Chair Kim Williams’ report to the AGM

December 2, 2019 | Uncategorized

Copyright Agency issued its 2018-19 Annual Report at its AGM held in Sydney last month. You can read it on the web here or see the online print version here.

Chair Kim Williams provided the following report to the AGM, which outlines the current status of litigation and the Future Fund.

There has been a lot of debate recently around major public institutions withdrawing their support for Australian writing and publishing. For instance, the University of Sydney has said it will no longer fund a chair in Australian literature and UWA looks set to close its publishing arm, while the Australia Council’s funding of literature remains at historic lows – indeed unprecedented levels of funding lower than with the formal inauguration of the then Literature Board in 1973/74.

I find such matters deeply troubling and frankly, quite dispiriting. We really do need a fully refreshed approach to supporting Australian creativity. If our creative and intellectual life as Australians is not to be taught, resourced, examined and indeed, celebrated, then we can only as a nation be poorer. We will lose much of the vitality and independence which has followed from the serious policy invigoration from the creation of the Australia Council in the early 1970s, and the allied propagation of academic commitment and the establishment of Writers’ Festivals ever since.

The need for bodies like the Copyright Agency are more urgent than ever – as is the continued need for an effective copyright regime.

Copyright sets the framework that rewards and respects creators. It ensures that creators have an incentive to keep creating; it empowers creators to control the terms that apply to the use of their work; and it encourages innovation. At our core, Copyright Agency is dedicated to these important principles. Our members are at the forefront of creativity, Australian storytelling and the experience of digital transformation. Publishers, writers and artists know exactly how difficult, rewarding and vital it is to tell these stories and to find readers, viewers, listeners and audiences.

To connect. To entertain. To inform. To challenge. To make a difference.

One of the most important changes all creators face is brought by digital technology. In our case, digital technologies enhance the ease with which licensees can copy and communicate our members’ content.

A major challenge for us is that the value of such forms of copying and sharing has not been agreed, in recent times, between the Copyright Agency and some of our major licensees.

In fact, the major points of discussion, and in some cases serious disagreement, with important licensees including schools, universities and the media monitoring companies, is over the value of their digital usage of our member’s content.

We also have a disagreement over the best and most effective way of collecting data on usage with, for instance, the university sector.

“We are dedicating the best possible resources we can, in terms of legal, economic and survey expertise resources, to secure a good outcome to all our cases.”

In my view, it is much better to resolve such things through commercial negotiations. But regrettably, there are times when the parties are just so far apart, the issues so important to members, and the need to establish clear markers for the future so pressing that we have no other option than to go to the Copyright Tribunal. The Tribunal has jurisdiction with respect to the Statutory licences we administer for education, commercial licences and for the management of associated procedures which are within its discretion, subject to the Act and allied regulations.

The decisions by the Tribunal have a significant impact on the settings that we operate under – including the value of our members’ content and the best way in which to measure usage. Such decisions can set the framework we operate under for up to 20 years. So, they are profoundly important decisions for members.

Last year I reported, we had reached the point where we decided that we had no option but to go to the Tribunal with Australia’s 39 universities – represented by Universities Australia. This is a very important case and will influence the framework under which we operate for many years to come.

Since the last AGM we have had an unsuccessful mediation with Universities Australia. The Tribunal has also handed down a judgement on the interim rate the universities should pay. The Tribunal set this at the same amount ($32.5m) as the rate universities were paying under our last agreement. However, half of this money is paid directly to Copyright Agency and the other half into the equivalent of an escrow account, where those monies will be suspended pending a final Tribunal decision. We have also had a timetable set by the Tribunal – with the hearing set down for September 2020. Within a few days of this AGM [held 20 November], we will submit a large body of evidence on the critical value of the licence to members.

We are also in the Tribunal with our media monitoring licence with three separate companies – Isentia, Meltwater and Streem.

And we are in the Tribunal with the State of NSW, for its refusal to pay a fair rate for copyright for the last seven years. However, although we are preparing the strongest case possible to protect the interests of copyright owners and ensure that they receive fair remuneration, we remain open to reaching a sensible commercial resolution of the issues in the same way that we have reached an agreement on the rate for use in every other State and Territory and with the Commonwealth. We will continue to keep you updated on progress of this matter and I personally remain hopeful of a negotiated resolution with the State.

We are dedicating the best possible resources we can, in terms of legal, economic and survey expertise resources, to secure a good outcome to all our cases.

But it is a testing time for the Copyright Agency. Litigation is exceedingly resource intensive. It is expensive. It is highly uncertain. It has meant that we have had to look very carefully at the amount of money we distribute to members, where the fees associated with this money are the subject of dispute before the Tribunal.

In the case of the universities, for instance, as a result of the tribunal’s order, we have only had half the amount of money compared to previous years available for distribution. The CEO conducted extensive briefings of members on this matter following the Tribunal decision.  We have also updated all members on this via Creative Licence.

Future Fund update

The Board, as you all know, has set aside a Future Fund. As I noted last year, the Future Fund was first considered after drastic copyright changes were implemented in Canada in 2012. These changes caused a rapid and serious decline in revenue to copyright owners. The Future Fund was initially capped at 15 million dollars. In two separate decisions, the Board decided, after careful consideration of the regulatory and operating environment, to reduce the Future Fund by a total of 5 million dollars over a 3-year period. The Board has further determined that the fairest way to return this money to members is by way of off-setting against operating costs.

The company faces significant challenges in the years ahead, and many of these challenges require investment to ensure that we are in a position to protect the rights of copyright owners to receive a fair and timely return for the use of their work. The Board will continue to consider these issues in a rigorous and orderly manner. The Board has also undertaken to periodically review the purpose, function and quantum of the Future Fund.

We, through the CEO and his regular updates to members, will keep members informed of any decisions we make.