Collecting Society Projects/Australia

Parties Involved

1. APRA-AMCOS - two separate non-profits that maintain joint operations, consisting of:

• The Australasian Performing Right Association (APRA) - the performing rights collecting society for Australia and New Zealand

• The Australasian Mechanical Copyright Owners Society (AMCOS) - the Australian and New Zealand collecting society for 'mechanical’ royalties eg the reproduction of musical works on CDs, DVDs, music videos etc

2. Creative Commons Australia - based at Queensland University of Technology and headed up by Professor Brian Fitzgerald.

Objectives

1. To provide a legal means for APRA members to use Creative Commons licences
2. To clarify and streamline the ability of APRA members to manage their own works
3. To ensure Australian musicians are able to take advantage full advantage of the benefits offered by the internet, without sacrificing revenue from traditional business models

How does it work

Currently, Australian and New Zealand musicians do not have the ability to legally license their works under a Creative Commons licence.

Problems with the Current System

APRA, like many collecting societies around the world, takes a full assignment of the member’s performance and communication rights (eg broadcasting or posting online) of all past, present and future works. Assigning the rights to the collecting society allows more efficient administration and enforcement of the royalty collection process. However, it also causes compatibility issues for collecting society members who wish to issue their music under direct licences, such as the Creative Commons licences.

In simple terms, because of the assignment, the creator no longer has the right to issue any direct licences for the performance or communication of their works. This means they can't legally issue their material under a Creative Commons licence without APRA's permission or, for that matter, upload it to services such as MySpace, YouTube, Last.fm and other social networking services. It also means that current APRA members are, as yet, technically not able to make use of most of the online business models enabled by these platforms. Often musicians are not even aware of these legal complications, and put themselves at risk by licensing their material in ways that are technically invalid.

Licence Back and Opt Out Mechanisms

APRA has historically had two mechanisms that allowed its members to regain control of their works — "Opt Out" and "Licence Back". However, limitations in the terms of these mechanisms meant that they were insufficient to enable musicians to (legally) use CC licences. The Opt Out mechanism allows an APRA member to permanently regain their rights over their work for a specific category of use (eg performing the work in public or radio broadcasting) - but does not apply to communications of the work, or allow licensing for purposes outside the specified category. Under the Licence Back, the member obtains permission from APRA to use their work for a specific work one-off purpose (such as playing it at a charity gig) - but can't license the material to others and needs a separate permission every time they intend to use the work.

Non-commercial Licence Back

To address this issue, in late 2008 APRA introduced a new "Noncommercial Licence Back" which allows APRA members to make their musical works available online for noncommercial purposes. This mechanism aims to increase the options for musicians to utilise digital technologies to promote and capitalise on their music. The musician can now host streamable and/or downloadable audio files of their musical works on their own website, or on third-party sites (where the reuse is noncommercial), or even grant their fans the right to host songs on their websites or personal blogs.

However, because it only applies to online communications (ie doesn't include other uses such as broadcasting or performance) and then only in certain circumstances, the new Noncommercial Licence Back option still has limited application. It doesn't allow Creative Commons licensing (which applies to communication, broadcast and performance) and won't allow musicians to upload their material to most popular Web 2.0 platforms.

Definition of (Non)Commercial

The scope of what is considered noncommercial under the APRA Noncommercial Licence Back is very limited, and is arguably out of step with the expectations of APRA members who choose to apply the mechanism. This definition was drafted independently by APRA, without consideration of feedback from Creative Commons.

Article 17(i), which defines noncommercial purposes in relation to Article 17(h), reads:

"In this Article, “Non-Commercial Purposes” means:

1. 1. that there is no consideration or financial incentive whether directly or indirectly received by any party for the communication or any subsequent use of the work under any sub-licence; and
   2. any sub-licensee is a not for profit entity whose activities are not directed towards commercial advantage and that does not receive public or institutional funding."

As one would expect, this definition bans direct sale of or payment of fees for use of music, as well as indirect payments, such as accruing revenue from advertisements. The provision also limits the licensing of the material exclusively to not-for-profit entities, and so does not permit the uploading of music to popular content aggregation and exhibition websites such as MySpace, YouTube, Last.fm. Again, such limitations are not unexpected - however, it does limit the utility of the provision, as it is though such sites that most members will be seeking to distribute and promote their music. Presumably APRA either has or intends to enter into separate agreements with such sites to permit member use of the site subject to the adequate payment of royalties - but without formal notification of these agreements, members are still left in a legal grey area.

However, APRA's language goes far beyond these expected limits, resulting in a definition of non-commercial which is far more restrictive than ordinary useage. The two areas of particular concern with the definition are:

• The unqualified use of the term "consideration" - this has the potential to import a significant amount of jurisprudence on the meaning of this term from Australian contract law. Under Australian law, consideration can be anything from the transfer of money to a mere peppercorn or even a promise - so any transaction in which the user promises to deal with the material only in a certain way (eg under a Creative Commons licence) would potentially be excluded. APRA's decision to include "financial" after the word "consideration", rather than before it (ie to read 'financial consideration or incentive') seems to indicate that they did intend for such non-financial exchanges to be prohibited.
• the requirement that the not-for-profit entity also must not receive "public or institutional funding" - this is presumably intended to capture government funding and funding from universities and other quasi-governmental bodies, ensuring organisations such as public broadcasters and government departments are excluded. However, it also excludes a number of organisations that would commonly be considered non-commercial, including all educational institutions (including primary and secondary schools), and potentially groups receiving funding from the larger charitable organisations, such as the Gates Foundation. As the majority of, if not all, non-profit organisations in Australia rely solely or partly on funding from a State or Territory government or the Commonwealth government (or indeed a number of each) it is difficult to imagine a single body that would fit within this strict test.

As a result, it seems likely that the APRA definition of non-commercial excludes all uses except those by private individuals (presuming they are considered "not for profit entities").

Experiences (so far)

Additional Information

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