Reference by Phonographic Performance Company of Australia Ltd (No 2) [2025] ACopyT 3

Reference by Phonographic Performance Company of Australia Ltd (No 2) [2025] ACopyT 3 is a Copyright Tribunal decision about the royalty rate and licence scheme for Australian commercial radio broadcasters using protected sound recordings in the PPCA repertoire, including in radio simulcasts.

The dispute arose after a long-running industry arrangement dating from 1999 to 2000 was terminated in 2023. PPCA said the old deal no longer reflected the current value of the rights and proposed a new sliding-scale model. CRA said the existing 0.4% industry-wide approach should continue, or that the old agreement remained the right benchmark with adjustments. The Tribunal's stated conclusion was that the appropriate rate was 0.55%.

PPCA is a collecting society for sound recording rights. It represents record companies and recording artists, including major labels and thousands of other Australian and international licensors. It receives non-exclusive rights from those licensors and can grant blanket licences over the sound recordings in its repertoire. CRA is the peak body for Australian commercial radio broadcasters and represents hundreds of licensees operating AM, FM and DAB+ stations.

The relationship between the parties was not new. The judgment material says they had been engaged in a series of licence scheme arrangements over several decades. Their last negotiated licence scheme agreement was dated 16 June 2000 and was deemed to commence on 1 July 1999. Although that agreement was due to expire on 30 June 2003, the parties continued it on a rolling month-to-month basis. That continued until 30 June 2023, when PPCA terminated the agreement.

Once the old arrangement ended, the parties needed the Tribunal to determine what should replace it. PPCA commenced proceedings under section 154 of the Copyright Act on 17 May 2023, referring a proposed licence scheme for consideration and confirmation. CRA then filed its own application on 14 September 2023 under section 152(2), seeking determination of an applicable royalty rate and also putting forward an alternative licence scheme.

To avoid immediate disruption while the case was running, the parties operated under an Interim Licence Scheme. That preserved the status quo by requiring fees to be paid under the old arrangement, subject to retrospective adjustment once the Tribunal made its determination. So the case was not just theoretical. It would affect what broadcasters ultimately had to pay for the relevant period.

The commercial disagreement was sharp. PPCA argued that the old agreement, adopted more than 25 years earlier, was no longer fit for purpose and was not an appropriate benchmark for current pricing. It proposed a sliding-scale royalty rate based on each broadcaster's music use percentage, with rates increasing progressively and capped at 1% of gross revenue for broadcasters with higher music use. CRA argued that the existing arrangements should continue, with broadcasters collectively paying an industry-wide fee equivalent to 0.4% of gross industry revenue. Alternatively, CRA said the old agreement remained the right benchmark, with suitable adjustments.

The judgment material also shows that the Tribunal was dealing with a market that had changed materially since 2000 and 2010. The issues listed in the reasons include the advent of streaming, the changing promotional value of radio, the arrival of DAB+ stations, increased volume of music played, use of snippets, growth in PPCA's repertoire, blanket licensing, opportunity cost and the value of simulcast rights. In other words, this was a valuation dispute in a changing media environment, not just a fight over preserving or replacing an old percentage.

The background also helps explain why the dispute mattered commercially. Commercial radio stations are advertising funded. They operate in a regulated broadcasting environment and use music as part of a broader service that includes local news, emergency information, community information and entertainment. PPCA, on the other hand, collects licence fees and distributes net income under its distribution policy to licensors and registered Australian recording artists. That means the rate dispute was not only about broadcaster costs. It was also about the return flowing back through the collecting society to rights holders and artists.

The material further shows that PPCA's repertoire and licensing footprint had grown significantly over time. As at June 2024, PPCA had 4,138 licensors, up from 277 in 2003, and was entitled to license rights in respect of sound recordings released under 133,360 licensor labels. That growth formed part of the broader context in which the Tribunal had to assess whether an agreement negotiated decades earlier still worked as a benchmark.

The legal issue was what licence scheme and royalty rate were reasonable in the circumstances for the broadcast of protected sound recordings on commercial radio, including use in radio simulcasts. The judgment material shows there were two procedural pathways before the Tribunal: PPCA's section 154 reference of a proposed licence scheme, and CRA's section 152(2) application seeking determination of an applicable royalty rate.

The Tribunal's table of contents shows that it considered the source of its power, the parties' competing contentions about section 152 versus section 154, and several valuation approaches. Those approaches included a notional bargain, benchmarking and judicial estimation. It also considered ACCC Guidelines, appropriate comparators, the influence of statutory constraints, market evolution and changed circumstances.

That matters because the Tribunal was not simply choosing whichever commercial proposal it liked better. It had to decide what was reasonable under the Copyright Act framework. The material indicates that the Tribunal examined whether older agreements remained useful benchmarks, whether newer comparators such as the APRA AMCOS-CRA agreement were relevant, and what adjustments were needed to account for differences such as simulcast rights, protected works, the 1% cap, market power, reproduction rights and webcasting rights.

The Tribunal also had to deal with non-price terms. The reasons list disputes about catalogue variations, tax invoices, term, termination, reporting, recordkeeping and inspections. For businesses, that is a useful reminder that a licence dispute is rarely only about the headline rate. Operational clauses can materially affect compliance burden, audit exposure and bargaining leverage.

The statutory and commercial setting also shaped the analysis. The material notes that commercial radio stations have long operated under the compulsory licence scheme in section 109 of the Copyright Act in certain circumstances, and that they are licensed and regulated under the Broadcasting Services Act 1992 (Cth). The Tribunal also referred to the 1% cap as a specific issue. Those features meant the pricing exercise was not a free-form commercial negotiation. It had to be assessed against a framework that included statutory constraints, existing industry practice and the practical realities of radio broadcasting.

The Tribunal's structure further shows that it separated changed factors from unchanged factors. Changed factors included streaming, DAB+, snippets, repertoire growth and opportunity cost. Unchanged factors included the importance of music to radio, the 1% cap and the parties' relationship. That suggests the Tribunal was trying to work out not only what had shifted since the old agreement, but also what had stayed sufficiently stable to remain relevant.

The material states the Tribunal's conclusion clearly: the appropriate rate payable by commercial radio broadcasters for the broadcast of copyright-protected, commercially released sound recordings within the PPCA repertoire was 0.55%.

That outcome sat between the parties' positions. PPCA had proposed a sliding-scale model that could rise to 1% of gross revenue for broadcasters with higher music use percentages. CRA had argued for continuation of the existing arrangements under which broadcasters collectively paid an industry-wide fee equivalent to 0.4% of gross industry revenue. The Tribunal therefore did not simply preserve the old arrangement and did not simply adopt PPCA's proposal as advanced.

From the structure of the reasons set out in the published material, the Tribunal appears to have reached that result after considering benchmark agreements, statutory constraints, changed market conditions, the value of simulcast rights, international rates, capacity to pay, inflation and operating costs, and disputed non-price terms. The material also shows the Tribunal considered both changed factors and unchanged factors, including the continuing importance of music to radio, the 1% cap and the parties' long relationship.

That is commercially significant. It suggests the Tribunal was not treating the old agreement as irrelevant, but nor was it treating it as decisive. Instead, it appears to have used a broader evaluative exercise, drawing on historical benchmarks, newer comparators and present market conditions to arrive at a rate it considered appropriate.

The orders are also important. On 10 December 2025, in both the section 154 reference and the section 152 application, the Tribunal directed the parties to confer and inform the Tribunal by 4.00 pm on 18 February 2026 of the further steps necessary to finalise the matter. So while the Tribunal stated the appropriate rate, the administrative and implementation steps were not fully wrapped up on the judgment date.

For business readers, that means there are two separate points to keep in mind. First, the Tribunal's stated rate is a strong indicator of the substantive outcome of the dispute. Second, if you need to rely on the case for drafting, pricing or compliance, you should still check the final form in which the matter was implemented, including any settled licence wording or later procedural steps.

Most businesses will never appear before the Copyright Tribunal, but the commercial logic of this case is widely relevant. If your business operates under a collective licence, industry code, standard fee arrangement or long-running sector agreement, do not assume the existing price will survive unchanged forever. Once the market changes enough, an old benchmark may stop carrying the same weight.

This case shows that decision-makers may use several tools at once. They may compare existing agreements, ask what rational parties would have agreed in a hypothetical negotiation, and then make an evaluative judgment where the evidence is imperfect. That means businesses should not rely only on historical practice or broad assertions about fairness. They should keep evidence of actual use, revenue impact, operational constraints and genuinely comparable arrangements.

The case also highlights the importance of digital extensions of traditional services. The material specifically identifies the use of sound recordings in radio simulcasts and the value of the simulcast right as part of the dispute. For other industries, the equivalent issue may be app access, streaming, online archives, cloud delivery, API use or multi-channel distribution. If your business has expanded into new channels, an old licence may no longer map neatly onto what you actually do.

Another practical lesson is that non-price terms deserve close attention. Reporting, recordkeeping, inspections, invoicing, term and termination are often treated as boilerplate, but they can drive real cost and risk. A lower headline fee may still be unattractive if the compliance burden is heavy or the audit rights are broad.

This decision is also a reminder that industry relationships can cut both ways. A long history of dealing may provide a useful benchmark, but it can also mask the fact that the commercial environment has changed substantially. Here, the old arrangement had continued on a rolling month-to-month basis for about two decades after its original expiry date. That kind of rollover can create commercial stability, but it can also store up a major pricing dispute once one side decides the old terms no longer reflect current value.

Businesses should also notice the role of interim arrangements. The Interim Licence Scheme preserved the status quo while the case was being decided, but it also allowed for retrospective reconciliation. In practice, that means a business can continue operating while a dispute is unresolved, yet still face a later adjustment once the final position is known. If you are operating under an interim or holding arrangement, you need to understand whether future true-up payments are possible and budget accordingly.

One of the clearest commercial themes in this matter is the importance of documents and conduct over time. The parties' relationship was shaped by a negotiated agreement from 2000, a deemed commencement date in 1999, an original expiry in 2003, and then a long period of continuation on a rolling month-to-month basis. That history mattered because it gave the Tribunal a real-world benchmark to examine, but it also raised the question whether the benchmark had become stale.

For businesses, this is a practical warning. If an agreement has been rolling over for years, the fact that everyone kept performing it does not necessarily mean the pricing still reflects current value. It may simply mean the parties deferred a difficult renegotiation. Once that renegotiation finally happens, the historical paperwork, correspondence, prior negotiations and actual conduct can become central evidence.

The material also shows that the Tribunal looked beyond the headline rate to the mechanics of the licence. It identified disputes about catalogue variations, tax invoices, term, termination, reporting, recordkeeping and inspections. Those are the clauses that often receive less attention during routine renewals, but they become critical when a relationship breaks down or when a business needs to prove what it has used and what it owes.

A sensible business response is to treat licence administration as part of risk management. Keep copies of all current and superseded agreements, note any side arrangements or rollover practices, and make sure your internal teams understand the reporting and audit obligations that sit behind the fee. If a dispute arises, those records can be just as important as the pricing formula itself.

The material identifies a long-running commercial arrangement that began with a negotiated agreement dated 16 June 2000 and deemed to commence on 1 July 1999. Although that agreement was due to expire on 30 June 2003, it continued on a rolling month-to-month basis until 30 June 2023, when PPCA terminated it.

PPCA commenced the Tribunal proceeding on 17 May 2023. CRA filed its own application on 14 September 2023. The hearing took place across multiple dates in April, May and June 2025, with the date of last submissions recorded as 17 June 2025. The judgment date shown is 10 December 2025. The Tribunal then directed the parties to confer and report by 18 February 2026 on the further steps necessary to finalise the matter.

That means the case can be read as a substantive decision on the appropriate rate, but not necessarily as the last word on implementation detail. If you are using this decision to inform negotiations or assess risk, the key public point is that the Tribunal stated a 0.55% rate. If you are using it for legal drafting, compliance or a live dispute, you should also check what happened after the direction to confer and whether any final licence wording or later orders affected the practical operation of the determination.

This page therefore remains a careful public explainer of the decision and its commercial significance, rather than a substitute for checking the complete decision record and finalised licence terms.

The published material identifies the matter as Reference by Phonographic Performance Company of Australia Ltd (No 2) [2025] ACopyT 3, decided by Rofe J as Deputy President of the Copyright Tribunal on 10 December 2025. It records file numbers CT 1 of 2023 and CT 2 of 2023, the hearing dates, the date of last submissions, the parties' competing proposals and the Tribunal's conclusion that the appropriate rate was 0.55%.

The material also sets out the structure of the reasons, including sections dealing with the parties, agreed facts, previous licensing arrangements, the proposed schemes, the Tribunal's task, valuation approaches, market changes, benchmark agreements, non-price terms and other relevant matters such as international rates, capacity to pay, inflation and operating costs.