerned about APRA’s lack of transparency and accountability, both to its songwriter members and to businesses from which it collects licence fees.

“The ACCC is granting reauthorisation with a number of conditions to limit APRA’s market power and help protect songwriters and small businesses when dealing with APRA,” Mr Keogh said.

These conditions require APRA to publish its methodologies for calculating the rates for each category of licence it offers. APRA will also be required to publish an explanation each time it increases licence rates by more than CPI.

The conditions also require APRA to publish more detailed information about its royalty distributions to its members; to publish an annual transparency report with information on rights revenue, operating costs and payments to members, and to continue the “Resolution Pathways” alternative dispute resolution scheme set up in response to a previous ACCC condition.

“If the information APRA publishes about how it calculates its licence rates is not sufficiently clear and detailed, the ACCC is able to require that an independent report be prepared,” Mr Keogh said.

A copy of the determination is available on the ACCC’s Public Register at Australasian Performing Right Association.

Notes to editors

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Background

APRA is a collecting society established in Australia in 1926. It has approximately 100,000 members (composers, songwriters and music publishers who assign their copyrights to APRA), and 145,000 licensees (businesses who pay APRA a licence fee to perform in public or communicate musical works).

APRA’s arrangements were first authorised with conditions by the Australian Competition Tribunal in 1999. They were reauthorised by the ACCC in 2006, and in 2010 and 2014 subject to additional conditions.

Public performance of a musical work includes broadcast of the work via radio or television, as well as causing works to be heard in public, for example in pubs, clubs, cafes, gymnasiums and workplaces.

The ACCC has a limited role in relation to collecting societies. Because APRA acts on behalf of songwriters who may be considered to be each other’s competitors, its arrangements may risk breaching competition laws unless an authorisation is in place.

Many of the concerns raised about APRA’s arrangements are about the licence fees it charges. These concerns provided relevant context to the ACCC’s assessment about whether APRA’s collective licensing arrangements are likely to result in overall public benefits. However, the ACCC does not have a role in approving or regulating APRA’s arrangements as a whole, or in approving APRA’s licence fees.

Like other businesses, creators of music are entitled to set fees for use of the music they create. The application for reauthorisation, and the ACCC’s assessment of it, focused on APRA’s arrangements through which those fees are set, rather than the level of any particular fee (which will vary according to the type of use and other factors).

Release number: 
144/20
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