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A Trans-Tasman Battle. Statutory vs Voluntary Licensing – Who Benefits?

By September 9, 2014 No Comments

Paula Browning writes: As New Zealanders, we’re quite used to the rest of the world thinking that we’re a southern territory of Australia. While there are plenty similarities there are also a lot of areas in which we are very different – from the 2013 performances of our respective national rugby teams to the way content is licensed in our education sectors. We know that in rugby terms New Zealand comes out on top, but which licensing system works better and who benefits the most from each?

A quick description of the two licensing schemes:

Voluntary licensing – a collective management organisation (e.g. CLNZ) sells licences for the copying of copyright materials on behalf of rightsholders (either via a direct mandate from the rightsholders or via reciprocal agreements with collective management organisations representing rightsholders in other territories.)

Statutory licensing – a remunerated exception in the relevant copyright laws, for defined classes of users, and under which a collective management organisation (e.g. Copyright Agency for the Australian statutory schemes for education and government users) is the named collecting society and operates in accordance with that legislation

The following table shows the main operational differences between the two schemes:

  Statutory Licence – Australia Voluntary Licence – NZ
Content that can be copied All text and images:

  •          From any source
  •          Print or digital
  •          Local or foreign
As specifically authorised:

  •          By mandate
  •          By foreign affiliates
How content can be used All forms of reproduction and communication for educational purposes As specifically authorised:

  •          By mandate
  •          By foreign affiliates
Content excluded from use None
  •          Standalone artworks
  •          Digital-born content
  •          Maps, charts and plans
  •          Any content not authorised by rightsholder
Decision to take up licence For education, formal notice of intent to rely on statutory scheme.
For government, no notice required.
Individual school
Negotiation and payment of licence fees Negotiated and paid by relevant peak body. Individual school
Risk management for infringement Not applicable – statutory exception Borne by individual school and, potentially, individual teachers

 

Both systems rely on surveys of copying in schools in order to establish what is being copied and which rightsholders need to be paid. As can be seen from the table above, the material for which payment for copying will be made in Australia is much more comprehensive than in New Zealand. For example, if you blog and the content of your blog is used in Australian schools and captured in a survey, you will receive a payment. In New Zealand, no payment would be made and it is up to individual teachers to decide if the material they wish to use in their teaching is legally available to them either via the Section 44 education exception in the Copyright Act or under licence, if their school has one. A Statutory Licence scheme relieves the teacher of having to make this decision.

In 2012/2013 the Australian system generated revenue from schools for rightsholders of $A59.8m ($NZ64.6m). In New Zealand, schools income for 2013 was just under $1m. The current agreed flat rate for each school student in Australia is $A16.93. Primary schools in New Zealand that take out a CLNZ licence pay $1.50 per student; secondary schools pay $3.00 per student.

It’s fairly easy to deduce from the figures above, that if you’re a publisher of education content that is being copied in schools in both countries, your return is likely to be much better under the Australian Statutory Licence scheme.

In addition, the Statutory Licence seems to benefit both educators and publishers. For educators, the resources they need for teaching are comprehensively covered by the Statutory Licence and there is no need for complex decisions on what and how materials can be used.  At the same time, the creators of the materials being used are fairly compensated for the use of their material, generating a revenue stream that allows them to invest in more content.[i]

Paula Browning, Chief Executive Copyright Licenising NZ

Disclaimer: This is a simplified summary intended to provide high-level comparisons between the two systems. It is not intended to be a definitive legal analysis.



[i]
 In 2013, the Australian Law Review Commission (ALRC) commenced an inquiry into Copyright and the Digital Economy in Australia. One of the areas of review is the Statutory Licence Scheme. CLNZ has made a submission to the ALRC on behalf of publishers to argue for the retention of the scheme given the effectiveness of its operation that enables investment in future content creation that benefits the next generation of school students.