Copyright Agency Annual Report 2020

DOWNLOAD ANNUAL REPORT AS PDF HERE.

1            Some key results

In 2019–20 Copyright Agency:

• responded to the challenges of COVID-19 by:
  • making a special allocation of $500,000, through the Cultural Fund, to support writers, visual artists, publishers and creative organisations affected by COVID-19
  • bringing forward the allocations from the Cultural Fund for 2020–21
  • agreeing to requests from the school and university sectors to pause surveys
  • assisting our members to respond to requests from schools
  • assisting the Australian Society of Authors and the Australian Publishers Association to develop the Storytime arrangements that have enabled the recording and online delivery of children’s stories by libraries and schools
  • providing flexible payment plans to licensees in the education and commercial sectors
• enabled copying and sharing of content by millions of Australians without the individual copyright clearances otherwise required, including:
  • nearly 3.9 million school students in more than 9,400 schools[1]
  • nearly 300,000 teaching staff
  • 4 million university students
  • 130,000 university staff[2]
  • students in more than 1,000 other education institutions, such as registered training providers; and
  • more than 850,000 government employees[3]
• paid $114m to more than 10,000 recipients, many of whom passed on payments to other recipients (e.g. as agents)
• paid more than $980,000 in artists’ resale royalties
• allocated more than $1.6m from the Cultural Fund (members’ contribution of 1.5% of licence revenue)
• licensed 88 new commercial clients and extended 792 licences to cover additional content and uses
• continued proceedings in the Copyright Tribunal to determine licence fees payable by media monitoring organisations
• worked with the Copyright Advisory Group for the Education Council (representing the school sector) to consider new data collection methodologies
• continued proceedings in the Copyright Tribunal to establish new data collection methodologies in universities, and fair compensation for writers, artists and publishers
• licensed, under individual agreements, nearly 1,000 other education institutions (such as registered training organisations), 74 of which are newly licensed institutions
• continued the development and deployment of FLEX for Education: at 30 June there were 11 licensees (some comprising multiple colleges), a further 11 were running a trial, seven had expressed an interest in a trial, and there were discussions about a trial with another 10 licensees, comprising 30 colleges or institutes
• processed nearly 95,000 survey records of copying in schools and universities, comprising more than 700,000 pages
• reached a settlement with the Government of NSW for the past liability back to July 2012 and the payments forward to June 2023
• increased Reading Australia subscribers by 20% to nearly 20,000, and added 27 new teaching resources for schools
• made submissions on a code to regulate bargaining between digital platforms and media companies

2           Copyright Agency at a glance

3           About copyright

The objective of copyright law is ‘to give to the author of a creative work his just reward for the benefit he has bestowed on the community and also to encourage the making of further creative works’.[7]

Copyright rights are granted by the Copyright Act.[8] Copyright applies to designated ‘forms of expression’ such as writing, music and images. The ‘owner’ of a copyright has exclusive rights to do certain things such as copying, making available online, broadcasting and public performance. No registration is required for copyright: rights are granted ‘automatically’ on creation of a designated form of expression.

Copyright is a form of ‘intellectual property’: it is ‘owned’ and can be licensed and transferred to others.[9] The Copyright Act determines the first owner of copyright (usually the creator). Creators also have ‘moral rights’ in their work (relating to attribution and the ‘integrity’ of their work), even if they do not own copyright.[10]

The artists’ resale royalty right (artists’ entitlement to a share of the resale price for artworks) is often regarded as a copyright-related right, though it differs from copyright rights in a number of respects, and in Australia is granted by standalone legislation.[11]

Rights usually last for 70 years after the creator’s death.[12]

The Copyright Act contains a range of ‘exceptions’: activities that can be done without the copyright permissions usually required. The Act also contains a number of ‘statutory licences’ that allow copying and sharing of content (e.g. for education) without permission, but subject to fair compensation.[13]

The copyright system is international, involving national legislation that conforms with standards in international treaties.[14]

3.1         About statutory licences

Statutory licences have been introduced for situations in which it was assumed ‘that, if left to themselves, the parties will be unable to reach a satisfactory resolution of the terms for the access desired’ for reasons that include ‘unacceptably high transaction costs in cases where individual uses would be too difficult to identify and control’ and ‘the user is in a powerful initial position and has been able to obtain a statutory solution in its favour’.[15]

Statutory licences are compulsory for content creators but not for licensees: users can choose to make alternative arrangements with copyright owners for uses covered by statutory licences, rather than relying on the statutory licence provisions.[16] Content creators have adjusted to the statutory licences, which were introduced a long time ago and enable efficient licensing solutions.

Copyright Agency is appointed (‘declared’) by the Australian Government to manage statutory licences for the use of text, images and print music by the educational and government sectors.[17]

A statutory licence for education was introduced in 1980 following the recommendations of an expert committee,[18] extensively amended in 2000 to enable digital uses of content (such as making content available on an intranet and emailing),[19] and simplified in 2017 following a joint proposal from Copyright Agency, Screenrights and education sector representatives. In 1990, the Attorney-General’s Department produced guidelines for ‘declared’ collecting societies, which are reflected in Copyright Agency’s Constitution.[20]

A statutory licence for governments was introduced in 1968 as part of the current Copyright Act, following the recommendation of an expert committee,[21] and was amended in 1998 to facilitate collective management.[22]

Statutory licences are consistent with Australia’s international treaty obligations, and exist in other countries, but are more prevalent in Australia than elsewhere.[23]

The Copyright Tribunal has power to determine a range of matters associated with statutory licensing, including the compensation payable, data collection, and distribution of compensation to content creators.

4           Our business: an overview

4.1         Revenue by category

These figures are for revenue recognised for the 2019–20 financial year, rather than received in that period. [24]

4.2        Revenue and distributions at a glance

Each year’s distributions include some money received before that year, depending on when the funds and data for allocation were received. For more on payments to content creators, and funds received in 2018–19 for distribution in 2019–20, see Parts 12 and 13. Our gross costs in 2019–20 were $21.9m (15.4% of revenue) including operating costs of $18.3m (12.9% of revenue) and $3.6m of non-operating costs.

In 2019–20, Copyright Agency received a total of $142m, comprising:

• $138m from domestic licensing; and
• $4m collected overseas.

Copyright Agency distributed $114m, comprising:

• $97m to domestic rightsholders; and
• $17m to foreign rightsholders.

4.3        Revenue and distributions 2016–20

5           Education sector licensing

The statutory licence scheme for education in the Copyright Act allows copying and sharing of text and images for education, by educational institutions, provided there is fair compensation to content creators.[26] Copyright Agency was appointed by the Australian Attorney General in 1990 to manage the scheme.

There is a similar scheme for broadcast content (e.g. documentaries, films and current affairs), managed by Screenrights.[27]

The schemes apply to both not-for-profit and for-profit educational institutions. The amount of fair compensation can be determined by the Copyright Tribunal if it cannot be agreed.

Most schools (all government schools, and most Catholic and independent schools) are represented by the Copyright Advisory Group to the Education Council (CAG)[28] in negotiations for fair compensation and data collection arrangements. Most Technical and Further Education (TAFE) colleges (apart from those in Victoria)[29] are also represented by CAG. Australian universities are represented by Universities Australia.[30]

Copyright Agency also negotiates individual agreements with about 1,000 independent educational institutions. Some of these agreements cover activities in other countries, based on authorisation from our members rather than the statutory licence. We also offer a joint licence, with music licensing bodies, to the early childhood sector, which is based on authorisation from our members rather than the statutory licence.

For total revenue from the education sector, see 4.1 Revenue by category.

5.1         Developments in 2019–20

• working with CAG to consider new data collection methodologies that harness opportunities provided by new technologies and reduce the reporting burden on teachers
• continuation of proceedings in the Copyright Tribunal to establish new data collection methodologies in universities, and approach for determining fair compensation for writers, artists and publishers, having regard to technological and other developments since the previous application to the Tribunal more than 20 years ago
• licensed, under individual agreements, more than 1,000 other education institutions (such as registered training organisations), 74 of which are newly licensed institutions
• in response to COVID-19:
  • agreeing to requests from the school and university sectors to pause data collection surveys
  • assisting our members to respond to requests for assistance from schools
  • assisting the Australian Society of Authors and the Australian Publishers Association to develop the Storytime arrangements to enable the recording and online delivery of children’s stories by libraries and schools
  • providing flexible payment plans to licensees in the education and commercial sectors

5.2        Total cost of education for school students

According to the Australian Curriculum, Assessment and Reporting Authority, the recurrent government funding for school education in 2017–18 was $61.5 billion: about $16,000 per student.[31]

Compensation to content creators under the statutory licence is less than 0.1% of this funding.

5.3        Licence fees paid for school students over time

Under the current four-year agreement with schools (2019–22), the amount per student decreases each year so that in 2022 it will be about 25% less than the amount per student in 2018.

5.4        Universities

In September 2018, Copyright Agency made an application to the Copyright Tribunal to set a new rate and monitoring system for the university sector, when it became clear that these matters would not be resolved by negotiation. The last time that the Copyright Tribunal was asked to determine the rate for universities was 20 years ago. The Tribunal heard the case in September 2020, and is expected to give a determination in early 2021. The Tribunal has made interim orders regarding the payments to be made by universities until it makes its final determination.[32]

5.5        Individually licensed institutions

As at 30 June 2020, we had 1,028 individual agreements in place with education institutions, 74 of which are newly licensed institutions (50 commercial institutions, and 24 non-commercial institutions).

Roughly 58% of the individually licensed institutions are not-for-profit, and the remainder for-profit. The institutions include pre-schools, schools and colleges offering higher education degrees, as well as Vocational Education and Training (VET) level diplomas and Certificates I–IV. Some offer specialist education, such as theological studies, business studies and English language training.

The for-profit institutions are mostly very large private colleges and registered training organisations (RTOs) offering tertiary education. The not-for-profit institutions include training arms of government bodies, private or community kindergartens, community colleges, smaller RTOs and charitable RTOs.

While we enter into agreements with these institutions individually, we liaise with peak bodies for various classes of institution with a view to:

• increasing understanding of copyright and licensing issues;
• providing licensing information to their members; and
• designing licences that are appropriate to the needs of their members.

5.6        Early Childhood Licence

We offer a joint licence, with music licensing bodies, to cater for the needs of early childhood education and care providers.[33]

5.7        Engagement with education sector

Our licensing staff engage with the education sector in a variety of ways, including participation in education conferences and other events, webinars and individual training sessions. These activities were more limited in 2020 due to COVID-19. Engagement in 2019–20 included:

• ACPET Conference – Gold Coast August 2019
• English Australia Conference – Melbourne September 2019
• VELG Conference – Brisbane September 2019
• Early Childhood Australia Conference (with APRA AMCOS) – Hobart September 2019
• IHEA Library Summit – Melbourne October 2019
• Community Colleges Conference – Brisbane November 2019

6           How content is used in the education sector

The statutory licence managed by Copyright Agency allows copying and sharing of text and images for educational purposes:

• from any source, in any format, from anywhere in the world; and
• for any type of reproduction or communication (e.g. printing, scanning, photocopying, downloading, making available on a server, emailing).

The key limitation is that works that are available for purchase cannot be copied in their entirety.

6.1         Collection of information about content used under the licence

Information provided by schools and universities is taken into account for two separate things:

1. to understand licensee behaviour regarding the use of content, including reliance on the statutory licence; and
2. to assist with distribution of fair compensation to content creators.

The information relevant to (1) does not require identification of individual rightsholders. The information relevant to (2) can come from multiple sources, including information provided by members.

The extent and type of information gathered about usage is affected by a number of factors including:

• the technology available to collect and process data;
• administrative burden on licensees and staff;
• cost of collecting and processing data; and
• the approach to assessing the value of the statutory licence.

6.1.1          Future data collection

The future methods of data collection are currently under review as a result of:

• undertakings in the current agreement between Copyright Agency and CAG (2019–22) to develop new data collection methods for the school sector;
• proceedings in the Copyright Tribunal (commenced in September 2018) to establish new methods of data collection in the university sector; and
• COVID-19, which has made the implementation of the past methodology impractical for the period of the pandemic.

6.1.2        Data collected from surveys in samples of schools and universities

Until COVID-19, a small sample of schools and universities were participating in annual surveys of usage conducted by an independent research company.[34] The surveys have been largely paused as a result of COVID-19.[35]

The design of each survey (including sample design and duration) was agreed with CAG (for schools) and UA (for universities), and those organisations participated in training of survey participants. By agreement with education sector representatives, survey participants recorded some uses made outside the statutory licence.[36]

Uses made outside the statutory licence are identified and excluded when the usage data is processed by Copyright Agency’s researchers, in accordance with protocols agreed with education sector representatives.

Some survey records are useful for the first purpose but not for the second (because they do not contain sufficient information to identify a rightsholder). In identifying survey records for distribution purposes, we exclude those that do not contain sufficient identifying information.[37] Conversely, some information gathered in surveys is relevant to distribution, but does not affect compensation negotiations.

6.2        Survey records from schools and universities processed in 2019–20

The table shows the number of records from surveys in schools and universities that we processed in 2019–20. In most cases, these survey records comprised a cover sheet with information about the copying, and a copy of the content copied.

Each survey record may show that numerous ‘pages’ were copied, and may show that those ‘pages’ included a number of separate ‘works’. For example, a survey record may show that 10 pages from a book were copied, and that those pages included narrative text, a poem, and images. Survey records from universities included course packs, which comprise extracts from a variety of sources.

Components of copied pages may be processed separately: there are different relative values for different types of content, and there may be different owners of copyright for various components.

The table gives an indication of the volume of processing, rather than a comprehensive report on all processing in 2019–20. The processing includes research to determine whether or not a use was made in reliance on the statutory licence (e.g. a use that has been directly licensed by a copyright owner is excluded). The table includes records for uses made outside the statutory licence, and therefore excluded from estimates of the overall extent of reliance on the statutory licence, and from distribution.

Copyright Agency employs experienced data researchers who extract relevant information from the survey data, and supplement it with additional information about the content and the rightsholders (such as International Standard Book Number and publisher name). There are detailed descriptions of the role of the data researchers in the Data Processing Protocols (DPPs) agreed with education sector representatives.[38]

As noted in the DPPs agreed with education sector representatives:

It is not always possible for researchers to retrieve comprehensive bibliographic information so as to verify rightsholders. Researchers are constrained by the quality of original data provided in the survey and the complex nature of the publishing industry. However, the role of the researcher is to identify and complete the citation as far as possible in the circumstances.

Given the need to keep costs reasonable, the researchers do not identify every rightsholder for every survey record. They do, however, identify rightsholders for nearly all survey records, including records on which a teacher has marked ‘source unknown’ on the cover sheet.

6.3        2019 schools surveys

Under the arrangements before COVID-19, agreed between Copyright Agency and CAG, an independent research company conducted two surveys of copying in a sample of schools. One survey recorded printing, scanning and photocopying in 252 schools over a two-year period, each for a term:

• NSW, ACT, South Australia and Northern Territory in the ‘even’ years (e.g. 2016, 2018)
• Victoria, Tasmania, Queensland and Western Australia in the ‘odd’ years (e.g. 2017, 2019).

The other survey recorded ‘electronic use’ (e.g. uploading to a server, downloading, emailing) in 100 schools each year, for a four-week period.

Different schools were surveyed each year. A surveyed school did not participate in another survey for at least eight years.

6.4        Number of schools and students in Australia in 2019

In 2019, there were 9,503 schools in Australia, with nearly 3.95 million students: 65.7% in government schools, 19.5% in Catholic schools and 14.8% in independent schools.[39]

6.5        Schools surveyed in 2018–2019

In 2018–19, surveys of printing, scanning and photocopying were conducted in the following number of schools:

6.6        Printing, scanning and photocopying by schools surveyed in 2018

The 2019 data was not available in time for this report.

There were 84,485 students in the schools surveyed for photocopying, printing and scanning in 2018.

The following figures represent content copied and shared in reliance on the licence managed by Copyright Agency: that is, uses that would otherwise have required a copyright clearance. Any uses recorded in surveys that were not done in reliance on the licence are excluded.[40]

The 128 schools surveyed:

• photocopied 2.8 million ‘pages’ of content[41]
• printed 508,000 ‘pages’
• scanned 17,000 ‘pages’

Taking into account the survey results for both 2017 and 2018, the calculated ‘pages’ per student is 156.24.

6.7        Electronic use by schools surveyed in 2018

In addition, a survey of electronic use was conducted in 100 schools, with 3,617 registered participants.

The schools surveyed for electronic use copied or shared more than 700,000 ‘pages’ of content under the licence.

The calculated ‘pages’ per student for 2018 is:

6.8        Uses excluded from licence fee negotiations for school sector

In negotiations with the school sector, uses of content that were excluded from consideration include those that:

• do not ordinarily require copyright permission;[42]
• we have been notified by the copyright owner are directly licensed for educational use;
• are presumed to be directly licensed for educational use;[43]
• are presumed to have no value (such as ‘technical’ copies); and
• are not practicable to ‘measure’.

There were two mechanisms for taking these uses into account in fee negotiations:

1. uses recorded in surveys that are excluded in accordance with the data processing protocols agreed with CAG; and
2. overall discounts for a class of excluded use.

In the data processing protocols agreed with CAG, processing exclusions include:

• quotations and extracts of three paragraphs or less;
• material created exclusively by the surveyed institution’s current employees: teacher’s own work;
• media releases;
• examination papers/materials used for assessment purposes;
• logos;
• advertisements and branded material; and
• content published by government departments and agencies.

The fee negotiations include adjustments for uses such as the following:

• ‘small portions’;
• copying from ‘blackline masters’;[44] and
• content that may lack sufficient ‘originality’ to be protected by copyright.[45]

6.9        Books school teachers copied in 2018–19

The list below is the top 50 books copied by teachers surveyed in 2018–2019, selected by the number of schools the books were copied in (rather than the total number of copies made). The list is sorted alphabetically.

Addition and Subtraction: Student Book (Mathletics Instant Workbooks: Series D)

Arty Animal Outlines

Benchmark Assessment System 1

Benchmark Assessment System 1: Years K-2: Levels A-N

Cambridge HSC Mathematics: General 2

Cambridge Maths: NSW Syllabus for The Australian Curriculum: Year 9 Stage 5.1/5.2/5.3

Cambridge Maths: NSW Syllabus for The Australian Curriculum: Year 8

Cambridge Maths Stage 6 Year 11: Mathematics Standard

Excel Essential Skills: New Year 7 Mathematics Revision and Exam Workbook 1

Excel Essential Skills Mathematics Revision and Exam Workbook: Year 10

Fountas and Pinnell Benchmark Assessment System 2

Fractions Decimals and Percentages: Student Book (Mathletics Instant Workbooks: Series G)

Fractions Decimals and Percentages: Student Book (Mathletics Instant Workbooks: Series F)

General Mathematics: Units 1 and 2: Cambridge Senior Mathematics Australian Curriculum VCE

Have Sum Fun: 200 Maths Puzzles

IMaths 4: Student Book

IMaths 5: Student Book

Maths Plus 2: Australian Curriculum Edition: Student Book

Maths Plus 3: Student Book: Australian Curriculum

Maths Plus 5: Student Book: Australian Curriculum

Measurement (Mathletics Instant Workbooks: Series D)

Multiplication and Division (Mathletics Instant Workbooks: Series E)

Multiplication and Division (Mathletics Instant Workbooks: Series F)

New Century Maths 8 for the Australian Curriculum: NSW Stage 4

Numbers (Mathletics Instant Workbooks: Series B)

Numbers (Mathletics Instant Workbooks: Series C)

Operations with Numbers (Mathletics Instant Workbooks: Series C)

Persuasive Text Worksheets: Primary

PM Benchmark 1: Reading Assessment Resource

PM Benchmark Kit 1: Teachers’ Notes

PM Benchmark Kit 2: Reading Assessment Resource

PM Benchmark Kit 2: Teachers’ Notes

Primary Mathematics: Book B

Probe 2: Reading Comprehension Assessment Kit

Revisit Reflect Retell: Time Tested Strategies for Teaching Reading Comprehension

Sound Waves 3: Student Book

Sound Waves 4: Student Book

Space Shape and Position (Mathletics Instant Workbooks: Series D)

Sum Fun: 170 Maths Puzzles

Targeting Maths Australian Curriculum Edition Student Book Year 1

Targeting Maths NSW Student Book Year 2

Teaching Reading Comprehension Strategies

Teaching Reading Comprehension Strategies: A Practical Classroom Guide

Times Table Challenge

Words Their Way: Word Sorts for Letter Name-Alphabetic Spellers

Words Their Way: Word Sorts for Syllables and Affixes Spellers

Words Their Way: Word Sorts for Within Word Pattern Spellers

Writing Book: A Practical Guide for Teachers

Year 8 Mathematics Revision and Exam Workbook (Excel Essential Skills Series)

Year 9 Mathematics Revision and Exam Workbook 1 (Essential Skills: Years 7 to 10 Series)

7           FLEX for education

Copyright Agency has worked with international company Kortext to develop an online product called FLEX, which makes the task of preparing and delivering course reading material simpler and faster for librarians and educators. In the UK, librarians from more than 100 educational institutions use a similar product.

FLEX has been successfully trialled in libraries in a number of education institutions in Australia and is now offered to education providers such as registered training organisations and non-university higher education institutions that have licensing agreements with Copyright Agency.

Participating publishers currently include: Allen & Unwin, Australian Academic Press, Bloomsbury Publishing, Cengage, CSIRO, HarperCollins, McGraw-Hill, Pearson, PsychOz, Oxford University Press, Wiley and Wolters Kluwer.

FLEX customers get access to participating publishers’ digital original files and high-quality scans from the British Library. FLEX has in-built compliance checks. It also allows visibility of reading list content at a course level, and enables the assignment of content to students. We are also working on functionality to assist students with a visual impairment.

As at 30 June 2020, we had deployed FLEX with 11 licensees (some comprising multiple colleges), a further 11 were running a trial, and seven had expressed an interest in a trial. We had also started early discussions about a trial with another 10 licensees, comprising 30 colleges or institutes.

8           Government sector licensing

The statutory licence for governments allows Commonwealth, State and Territory government departments and agencies to make any use of any copyright content for the services of the government.[46] Copyright Agency has been ‘declared’ by the Copyright Tribunal as the collecting society authorised to collect and distribute ‘equitable remuneration’ for government copying of text images and print music.[47] Copyright Agency also licenses, as agent for its members, the communication of text, images and print music.[48]

The statutory licence does not apply to government-related entities that are not ‘the Crown’, or to local governments, but Copyright Agency offers other licences for them (based on authorisation from members).

For total revenue from the government sector, see 4.1 Licence fees by sector.

8.1         Developments in 2019–20

• settlement with the Government of NSW for the past liability back to July 2012 and the payments forward to June 2023[49]
• agreements in place with the NSW government until June 2023, and with the Northern Territory and Commonwealth governments until June 2021;
• processes to extend other agreements with other governments in train, affected by COVID-19;
• agreement on retrospective payment with Tasmanian government for sales of survey plans; and
• negotiations with Northern Territory government regarding sales of survey plans.

8.2        Number of government employees

The table below indicates the number of employees (full-time equivalent: FTE), according to the most recent reports we have received.

9           Commercial licensing

Members, including copyright management organisations in other countries, can appoint us as their agent to include their works in various licence schemes we offer. Licensees include corporations and not-for-profit organisations.

We offer ‘blanket’ annual licences, which cover uses of all works we represent. We also offer ‘pay-per-use’ (transactional) licences, including through an online automated facility.[50]

The licences do not cover works that are listed on Copyright Agency’s website as excluded works,[51] but do include an indemnity for uses of other works not represented by us.

Licence fees reflect the value of the licences (e.g. compared to other commercial licensing arrangements).

For total revenue from commercial and other voluntary licences, see 4.1 Licence fees by sector.

9.1         Developments in 2019–20

• 88 new clients and 792 extended licences to cover additional content and uses resulting in a 2.1% increase in licence fees from the corporate sector
• Continuation of monitoring program for corporate websites with infringing newspaper content, with a view to increased uptake of licences in the corporate sector
• Settled 6 infringement matters in the financial year generating $33,000 in one-off payments for past use, and $15,000 in licence fees for ongoing annual copyright licences
• Continuation of proceedings in the Copyright Tribunal regarding licence fees payable by media monitoring organisations under media monitoring licences[52]

9.2        Licences for the corporate sector

In addition to our general licence for corporations, we have licences covering the specific requirements of:

• pharmaceutical companies
• public relations (PR) companies
• law firms
• Australian-based firms with offices in other countries

Other licence schemes include:

• media monitoring (as agent for newspaper and magazine publishers)
• inclusion of journal articles and other works in commercial subscription services

9.3        Not-for-profit sector

We offer licences for a range of not-for-profit entities, including incorporated associations, unincorporated associations, societies and unions. We have specific sector licences for:

• local governments;
• religious organisations; and
• civil celebrants

9.4        Transactional (pay per use) licences

We offer transactional (pay per use) licences in two ways:

• an automated online service (RightsPortal);[53] and
• a manual clearance service.

The automated service currently applies to newspaper content (text, but not images), and articles from scholarly journals.

For content not yet covered by the online facility, we offer a manual clearance service. Licensees make a request via the RightsPortal, and we respond within 48 hours. We liaise with the rightsholder, who decides whether or not to license and sets a price, and manage the licence arrangements, invoicing and payment.

Most of the users of these services are publishers.

9.5        Engagement with licensees

The Commercial Licensing team engages with current and potential licensees in a variety of ways. In 2019–20, they conducted 52 training sessions with a range of organisations around Australia.

And the team participated in the following industry events:

• Public Relations Institute of Australia (PRIA) Annual Conference – November 2019
• Australasian Reporting Awards (ARA) – July 2019
• LG Professional, Victoria – Corporate Partners for FY 2020–21
• Franchising Council
• LGNSW Conference – November 2019
• Association of Corporate Counsel
• Association of Regulatory and Clinical Scientists

9.6        Closure of LearningField

In 2013 Copyright Agency, in partnership with publishers, established the online subscription website LearningField, which allowed Year 7–12 students to use multiple digital textbooks per subject, from a range of publishers, in a searchable format, linked to the Australian and state curricula across a range of devices. It included more than 17,000 chapters from nearly 1,500 textbooks, as well as interactive content. LearningField was taken up by more than 60 schools, reaching 30,000 students.

At the end of the 2019 calendar year, the LearningField service was withdrawn from the market, following an announcement to that effect in early 2019. This resulted from an assessment that the investment required to further grow the business, and risks associated with this investment, outweighed the benefits to Copyright Agency’s members, in what is an increasingly competitive market.

10        Artwork licences

Copyright Agency licenses the use of fine art and other artworks. Most of the artwork licences are pay-per-use (rather than ‘all of repertoire’). There are also ‘blanket’ licences that cover agreed uses for all artist members, in advance of the use. The uses are reported after the event. This type of licence is used in conjunction with long-term licence agreements and to assist administration of high volume uses.

10.1       Developments in 2019–20

• Licensing worth nearly $1.5m to members
• Significant licences included those for the Sydney Zoo, Matisse and Picasso exhibition at NGA, model trains, Ella Bache promotion, NBN cabinet wraps, home furnishing collaborations – Adairs with Miimi & Jiinda, Kip&Co with Bábbarra – Wesfarmers/Jam Factory corporate gifts with Warmun, architectural uses at Newman Medical Clinics, Ord Valley Aboriginal Health Service, Chancellery building at Monash University and Cairns Bailey Hotel.
• Public galleries, auction houses and commercial licences contributed 70% of the licensing revenue this year, with commercial licences in home furnishings, architectural, merchandise, branding and event uses.
• Artists licenced include the artists of Bábbarra, Margaret Preston, Matisse, Picasso, Tiwi artists, Joy Hester, Leanne Watson and many more.
• The 2019 John Fries Award continued to be recognised as an important national award for emerging and early career artists, with the finalist exhibition attracting over 800 attendees for the opening evening and 2,500 attendees throughout the course of the exhibition[54]. The 2020 JFA finalists’ exhibition has been postponed until March 2021. That exhibition will be a celebratory conclusion to the decade long partnership between the Fries family and Copyright Agency presenting the John Fries Award. Copyright Agency will continue to support visual artists through the Cultural Fund.
• We were pleased to support Sydney Contemporary Art Fair through a special program of digital commissions which supported artists in the creation of new work.

11         Artists’ resale royalty scheme

The artists’ resale royalty scheme commenced on 9 June 2010. Copyright Agency was appointed by the Minister for the Arts to manage the scheme in May 2010.

The scheme requires payment of a 5% royalty of the sale price for certain resales of artworks by Australian artists.[55] It also requires the reporting of all resales with a sales value of $1,000 or more to Copyright Agency, with sufficient information to determine if a royalty is payable. A royalty is not payable if the seller acquired the work before the scheme commenced.

There is a dedicated website – resaleroyalty.org.au – which has an online reporting facility, and online registration for artists and art market professionals to provide contact details.

11.1        Scheme results

• the resale royalty scheme has generated over $8.5m in royalties from more than 21,000 resales benefitting over 1,950 artists
• the artists who received royalties are at different stages of their careers, from early to senior, and from different parts of Australia, including urban and remote areas
• 65% of the artists receiving royalties are Aboriginal and Torres Strait Islander artists, who received 37% of the royalties
• of all the artists receiving royalties, over 35% reside in the Northern Territory and central Australia – demonstrating the regional and remote impact of the scheme
• in 2019–20 we paid more than $980,000 in artists’ resale royalties to 480 recipients

The following shows the percentage of resales reported to Copyright Agency that met the eligibility criteria for payment of a royalty, by payment range.[58]

11.2       Payments by state/territory

The following shows payments by state and territory, from the commencement of the scheme in June 2010.

11.3       Stakeholder engagement

Stakeholder engagement included:

• Information sessions and meetings to discuss resale royalty at or in conjunction with key events such as the IACA conference, CIAF, Desert Mob, Darwin Aboriginal Art Fair, Ku Arts Conference, Sydney Contemporary, MGA conference and the Adelaide Biennial of Australian Art. These forums are utilised to reach artists, art centre managers, arts workers and art market professionals. We also presented to the Aboriginal Art Association of Australia in Alice Springs.
• Information sessions to artists via the professional development component of their tertiary education course and artist studio talks.
• Articles to drive compliance, provide clarity on eligibility criteria and support efficient administration of the scheme. These articles are used in CANVAS, on the website and in email communication to relevant stakeholders:
  • Where to find the answers to your Resale Royalty questions: a guide to available resources and useful ways to contact the Copyright Agency’s Resale Royalty team.
  • The Resale Royalty Right: Scheme Performance 2010 to 2020.
  • Find out what the Post-Implementation Review says about the Resale Royalty Scheme’s early growth and how it’s tracking now
• Information provision to artists and art market professionals via email alerts and through our visual arts eNewsletter, CANVAS – Copyright Agency News for Visual Artists. CANVAS is performing extremely effectively with a distribution of over 10,900 (2,200 more than last report) and an open rate of 41% (up 4% from last report), and well above the industry open rate of 29%. Our average click rate of 5.4% is also above the industry rate of 4.2%.
• We participated in many advocacy and policy discussions, such as presenting at the hearing of the Environment and Communications Legislation Committee for the Competition and Consumer Amendment (Prevention of Exploitation of Indigenous Cultural Expressions) Bill 2019.

12       Payments to content creators

Copyright Agency acquires data for distribution from a variety of sources, including surveys of usage by licensees and data that indicates content available to licensees. There are a series of processes involved in allocating payments to content creators based on the best data available at a reasonable cost within the relevant time period. These include analysing the available data, applying relative values for different types of content and uses, and identifying content creators. The processes are sometimes complex, accounting for the time between receipt of licence fees, allocation, and payment.

Distribution policy is overseen by the Board, and published on our website.[59]

The Copyright Tribunal has power to review distribution arrangements for statutory licence fees.

In 2019–20, we made payments to more than 10,000 unique recipients, many of whom pass payments on to others (e.g. as agents).

12.1       Payments to content creators by licence sector and publication type

The following table shows estimates of allocations to content creators according to type of publication the content was copied from, where relevant, and licence sector. [60] It also shows the amounts for the annual artists’ and writers’ royalty claim distributions. These are amounts set aside from licence fees for artists and writers where there is limited usage data, and are in addition to allocations from other sources, such as artistic works copied from books or websites in schools and universities.

12.2      Payments to be shared

Our payments reach rightsholders in two ways: directly (from us) and indirectly (through a member who receives a payment from us).

In 2019–20, we allocated more than $15m in direct payments to writers and artists. We also allocated more than $84m to publishers, mostly for books. Book publishers pass on a share of Copyright Agency payments to writers and artists in accordance with their publishing contracts. We also allocated more than $12m to copyright management organisations to pass on to their members, and nearly $2m to surveying firms from sales of survey plans by state governments.

In addition to the payments shared with non-staff creators, publishers also have writers and illustrators on staff, and Copyright Agency payments contribute to their salaries.

12.3      Distribution by state and territory

12.4      Allocation recipients for 2019–20

The following tables show amounts allocated in 2019–20, some of which may be paid in subsequent financial years.

12.4.1      All payments

12.4.2     Schools

12.4.3     Universities

The amount available for distribution to members was less than in previous years because of the proceedings in the Copyright Tribunal to determine the future licence fees and monitoring system. In May 2019, the Tribunal ordered that, pending the final determination, the universities would continue to pay the amount payable under its previous remuneration agreement that expired in December 2018 with half going to Copyright Agency (for distribution to members) and the other half going into escrow.

12.4.4     TAFEs

12.4.5     Other education providers

12.4.6     Governments

The distribution of licence fees compensation from governments in 2018–19 was (apart from that from survey plans) mostly based on data from various sources indicating content that was available to governments to use during the licence period (rather than information about actual use). We used different data sources for different types of content (such as books, journals, newspapers and images), in accordance with the best data available to us at the time at a reasonable cost.[61]

13       Cultural Fund

Copyright Agency’s Constitution allows the Board to allocate up to 1.5% of income to support writers, visual artists, publishers and creative organisations through the Cultural Fund.[62] With an annual budget of approximately $2 million the Cultural Fund supports a wide variety of projects each year.

In 2019–20, $1,643,016 was approved through the Cultural Fund for 81 projects, including six Create Grants and four Copyright Agency Fellowships.

Some of the funds approved are for release in subsequent years.

13.1       Recipients by category 2019–20

Some of the amounts paid were approved in previous years.

13.2      Projects supported by the Cultural Fund in 2019–20

The following projects were approved for funding in 2019–20. These, and projects supported in previous years, are described in more detail on our website.[63] In some cases, the funding was approved for a project spanning up to three years.

13.3      Create Grants 2019–20

The following applicants were successful for Create Grants in 2019–20.

13.4      Fellowships 2019–20

The following applicants were successful for Fellowships in 2019–20.

13.5      Projects supported through the Copyright Agency’s Emergency Action Funding 2020

This year the Copyright Agency’s Board approved a special allocation of $500,000 from the Future Fund to support writers, visual artists, publishers and creative organisations affected by COVID-19.

61 projects have been supported through this initiative. The full list of recipients is below.

13.6    Reading Australia

Reading Australia (readingaustralia.com.au) is a Copyright Agency initiative to assist the teaching and reading of Australian literature in Australian schools. The Cultural Fund allocates approximately $100,000 a year to Reading Australia for:

• commissioning new resources and material for teachers;
• partnerships with education, libraries and writers’ organisations;
• conferences and stakeholder engagement and for website development; and
• the Reading Australia Fellowship for Teachers of English and Literacy

It has been developed in partnership with the Australian Association for the Teaching of English, the Primary English Teaching Association Australia, the Australian Literacy Educators Association and the Association for the Study of Australian Literature.

Reading Australia began as a list of 200 books chosen by a panel from the Australian Society of Authors to celebrate the work of leading Australian writers and illustrators. Recently the focus has been to publish resources for books that are being taught in schools and for important literary titles that should be taught in the classroom.

A further 180 titles, covering all genres and periods of Australia’s literary history, have been added to Reading Australia.

Resources are available for 205 titles, aimed at Foundation to Senior Secondary. The educational resources are designed to help teachers navigate Australian texts within the framework of the Australian Curriculum. The secondary-level titles are also accompanied by essays written by eminent authors, academics and critics. The website also has video interviews with authors, including 10 created in partnership with ABC Splash, and podcasts from The Garret with accompanying resources.

20 titles have AustLit trails, which are curated collections of information covering the title’s context, themes, and more, as well as links to academic research and publications.

13.7      Developments in 2019–20

• 2% increase in subscriber numbers from 16,500 to 19,831
• Total pageviews for the year are 841,890, an increase of 16.8% (from 720,831) in 2018–19
• New resources:
  • 19 new teacher resources for secondary students – 127 in total
  • Eight new resources for primary schools – 78 in total
  • Dub Leffler commissioned to create colouring sheets for the Reading Australia illustrator gallery
• The inaugural Reading Australia Fellowship for Teachers of English and Literacy was awarded to Alexander Wharton
• Partnership with The Garret podcast to produce a further eight resources to accompany podcast interviews with Reading Australia authors and illustrators (for a total of 24 resources)
• Partnership with Red Room Poetry to develop a poetry competition for Australian students and teachers. Over 2,000 entries were received
• Engagement with Australian publishers to source potential titles for Reading Australia
• Conference participation:
  • July 2019, ALEA National Conference in Melbourne
  • December 2019, AATE National Conference in Melbourne

14       Money held for payment to rightsholders and reserves

At any given time, we are holding money for payment to rightsholders and reserves. The amount of money for payment to rightsholders changes significantly over the course of a year, increasing with the receipt of licence fees, and decreasing with the payments to rightsholders.

The reasons that licence fees may not have been paid at a given date include:

• the licence fees were only recently received;
• we have not yet received the information needed to allocate to rightsholders; and
• fees have been allocated, but not yet paid, to rightsholders.

14.1       Money held at 30 June 2020 for payment to rightsholders

As at 30 June 2020, there was $31.6m[64] for payment to members representing:

14.2      Licence fees received but not yet allocated

The table below shows licence fees invoiced to 30 June 2020 that have not yet been allocated. The amounts are fees available for allocation after our deductions for anticipated operating costs. They include some licence fees that were invoiced before 30 June 2020, but received in the 2020–21 financial year.

14.3      Time between invoice and distribution of licence fees from schools and universities

Licence fees were due from the school sector in April 2020 for January to December 2020, and allocated to rightsholders in June 2020. Most allocations were paid to rightsholders by 30 June.

Licence fees payable under the interim arrangements with Universities Australia set by the Copyright Tribunal are invoiced quarterly and paid to members twice a year, in December and June. The fees for January to June 2020 were due in April 2020, allocated to rightsholders in June 2020, and mostly paid to rightsholders by 30 June 2020.

14.4      Why allocated funds have not yet been paid

The following is a breakdown of allocations that we were holding at 30 June 2020.

14.5      Unpaid allocations for return to members

We are required to hold allocations from statutory licence fees for at least four years. Under our current distribution policy, allocations from non-statutory licence fees can be released after 12 months. The Board determines how unpaid allocations that are no longer held for specific rightsholders (‘rollovers’) will be applied.

At 30 June 2019, we were holding $3.96m in unpaid allocations made since 30 June 2011. The Board determined that those funds would be returned to members, by way of a reduced deduction for operating costs, over a three-year period ($1.3m a year). As a result, we are still holding $2.6m of the $3.9m. In 2019–20, we spent the $1.3m on upgrading our IT systems.

We are currently holding $4.4m of unpaid allocations, comprising $2.6m of the 2019 amount and $1.78 of unpaid allocations that ‘rolled over’ in 2019–20. The sources are shown below.

This amount will be used over time to meet expenses, with the effect that the deductions from licence fees for operating costs will be reduced, and members will receive a higher proportion of licence fees. We have planned to apply $3.02m to expenses in 2020–21.

14.6      Reasons allocations were not paid in 4 years

14.7      Reserves as at 30 June 2020

As at 30 June 2020, there was $15.46m in reserves, representing:

14.8      Future Fund

Funds held as retained earnings are used for the benefit of members at the discretion of the Board. This includes funds set aside for the Future Fund and the Indemnity Fund.

The Future Fund was established in 2013 in response to such issues as the Australian Law Reform Commission recommendation for radical changes affecting licensing arrangements. In Canada, comparable changes to copyright law saw a catastrophic collapse in some licensing revenues. The Future Fund was built up over several years from interest on licence fees and allocations that were unpaid for four years. As noted in the 2016 Directors’ Report, the purpose of the Fund is to ‘safeguard and manage the rights of members including but not confined to taking such necessary actions in communications, research and advocacy … to the extent required consistent with the Board’s prudent judgment’. Further, the Board noted in the 2017 Directors’ Report that: ‘The Fund may also be called upon to conduct litigation which is necessary to protect the rights of creators, for example, to clarify the role of exceptions in the Copyright Act 1968’.

In 2017, the Board reported that it had determined to maintain the Fund but that it would periodically review the need for it and any amounts no longer required for safeguarding members’ interests will be returned to members.

14.8.1      Funds allocated and spent to 30 June 2020

14.8.2     Use of the Fund in 2019–20

In accordance with a Board decision to reduce the Fund over time, $2.25m was released from the Fund and used to meet the company’s expenses: $1.57m for legal costs and $680,000 for upgrading our IT systems.[67]

This has the effect of reducing the deductions from licence fees for operating costs, and enabling a higher proportion of licence fees to be distributed to members.

An additional $0.5m was used to support members affected by COVID-19. The projects are listed at 13.5: Projects supported through the Copyright Agency’s Emergency Action Funding 2020.

14.9      Indemnity Fund

Copyright Agency has an Indemnity Fund to compensate rightsholders for use of their content in connection with licences managed by Copyright Agency. For example, Copyright Agency’s Distribution Policy provides for an ex gratia payment to a rightsholder who can establish that their work was substantially copied under a licence, but who received little or no payment for that use (for example, because the use occurred in a school that did not participate in the surveys of copying that were used for distribution).

14.10   Funds for distribution and reserves at 30 June 2014–20

15       Operating costs

Our operating costs are met from licence fees.[68] For most licence schemes, we make a deduction for anticipated operating costs when licence fees are received, rather than a fixed commission.[69] Deductions therefore vary from year to year. Copyright Agency’s Constitution also allows a deduction of up to 1.5% of revenue for support of cultural projects (the Cultural Fund).[70]

Copyright Agency’s Board must approve the company’s annual operating budget. Any proposed changes to directors’ remuneration must be approved by members at a general meeting. The largest component of operating costs is salaries.

For the past five years, total operating costs have been around 14% of total revenue.

15.1       Operating costs in 2019–20

• Revenue recognised: $142.2m
• Total expenses: $18.28m

15.2      Operational expenditure to revenue ratio

The following represents our operational expenditure as a proportion of our total revenue.

15.3      Staff remuneration and performance

All employees have a position description outlining the responsibilities and key competencies required for their role. Key Performance Indicators (KPIs) are set each financial year and cascaded down from the senior management team to ensure alignment with the business requirements. They are then reviewed and agreed upon by employees with their manager, and performance objectives and targets are determined.

Our employees have one formal performance review each year, during which an individual’s performance is reviewed against the agreed objectives. Recommendations for annual remuneration are based on:

• the assessment of each employee’s performance against those objectives;
• benchmarking against similar positions in comparable organisations;
• overall company performance; and
• market and economic conditions.

Final decisions regarding remuneration are made after considering managers’ recommendations, external benchmarks and environment, salary relativities within the company and our financial capacity.

• In 2019–20, employee benefits expense was 8.4% of total revenue (65% of our operating costs)
• Staffing levels vary from time to time in accordance with requirements
• Staff include full-time employees, part-time employees and contractors
• In 2019–20, staffing levels ranged from 87.73 full-time equivalent (FTE) to 82.19 FTE
• At 30 June 2020, there were 82.19 FTE staff
• As at 30 June 2020, the median remuneration (including superannuation) for all staff was $116,537.50

Staff remuneration greater than $153,600[71] is as follows:

16       Members

Membership of Copyright Agency is free. Anyone with a copyright interest in a text work or image can apply for membership.[73] Applications for membership are approved by the Board.

Until November 2017, there were three classes of membership: ‘author’, ‘publisher’ and ‘collecting society’.[74] Since then, there has been an additional class of member – visual artist – as a result of the merger with Viscopy.

People can choose to be a member solely for entitlement to any statutory licence compensation allocated for use of their works, or they can choose to also authorise Copyright Agency to license reproduction and communication of their works. This authorisation is non-exclusive; they can also license these uses themselves.

For a number of reasons, we only make payments to members, but our systems enable payment to new members for past usage. And members who receive payments share them with others, including non-members. For example, many authors receive Copyright Agency payments indirectly via their publisher rather than directly from Copyright Agency.

16.1       Members at 30 June 2020

In 2019–20, 832 new members were admitted to membership. Some memberships also ceased for various reasons (e.g. a company ceased trading).

Many rightsholders are not direct members of Copyright Agency, but are represented by (and receive payments from) our members. For example, there are more than 1,800 writers represented by literary agents who are members, and more than 6,000 artists represented by Indigenous art centres.

Thousands of writers and illustrators also receive payments via their publishers, rather than directly as members.

16.2      Members by profile

16.3      Member enquiries

The Member Services team answered nearly 13,800 enquiries in 2019–20, mostly from members.

Many members are now getting the information they need from the online Help Centre: there were more than 29,000 views of information on the Help Centre in 2019–20.

Of the customers who provided feedback on the response to their enquiry, 97% were satisfied with the response.

The Member Services team responded to more than 98% of enquiries within four hours.

17       International agreements and engagement

The non-statutory licences offered by Copyright Agency are dependent upon the authorisation given by members to license their content, and the authorisation of foreign content creators through their collective management organisations (CMOs). Copyright Agency therefore has agreements with foreign CMOs that enable us to include foreign works in Australian licences, and to also collect payment from foreign CMOs on behalf of members when Australian works are included in foreign licences.

The maintenance of those agreements requires active management, affected by a range of external developments including changes in regulatory frameworks and business practices.

Copyright Agency is a member of the International Federation of Reproduction Rights Organisations (IFRRO)[75] and the International Confederation of Societies of Authors and Composers (CISAC).[76] Copyright Agency plays an active role on the IFRRO Committees, and is on the Executive Committee of CISAC’s visual arts body, CIAGP.[77] Copyright Agency is also a member of the Press Database and Licensing Network (PDLN)[78].

17.1       Agreements

Copyright Agency currently has agreements with 36 rights management organisations around the world who represent rightsholders for the text/image sector. All agreements are with IFRRO members.

Additionally, to support our visual arts licensing schemes, we have 38 agreements in place with CISAC visual arts societies, as well as 5 foreign artist estates/foundations.

New agreements in 2019–20 include JCOPY (Japan) – digital bilateral agreement, February 2020.

We monitor for new opportunities to include additional repertoire under our voluntary licences, and to ensure that Australian rightsholders are appropriately represented in the international space.

17.2      Revenue

Foreign revenue is influenced by many external factors, including fluctuations in usage, legislative changes, and variations to foreign affiliates’ business practices and distribution policies.

Revenue from foreign CMOs over the past 5 years:

In 2019–20, the top five sources of international revenue were:

17.3      International engagement in 2019–20

• Copyright Agency hosted a visit from Copyright Clearance Center (CCC), 26 Sept 2019 in relation to enhancing corporate licensing schemes
• Participation in CISAC CIAGP Annual Meeting, 1–2 October 2019, Berlin Germany, presenting on visual arts licensing and resale rights developments in the Asia Pacific region
• Participation in IFRRO Annual World Congress, 5–8 November 2019, Edinburgh Scotland, including presentations at the International Business Models Forum, Legal Issues Forum, the Newspapers and Periodicals Working Group, and Visual Arts Working Group. We also chaired the Asia Pacific Committee Meeting
• Series of meetings with IFRRO and partner CMOs including CLNZ (NZ), CLASS (Singapore), CLA (UK), KORRA (South Korea), CCC (US), JCOPY (Japan), JAC (Japan), NLA (UK), ARS (USA), ASCRL (USA), PICSEL (UK), DACS (UK), VG BildKunst (Germany), VIETRRO (Vietnam), ACCESS Copyright (Canada), PLS (UK) to coincide with IFRRO World Congress. We also met with the Common Law Group – Access Copyright (Canada), Copibec (Quebec), DALRO (South Africa), ICLA (Ireland), CLA (UK), PLS (UK), CLNZ (NZ)
• Delivered training at Norcode Seminar for Collective Management Organisations (Asia Pacific Region), 9–14 November 2019, Hanoi Vietnam. Norcode is a Norwegian not-for-profit dedicated to building cultural infrastructure in developing countries and works closely with WIPO to deliver copyright training programs for developing CMOs in different regions
• Hosted visit from CISAC Director General, Gadi Oron, 12 December 2019, to discuss the Australian Resale Royalty Scheme for Artists and developments in introducing the resale right in countries in the Asia Pacific region
• Hosted study tour for delegates from South Korean collective management organisation, KORRA, 2–4 December 2019, focusing on governance, survey/distribution methodology, and new licensing developments
• Participated in CISAC Asia Pacific Committee Annual Meeting, 21 May 2020 (online), focusing on the impact of COVID-19 on global creative industries and collective management organisations in the region

18       Policy and advocacy

We monitor and seek to influence policy developments that affect copyright-based licence fees and other income. We form policy positions in consultation with a range of stakeholders, including industry and professional bodies representing content creators.

We are a member of bodies that have a key advocacy role, such as the Australian Copyright Council. We seek to influence policy at the international level primarily through our membership of IFRRO.

In their responses to member surveys and other communications with us, members have indicated that they want and expect Copyright Agency to advocate for their interests.

18.1       Developments in 2019–20

The major development was the release of the report by the Australian Competition and Consumer Commission (ACCC) from its inquiry into digital platforms in July 2019, followed by the release of a Concepts Paper on a code governing bargaining between digital platforms and media companies in May 2020 and draft legislation in July 2020.

18.2      Submissions and representations in 2019–20

Engagement in policy and advocacy included:

• response to the final report of the Australian Competition and Consumer Commission (ACCC) from its inquiry into digital platforms (September 2019);[79] and
• response to ACCC Concepts Paper of Code of Conduct for digital platforms (June 2020).

19       Stakeholder engagement

Copyright Agency’s stakeholders include content creators, content users (licensees) and the Australian government.

Content creator stakeholders include members of Copyright Agency, potential members, professional organisations for content creators (such as Australian Society of Authors, Australian Publishers Association, Media Entertainment and Arts Alliance, National Association for the Visual Arts, and Australian Institute for Professional Photography), and international affiliates.

Content user stakeholders include people who use content under licences (e.g. teachers, government employees, businesses), professional associations for those users (such as teacher associations and unions), and people who negotiate licence fees and other arrangements for their sector (such as Copyright Advisory Group and Universities Australia).

Copyright Agency’s main stakeholder relationship with the Australian government is related to its appointments by the government to manage statutory schemes and the artists’ resale royalty scheme.

Copyright Agency also has a stakeholder relationship with the Australian government, and with State and Territory governments, in their capacity as licensees, and as owners of copyright.

Other important stakeholders include other copyright management organisations (such as Screenrights and APRA AMCOS), and industry associations for content creators (such as those for music and film).

19.1       Developments in 2019–20

• Joint sponsorship of Parliamentary Friends of Books and Writing group
• Meetings with various Departments and Ministers
• This Book Changed My Life panels at Writers Festivals
• John Fries Award for early career visual artists
• Major sponsorship of Miles Franklin Literary Award
• Major sponsorship of the Reading Hour with the Publishers Association and Australian Library and Information Association
• Sponsorship of the Australian Book Industry Awards, Educational Publishing Awards Australia, Walkley Awards for Journalism
• Sponsorship of Walkley Arts Journalism prizes
• Sponsorship of Sydney Contemporary Art Fair
• Monthly eNews, Creative Licence, issued to members and other stakeholders
• Quarterly eNews, CANVAS, issued to visual artist members and non-members
• Quarterly eNews, Licence Plus, issued to business licensees
• Promotion of Inclusive Publishing Guides
• Regular meetings and presentations to staff and boards of key industry organisations
• Engagement with stakeholders via Facebook, Twitter, LinkedIn and Instagram
• Media coverage of Copyright Agency activities and issues
• Promotion of Cultural Fund grantees and Fellowships
• Promotion of FLEX for Librarians to Private Education Providers
• Publication of opinion pieces in media on copyright issues
• Promotion of new Code of Conduct website to all members (in conjunction with other collecting societies)
• Literary agents and publishers briefed in Sydney and Melbourne
• Training sessions about the Copyright Agency’s processes with business licensees and members on request

20     Governance and accountability

Copyright Agency is a signatory to the Code of Conduct for Copyright Collecting Societies.[80] Matters covered in the Code include governance and accountability, education and awareness, and complaints and disputes.

We report annually to the Code Reviewer on our compliance with the requirements of the Code, and the Code Reviewer’s report is published on our website.

In conjunction with the Government’s appointment of Copyright Agency to manage the statutory licence for education in 1990, the Attorney-General’s Department developed guidelines for collecting societies.[81]

Our Constitution (which reflects some of the requirements in the guidelines) is available from our website, as is our Corporate Governance Statement, Client Service Charter, Privacy Policy and profiles of Board Directors.

Our Complaints Procedure and Disputes Resolution Procedure are available on our website.

The Copyright Tribunal has powers to determine aspects of licensing arrangements, including compensation fees payable under statutory licences, and distribution arrangements.

20.1      Developments in 2019–20

• website for Code of Conduct for Australian Copyright Collecting Societies launched: copyrightcodeofconduct.org.au
• amended Code of Conduct adopted, implementing recommendations of government report
• undertaking by Copyright Agency and other collecting societies to implement recommendations in report
• Code Reviewer’s report on collecting societies’ compliance with the Code of Conduct in 2018–19 published (available on new Code of Conduct website)
• report to Code Reviewer on compliance with the Code of Conduct 2019–20 (available on Code of Conduct website)

21       Directors’ Report and Financial Report

[1] abs.gov.au/ausstats/abs@.nsf/mf/4221.0.

[2] https://www.universitiesaustralia.edu.au/stats-publications/.

[3] Number of employees covered by Copyright Agency’s licensing agreements.

[4] From statutory and voluntary licences, but not the artists’ resale royalty scheme or payments from Screenrights for artists.

[5] Principally Screenrights (broadcast content), APRA AMCOS (music compositions), and PPCA (recorded music).

[6] copyrighttribunal.gov.au.

[7] Report to Consider What Alterations are Desirable in the Copyright Law of the Commonwealth (the Spicer Report) (1959): this report preceded the introduction of the current Copyright Act 1968.

[8] Copyright Act 1968 (Cth), available at jade.io/article/218245.

[9] Other forms of intellectual property include patents, trademarks and designs: see ipaustralia.gov.au/understanding-intellectual-property.

[10] Creators have these rights in their work even if they do not own copyright.

[11] The primary copyright treaty, the Berne Convention, provides that parties are not required to have an artists’ resale right, but that if they do they must provide reciprocity to nationals of other countries that have the right. In Australia, the right is granted by the Resale Royalty Right for Visual Artists Act 2009 (Cth), overseen by the Minister for the Arts. One of the key arguments for the right is that it benefits ‘fine artists’ who receive fewer benefits from the copyright system than other creators (such as writers and composers) whose work is primarily created for copying and communication rather than the value of the ‘original’ version.

[12] copyright.com.au/duration.

[13] For an overview of all the statutory licences, see Ricketson & Creswell, The Law of Intellectual Property: Copyright Designs & Confidential Information at [12.0]ff.

[14] Australia is party to a number of treaties, such as the Berne Convention administered by the World Intellectual Property Organization (WIPO) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), administered by the World Trade Organization (WTO). Australia is also party to a number of bilateral and other agreements that affect copyright, such as the Australia–US Free Trade Agreement.

[15] Ricketson & Creswell, The Law of Intellectual Property: Copyright Designs & Confidential Information at [12.0].

[16] For example, the use of print music in schools is mostly done under the AMCOS print music licence rather than the statutory licence, because it allows the copying of entire works that are available for purchase (provided the school purchases the requisite number of originals), though the statutory licence remains available to schools for uses not covered by the AMCOS agreement.

[17] Copyright Agency was ‘declared’ by the Attorney General in 1990 as the collecting society for the statutory licence for education, and by the Copyright Tribunal in 1998 as the collecting society for government copies of ‘works’ and ‘published editions’.

[18] Report of the Copyright Law Committee on Reprographic Reproduction (AGPS, Canberra, 1976), known as the Franki Report.

[19] By the Copyright Amendment (Digital Agenda) Act 2000 (Cth).

[20] The Guidelines and Constitution are available at copyright.com.au/governance.

[21] Report of the Committee Appointed by the Attorney-General of the Commonwealth to Consider What Alterations are Desirable in the Copyright Law of the Commonwealth (1959), known as the Spicer Report, at [404].

[22] The statutory licence in section 183 of the Act allows the Commonwealth, States and Territories to use any copyright material for the services of the Crown. The amendments empowered the Copyright Tribunal to appoint (‘declare’) collecting societies to manage ‘government copies’. Copyright Agency was declared as the collecting society in relation to ‘works’ (other than those embodied in films and sound recordings) and ‘published editions’ in 1998. Screenrights is the declared society for broadcast content. For uses that are not ‘government copies’ managed by a declared collecting society, the government must (unless it is contrary to the public interest) notify the copyright owner and either agree terms with the copyright owner, or have terms determined by the Copyright Tribunal. The legislation does not empower the Tribunal to declare a collecting society in relation to ‘communications’ made under the statutory licence, but Copyright Agency operates as agent for its members by accepting notification and negotiating terms.

[23] Some other countries have provision for ‘extended collective licensing’, which is similar to statutory licensing but allows a copyright owner to ‘opt out’. This form of licensing originated in Scandinavian countries, and has recently been introduced in the UK.

[24] This includes licence fees that are currently the subject of proceedings in the Copyright Tribunal, from media monitoring companies and universities. See further external auditors’ report, annexed.

[25] Revenue includes one-off ‘retrospective’ payments for past sales of survey plans.

[26] The statutory licence was first introduced in 1980 and has been amended numerous times, including in 2000 to cover digital content and communication, and in 2017 to simplify the legislative framework.

[27] There are also arrangements for use of music in schools and universities through the music collecting societies, APRA AMCOS and PPCA.

[28] CAG represents schools on copyright matters to the Education Council. CAG is assisted by the National Copyright Unit (NCU), based in the NSW Department of Education.

[29] Since 2006, Victorian TAFEs have been represented by their own self-funded association, Victorian TAFE Association (VTA).

[30] There are 40 Australian universities registered by TEQSA. UA represent 39 – the last one, Torrens University Australia, is individually licensed.

[31] https://www.acara.edu.au/reporting/national-report-on-schooling-in-australia-data-portal/school-funding/government-recurrent-expenditure-on-government-and-non-government-schools.

[32] https://www.judgments.fedcourt.gov.au/judgments/Judgments/tribunals/acopyt/2019/2019acopyt0002. See further external auditors’ report, annexed.

[33] https://www.copyright.com.au/licences-permission/educational-licences/early-childhood-education-licence.

[34] See Copyright Agency surveys in schools and universities at static-copyright-com-au.s3.amazonaws.com/uploads/2018/03/R02134-CA-surveys-in-schools-and-unis-Jan-2018.pdf.

[35] In universities, the hardcopy survey in the last surveyed institution for Semester 1 ceased in week 6, but there has been some continuation of the electronic use survey by arrangement.

[36] This is partly in recognition that the teachers completing the surveys would have difficulty determining whether a particular use is made in reliance on the statutory licence or not. Uses not made in reliance on the statutory licence are identified by Copyright Agency’s researchers, following protocols agreed with education sector representatives. Licence fee negotiations take into account both these ‘exclusions’ from the usage data, and global ‘discounts’ for uses made outside the licence. Universities self-exclude some uses not made in reliance on the statutory licence, for example where the university believes that the usage is governed by a direct licence with the copyright owner.

[37] This does not necessarily mean that the work used is an ‘orphan work’: it means that insufficient information has been provided to enable us to identify its copyright owner (the licensee may have additional information that has not been provided to us).

[38] copyright.com.au/data-processing-protocols. As noted in the DPPs, the researchers’ tasks include to ‘complete (add missing information such as author, publisher full title, ISBN, etc.) information provided on the survey records by the survey participants’.

[39] abs.gov.au/ausstats/abs@.nsf/mf/4221.0.

[40] In accordance with protocols agreed with the sector. For example, content covered by a Creative Commons licence, a licence that allows free use by schools, or a subscription licence that allows the use.

[41] ‘Pages’ means the ‘units’ of content (such as a page from a book, an image, or a page printed from a website) times the ‘consumption’ (e.g. number of copies or viewers).

[42] E.g. because the content is not protected by copyright.

[43] Such as from a website with terms of use that allow ‘non-commercial use’.

[44] ‘Blackline masters’ are workbooks sold with a licence to the purchaser to photocopy. Survey records do not indicate whether or not the recorded use was covered by the licence.

[45] Such as the TV guides at issue in the High Court decision in Ice TV.

[46] The statutory licence is in Part VII Division 2 of the Copyright Act.

[47] Screenrights is similarly declared for broadcast content.

[48] The legislation does not enable the Tribunal to ‘declare’ Copyright Agency for communication, only for ‘government copies’.

[49] The settlement does not cover state-owned corporations.

[50] rightsportal.copyright.com.au/.

[51] copyright.com.au/excluded-works.

[52] See external auditors’ report, annexed, at page 3.

[53] rightsportal.copyright.com.au/.

[54] www.johnfriesaward.com/.

[55] Royalties are paid to successors in title after an artist’s death. The legislation allows for the scheme to be extended to artists and successors in title from other countries with similar schemes, by listing those countries in regulations. At the time of writing, no countries were listed.

[56] Resales for $1,000 or more.

[57] All resales must be reported, and Copyright Agency determines which resales are subject to a royalty. A royalty is not payable if the artwork was acquired by the vendor before the commencement of the scheme. Other reasons for a royalty not being payable are: the artist is not an Australian national or resident, and (if the artist has died) there are no beneficiaries with the requisite connection to Australia.

[58] In some cases, artists elect to receive payment directly from the art market professional and in some cases artists decline payment for particular resales (e.g. charity auctions).

[59] copyright.com.au/distribution-policy.

[60] Distributions of licence fees from the education sector were based on surveys of usage in statistical samples of educational institutions. Distributions of licence fees from governments (apart from those for sales of survey plans) were based on data indicating content available for use.

[61] We had regard to the Attorney-General’s Department’s guidelines for declared collecting societies (2001) in determining the approach to the distribution.

[62] copyright.com.au/cultural-fund. The deduction does not apply to artists’ resale royalties or payments from Screenrights for artists.

[63] copyright.com.au/cultural-fund/projects-supported.

[64] Does not include adjustment of $1.6m for payments in transit and GST shown in auditors’ report at Note 11.

[65] This includes amounts that will be deducted for operating costs.

[66] This covers a range of scenarios such as: deregistered companies; estates and individuals where we have a name but cannot find any further information to enable contact; organisations that we have contacted but have not joined; and small allocations where the cost of identification and contact exceeds the allocated amount.

[67] The legal costs were associated with three separate proceedings in the Copyright Tribunal relating to payments from media monitoring companies ($0.6m), universities ($0.9m) and the government of NSW (now settled: $0.1m)

[68] In accordance with the Copyright Act, the Copyright Regulations, the government Guidelines for Declared Collecting Societies and Copyright Agency’s Constitution.

[69] There is a fixed commission from some of the commercial licence schemes.

[70] We do not make any deductions for the Cultural Fund from artists’ resale royalties or LearningField subscriptions.

[71] Employees who earn over the high income threshold are considered ‘high income employees’ under the Fair Work Act 2009. The threshold for 2020 is $153,600 (includes superannuation guarantee contributions but not incentive payments).

[72] Includes superannuation but not incentive payments.

[73] Membership is open to owners of copyright and their agents.

[74] A member can be both an author and a publisher member. The class of membership determines voting entitlements for the two elected members of the board: the elected ‘author’ and the elected ‘publisher’ director.

[75] www.ifrro.org.

[76] www.cisac.org.

[77] In 2019–20 Sarah Tran chaired the Asia Pacific Committee. Adam Suckling and Sarah Tran also participated in the Legal Issues Forum, and were members of the Newspapers and Periodicals Working Group and the Visual Arts Working Group. Sarah Tran and Judy Grady were members of the Executive Committee of CIAGP, CISAC’s visual arts arm.

[78] www.pdln.info. Josephine Johnston is a member of the Executive Board.

[79] https://www.accc.gov.au/system/files/Copyright%20Agency%20%28May%202019%29.pdf.

[80] The Code is available at copyright.com.au.

[81] There are links to the declaration and guidelines at copyright.com.au/governance.