COPYRIGHT TRIBUNAL of Australia

Reference by APRA AMCOS (Summons) [2023] ACopyT 3

COMMONWEALTH OF AUSTRALIA

COPYRIGHT ACT 1968

THE TRIBUNAL ORDERS THAT:

1.    The application to issue a summons in the amended form provided to the Tribunal on 3 August 2023 is refused.

REASONS FOR DETERMINATION

PERRAM J (PRESIDENT):

1    Stan and Netflix ask the Tribunal to issue to APRA AMCOS a summons under s 167(3) of the Copyright Act 1968 (Cth) (‘the Act’) requiring it to produce documents in its possession. The parties have resolved most of the issues between them consensually and summonses in an agreed form have already been issued. They remain in dispute about certain classes of documents the subject of these reasons. The relevant principles governing the issue of a summons seeking the production of documents are set out in Reference by APRA AMCOS (Summonses) [2022] ACopyT 4 at [2]-[20].

2    The reference is concerned with the appropriate fee to be charged to the providers of subscription video on demand services (‘SVOD services’) in return for the licence of APRA AMCOS to communicate and/or reproduce musical works within their repertoire which, in practical terms, includes the vast bulk of commercially available music. Although some of the content streamed by SVOD providers has been acquired by them pursuant to arrangements which licence the communication and/or reproduction of the music contained within that content, there is no practical way that an SVOD provider can check whether this has in all cases been done. In practical terms, therefore, they need a blanket licence from APRA AMCOS to avoid inadvertent infringements of copyright.

3    Each of the SVOD providers before the Tribunal already have in place consensual arrangements with APRA AMCOS licensing their use of the repertoire. Historically, the fee charged for these arrangements was [Redacted] of their gross revenues. APRA AMCOS has sought to change the basis on which licence fees are calculated and the Respondents including Netflix and Stan have not agreed to this proposed change. The Tribunal exists to resolve disputes of this kind which cannot be resolved by ordinary commercial dealings since neither set of parties has any choice about dealing with the other.

4    As the evidence for the hearing currently stands, one of the ways in which APRA AMCOS’s proposed licence fee is to be calculated is as 2.5% of an SVOD provider’s gross revenue, [Redacted]. APRA AMCOS has prepared evidence from an expert, Mr Martin Hall, that ‘Australian SVOD agreements are consistent with the market rate for licence fees as a percentage of gross revenue being the 2.5% proposed by APRA AMCOS’. APRA AMCOS has served on the Respondents all of the material with which Mr Hall was provided and upon which his opinion was formed.

5    APRA AMCOS has previously licensed the use of its repertoire by other video on demand (‘VOD’) services apart from SVOD services. For example, it has in place arrangements with the commercial television broadcasters in relation to their VOD services. In relation to the public broadcasters, it provides a licence which covers all of their offerings (including their VOD offerings). It appears that APRA AMCOS began licensing VOD services from around 2010. Since 2010 it would appear that APRA AMCOS has licensed more than 72 VOD services including SVOD services. Not all of these necessarily commenced operations. The evidence suggests that there may exist VOD services who do not presently hold a licence. Although streaming services of the present kind are now called VOD services this has not always been so and at one point they were known as ‘online TV’. In addition to the more than 72 VOD services which have been licensed, it appears likely that APRA AMCOS has at various junctures also dealt with parties about VOD services but where no licence arrangement ever ensued.

6    Stan and Netflix wish to explore the fees that have historically been charged to VOD services and also to know more about the negotiations that APRA AMCOS has had and the thinking it has done about the provision of licences for VOD services. I accept in principle that the current VOD licences may constitute comparable bargains from which a price for SVOD services may be determined. I also accept that any historical VOD licences may be used for a similar purpose.

7    APRA AMCOS’s negotiations for those arrangements or its internal thinking about the price it desired or was willing to charge for current or historical VOD licences or its reasons for charging that price would not establish a comparable bargain. There is a considerable inconvenience to APRA AMCOS in disinterring material of this kind from its records. I do not think that the materials sought by Stan and Netflix are of sufficient relevance to the function to be performed by the Tribunal to justify the corresponding burden that would be imposed on APRA AMCOS, particularly given the way the categories are currently framed.

8    However, Stan argues that its SVOD service is different to the international SVOD services (such as Netflix) and is instead more comparable to Australian audio-visual services. It also notes that the commercial, national and subscription broadcasters are all licensed on different terms. It submits that the reasons for these differences are relevant to a consideration of how Stan should be licensed. I do not accept that this submission requires for its advancement an examination of the internal ruminations of APRA AMCOS. The question for the Tribunal will be the extent to which the VOD licences provide comparable bargains for a licence for Stan. Stan is capable of advancing its case about the differences between its offering and those of other Australian or international SVOD services by reference to the differences between its situation and that of those providers. The question will be what the Tribunal thinks of that argument. I do not think it would be useful for the Tribunal to be tilling the soil of what APRA AMCOS thought about these matters and, indeed, I suspect this may turn out to be wasteful at any hearing.

9    That said, I do not see any reason why the licences for the 72 identified VOD services entered into since 2010 should not be produced. APRA AMCOS knows enough about these licences to know that there are at least 72 of them and to the extent that it still has possession of them I would be willing to order their production. However, the summons seeks much more than this and is too broad. In formal terms, I reject categories 3(d), 3(e) and 10.

Associate:

Dated:    7 September 2023