Copyright Tribunal Makes Determination in PPCA v Foxtel

21 August 2017

The Copyright Tribunal of Australia has today published a further determination in the long running dispute between PPCA and Foxtel regarding royalties for the broadcast of sound recordings, including broadcasts over the Internet.
The proceedings relate to a propped licence scheme for the broadcast of sound recordings over Pay TV.  The scheme was first referred to the Copyright Tribunal in 2012. In May 2016 the Tribunal made a determination.
However, there were a number of matters that remained unresolved. These related to the definitions of various types of content, programming, and streaming. The latest determination deals with those matters.
  1. PPV issue
There was an issue as to whether revenues Foxtel received from pay per view sporting events should be included in subscription revenues.The Tribunal determined that this revenue should be included.
  1. Power Issue
Whether the power of the Tribunal to approve a scheme is limited by what a collecting society may have agreed with its members.The Tribunal concluded that the Tribunal power to approve a scheme is not constrained by the licence a collecting society has from its members.
“The legal effect of the Tribunal’s power to approve a scheme does not derive from the existence of a licence which a collecting society may hold from its members. Indeed, the Act does not require that such a licence exists. In practical terms, collecting societies may find such licences useful for achieving consensual arrangements with possible licensees. But in the Tribunal, the machinery of the legislation does not operate by reference to any such licence.” [para 24]

  1. Streaming and On Demand Issues
The main issue was whether the scheme covered the storage of streamed and on demand content.The Tribunal determined that it did, notwithstanding PPCA’s submissions that its input agreements did not include the right to license storage of streamed content.
  1. Bundling issues
Foxtel offers bundles to its customers, not all of which require a PPCA licence. The issue therefore concerns how much of the revenue for these bundled services should be included in the subscription TV revenue. Rather than accepting the submission of either party as to how this issue should be determined, the Tribunal developed its own proposal. However, given that the parties had not been heard on this proposal, it directed the parties to confer.
  1. Additional charges
This issue concerned whether additional charges such as late fees should be included as subscription revenue. The Tribunal rejected PPCA’s submission and determined that it did not include such additional charges.
  1. Wording
The final issue related to whether drafting changes were necessary to make it clear that the scheme allowed Foxtel to provide services to its non-broadcast subscribers.The Tribunal determined that no changes were necessary.

This long running dispute highlights the importance of content distributed over the Internet.  It also focuses attention on the powers of the Copyright Tribunal under section 154 to confirm, vary or substitute a scheme “as the Tribunal considers reasonable in the circumstances”.  In particular, it casts a spotlight on the effect of orders made by the Tribunal under section s 159(1) .
As noted above, the parties have been directed to confer on the bundling issues, so we can be sure that we have not seen the end of this matter yet. Stay tuned.
The determination is available