Chapters: 9. RELATIONSHIP TO ALL OWNERS OF RELEVANT RIGHTS; 10. SERVICES OR BENEFITS TO RIGHTS USERS; 11. IDENTIFICATION OF COPYRIGHT OWNERS; 12. LICENSING ACTIVITY.
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9. RELATIONSHIP TO ALL OWNERS OF RELEVANT RIGHTS

9.1. AMCOS

9.1.1. Mechanicals

9.1.2. Synchronisation

9.1.3. Schools Photocopying Agreement

9.2. APRA

9.3. AVCS

9.4. CAL

9.5. PPCA

9.1. AMCOS

9.1.1. Mechanicals

Generally speaking, AMCOS does not collect on behalf of non-members. The only exception is when AMCOS receives money from foreign affiliates due to an Australian composer, who is a member of APRA but has not executed the authority for AMCOS to collect mechanicals, and is not represented by a publisher. In these instances AMCOS passes the money on without deducting commission. It then advises the Society who sent the royalties in error that AMCOS does not control the work, that it has passed the royalties on to the correct owner in this instance, but that it does not wish to receive further royalties for the work in question. This is completely appropriate as to process and conduct.

9.1.2. Synchronisation

Occasionally, AMCOS is approached to issue synchronisation clearances for non-members' works. The Society does not grant synchronisation clearances for non-members' works without prior written authorisation. Commissions and fees are generally the same as those that would apply were the party a member of AMCOS or of an affiliate society.

9.1.3. Schools Photocopying Agreement

Under the Schools Photocopying Agreement, AMCOS collects on behalf of non-members who have authorised it to include their repertoire in the Schools Agreement. These may be small local publishers who publish sheet music for the educational market or foreign publishers who are not sub-published for this territory. The AMCOS repertoire is so extensive that it cannot be defined in a directory which is supplied to schools, but rather is defined by exclusion. If works appear in the sample that are controlled by publishers that have not authorised AMCOS to include their repertoire in the agreement, AMCOS identifies these owners of copyright, makes payment to them, explains the statutory provisions and the background to the voluntary licence and asks them to execute and return an authority and indemnity.

There is provision for these publishers to indicate to AMCOS that they do not wish to participate in the licence. In that case AMCOS will then notify all its licensees under the provisions in the Agreement that those publishers' works are not included in the AMCOS Schools' Agreement. Their works may be able to be copied under the more restrictive terms of the statutory licence and the publisher would then have to obtain payment from CAL.

This approach to non-members works being copied under the AMCOS agreement was the only way of establishing a coherent and workable agreement that the educational authorities would accept and comply with, as they considered the statutory limits, as they applied to sheet music, too restrictive for their educational needs.

9.2. APRA

Clearly the Association could never claim to represent all people who claim to have written original musical works. Nor has it conducted research into the numbers of writers who do not join the Association. It is safe to assume, however (on the basis of the logs that it receives from both radio and television stations) that the Association represents over 99% of all writers whose works are publicly disseminated. APRA is not aware of any music publishers who have failed to seek membership.

9.3. AVCS

The Society collects under the statutory licence for all relevant copyright owners, whether or not they are members of the Society. Where the owner is not currently a member, the Society holds the allocated funds in trust pending identification and admission to membership.

Given that the Copyright Act grants the right, the role of AVCS is to identify and locate the relevant copyright owners to allow payment of royalties collected on their behalf under the relevant scheme.

The Society had very few members in its establishment years and most collections were on behalf of non-members. As the membership base of the Society increases, the proportion of royalties collected on behalf of non-members is diminishing. Given the way that the statutory scheme has been set up, there will always be the situation where royalties are collected on behalf of programs where the rights are controlled by a non-member. It is the role of the Society to identify these rights holders and advise them of the royalties held and invite them to membership of the Society so that they can claim the royalties held on their behalf.

There has been criticism made of AVCS (and it is to be expected of any collecting society operating a non-voluntary licence) that it has no obligation on it to notify non-member owners for whom they have collected, that it is holding money for them. Owners have to both know that AVCS exists and to ask if they are a distributable author.

There is no foundation for this fear. Given that locating and paying relevant copyright owners is a central function of any copyright society, the declaration of the Attorney-General could and should be revoked should any declared society cease adequately to fulfil that identification function. The Society actively seeks out relevant copyright owners to invite them to claim and the success of these efforts is shown by its increasing number of members. A large part of the Society's resources are devoted to this task which is regarded by the Board of Directors and management as an absolute priority. The process of attracting new members is described later.

9.4. CAL

Unlike AVCS, CAL does not licence copying or collect revenue in respect of non-members works. Where copying of non-members' works is discovered in the sample, it records it and then seeks to trace and contact the non-members and inquire if they want to become a member and accept the fees. In this manner, CAL builds up its membership and repertoire.

The logic of the system that CAL must administer is, (as the submission received from St Johns Ambulance Australia described it), "serpentine". The statutory licence allows educational institutions to copy, within certain limits and subject to certain conditions. The institutions pay a "per student" rate for this statute-granted right. CAL collects all of this money but the rules under which it operates, forbid it to distribute to owners who are not members. This has certainly raised the ire of certain rights owners who do not want to join CAL, but have been advised that certain copying of their work has occurred and that, accordingly, a certain allocation of the moneys collected, is payable to them - but only if they join. That said, it must be made clear that CAL is acting properly.

CAL is legally obliged to ensure that moneys which it collects are only paid to members. The legal obligations imposed on CAL regarding the collection of moneys collected from licensees under statutory and voluntary licences are as follows:

(i) Statutory Licences:

Pursuant to a notice in the Gazette dated 13 June 1990, the Attorney General declared CAL to be the collecting society for the purposes of Part VB of the Act, for each owner of copyright in a work other than a work in a sound recording or a cinematograph film.

In order to be declared an approved society, CAL was required to satisfy certain prerequisites set by the Attorney General under section 135ZZB (3) of the Act. In particular, the Attorney General had to be satisfied that CAL's distribution rules complied with the Regulations to the Act [in particular regulation 23JM(1)(g)]. The effect of this regulation is that CAL can only distribute a share of the distributable amount, to its members. If the copyright owner or their agent declines to join CAL, their potential share of the distributable amount in held on trust [regulation 23JM(1)(g)(ii)(A)&(B)] until the copyright owner joins CAL or for a period of four years, whichever first occurs [regulation 23JM(1)(i)]. If the copyright owner or their agent does not join CAL by the expiration of the trust period, their potential share will be returned to the distribution pool.

(ii) Voluntary Licences:

The funds collected under voluntary licences are outside the regime of Part VB of the Act. The voluntary licences between CAL and users do not contain a licence to copy all works. CAL only licenses users to copy works by CAL members. (For example, St Johns Ambulance Australia is not a member and its works are not licensed under the voluntary schemes.) Accordingly, the obligations of CAL as to the application of the funds collected by it as licence fees, are obligations owed solely to the Society's members.

If the sampling reveals that a non-member's work has been copied, CAL approaches the non-member and invites the owner to become a member and offers payment of that part of the distribution which would be allocated if that person were a member. (For example, Australian Consolidated Press received such an invitation but has chosen not to join.)

The money is not collected on behalf of all rights owners whose works are copied. It is collected on behalf of all owners who are, or who become, members of CAL. Essentially, the Act proscribes the statutory licence and who is eligible to be paid.

CAL would be well advised to review the correspondence that it presently sends to non-members who are identified as having had works reproduced. Their letters and the "Remittance Advice" are inadvertently misleading as to the nature of the process.

It is important for rights owners to be made aware that they cannot prevent the institutions from copying their material under the statutory licence and in any event, it is impossible for individual rights owners to supervise mass photocopying to ensure that the terms of the statutory licence is not exceeded. Without blanket licensing, users will not obtain individual permission to copy and infringements of copyright will occur. The benefit to copyright owners of blanket licensing is that payment can be obtained for otherwise unremunerated copying. The benefit to all rights owners in requiring that payments are made by only to members of the collective administration is that it acts to increase membership of the Society and thus, reduces the administration overhead of the Society.

9.5. PPCA

PPCA does not purport to represent all owners of the relevant rights. It represents only its contracted members. The money collected and distributed by PPCA is only in relation to the copyrights owned or controlled by its contractual non-exclusive licensors.

As with AMCOS and APRA, there is nothing to stop the owners of relevant rights setting up another collecting society or negotiating their rights individually - except that at the moment, it is not commercially practicable. Accordingly, PPCA is the only collecting society collecting on behalf of the relevant rights owners.

10. SERVICES OR BENEFITS TO RIGHTS USERS

10.1. GENERAL

10.1.1. AMCOS

10.1.2. APRA

10.1.3. AVCS

10.1.4. CAL

10.1.5. PPCA

10.2. LICENSEE INDEMNITY

10.2.1. AMCOS

10.2.2. APRA

10.2.3. AVCS

10.2.4. CAL

10.2.5. PPCA

10.1. GENERAL

10.1.1. AMCOS

AMCOS acts as a central clearing house, enabling the copying of music to be authorised swiftly, efficiently and economically without the need to enter into the labyrinth of copyright clearance. It also:

• provides a representative body for the recording industry and others to negotiate industry agreements.

• provides users of copyright material with educational material to inform them of their copyright obligations and how to fulfil them.

• processes label copy and sales reports from a variety of the smaller record producers and produces Prescribed Notices, as required by statute, at no charge.

• provides a forum for copyright users for them to make representations concerning mechanical rights administration.

• provides a "user pays" service to research copyright ownership for advertising agencies, film-makers etc.

• does research and referrals of print music, grand rights and synchronisation requests from educational institutions and other community users free of charge.

10.1.2. APRA

The benefit provided by the Association to licensees is the benefit of being able to obtain a one-stop blanket licence to perform or broadcast all of the musical works they could conceivably want to use. APRA effectively guarantees to broadcasters and other music users non-exclusive access to the entire repertoire of the world's music. (The users of that music may of course rail against the amount that they pay for that use, but that is another matter.)

In a narrower sense, many members of the public from time to time become involved in music performances, for example through involvement with schools or community groups. APRA is able to either steer the inquirer to the relevant copyright owner or to grant a licence for the performance itself.

The Association seeks, (through seminars, workshops and publications) to actively provide information to licensees not only on APRA-related matters, but on matters relevant to music industry issues generally. It also seeks to represent the voice of writers and, to a lesser extent publishers (because they have their own industry body), on general copyright issues. It is certainly the most vocal music industry association in these regards.

The Association also provides to licensees whatever information they may require concerning the works within APRA's repertoire.

10.1.3. AVCS

Within the general administration of the educational copying scheme, the Society responds to queries and provides information about copyright obligations. Where licensees require permissions from copyright owners for activities outside the scheme (for example a licence to copy a purchased or hired video cassette) the Society provides contact details, if it is able to do so, to facilitate seeking that permission.

10.1.4. CAL

The prime service that CAL provides is the provision of practical access to legal copying at a reasonable cost. Without CAL licences, institutions would either continue to infringe copyright or contact each copyright owner of every work they copy to seek permissions. By obtaining a payment for use for copyright owners, CAL helps ensure and maximise, public access to copyright works.

It also provides:

• telephone advice in relation to particular copying problems they may have;

• referral to members for individual arrangements if they want to copy more than the limits of the licence;

• brochures explaining licence terms and summaries of the copying provisions of its licences;

• conducts copyright training seminars in connection with the sample surveys of copying;

• provide speakers to address licensees about copyright.

10.1.5. PPCA

PPCA sees its sole service as providing effective one-stop licensing for those who wish to use sound recordings.

• To this end, it provides:

• telephone advice in relation to public performance arrangements;

• referral to members for special event arrangements (or organising the special event arrangement as the agent);

• pamphlets on public performance and music video;

• provide speakers to address licensees about public performance rights.

10.2. LICENSEE INDEMNITY

It is important to licensees that they be assured that the licensor has the right to grant the licence and the right to collect the money in respect of the licence. Where the right is granted by an organisation acting as an agent, licensee or assignee, the issue is very simple. There is a direct relationship between membership of the organisation and the rights of the organisation.

In the cases of the statutory licences administered by CAL and AVCS, the societies don't grant the rights, the statute does. As to whether the societies have the right to collect, their status as Declared Societies guarantees their right to collect.

As for AMCOS, the mechanical licence too is granted by statute. However, it has the right to collect, only on behalf of its own members.

The situation becomes more difficult when the societies and their licensees choose to move away from the statutory licence and negotiate voluntary licences. Both CAL and AMCOS do the majority of their work through voluntary licences because the strict terms of the statutory licence are inconvenient to both parties.

10.2.1. AMCOS

AMCOS members warrant that they control the relevant rights in the works that AMCOS licenses and they agree to indemnify AMCOS if they are in breach of that warranty.

In the Schools' Photocopying Agreement, AMCOS offers an indemnity to participating schools copying under the licence. In terms of print rights, AMCOS members and other publishers who have authorised AMCOS to include their repertoire in the schools' agreement cover most published musical works which are copied in schools. However the "AMCOS repertoire" is so wide, it is defined by exclusion. It is impossible to provide licensees with lists of works as the repertoire is constantly changing and growing. There is provision to notify licensees that certain works/catalogues are not included under the voluntary licence. Those works may still be copied under the more restrictive limits set out in the statute. Most of those few publishers who initially refused to be included in the scheme are now participating. Educational representatives insisted on the inclusion of the following indemnity:

Clause 9 Indemnity.

9.1 Provided the Participating Schools have substantially complied with the terms and conditions of this Agreement, AMCOS hereby agrees to indemnify and keep indemnified the Minister and participating Schools and each of them from all actions suits claims, demands, verdicts, judgements, costs, charges and expenses, legal and otherwise, and of any kind which has arisen or may hereafter arise as a consequence of or arising out of any Owner or any other person claiming under or by virtue of the Owner claiming, taking action, proceeding or making demand against the Minister or any Participating School for infringing or allegedly infringing the copyright vested in said Owner in respect of any Copies made by a Participating School, and provided that the Minister promptly notifies AMCOS of any such actions or suits.

9.2 This indemnity shall apply in relation to any Copies made pursuant to this agreement notwithstanding the Owner of the copyright in the Works alleged to be infringed or the licensee of such Owner may not have authorised AMCOS to act as his agent but it shall not apply to those Works which AMCOS has notified the Minister are excluded from the Agreement under clause 11.

10.2.2. APRA

Licensees of the public performance right have historically not been provided with an indemnity. According to the Association, the principal reason for this is that the licensees have not requested one. Some broadcast licensees have more recently been provided with an indemnity.

The indemnity issue is a difficult one for the Association, because:

(a) the Association must grant blanket licences (they are demanded by licensees); but

(b) the Association can never lay claim to representation of all writers' works from around the world at any given time.

The best that the Association can really do is to make accurate and fair representations about the practical comprehensiveness of its repertoire. This is probably satisfactory while there is only the one performing rights society representing writers and publishers in Australia.

10.2.3. AVCS

The Society offered indemnities to licensees in certain of its early contracts in relation to the period prior to the commencement of their licence agreement.

Copying of television and radio broadcasts by educational institutions was widespread prior to the introduction of the broadcast copying scheme in 1990. Due to the complexity of rights administration in film and television programs, it can be assumed that the majority of the copies made by educational institutions infringed copyright. Understandably, the fear of such illegal conduct and its repercussions still prevailed notwithstanding the introduction of Part VA of the Copyright Act.

The Society believed that compliance with the new procedures might be enhanced if they dispelled the institutions' fears associated with their previous, unlawful broadcast copying. Accordingly, AVCS acceded to the requests of the educational representatives and provided an indemnity in respect of unlawful copying made before the introduction of the statutory scheme.

Upon the commencement of the scheme in Part VA of the Copyright Act, the agreements entered into by the Society with educational institutions made provision for an indemnity as follows:

(i) The indemnity related to copies of broadcasts from television and radio made by the educational institutions for their educational purposes during a limited period prior to the commencement of the broadcast copying scheme ("Past Copies"). For example, the period for schools was from 1 July 1984 to 30 June 1990 (the commencement date of the agreements). Other educational institutions that entered into an agreement with the Society at the commencement of the scheme were offered a similar indemnity period.

(ii) The educational institution paid the Society remuneration for the Past Copies. For example, the agreement between the Society and the school sector provided that a fee of $0.30 for each enrolled student of the schools for 1989 (the year prior to the commencement date of the agreement) was paid for the Past Copies.

(iii) The Society offered to indemnify the educational institution which paid the amount for the Past Copies against any claims arising from the Past Copies.

(iv) The educational institution was not able to make any further copies of the Past Copies.

The agreements with the university sector including the indemnity provision expired on 31 December 1993 and the schools agreement containing the indemnity will terminate on 30 June 1994.

The most recent agreements with the university sector, which commenced on 1 January 1994, did not contain an indemnity provision. Similarly, the schools agreement, which is currently being negotiated, will not provide an indemnity to the educational institutions for copies not coming within the limits of the statutory licensing scheme.

It is significant to note that as the funds collected under the indemnity provisions of the Society's early contracts related to a period prior to commencement of the scheme, they are not funds collected pursuant to Part VA of the Copyright Act. In accordance with law, the funds are kept separate from funds collected under Part VA as trustee. On legal advice, the funds are held first, to meet claims arising under the indemnity provisions of the Society's contracts and secondly, may be employed for the benefit of the membership as a whole.

Notwithstanding the indemnity granted at the introduction of the scheme, the Society has taken the view that, as it does not acquire rights under licence from licensors, it is not appropriate that it offer any form of indemnity to licensors. Given that the institutions have now had ample notice of the existence of the scheme and ample opportunity to avail themselves of the statutory licence mechanism, it is difficult to see why licensors need any such indemnity or expect AVCS to give one. The statute provides the mechanism for institutions to copy lawfully and AVCS merely facilitates institutions to benefit from it.

10.2.4. CAL

CAL provides an indemnity to its licensors for copying within the terms of its licence. Depending on the type of licence, this indemnity varies between an indemnity against actions for copyright infringement by CAL's members and an indemnity against actions for copyright infringement by all copyright owners.

10.2.5. PPCA

The Company does not offer any indemnity to licensees of any of its relevant rights.

11. IDENTIFICATION OF COPYRIGHT OWNERS

11.1. AMCOS

11.1.1. Identification And The Record Licensing Process

11.1.2. Other Uses

11.1.3. Overseas Department

11.1.4. Schools Photocopying Licence

11.1.5. Off-air Copying

11.1.6. Design Of The Process

11.1.7. Systems Review

11.2. APRA

11.2.1. Registration of title details

11.2.2. Logging of performances

11.2.3. Design Of Procedures

11.2.4. Systems Review

11.3. AVCS

11.3.1. The Record Keeping System

11.3.2. The Sampling System

11.3.3. Criticisms Of The Sample Processes

11.3.4. Identification of Copyright Owners

11.4. CAL

11.4.1. Identification Process

11.4.2. Training

11.4.3. Criticisms Of The Sample Processes

11.4.4. Review of Record-Keeping System

11.4.5. Review of Sampling System

11.5. PPCA

11.5.1. System Review

11.1. AMCOS

The process of establishing correct copyright ownership for musical works is a critical part of AMCOS' operations. The Society works on the principle that it only invoices for the use of a musical work when it can establish that the work falls under its control.

11.1.1. Identification And The Record Licensing Process

The procedure for licensing non-Major record companies for the use of musical works on records is as follows:

(i) The record company issues an inquiry notice ("label copy") to AMCOS in respect of every record first released for sale to the public in Australia prior to the release of the record. The inquiry notice lists the composer and song details; proposed release date; catalogue number; format; and dealer or retail price.

(ii) In the event that the record company is unable to provide the composer details, AMCOS offers a service on a "pay per use" basis to research the work and determine the composer information. Without knowing the identity of the composer it is very difficult to determine the copyright owner for Australia. Some of the reference material used in the research process are CD Roms containing information on all works appearing on the BillBoard chart, the CAE (Compositeur-Auteur-Editeur) listing compiled by SUISA, access to the AEROS database (Australian Electronic Record Ordering System) and numerous directories, books and journals. However the greatest research resource in the company is the extensive musical knowledge of the research staff. Within the company it has experts covering most genres of music.

(iii) When AMCOS has the full label copy, the information is entered into the computer.

(In the past, the label copy has been provided on paper. AMCOS' biggest clients are now providing the information on computer disc. AMCOS has written software which allows the record companies to enter the label copy into their own IBM PC compatible computers. The information is recorded onto a disc which is sent to AMCOS. The record company uses the information to build up their own database of their repertoire. The information and unique catalogue numbers generated from this exchange also provides a simplified way for the record company to later provide sales figures on disc.)

(iv) After AMCOS has input all the label copy details, a check is made to see if the song information is contained in the AMCOS database. The database contains ownership information on some 350,000 works. It has been built up from works previously licensed by AMCOS and from information supplied by the publisher members.

(v) It is being continuously updated as catalogues change hands. AMCOS is notified when an agreement expires and the rights are acquired by another of its members. Members send AMCOS details of new agreements with song listings. From APRA the Society receives copies of the General Agreement Registration Forms ("GARF") and copies of all local writer registration forms. AMCOS also has on-line access to the APRA database, which is extremely useful in cross-checking composer/writer/publisher details.

(vi) AMCOS compiles the information from the inquiry notices, including publisher details as indicated by its database, into the form of a "circulation report" which is distributed to publisher members. Publishers indicate on the circulation whether they own particular works, whether they maintain or relinquish an ownership claim and the percentage of the work they control. The circulation process is the historical method for AMCOS obtaining ownership details and it remains the main way of finding ownership of new songs. The circulation process lets the publisher know what AMCOS is licensing on their behalf. Details of works where 100% ownership is not known, are circulated amongst the members.

(vii) If any dual claims arise (more than 100% of a work being claimed by two or more publishers) the work is put "into suspense" until the dispute is resolved. Reports of all works with dual claims are sent to the relevant members on a quarterly basis.

(viii) After receiving the publishers' responses to the circulations, AMCOS issues the record company with a royalty rate advice ("RRA") which indicates: the composer and song details; where a work is controlled by AMCOS, the publisher and percentage claimed; works not controlled by AMCOS; format; royalty rate; retail or dealer selling price; and the royalty payable per unit.

(ix) Any musical works (or parts thereof) which are not claimed by a publisher member are thoroughly researched before an RRA is issued with entries under the heading "works not controlled by AMCOS". Occasions arise when AMCOS is given the incorrect composer or title details or publishers fail to identify works as being part of their repertoire.

(x) At the same time that AMCOS issues the record company with a royalty rate advice, the music publishers who have made claims for works in the circulation are issued a Prescribed Notice. There is a statutory requirement that record companies issue a Prescribed Notice to the copyright owner. The Prescribed Notice contains essentially the same details as the RRA and notifies the publisher that AMCOS will be collecting royalties on their behalf in respect of the listed works and is an opportunity for the publisher to amend any details.

11.1.2. Other Uses

The above outlines the procedure for most record companies licensing musical works embodied in records.

For small companies and individuals ("sundry" clients), blanket licence uses, student films, demos, etc. the details are provided in a slightly different manner, but the process of identification involving research staff, database inquiries and circulation to the publishers is essentially the same. Production Music ownership is usually supplied by the publishers. Production Music cue sheets are researched using printed catalogues and direct contact with the publishers.

11.1.3. Overseas Department

The overseas department operates as a publisher in its own right, representing (on a reciprocal basis) works controlled by affiliated societies overseas but not represented by a sub-publisher locally. In this role it licenses the Major record companies as well as AMCOS clients. Some of the identification procedures utilised are:

• referral to listings of works on microfiche sent to AMCOS by some Societies (updated at regular intervals);

• receipt of specific instructions from a Society to collect mechanical royalties for particular works;

• listings of member details and works from APRA;

• replies received from Societies in response to AMCOS requests for information regarding specific works - usually per fiches internationales, but sometimes by advice/letter;

• establishing the original publisher(s) and/or composer(s) membership of a particular Society by referral to the current CAE listing;

• discussion and negotiation with AMCOS's Australian publisher members in respect of the works that they partly or wholly control on behalf of overseas publishers.

11.1.4. Schools Photocopying Licence

The distribution is based on data from a nation-wide statistical sample of all photocopying done by schools which was commissioned by CAL and designed by AGB McNair.

Under the sample, certain schools are selected from three states each year and are required to keep records of all photocopying for one term. Under this random stratified sample, schools are selected according to the system (government, catholic, independent), type (primary or secondary), location and size. The number of schools selected gives the most effective cost to accuracy ratio for the sample.

The raw data supplied by AGB McNair is processed by CAL and supplied to AMCOS, which edits the data by correcting references and determining which works under the category of "music" come within the AMCOS licence. For example, music tutorials which are excluded from the AMCOS licence are treated as books and included in the CAL distribution. Similarly, there may be many musical works which have been wrongly classified.

The edited data is then supplied electronically to AMCOS which matches the titles to known ownership details and prints out lists of the titles for circulation. The data for distribution used by AMCOS is supplemented by records of copying of instrumental parts by regional libraries in one school system, as the sheet music purchasing policy for this system is different to other systems in that orchestral sets are not purchased by individual schools but rather by regional libraries.

11.1.5. Off-air Copying

Titles of programs copied off-air in educational institutions which appear in the sample conducted by AVCS are processed by APRA to determine the musical works appearing on those programs. This data is provided to AMCOS electronically and matched to ownership details on its database. Titles that are not matched are placed on a circulation list. AMCOS enters new ownership details on the basis of the information circulated and researches unmatched titles. Moneys due to titles of which ownership details cannot be found are returned to AVCS.

11.1.6. Design Of The Process

The process of circulating lists of works used in record production was a natural evolution of the practice used by the major record companies to identify copyright ownership. The circulation process has been the basis for ascertaining ownership information since the beginning of the Society. This process (inquiry notices by the Majors, circulation reports from AMCOS) also allows the publishers to monitor activity in the marketplace. Similar societies overseas have had a process of registration of all works by their members. However, as AMCOS is a relatively new entity with limited resources it was not cost-effective or practicable to process the huge volume of catalogue ownership information required to create an instant database. Unlike European and American Societies it has never operated as a centralised licensing body.

The sample used in the Schools Photocopying Agreement was developed by CAL, the Australian Education Council and AGB McNair, due to the practical failure of the full record keeping requirements under the statutory scheme. The initial sample was implemented in 1988. The next sample period was from 1991 to 1993. A new sample cycle was commenced in 1994 and will continue until the end of 1996.

11.1.7. Systems Review

Review is an ongoing process. The distribution key for the photocopying licence was reviewed by the Board as recently as December last year when it was recommended that the same principles be applied to the distribution of moneys collected by CAL for the photocopying of sheet music under licences with educational institutions other than schools.

Furthermore, AMCOS is working with its members, the record companies, and computer consultants to come up with standards for Electronic Data Interchange (EDI) which will change the whole nature of the process of owner identification. AMCOS is also currently undertaking a feasibility study with APRA with a view to developing an industry database and instituting joint mechanical and performing rights registration procedures.

Record Clubs now provide AMCOS with copies of the Prescribed Notices issued by the originating record companies and the Board has approved the Society using this information as the basis for preparing new Prescribed Notices circulating the production details.

International standards for the documentation of copyright ownership have been the subject of long and tortuous negotiations, but there are indications that standardised procedures will be agreed to shortly.

Schools Photocopying Agreement - Amendments to the sampling process are required from time to time to improve the accuracy of the data and the identification of works for distribution. For example, where a musical work is included in a collection of works, schools had been supplying the name of the collection only, which meant that it was difficult to identify the actual work copied and therefore the relevant copyright and print right owners of the work. Participants in the sample are now instructed to place both the name of the collection and of the work in the record forms to ensure the work is correctly identified. Amendments to the sample are designed by the independent statistician to ensure the maximum cost efficiency to accuracy ratio.

The Schools Photocopying Agreement sample was reviewed prior to the commencement of the latest cycle to assess and review the accuracy and utility of the data. However, making significant amendments to the sampling process would require a renegotiation of the schools licences. The administrative burden placed on schools for the term they are selected to keep records of their copying is such that it is a major point of negotiation in the licences. Any extension of the sample would be met with resistance from licensees and from the relevant unions.

11.2. APRA

Owner identification has two aspects: The registration of title details from those represented by the Association and the logging of performances by licensees.

11.2.1. Registration of title details

Members of the Association, and affiliated societies, provide the Association with information relating to the works that they have written or which they control. This information is essentially as follows:

• the title of the work;

• the duration of the work;

• an indication of whether the work is instrumental only or has lyrics;

• the names of the composer(s) and, if applicable, the lyricist(s) of the work;

• the publisher(s), if applicable, of the work;

• the proportions, in percentages, in which each party is to share in royalty allocations accruing to the work;

• if known, and if applicable, the performer who has recorded the work.

These works are thus added to the Association's existing data base of titles. This data base currently consists of approximately 600,000 titles and 200,000 cue sheets on computer file and approximately 2 million titles on cards.

When a music return, or log, is then received from a licensee, the titles appearing in the log are matched against the title file data base and a performance credit is entered against the work (depending, obviously, on the kind of performance involved). If the work cannot be identified it is referred to the Association's Research Department for investigation and, hopefully, identification.

11.2.2. Logging of performances:

The information used by the Association to identify those writers and publishers who are entitled to receive a royalty allocation is provided in all but one instance by licensees. The exceptions referred to above relate to the area of live performances in venues such as hotels, restaurants and nightclubs, where the information analysed for distribution purposes is provided by the Association's own members, i.e., those who perform their own compositions live, and to the reporting of music written or licensed to accompany advertisements on radio or television.

ANALYSIS BY REVENUE SOURCE

REVENUE SOURCE ANALYSIS

ABC TELEVISION 52 weeks p.a.

AUSTRALIAN COMMERCIAL TELEVISION 169 weeks p.a.

NZ NATIONAL TV (TV1) 26 weeks p.a.

NZ NATIONAL TV (TV2) 26 weeks p.a.

NZ NATIONAL TV (TV3) 26 weeks p.a.

SBS (CHANNEL 0/28) 12 weeks p.a.

AUSTRALIAN COMMERCIAL RADIO 400 weeks p.a

ABC RADIO ('METROPOLITAN' STATIONS) 35 weeks p.a.

ABC RADIO (2JJJ) 12 weeks p.a.

ABC RADIO (FINE MUSIC) 13 weeks p.a.

ABC RADIO (RN) 26 weeks p.a.

AUSTRALIAN COMMUNITY RADIO 24 weeks p.a.

(Local content

only)

SPECIAL BROADCASTING SERVICE (2EA/3EA) Varies according to

language.

NZ NATIONAL RADIO NETWORK 13 weeks p.a.

NZ CONCERT RADIO NETWORK 13 weeks p.a.

NZ IBA RADIO 42 weeks p.a.

NZ COMMERCIAL RADIO 48 weeks p.a.

NZ STUDENT AND MAORI RADIO 13 weeks p.a.

(Local content only)

FIJIAN BROADCASTING CORPORATION 6 weeks p.a.

(Local content only)

ABC CONCERTS 100%

PROMOTER CONCERTS 100%

ANSETT 100%

(Local content only)

QANTAS 100%

AUSTRALIAN CINEMA Sydney Cinema Guides

NZ CINEMA 100%

(Local productions only)

LIVE PERFORMANCE NOTIFICATIONS Submitted by

(Other than concerts) members and

affiliate societies.

REGISTERED CLUBS 10 clubs p.a.

NZ SYMPHONY ORCHESTRA CONCERTS 100%

11.2.3. Design Of Procedures

In cases where a sample survey is adopted, the survey has generally been designed by AGB-McNair.

In its essentials, the title registration process has been in force for many years. In its technical aspects, however, it is continually evolving. For example, it has only been within the last three years that all new works notified by writer members have been entered straight into the computer data base. Until then, only "active" works (i.e., those that received performance credits) were so entered. Similarly, the on-line title registration facility was established approximately two years ago.

The logging system has, in its essentials, been in operation for many years. It is, however, constantly being improved and up-graded. For example, in Distribution 29 (applicable to the financial year 1991/92) the roster of weeks of Australian commercial radio analysed for distribution purposes was increased from 104 weeks to 400 weeks (an increase of 300%). This was made possible because APRA's IT Department devised an automatic title matching system which enabled radio stations to provide their logs on diskette rather than in hard copy. This was duly negotiated with FARB and has apparently proven to be an extremely successful project.

Insofar as title registration is concerned, the process has evolved over time as the logical response to the problem of dealing with the registration of tens of thousands of new works each year and the performance of hundreds of thousands of works each year. The information gathered this way is inevitably incomplete. It is a compromise, a balancing effort between accuracy and comprehensiveness of information on the one hand and cost efficiency on the other. The processes involved are complex and interlocking. Ultimately the Board is responsible for devising them after considering the views and recommendations of management.

11.2.4. Systems Review

The Association has no present plans to change the ways in which it identifies those who should receive a royalty allocation, but there is an appreciation of the fact that, with the proliferation of broadcast media outlets there will be greater pressure on the logging system. Associated with that is a belief that the automatic sound monitoring and identification processes currently under development in the US and Europe ultimately hold the key to solving those problems.

11.3. AVCS

There are two processes to determine which broadcasts are copied off-air from television or radio under the statutory licensing scheme - the record keeping system and the sampling system.

The process of obtaining information from record keeping institutions as to the copies of television and radio broadcasts that are made from records supplied on a quarterly basis is set out in Section 135K (2) of the Copyright Act and in Regulation 23C.

The process of obtaining information from sampling institutions was devised by AVCS and AGB McNair. AGB McNair had devised a sampling procedure to monitor print copying for CAL which had been operational for a number of years prior to the commencement of the educational copying scheme under Parts VA and VB of the Copyright Act. As educational institutions had already participated in this system and it was effective, it was logical to apply it to monitor broadcast copying with some modifications.

The information provided by the educational institutions enables AVCS to determine:

• which broadcasts have been copied in institutions using the record-keeping system, and

• which programs have been copied by the sampling institutions as an estimate of the actual copying of all educational institutions participating in the sampling system.

Program information then assists the Society to ascertain which owners of rights in these programs should receive distributions.

11.3.1. The Record Keeping System

If an educational institution signs a Remuneration Notice undertaking to pay equitable remuneration to the Society based on the record keeping system, the educational institution must attend to the following:

(i) Complete the following forms for every copy of a television or radio broadcast made by the educational institution:

(a) If the educational institution makes the copy for its own educational purposes, it must complete Schedule 1 to the Record Keeping Agreement.

(b) If the educational institution makes the copy for or on behalf of the educational purposes of another educational institution which has signed a Remuneration Notice, it must complete Schedule 2 to the Record Keeping Agreement; and

(ii) Submit the forms to the Society quarterly together with the equitable remuneration for copies declared in the forms.

When the Society receives the record forms from the record-keeping educational institution, it examines the record forms to ensure that:

(i) All of the details to enable a program to be identified are contained in each form, such as the broadcast date, channel, time of broadcast, segment of broadcast (if the program is not copied for its entire duration), program and episode title and category of program;

(ii) the details provided by educational institutions about the broadcast are consistent with the information provided to the Society by the broadcaster and the television guides; and

(iii) the details provided by educational institutions are consistent with information provided by the institution on a previous occasion. For instance, if an educational institution advises the Society that the copy is of a program broadcast on an earlier date and the educational institution has not previously declared the original broadcast copy, the Society will demand an explanation from the educational institution and outstanding remuneration if necessary.

In each instance, if the information supplied by the educational institution is inadequate, the Society will contact the educational institution and seek that the situation be remedied to accord with its obligations under the Copyright Act and agreement with the Society.

The information on the copies of broadcasts made by educational institutions participating in the record keeping system is entered into the database.

11.3.2. The Sampling System

If an educational institution signs a Remuneration Notice to pay equitable remuneration to AVCS based on the sampling system:

(i) the educational institution must complete the following forms for the period of the survey:

(a) The educational institution must sign a television/radio broadcast form for every copy of a program copied from television or radio.

(b) If a program is copied by an educational institution but is subsequently destroyed within a period of 14 days from the broadcast date without being used for the educational purposes of the institution (that is, it has not been shown to any students) in accordance with section 135F of the Copyright Act, the educational institution must complete the Preview Copy Form.

(c) Members of the academic and relevant administrative staff of the educational institution must sign a form entitled 'Survey Verification Form'. The member of staff will mark the form to indicate whether or not he/she has made any broadcast copies in the preceding week.

(d) The Survey Verification Form is a checking mechanism to ensure that every member of staff who makes copies of television and radio broadcasts remembers to complete the Television and Radio Broadcast forms.

(ii) The forms are collected by a field auditor of AGB McNair who attends the educational institution on a regular basis. Initially, the Field Auditor goes to the institution on a weekly basis for the first month of the sample period and then every fortnight for the remainder of the survey.

(iii) The Field Auditor has contact with a representative designated by the educational institution known as the 'Copyright Records Officer'. This person is nominated to supervise the conduct of the sample in the educational institution.

(iv) If the Field Auditor notices that there are omissions or gaps in the forms at the point of collection, the Field Auditor will not take the forms but rather will leave them to be duly completed.

(v) If the Field Auditor experiences any difficulties in compliance by the educational institution with the requirements of the sampling system at any point of the survey, the Field Auditor will advise AGB McNair who in turn will advise the Society.

(vi) If the problems are of a minor nature, officers of AGB McNair will ensure that compliance is maintained. However, if there is any real concern that an educational institution or even an individual member of staff is not complying with the legal requirements of the sampling system, the Society will contact the educational institution and member of staff involved and resolve the difficulty to ensure compliance with the legal requirements.

The Field Auditor forwards the forms to AGB McNair on a weekly (for the first month) and then a fortnightly basis for the duration of the sample. After preliminary analysis, AGB McNair forward the forms to the Society.

(vii) The Society then scrutinises the forms to ensure that they have been completed correctly.

(viii) If the Society has any concerns as to the information provided by the educational institution in the forms, the institution is contacted by AGB at the Society's request.

(ix) The information as to the copies of broadcasts made by the educational institution participating in the sampling during the survey period is entered by the Society into its database.

11.3.3. Criticisms Of The Sample Processes

The Society has received few criticisms in the past in respect of the sampling techniques which it has adopted. Criticisms are occasionally voiced by individual teachers and administrators in educational institutions selected to participate in the sample who naturally would prefer to avoid the obligation to complete copying forms, but these criticisms are answered by AVCS and the educational authorities in training sessions.

The sample has been designed to place the minimum burden on institutions that is possible while preserving the integrity of the scheme. AVCS' experience has been that teachers and administrators recognise this and are co-operative, diligent in meeting their obligations and sympathetic to the legitimate claims of copyright owners. There is strong support for the sampling scheme from educational authorities and teachers' unions.

The only criticism of the sampling techniques raised by a member of the Society (to the recollection of the Chief Executive) related to the fact that sampling is not necessarily undertaken in educational institutions across all viewing areas in each State at any given time.

The member argued that curricula may vary between states and some programs are not broadcast nationally but only on a state basis. The criticism was given very careful consideration and discussed at some length with AGB McNair. In the event, it was determined that the considerable cost to all members, and the additional burden on educational institutions, of extending the sample to all viewing areas at any one time could not be justified by the additional copying data likely to be obtained.

11.3.4. Identification of Copyright Owners

Once the Society determines which programs have been copied by educational institutions throughout the accounting period, it must identify and locate the owners of the relevant copyright in the films, sound recordings and literary or dramatic works incorporated in the programs.

The Society obtains a monthly report from the public television broadcasters (namely ABC and SBS) on a regular basis throughout the accounting period. These reports provide a list of all programs which have been broadcast on either the ABC or SBS throughout the previous month together with details as to the supplier of the program to the broadcaster. The address and contact of the supplier of the program is sometimes provided or is obtained by the Society from a number of sources including its own database and published Australian and overseas reference books.

If the monthly reports from the ABC and SBS omit the supplier details for specific programs, the broadcasters are asked to provide this information on an individual basis.

To date, the commercial broadcasters have been more reluctant than the public broadcasters to supply the Society with details as to the supplier of a program. Although the Society is currently seeking the additional support of these broadcasters, it supplements the information provided by the commercial broadcasters with information from its own database, the APRA database and published reference books and trade journals to obtain details of potential claimants.

This information is entered into the AVCS database.

AVCS then writes to each supplier of a program to ascertain if they are the owners of the relevant copyright in the films or literary or dramatic works incorporated in the program. If they can claim the royalties, the Society forwards a membership agreement and notification schedules (or warranty) for completion. If the supplier contacted is not the owner, exclusive licensee or agent for the owner or exclusive licensee of the off-air copying right, the Society will then write to the person referred to by the original supplier contact. This process continues until the Society is able to identify and locate the correct claimant.

Some broadcasts are copied by educational institutions that were copied in previous accounting periods and in such instances, the Society will simply contact the member to determine if the relevant rights are still held.

The owners of the relevant copyright in the musical works are identified by APRA and AMCOS. The acquisition of cue sheets for all programs broadcast on television and radio to identify the owners of copyright contained in programs copied from television would be an enormous task for the Society to undertake. The more cost-efficient and effective approach has been to utilise the database of APRA which already contains this information.

Details for all programs copied under Part VA are entered into the APRA system to match information from cue-sheets already stored. Most of these programs can be matched immediately with some requiring further research into the cue-sheet files not entered into the system with a small amount remaining unidentifiable where APRA does not have any cue-sheet information.

After the allocation of royalties in the musical works as described later, the APRA system identifies the owners of the performing rights in the musical works.

APRA collects the royalties for local unpublished writers in the capacity as agent for the relevant copyright owner. Published works (both local and foreign) and unpublished foreign works are distributed through AMCOS. The procedures for this distribution are still being developed.

To date, the Society has not identified owners of relevant copyrights in programs copied from radio. Understandably, the identification process has proved difficult and the amounts of money available for distribution are very small.

11.4. CAL

11.4.1. Identification process

The data processing to determine the royalty payments to copyright owners is performed over a 12 month period. The full process occurs over the following phases:

(i) Sample survey

CAL retains an independent statistician, AGB McNair to:

(a) Design the sample survey in co-operation with licensees;

(b) Select the institutions and terms of survey;

(c) Co-ordinate the data collection;

(d) Liaise with CAL and the sampled institutions; and

(e) Provide auditing of the record keeping, and CAL's data entry to provide statistical and data analysis.

The survey of copying has two purposes:

• To establish the volume of pages copied, thereby enabling the licence fee to be calculated;

• To objectively identify what has been copied and the volume of copying of the particular copyright works in order to distribute the fees to the copyright owners, according to the copying of their works.

In schools, AGB McNair draws a sample which builds over 5 years. The data is weighted year by year to recognise the partial nature of the sample that is drawn in a particular year. Therefore, although the survey is an annual process, and national estimates of copying volumes are provided annually, each year's sample is an element of a five year national sample cycle. The partial nature of annual estimates is dealt with by calculating rolling averages of yearly copying volumes over the period of Agreements. For example, the first Schools Agreement commenced in 1988 and was completed in 1991, while the second Schools Agreement runs over the period 1992-1996. Distribution is conducted according to each year's sample data.

National surveys are also conducted for Universities and TAFEs. Over the period of the national survey, representative numbers and types of institutions are included to participate in the survey.

(ii) Data Processing

AGB McNair field auditors remain in constant contact with each institution to ensure that reasonably reliable data is supplied to CAL for its distribution. AGB field auditors visit the institution every 1-2 weeks.

Five fully qualified and experienced librarians/researchers are employed at CAL to clean, research and validate each and every bibliographic citation of copying provided by the staff at each institution. Various databases and resources are utilised to research the records and complete deficient or illegible citations.

Because the research of the records is a specialised task, CAL also employs two full time data entry personnel to enter the records, which are then fully audited by the data researchers. AGB McNair also completes its independent audit to verify CAL's research and data entry.

(iii) Distribution

The completed records are then further processed so that recipient allocation can occur. Identical records are compiled and the correct recipient researched and identified.

11.4.2. Training

Staff representatives from each institution participating in the sample survey are contacted and attend a briefing session prior to the survey period. The briefing sessions held throughout the country are an important part of the conduct of the survey. They are normally one day seminars conducted by a representative from AGB McNair, a senior representative from CAL and representatives from the relevant educational systems and institutions.

At each briefing session, a representative from the peak body introduces the system and discusses the need for the co-operation of each sample participant. The representative from the peak body explains how the institutions are required by the terms of their licence agreement to co-operate in the survey and that as a whole the education system is in favour of the sampling process continuing. The participation of a representative from the educational system being sampled is crucial to the level of co-operation obtained from the institutions.

The senior representative from CAL discusses the terms of the agreement between CAL and the relevant educational institution and the role and operation of CAL. The role of the CAL representative is to motivate the staff of the sample institution or faculty into willing co-operation by explaining the importance of the survey to authors and publishers. The CAL representative also explains copyright, discusses what CAL is, explains the copying limits under the licence, and answers questions about copying practices. However, because it is important that the photocopying habits of the staff of the institution do not change simply because the institution is being surveyed, the CAL representative explains that CAL provides an indemnity during the period of the survey for any copying which exceeds the limits of the licence. A package explaining what CAL does and is, together with a copy of the latest issue of CAL's newsletter, the copying limits, and some general information on copyright and CAL, is presented to the representatives from the institutions.

The representative from the statistician, AGB McNair explains the importance of accurate sampling and the need for the support of all staff if the results of the sample are to be of use. Also presented is a detailed description of the sample procedure. AGB McNair documents are explained to the institution representatives. The photocopying record form is discussed in detail, with the AGB McNair representative discussing and providing examples for each column required to be completed by the institution. Organisational details are also discussed, for example the location and number of photocopying machines used by staff. Several common issues are also dealt with, (such as, that the "no. of pages copied" column refers to the number of pages of the original material which is copied and that the most important title information is the name of the publication rather the name of the article itself in regards to newspapers and periodicals).

A package from AGB McNair is also provided to each attendee. The kit explains the recording scheme and provides guidelines for staff members. Copies of the documents, forms, and signs to be utilised in the survey process are included in this kit. A copy of the 1994 University kit is provided with this Report.

Business cards for the CAL and the AGB representative are provided for each attendee and all are invited to make enquires either prior to, or during the survey period, or at any other time that information is required from CAL. A 008 telephone number is provided for their use. In addition AGB McNair field auditors remain in constant contact with the institution during the survey period to ensure that the data collection processes progress as smoothly as possible. AGB field auditors visit the institution to place the survey material just prior to survey commencement and thereafter every one to two weeks to collect the records at which time the records are checked for accuracy and advice can be given.

11.4.3. Common Criticism

There is a common criticism made of CAL, that there is no obligation on it to notify non-member owners for whom they have collected, that they have money for them. It is said that owners have to both know that CAL exists and to ask if they are a distributable author.

CAL is well aware of this criticism. However, although there is no legal obligation on CAL to do so, it is the finding of this Review that the Society makes strenuous effort to identify, locate and contact either the author or publisher of any work appearing as having been copied in a CAL sample.

CAL uses a number of resources ranging from CD Rom Databases to reference works, library catalogues to telephone books to locate individual publishers or authors. CAL also has a policy of co-operating with authors and publishers organisations and centres across Australia in efforts to raise the awareness of CAL amongst the literary community generally. As publishers are generally easier to locate than authors, CAL attempts to locate publishers first. When the publisher returns a Membership Form and an Undertaking and Indemnity, undertaking that it is the copyright owner of the stated works and that it will distribute fees to any other copyright owner entitled, CAL distributes to that publisher.

Where CAL's researchers are unable to locate publishers they make an effort to track the author down, especially when there is a large amount of money owing. (It would be an inappropriate waste of members' funds to spend much effort on tracking down non-members who are owed only small sums.) A number of examples of such efforts to identify relevant rights owners (or to find those who were identified) were considered. What was apparent, was that CAL often has to play the role of a private investigator to track down the appropriate author and publisher. Companies fold, authors change houses, cities and State, published information is often incomplete or sometimes, simply wrong. All of this must be sifted.

At the end of the day, CAL's drive for membership can only be successful if it tracks down parties to whom money is owed and if those parties want to join.

11.4.4. Review of Record-Keeping System

This process is reviewed on an on-going basis and was substantially reviewed at the time of negotiating new agreements with universities. Amendments are designed by the management of the Society.

11.4.5. Review of Sampling System

The sampling system is reviewed on an on-going basis by AGB McNair and the Society. More systematic reviews are performed twice a year:

(i) when drawing the sample and selecting the educational institutions which will be representative of all participating sampling institutions for the subsequent year; and

(ii) when analysing the results of the sample and calculating the equitable remuneration which is due to the Society from educational institutions which participate in the sampling system.

The last major review of the sampling system by AGB McNair and the Society was at the time of preparing the sample for universities which moved to this system as from 1 January 1994. Due to the different needs of universities for broadcast material depending upon their curriculum, the Society introduced tiered groups to represent the low, medium and high copiers. AGB McNair devised a sample by which universities from each sample group will participate in the survey during 1994.

Besides the review process already outlined, the Society and AGB McNair will review the sampling procedure to ascertain if amendments are required if the Society receives any suggestions from educational institutions or if problems arise that can be resolved by a change in procedure.

11.5. PPCA

Distribution for classical music is done on market share based on audited sales data collected by PPCA's auditors. For non-classical sound recordings, logs are supplied by APRA. APRA warrants that its logs are based on a sample in excess of the minimum sample base standard. It is important to note that APRA logs contain information as to performers as well as writers.

APRA logs are supplied to PPCA for a fee. Upon receipt of the logs PPCA:

(i) checks each entry in the APRA logs and

(ii) converts the entries into

(a) protected and unprotected titles (PPCA only collects on protected recordings);

(b) artists and record company;

(c) country of origin groupings; and

(iii) allocates identification numbers to titles for future use and internal reference.

The contract with APRA is in place for another two years. This year PPCA will add video play lists that it compiles itself, to the data.

The cost of identification of relevant copyright owners seems extremely modest. It would appear that the co-operative arrangement with APRA to buy their data, is most cost effective.

In earlier days, before PPCA started to receive useful income flow, the costs of log supply was high in comparison to the distributable amounts. (1983-$16,500; 1984 $16,500; 1985 $13,400). The Board ceased to purchase them. In 1993 the system was resumed. It represents a cost of only 3% of even the present distributable amount. In between 1986 and 1992, distributions were based on members' audited sales figures. These figures were provided in commercial confidence to PPCA's auditors who calculated each owner's entitlement. In 1993 the cost was $35,000 (paid to APRA). This does not include the in-house cost associated with the processes outlined above (which are estimated to be no more than $15,000). This should decrease as the work done on the APRA logs are re-useable in future years.

PPCA intends that with the increasing coverage of the ISRC code (developed by IFPI and administrated by ARIA in Australia), logs will be directly sourced by PPCA. Cost of collection of such data will be minimal, accuracy perfect and thus the current substantial work done by PPCA on APRA supplied logs will be no longer needed. (Indeed, the PPCA hopes to reverse the present deal and offer its data to APRA as it should be suitable for APRA (as it also includes composer details). The system will also be suitable for much of PACCS needs.)

11.5.1. System Review

The present system has only operated since 1993. No review is planned for next 2 years. The previous system was reviewed in 1991 and as a result it was decided:

(i) to adopt airplay distribution logs and

(ii) to distribute a percentage share direct to all Australian artists who register.

Planning and design of procedural change is done by PPCA staff with computer consultants. (The sampling system is presently provided by APRA, so PPCA's task is only to check and correct rather than ensure statistical accuracy.) It is subject to the approval of the Finance Committee.

[See too, Chapter 15, "APRA And CAL Sampling Schemes"]

12. LICENSING ACTIVITY

12.1. AMCOS

12.1.1. AMCOS' blanket licence activity

12.1.2. AMCOS' individual licence activity

12.2. LICENSEES BY USE AND STATE/TERRITORY

12.2.3. Qantas

12.2.4. Stellar Sound

12.3. APRA

12.4. AVCS

12.4.1. Licences By Type And Territory

12.5. CAL

12.5.1. Schools

12.5.2. Universities

12.5.3. TAFEs

12.5.4. Other Non-profit Educational Institutions

12.5.5. For-Profit Educational Institution

12.5.6. Adult Education

12.5.7. Media Monitors

12.5.8. Churches

12.5.9. Commonwealth Government

12.6. PPCA

12.7. RELATIONSHIPS WITH LICENSORS

When one considers the amount of licensing activity performed by the societies, one cannot help but be impressed. The huge volume of legal and administrative processing that is carried out by the societies is indicative of the how important it is that the relevant sectors of the community have ready access to copyright material through efficient procedures. It is impossible to conceive of how this volume of licensing could be achieved, other than by collective administration of rights.

When one considers the amount of licensing carried out, it is clear that the collective administration is an efficient and cost effective mechanism for both licensors and would-be licensees. There will always be disputes as to whether one party is paying too little or too much for particular rights. That is at the heart of commerce. What cannot be disputed, is that the societies provide a valuable function within society by permitting access to, and therefore promoting use of, copyright material.

12.1. AMCOS

An Individual Licence is defined as a single production (such as a record release or a film production) having a specific royalty liability for which an invoice is raised.

A Blanket Licence is defined as a licensed client whose royalty liability is either a specific agreed amount or a percentage of revenue which is then distributed across the total number of works used. The royalty liability is not directly related to the number of works used. Blanket licences are issued to the following sorts of licensees:

• Television Stations

• Radio Stations

• Recording Studios

• Production Companies

• Background Music Audio Recording Suppliers

• MIDI Computer Disc Suppliers

• Music Video Compilation Suppliers

• Dance Schools

• Wedding Video Operators

12.1.1. AMCOS' blanket licence activity :

12.1.2. AMCOS' individual licence activity :

AMCOS issues licences for the following number of works annually:

12.2. LICENSEES BY USE AND STATE/TERRITORY

It should be noted that the following figures represent the actual business address of the licensee to whom a licence was issued. Virtually all licences issued allow usage within the territory of Australia as a whole and are rarely limited to the state or territory indicated. Information is provided for the 1993-94 financial year:

SYNCHRONISATION CLEARANCES

(Excl TV Blanket Licences & Production Music)

MECHANICAL & VIDEO BLANKET LICENCES

(% of Gross Revenue)

TV BLANKET LICENCES

A. NETWORK STATIONS

1989-90

1990-91

1991-92

1992-93

B. NETWORK AFFILIATES

1989-90

1990-91

1991-92

C. INDEPENDENT

1989-90

1990-91

1991-92

COMMERCIAL RADIO STATION BLANKET LICENCES

Breakdown is by number of licences issued rather by percentage:

1990

1991

1992

1993

NARROWCAST RADIO STATION BLANKET LICENCES:

Information is only available for 1993 Calendar year

MUSIC-ON-HOLD

PRODUCTION MUSIC LICENCES

(Breakdown By State/Territory)

NEW ZEALAND BLANKET LICENCES

AMCOS has the most complex pattern of licensing of all the societies because it deals with the greatest range of different licences. Its function as a "sundry rights" licensor is illustrated in the following breakdown of its licensing activities. The volume of its licensing and the diverseness of its licensing indicates that it is fulfilling a function that its individual members would be hard-pressed to provide as efficiently or for such a cost, without the benefit of collective administration.

Licensing of records:

SP Clients - "Special Recordings" - are record makers that are under licence agreements which allow for the payment of royalties to be made quarterly in arrears on units sold rather than units produced. These clients are issued with a Royalty Rate Advice which provides details of the value of the royalty payment applicable for each production. The number of actual clients operating under such agreements is as follows:

SYNCHRONISATION CLEARANCES

(Excl .TV Blanket Licences & Production Music)

Figures for the above types of licences are falling due to the fact that publishers are issuing licences directly for most synchronisation clearances involving theatrical, non-theatrical and video rights.

STUDENT FILM OR VIDEO LICENCES

PRODUCTION MUSIC LICENCES

The apparent drop in licences issued for the 1992-93 financial year was due to the fact that multiple territories and licence categories can now be included on a single licence for a client.

TV BLANKET LICENCES

(% of Gross Revenue)

Radio Station Blanket Licences

Dance School Blanket Licenses (Audio Mechanical)

Music-on-Hold

12.2.3. Qantas

12.2.4. Stellar Sound

Another high volume user of production music. An agreement was negotiated to commence in September 1989 which charges this client the same rate as a metropolitan radio station.

12.3. APRA

The Association currently has the following licences in place:

(i) Public performance - Australia: 19,043 (for 34,424 venues)

(ii) Public performance - New Zealand: 904

(iii) Radio broadcasting - Australia: 352

(iv) Radio broadcasting - New Zealand: 93

(v) Television broadcasting - Australia: 42

(vi) Television broadcasting - New Zealand: 7

(vii) Diffusion - Australia: 3

(viii) Diffusion - New Zealand: 9

Blanket licences are granted to all licensees except casual permits for the performance of particular named works.

The following numbers of works were allocated royalties in the Association's last two complete distributions:

Distribution 30(a) - 1 July 1992 to 31 December 1992 72,762 works paid

Distribution 30(b) - 1 January 1993 to 30 June 1993 100,768 works paid

(A proportion of works paid in 30(a) will also have been included in 30(b).)

The breakdown requested is really only relevant to the area of general public performances licences and in this respect the breakdown is as follows:

12.4. AVCS

All agreements that AVCS has with educational institutions are by their nature blanket licences to the extent that they allow an individual educational institution to copy any television or radio program for educational purposes.

For AVCS' purposes a blanket licence is one with an entire education sector (for example, each of the state education departments or state TAFE commissions). An "individual" AVCS licence is one with a stand-alone educational institution.

The following table details the breakdown as to the number of blanket licences and individual licences currently held by AVCS in the educational sector.

12.4.1. Licences issued by AVCS by type and territory

12.5. CAL

As discussed earlier, CAL only grants blanket licenses or licences to copy the works of its members. It does not grant licences in respect of non-members' rights. Licences are currently granted to educational institutions, quasi-educational institutions; churches; media monitor services and Commonwealth government bodies. CAL eventually intends to licence other types of users also.

As at 26 July 1994, CAL holds 1,546 licences. All of CAL's licences are ongoing, terminating and being renegotiated again at various times. It is therefore probably more useful to present a list of the numbers of each type of current licence:

12.5.1. Schools

All schools in Australia are licensed via either the Education Department of their state, the Catholic Education Office in each state, the Association of Independent Schools in each state, the Seventh Day Adventist Association in each state, the Christian Schools Association or the Christian Parent Controlled Schools Association. The number of school licences is 32 which incorporates approximately 9,950 schools and 3.1m students.

12.5.2. Universities

Most of the universities in Australia are licensed through a Head Agreement with the AVCC and an individual agreement with each university. There are 39 universities (licensed by the AVCC). There are 2 universities licensed through the E Scheme and 1 on the Statutory Licence.

12.5.3. TAFEs

In all states but Victoria, there is one Head Agreement for all TAFE colleges with the appropriate government department of that state. In Victoria there are 30 individual agreements with each Victorian TAFE.

12.5.4. Other Non-profit Educational Institutions

12.5.5. For-Profit Educational Institution

The T Licence Scheme is available to profit run educational institutions that do not fit into one of the categories above, e.g. English Language Colleges, Private Tutors, Commercial Business, Travel Colleges, Speech and Drama Colleges and some private company training such as Ansett Australia. There are 63 T Licences.

12.5.6. Adult Education

CAL holds licences with 7 adult education organisations.

12.5.7. Media Monitors

12.5.8. Churches

There are 724 church licences held by CAL. A number of these are group licences so that in effect CAL licenses approximately 2,500 churches.

12.5.9. Commonwealth Government

All Commonwealth Government departments have agreed to pay CAL for the copying of CAL members' works under s.183 of the Copyright Act. There are current negotiations with State Government departments but none are presently participating with CAL.

12.6. PPCA

All licences issued are blanket licences. The company issues 13,000 current annual licences.

There are four main types of blanket licenses:

• public performance of sound recordings

• public performance of videos

• broadcast of sound recordings and

• broadcast of videos. (For types of users see tariff sheets attached.)

By these blanket licences, users are given access to in excess of 500,000 individual works. The geographical distribution of licences granted is not surprising:

12.7. RELATIONSHIPS WITH LICENSORS

The Inquiry received four submissions from individuals and organisations who expressed dissatisfactions with the manner in which certain societies sought to effect licences. These particularly related to CAL, APRA and PPCA. Basically it was alleged that the agencies "do not provide proof of their bona fide right to collect fees" and that they do not properly or adequately describe who they are, or the basis upon which they are empowered to collect or the extent of the repertoire that they represent.

This may indicate that either the written material made available to intended licensors or the training of the field operatives is deficient. (The quality of the available printed material has already been discussed.) However, the initial interaction between a collecting society and a business person who probably knows nothing about copyright or collecting societies, is very likely to be fraught with suspicion and hostility. The collecting society is viewed as yet another impediment to the business making a profit.

Down to the next part of the Simpson Report