COPYRIGHT TRIBUNAL OF AUSTRALIA

Audio-Visual Copyright Society Limited v Foxtel Management Pty Limited (No 2) [2012] ACopyT 2

THE COURT ORDERS THAT:

1.    The parties are to file an agreed form of orders reflecting the Tribunal’s position by close of business Monday 27 August 2012.

REASONS FOR DETERMINATION

1        On 1 June 2012 the Copyright Tribunal (the Tribunal) determined that it was appropriate to adopt a sum of 10 cents (pspm) as equitable remuneration for the retransmission by Foxtel Management Pty Limited (Foxtel) of all of the nine new multichannels (Audio-Visual Copyright Society Limited v Foxtel Management Pty Limited [2012] ACopyT 1 (the previous decision)). One of the issues left for future determination was the issue in dispute between the parties today, namely, equitable remuneration for subscribers who do not have access to all of the retransmitted new multichannels but have access to only one or more of those new multichannels. Both parties have helpfully set out in clear terms in their written submissions the proposal for which they contend.

2        The position of the applicant, Audio-Visual Copyright Society (trading as Screenrights), is that the amount of equitable remuneration which was determined – the 10 cents pspm across all nine new multichannels – should be divided equally between those channels for the purpose of calculating equitable remuneration for subscribers with access to less than all nine channels. Screenrights supports this approach on the basis that it has the advantage of simplicity and is appropriate in circumstances where the evidence does not reveal a more sophisticated method for dividing the total amount. Accordingly, Screenrights sets out in a table the applicable rates for the retransmission of less then nine multichannels, leaving aside adjustments for CPI.

3        For its part, Foxtel suggests an approach which divides the nine multichannels into four bands: – (i) band 1, for retransmission of one to three channels, would attract 10% of the rate – that is, 10% of the 10 cents pspm, (ii) band 2, for four to six channels, would attract 20% of the rate, (iii) band 3, for seven to eight channels, would attract 40% of the rate, and (iv) band 4, for retransmission of all nine new multichannels, would attract 100% of the rate. According to Foxtel, its sliding scale of remuneration recognises the fact that the convenience value to the subscriber which was emphasised in the Tribunal’s decision is not linear on a per channel basis and retransmission of just a few of the new multichannels is not very convenient at all, retransmission of a majority of the new multichannels is considerably more convenient, and that nonetheless “[t]here is a very large drop in convenience value between retransmission of all new multichannels and retransmission of anything less”. The effect of Foxtel’s banding proposal would be that Screenrights would receive one cent pspm (equivalent to 10%) for additional channels 1 to 3, two cents pspm for additional channels 4 to 6, and four cents pspm for additional channels 7 and 8, with the full rate of 10 cents pspm for the addition of the last of the existing new multichannels, the ninth channel.

4        As the previous decision of the Tribunal discloses, much is based on estimation and approximation in this field of discourse. It is true that at [185] of the Tribunal’s previous decision the Tribunal made comments about the relationship between existing and new multichannels. The Tribunal observed that “it is unrealistic to infer that a subscriber would treat the value of convenience to that subscriber as increasing in some linear way with the number of free-to-air multichannels being retransmitted” and that “[i]ndeed it might be expected that each additional multichannel has a decreasing value to the subscriber”.

5        This observation forms part of the foundation for Screenrights’ submission that although its proposal does involve a linear increase in value, the contrasting Foxtel proposal loads most of the value onto the last ninth multichannel (that is, 60% of the total value) and retransmission of eight or less of the new multichannels is remunerated at only 40% of the total value. For its part, Foxtel emphasises the many references throughout the Tribunal’s decision to the fact that the value to the subscriber, which must be the ultimate foundation of the value of retransmission to Foxtel, cannot be founded on the content of the channel because the channel content is otherwise freely available but is founded on convenience and that having access to all the multichannels rather than simply a few of them is the ultimate convenience. The true value therefore lies in that ultimate convenience.

6        There are no doubt many other ways in which equitable remuneration for the full suite of the nine new multichannels could be apportioned between lesser numbers of channels, but there is no magic in any particular formulation. My concern about Foxtel’s proposal is that it does heavily load the ninth channel in a way that I do not think is equitable in all of the circumstances. It is true that an alternative approach still based on banding could be taken which more evenly distributes the loading compared to the 40%/60% approach which Foxtel has taken. However, on analysis, altering or amending Foxtel’s banding would probably have a result that is not too different from the linear approach that Screenrights has taken.

7        In circumstances where there is no particular basis in the evidence for deciding otherwise, it seems to me that Screenrights’ approach best reflects what is equitable in all of the circumstances. It does have the advantage also of simplicity and in a matter such as this the value of simplicity should not be underestimated. In short, I accept Screenrights’ submission that the evidence does not reveal a rational basis to take any more sophisticated approach to the dividing up of the total amount.

8        Accordingly, the order I would make would reflect Screenrights’ table as set out in its written submissions.

Associate:

Dated:    27 August 2012