Australia Biz Divided On Blank-media Tax

The Australian music industry is divided over proposed copyright law changes that would introduce a levy on blank recording media.

Phil Tripp, managing director of Sydney-based events company Immedia and publisher of the Australasian Music Industry Directory, recently launched a campaign to amend Australia's Copyright Act of 1968 to allow music copying for personal use.

Currently, Australians who make personal copies of recorded music are in breach of the Copyright Act. Penalties range from $500 Australian ($350) to $5,000 Australian ($3,500).

Tripp proposes allowing music buyers to copy purchases onto recordable discs, tape or digital music players. In return, a levy would be applied to the recordable media and players.

He dismisses labels' assertions that legalizing copying will lead to lost sales. "That has not been the case in overseas countries where such a levy was introduced," he says. "If anything, a levy puts a value on music as far as customers are concerned."

A levy system similar to the one Tripp proposes exists in Canada. It is administered by the Canadian Private Copying Collective, which collected $28.4 million Canadian ($21.2 million) in 2003.

Tripp claims to be acting as an individual who believes that the law on private copying is wrong and that consumers' rights are being ignored.

Labels body the Australian Record Industry Assn. opposes legalizing copying. ARIA contends that copyright holders should be able to control how their copyrights are used.

"A tax on technology doesn't seem to be a smart way to go," ARIA CEO Stephen Peach says. "It's an old-world solution to a new-world problem."

Peach says a more viable alternative would be to introduce digital-rights technology that would allow Australian downloaders to make three copies of a work in a controlled environment. ARIA also favors legitimate download sales and educating consumers so they realize that mass copying harms investment in artists.

As for the levy proposal, it has three fundamental flaws, Peach claims. One is the issue of how it should apply to consumers who use recordable media for non-copyright purposes. He also foresees problems in dealing equitably with the existing wide range of recordable media. Finally, he points to the difficulty of determining how creators should be compensated.

CONSTITUTIONAL PROBLEMS

The Australian government is considering modifying the Copyright Act in line with a pending Free Trade Agreement with the United States. The U.S. Congress endorsed the FTA July 15 and has submitted it for presidential approval. An Australian Senate select committee will deliver its final report on the FTA by Aug. 12. The FTA then goes to Parliament for debate; observers expect the agreement will pass and come into effect by February 2005.

A June 25 report on the repercussions of the FTA, issued by the parliamentary Joint Standing Committee on Treaties, recommended that the government consider a levy for personal copying.

The Australian Consumers Assn. backs Tripp's campaign. "The FTA seeks to adopt the draconian U.S. line on copyright without attending to crucial aspects of consumer protection," ACA senior policy officer Charles Britton says. "The U.S. has fair-use provisions that provide some level of protection for consumers in home copying—we do not."

Britton says the Copyright Act must be changed to strengthen consumers' rights with the advent of the FTA.

Tripp says the government's Copyright Tribunal would determine the size of the levy. He suggests that the monies be collected and distributed to artists, songwriters, labels and publishers through the Australasian Performing Right Assn.

APRA CEO Brett Cottle backs the idea. "Technical solutions will not stop copying, because they can be hacked," he says, "and they alienate the very people we want back into buying music."

In November 2003, APRA and its film industry equivalent, Screenrights, proposed plans for a levy to the government. The proposal was rejected, receiving almost no support.

In 1984, the Australian High Court rejected ARIA's own proposal to introduce a blank-tape levy as unconstitutional after blank-tape manufacturers and equipment companies challenged it in court.

Cottle says peculiarities in the Australian Constitution pose "quite serious drafting and practical problems in enacting a [levy] system."

MIXED RESPONSE

Tripp initiated preliminary discussions in May with government intellectual-property advisers in the Attorney General's department and the department of communications, information technology and the arts.

He then sought support for a legal change from 25 music-industry associations. These included the Assn. of Independent Record Labels (known as AIR), the Australian Music Retailers Assn., the Music Managers Forum, the Country Music Assn. of Australia and the Folk Alliance of Australia.

The proposal received a mixed response. The AIR board discussed it at a meeting July 8 but postponed a decision until July 20. The key question for members, chairman David Vodicka says, is, "Do you give up the rights of your copyright to the government and hopefully get that money back? And will that money be enough?"

AMRA's board rejected backing the levy at its July 8 meeting. "The proposal as it stands has no obvious benefit to music retailers," AMRA executive officer Ian Harvey says.

The Australian arm of the MMF suggests that the issue be debated publicly and proposes a national series of seminars during August featuring input from ARIA, APRA and other parties. MMF Australia chairman Marshall Cullen says the issue "is a lot deeper than it appears."