The Implications of Platforms Discontinuing Payments for Content

Published March 20, 2024

The matter of content providers being paid by platforms is an ongoing debate with significant implications. In Australia, musicians are not earning much from radio airplay, with payment rates extremely low. This is due to legislation capping the payment amount that no radio station needs to pay per year at more than 1% of its gross revenue. Consequently, artists receive even less after record labels take their share.

Prospects of Removing Payment Ceiling

Now, legislation is being considered that could eliminate this cap, allowing musicians and radio stations to negotiate without restrictions, much like the similar situation faced by Facebook and news organizations. The proposed conditions involve arbitration by the Copyright Tribunal if parties cannot agree on a payment rate.

The power disparity in negotiations often favors platforms - whether discussing music, news, or other products - leaving providers with less control. When platforms like radio or Facebook limit the dissemination of content, the providers, such as musicians or news sites, may suffer a loss in exposure and revenue.

The Historical Radio Boycott and Modern Parallels

In the past, the Australian radio industry once boycotted the music from certain labels and instead played music from other countries, notably the United States, which didn't charge for play and was not part of the same copyright treaty. The move didn't significantly affect listener habits, indicating that platforms can exert substantial control over content access.

When Facebook pushed back against the news media bargaining code and temporarily stopped linking to Australian news sites, there was a notable decline in traffic to those sites. A message emerged: platforms have considerable influence over how widely content is distributed.

As the ongoing conversation unfolds, the future remains uncertain for content providers. Facebook has hinted at no longer paying Australian news sites once their current agreement ends. Without platform support, content providers face the challenge of reaching audiences.

content, platforms, payments