The Federal Court has ruled that musicians should be entitled to receive royalties when commercial radio streams music online.

A year ago the court ruled commercial radio did not have to, but today the Phonographic Performance Company of Australia successfully appealed that decision.

Chief executive Dan Rosen says PPCA will now try to negotiate a fee that radio stations will have to pay when they simultaneously play music on the airwaves and online.

"It means that musicians and labels, be they big or small, will be able to get a commercial fair return when their work gets used by commercial radio online," he said.

"It will bring us into line with what's happening in other big markets around the world."