Copyright Agency Limited (CAL) licenses copying and use of copyrighted works in schools and other institutions in Australia. CAL collects usage data from schools to determine appropriate licensing fees. Over time, CAL has built licensing fees for schools through legislation, tribunal rulings, and commercial deals. CAL distributes over $100 million annually to authors and publishers based on the usage data collected.

1. Copyright Seminar
How to make a living as a creator of artistic works?
Yogyakarta, September 2010
Michael Lijic
International Affairs Manager
Copyright Agency Limited, Australia
1

2. Overview
1. The Traditional Publishing Model
2. The Digital Publishing Model
3. The RRO Model
– Background to Copyright Agency Limited
– Case Study: Licensing Schools
2

3. 1. The Traditional Publishing Model
3

4. Copyright Background
• Copyright has taken 300 years to develop -Statute of Anne
(1710)
• The real benefit of copyright is that it has enabled us to talk to
each other
• I can buy a book in Wagga Wagga, and an author in Indonesia
can be rewarded for that purchase
• Technology comes and goes in cycles, and copyright will
evolve as it always has
• The supply of content is always the key issue, and copyright
supplies this content via the virtuous cycle
4

5. Copyright In Australia
• Copyright industries comprise a substantial
proportion of the Australian economy
• Last year Australia’s copyright industries:
– Employed 836,577 people, which constituted
7.9% of the Australian workforce
– Generated economic value equal to 9.8% of gross
domestic product ($97.5 billion)
– Generated $6.873 billion in exports, equal to 4.1%
of total exports
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6. Publishing in Australia
• Generated AUD$1.96 Billion revenue in 2009/10
• Has grown 2-3% per annum over the last 10 years
• Contributes AUD $573.5 million to the Australian economy
and GDP
• Exports AUD $146.6 million
• Imports AUD $618.8 million
• Employs 6,200 people
• 240 employer publishers (many other sole traders of part time
publishers)
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7. Publishing Value Chain Profitability
Analysis
0.60
CentsProft Per $10 Revenue
0.49
0.50
0.40
0.31
0.30
0.20
0.10 0.07
0.02
0.00
Publisher Bookseller Royalties Printer
7

8. Revenue ($m)
100
150
200
250
300
350
400
450
0
50
Book
Chain
s
391
Indep
en de
n ts
337
D i rec
t
308
M ass
Merc
hants
233
W ho
lesal e
rs
183
Cam
pus S op
h s
178
D epa
rmen
t
Book sales by channel
Sto re
s
62
8

9. Australian titles / Market Segments
• Australian titles make up nearly 70% of the books sold in Australia
(but 60% of the value)
Market Segments
Electronic
Professional and
reference
Children books Adult non
fiction
Tertiary
education books
Adult fiction
School books
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10. Cost components for publishers
Royalties, 6.3%
Sales and
Marketing, 6.5% Printing, 19.8%
Distribution,
6.8%
Profits, 7.9%
Other, 19.2%
Imports, 15.3%
Wages, 18.2%
10

11. Components of the publishing value chain
in Australia
1. Content Development
 Content acquisition
 Rights / contracts / royalties
 Drafts and editing
2. Production Process
 Colour, typefaces, layout
 Paper / stock type
 Typesetting and printing
 Binding
11

12. Components of the publishing value chain
in Australia (Cont.)
3. Content Distribution
 Marketing (ads, press, reviews, signings)
 Inventory management
 Customer service
 Warehousing
 Delivery
 Returns
 Marketing materials
 Sales results
12

13. Demand for Published Works:
• Price
• Disposable income
• Economic growth and general business conditions
• Tastes and interests in the community
• Growth, age, and gender composition of the population
• Level of promotion by both publishers and retailers
• Technology
• Tax on books
13

14. Competition Between Publishers
• Content
• Price
• Distribution
• Promotion
• Brand names
• Competition from substitutes
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15. 2. The Digital Publishing Model
15

16. The e-book Race
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17. Apple iPad
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18. Apple iPad
Positives Negatives
• Large, colour screen • Not a dedicated e-book
• Dedicated iBookstore reader
• Huge Apple customer • Screen is backlit, no e-ink
base, who trust and are • Closed proprietary system
familiar with iTunes • A multipurpose device –
• A multipurpose device - books seen as an
video, music, web, apps afterthought.
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19. Amazon Kindle
19

20. Amazon Kindle
Positives Negatives
• Dedicated ebook reader • Black and white screen
with e-ink, designed from • Closed proprietary system
ground up around the
reading experience • Publishers don’t like
• Huge catalogue of US$9.95 pricing for best-
books, sold internationally sellers and are looking
• Readers like the US$9.95 elsewhere
pricing for best-sellers
• First to market with large
and qualified customer base
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21. Google Editions
21

22. Google Editions
Positives Negatives
• Search results lead to • Last to market – may have
discovery and sale of books missed the boat
• Content from Partner Program • Model is platform-based, and
and (if approved) Library not based around a device or
Scanning Project – potentially
12million books the reading experience
• Based on open standards and • No existing customer base
not tied to any one device • No successful consumer
• Loss-leading product, can products or experience
leverage off Google’s massive
infrastructure and cash coffers
22

23. ...and then there’s smartphones
23

24. Boy who cried wolf
or
Tipping Point?
24

25. Frankfurt Survey - 2009
• 2018 was named as the point when digital sales would overtake
traditional books
• However, 60% estimated that ‘considerably less’ than 10% of
current sales are digital
• 58% anticipated that by 2011 digital sales would make up ‘a
considerably higher’ share of total revenue
• 80% said they embraced the ‘radical change’ that digitization
brings
• Only 22% thought that digital formats would never overtake
print
25

26. Digital Publishing in Australia – CAL
conducted research to examine:
• Professional development
– What do publishers want to learn about digital publishing, e.g.
ebooks, POD, ecommerce, revenue models and strategy?
– What delivery method do they prefer for this education, e.g.
online, face-to-face, etc?
• A co-ordinated approach
– Who should drive the education campaign, e.g.
government, industry bodies, publishers, etc?
• A digital portal
– Is there a need for centralised digital publishing portal for Australian
publishers, who should run this portal, how could it work, who
should pay for it, etc?
26

27. Initial Findings and Trends
• Education vs Trade. There is a clear difference in opinion
between those in education and those in trade.
– Education know that digitisation, ebooks, online publishing and other
technological changes are already beginning to affect what they do in a
fundamental way
– Trade publishers have no such consensus.
• Some doubt that new technology can ever challenge the book, or not in our
lifetime
• Some see emerging Print On Demand (POD) technology and ecommerce as ways to
make small publishing profitable. Some take both views
• Others see the book as doomed
27

28. Initial Findings and Trends
• Professional Development
– There is clear hunger for information, though little consensus on what topics
need to be covered and the way in which the information would best be
delivered.
– Most respondents are intrigued to know more about revenue models for
digital publishing, largely because theirs don’t work.
• Difference in Experience
– Big publishers already investing heavily in digital publishing
– Small publishers already active in this area are finding the returns pitiful, and
dwarfed by the costs of getting them
– Medium-sized publishers do not know whether they are doing enough to
prepare for a revolution that will change everything, or spending too much on
something that won’t in the end affect them
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29. Initial Findings and Trends (cont)
• Summary: Wide range of views
– The research shows that there are as many views on what publishing
will be in the future as there are on what it is now.
– Responses range from the flatly dismissive, “hype over digital
publishing is rubbish”, to those who are convinced it is the future of
publishing, and every shade in between.
29

30. 3a - The RRO Model:
Background to Copyright Agency
Limited
30

31. Summary of CAL
• CAL’s mission is to secure fair payment for
authors and publishers for the copying of their
works
(books, journals, magazines, newspapers, etc)
• By ensuring fair payment to copyright
owners, creativity and further investment is
encouraged
31

32. Other Collecting Societies In Australia
• APRA/AMCOS – administers public
performance rights for music and lyrics
• Screenrights – administers licences which
allow organisations to copy material from
radio/television
• Viscopy - licenses the works of Australian
visual artists (fine arts)
32

33. Collecting Society Revenue in Australia
Collecting Society Material AUD
APRA/AMCOS Music 210,000,000
CAL Print/text 114,000,000
Screenrights Television/Radio 34,000,000
Viscopy Fine arts 2,400,000
Total 360,400,000
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34. Collecting Societies (RROs) in Asia
− Established − Emerging
− Japan − China
− Hong Kong − India
− Singapore − Indonesia
− Korea
− New
− Philippines
− Taiwan
34

35. Background to CAL
• CAL was born out of the ‘market failure’ that the
photocopier created
• Established in 1974, but did not begin operations until 1985
• Public company limited by guarantee
• CAL’s Board comprised of Author Directors, Publisher
Directors, and Independents – mixture of appointments
and voting
• Directors appointed by the Australian Society of Authors
(ASA) and the Australian Publishers Association (ASA)
• CAL is the declared collecting society for statutory
licences, and report to the Attorney General’s Department
35

36. What we do
• Provide a bridge between creators and users of copyright
material – enable access and a legal way to copy
• Represent our members as their non-exclusive agent to
license the copying of their works to the general
community
• Offer licences to educational institutions, Government and
the corporate sector
• Make payments to members for the copying of their work
• Copyright education and lobbying services for our members
• Cultural Fund and thought leader in the creative industries
36

37. What we don’t do
• Enforcement / piracy
• Supply or sell content
• Offer legal advice or legal services
37

38. Financial Snapshot – 2008/09 Results
• Total revenue $114million
• Revenue/Expense ratio of 13.7%
• For every $100 dollars collected, we pay out
$86.30
• $101million distributed to members
• A total of $650million distributed since 1989
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39. Licence Schemes
• Statutory Licences
– Worldwide mandate
– Declared by Government
– Copyright Act
• Voluntary licences
– CAL must seek mandate from members
– Individual negotiation with licensees
– Commercial terms
39

40. What can you copy with a CAL licence?
• The reproduction limits under the Statutory
Educational licence for hardcopy:
– 10% of the number of pages or one chapter;
– one article from a journal;
– the whole of an artistic work;
– The whole of a work if that work cannot be
obtained within a reasonable time at an ordinary
commercial price
40

41. Summary of CAL licences
Sector Mandate Revenue
Schools Statutory $54.3 million
Universities Statutory $24.3 million
Commercial Licences Voluntary $13.2 million
Government (State) Statutory/Voluntary $10.7 million
TAFEs Statutory $4.1 million
Government (Federal) Statutory/Voluntary $3.0 million
Independent Colleges Statutory $3.0 million
Other collecting Societies Voluntary $1.4 million
Total $114.0 million
41

42. Breakdown of CAL Licence Fees
• Education
– Schools - $16 per student
– Universities - $39 per student
• Corporate
– Regular - $13 to $17 per employee
– Pharmaceuticals - $70 to $75 per employee
– Press Clips - $1.18 per clip
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43. CAL’s Members
• Authors and Publishers
• 16,000+ members
• Diverse membership base
43

44. CAL Author Members
• Authors
• Academics
• Journalists
• Visual Artists
• Illustrators
• Cartoonists
• Fine artists
• Surveyors
• Photographers
44

45. CAL Publisher Members
• Traditional (Trade & Education)
• Journal
• Newspapers
• Magazines
• Government departments
• Associations, charities
• Corporate
• Self-publishers
• ‘Grey publishers’
45

46. Distribution Payments
Group Amount Percentage
Authors $9.1 million 9.1%
Publishers $75.9 million 75.0%
Collecting Societies $0.8 million 0.9%
(Australian)
Collecting Societies $15.1 million 15.0%
(Foreign)
Total 100%
46

47. 3b - The RRO Model:
Case Study: Licensing Schools
47

48. Licensing in Schools
License Schools
Collect Usage Data
Calibrate Fees
48

49. License Schools 49

50. 1981 Legislative Changes
• Statutory Licence Provisions incorporated into
the Copyright Act
• Schools may reproduce from works provided
they adhere to:
– copying limits
– record keeping requirements
– fair payment requirements
50

51. One In, All In 51

52. Build Licence Fees Over Time 52

53. Schools Licensing Strategy
Legislation
(1981)
Tribunal
(1985)
Commercial Deals
(1980s & 1990s)
Collect Data
(1990s & 1990s)
Tribunal
(2001)
Commercial Deals
(2009)
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54. It’s All About Data 54

55. Differential Rates
Poetry
Artistic 8 Cents Display
Works 40 Cents
Short 8 Cents
Stories
6 Cents
General
4 Cents
55

56. Total Remuneration – Schools
Hardcopy
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57. Thank you for your attention
Michael Lijic
International Affairs & Digital Strategy
Copyright Agency Limited, Australia
mlijic@copyright.com.au
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