As a not-for-profit organisation, the Copyright Agency funds its operations by deducting its costs from the licence fees received each year.
Every financial year, the Copyright Agency prepares a revenue and expenditure budget, within which it must operate. The funds used to run the Copyright Agency are then drawn down from the Trust Fund as required throughout the year.
MOST DEDUCTIONS ARE based on OPERATING COSTS
Our deductions for administrative costs vary from licence scheme to licence scheme, and from distribution to distribution. The deductions are made when licence fees are received, rather than when they are distributed. They include the deduction for the Cultural Fund (explained below), and are offset by interest on licence fees, and allocated amounts unpaid after four years (‘rollovers’).
For a small number of schemes, the deductions are fixed. For most schemes, however, the deductions are based on operating costs. The current methodology (from 1 December 2017) is based on the actual operating costs in the past two years, and the projected operating costs for the financial year.
MAJOR FACTORS CONTRIBUTING TO COSTS
The major component of the costs for a distribution is the staff costs. Other costs include the surveys of use (to determine what is being copied) and the IT systems used to process data.
CULTURAL FUND DEDUCTION
The Copyright Agency allocates up to 1.5% of licence fees to the Cultural Fund, which grants funds for cultural purposes as approved by the Board. The current percentage of licence fees allocated to the Cultural Fund was voted on and approved by members at the 27 November 2010 AGM.
The deduction for anticipated operating costs in 2017–2018 is 15.4%.
The fixed deductions are currently:
- Copyright Agency pay-per-use licensing (e.g. through RightsPortal): 15%;
- licence fees from digital press clippings (media monitoring) licences: 10%;
- artists’ resale royalty scheme: 15%
- fine art licences (formerly Viscopy licences): 25%.
In 2016–17, the deductions ranged from 10% to 16.29%, including the 1.5% Cultural Fund deduction. There is a detailed list in our forthcoming annual report. The deductions for 2015–16 are in the 2016 annual report.
Overall cost to revenue ratio
Our licence fee revenue and investment income recognised for 2016–17 was $147.4m and our operating costs were $20.8m, so the total costs as a proportion of total revenue was 14.1%.
There is information about the breakdown of revenue and costs in our forthcoming annual report.
4 January 2018