Kim Williams

Former Foxtel chief executive Kim Williams claims that the Productivity Commission’s report on copyright could spell the death of Australia’s film, music, book and television industries. But there is little to no evidence that is the case.

As Productivity Commission commissioner Karen Chester told Crikey in April, the PC believes that Australia’s copyright system, over time, has swung too far in favour of “some vocal rights holders and some influential exporting IP nations, and it has lost sight of the users”.

The Productivity Commission’s draft report, released in April, is an attempt to swing the pendulum back.

This is “patent nonsense”, according to Williams, who now heads up the Australian Copyright Agency. He says there is no evidence copyrighted works are more expensive in Australia than elsewhere — although Choice does have evidence Australians paid about 50% more for digital content than elsewhere in the world when the dollar was closer to parity.

In a speech to the Melbourne Press Club on Wednesday, Williams said the Productivity Commission’s draft report was “ill-considered”, “poorly argued”, “unusually slanted” and “lopsided”.

Copyright holders such as those Williams’ organisation represents have many issues with the report’s suggestions to improve copyright in Australia, chief among them the proposal to introduce a fair use rule into the Copyright Act.

The Productivity Commission is one of many government agencies to recommend the government adopt a new fair-use standard, similar to that in the US, to make use of copyright works for adaptation, online services, news reporting and in schools much easier.

Williams has been critical of the proposal, relying on a PricewaterhouseCoopers report commissioned by the Copyright Agency that found fair use could cost Australia’s GDP more than $1 billion.

But the Productivity Commission examined the claims made by PwC in its draft report and thoroughly debunked many of them. The $1 billion GDP impact is based on a cost-benefit analysis that the PC said was “methodologically flawed”:

“It concentrated on potential impacts on publishing, ignoring the fact that fair use would apply to all of the copyright industries. The cost benefit analysis also implicitly assumes a closed economy model where transfers represent a redistribution of welfare between consumers and producers without a change in overall welfare.”

Williams also claimed that the introduction of fair use in Canada led to a 98% reduction in licensing fees to schools and universities. The PC said in its draft report that there is debate over the extent to which all declines in the Canadian publishing sector can be blamed on changes to the copyright act, including the shift to digital textbooks, the sales of second-hand textbooks, and the use of open education resources.

The Productivity Commission also said that there are significant differences between the Canadian and Australian markets, including the fact that Canada is adjacent to the world’s largest English-speaking publishing market that could supply goods easily to Canada. The PC has said that where fair use has been introduced, such as the US and Israel, innovation has flourished.

In response to Williams’ assertions, in a series of tweets this morning, intellectual property academic Rebecca Giblin listed several examples where a lack of fair use in Australia was restricting what educational institutions could do. For example, a lecturer who wants to use a clip from Breaking Bad in a lecture currently has to seek permission from the studio. If fair use were in place, with an exception for educational uses, permission would not be required.

Williams also takes issue with the PC’s position that the ideal copyright term is between 15 and 25 years after the creation of the work. Australia has signed up to international treaties (with the US) that have forced our copyright term for works to be extended to 70 years after the death of the author. For example, it will be 2086 before Starman enters the public domain.

Williams said a copyright term of between 15 and 25 years would be akin to confiscating superannuation from people when they turn 50:

“Most would call that a form of theft, wouldn’t they? Not only is it unfair but it makes it much harder to support and nurture the next generation of stars and Aussie icons — the Jimmy Barneses, Peter Sculthorpes, Patrick Whites and Mad Maxes of the future.”

Williams instead advocated for a “progressive, sensible, and responsible evolution” to copyright changes, driven on principles of doing no harm and respecting creators. If the government adopts the PC’s draft recommendations, Williams predicts a backlash.

“You don’t have to be a genius to see that right now economic reform and innovation are in serious trouble. There’s a backlash. Whether it’s the Brexit, or the rise of populists like Donald Trump and Marine Le Pen, or even the result of our own recent federal election, too many people are saying that innovation and economic change are creating too many losers and too few winners.

“Undermining copyright will perhaps prove such critics correct. By stopping so many self-employed creative people from gaining adequately from their work, it will create a potential new source of backlash.”

Williams estimates that the average writer makes just $13,000 a year from his or her writing, and that loosening copyright restrictions will make it even tougher for writers.

But how much the Copyright Agency actually pays Australian writers remains unclear, as it does not disclose how much it pays directly to Australian authors. The Copyright Advisory Group to COAG said in its response to the draft report that the $700 million per year paid by schools on direct purchase would not be greatly affected by fair use, and that the licensing scheme the Copyright Agency oversees actually tends to benefit overseas authors more than Australian authors.

The commission’s final report will be handed to the government in September.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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