Secondary Royalty Entitlements

Maha Ismail
Nov 12, 2020 · 5 min read

A Guide for Rightsholders in Screen Content

A strong grasp of how royalties work in the film and television industry, here in Australia and around the world, is a core requirement for industry practitioners and creatives.

Many practitioners have had their income impacted by COVID-19 shutdowns. In this sense, it’s perhaps more important than ever to understand and maximise all the revenue streams you are entitled to as a creative. By increasing your knowledge around secondary royalties, industry practitioners including producers, writers, directors and musicians may discover you are entitled to payment for secondary uses of film and television programs.

SECONDARY ROYALTIES: AUSTRALIA AND NEW ZEALAND

What are Secondary Royalties?

Secondary royalties, also known as collection society royalties, are monies payable for so-called secondary ‘use’ of a film or television program. A very simple example of secondary use is a school copying a program with the purpose of screening it to students in the classroom.

The Copyright Act provides that certain uses of programs, such as educational copying, are socially important — and therefore those uses can occur without permission from the copyright owners. In return, the copyright owners receive compensation through a collecting society for these secondary uses.

The Australian Government has appointed Screenrights as the collecting society to administer these provisions of the Copyright Act in Australia. Screenrights also administers similar provisions in New Zealand.

The difference between ‘primary’ and ‘secondary’ use of a program

Primary uses of a program are the mainstay sources of income that rights holders receive, such as from a broadcast or box office.

Secondary use of a program typically describes a use that occurs after there has first been a primary use, such as following a broadcast.

Following a primary use, secondary use of a program may occur in Australia in the following ways:

  • by the copying or communication of a broadcast by an educational institution such as a school or uni;
  • by the copying of a broadcast or AV transmitted over the internet by a government department;
  • by the retransmission of a free-to-air broadcast program.

Below is a brief overview of activity that is considered to be copying, retransmission or communication of a program.

Copying and communication of a broadcast

Under the Copyright Act, educational institutions have the right to copy and communicate a copy of a program from a free-to-air or pay TV broadcast in Australia, on the basis that the copy of the program will be used for educational purposes only.

This was once via VHS or DVD, but today resource centres (kind of like Netflix for teachers) collect and curate copies of the broadcast programs for educational institutions to subscribe to and access. The copying is the capture of the broadcast, and the communication is making it available on the resource centre, i.e. the educational VOD service.

Share of copies made for different types of content at Australian Educational Institutions, FY2019–20

Screenrights grants educational institutions a licence to copy and communicate broadcast material in exchange for a licence fee, which is based on the number of students. The licence fees collected (by Screenrights) are then pooled and distributed (according to a number of variables) as a royalty to the owners of the copyright.

Government departments also have a similar right to make a copy of a broadcast ‘for the purposes of the Commonwealth, State or Territory.’

What is Retransmission?

In Australia, some communication platforms, such as pay television operators like Foxtel, may simultaneously carry the free-to-air channels as part of their day-to-day services. For example, if a program is broadcast on the ABC, audiences can also access that program on the ABC using the Foxtel platform. Foxtel enjoys a commercial benefit from this retransmission, and the copyright owners of the program are entitled to compensation for this secondary use — so Foxtel pays Screenrights a fee, which is then distributed to the owners of the copyright as a secondary royalty.

SECONDARY ROYALTIES ACROSS THE GLOBE

Secondary royalties are also generated for a range of uses across the globe, varying in accordance with local regulations. Sources of secondary royalties outside Australia include retransmission, private copying, public lending, public performance, and educational copying. Each country’s regulations determine the ‘type’ of use that will trigger secondary royalties as well as timing and amounts of payment.

Retransmission: secondary royalties are available for transmission of programs in various territories around the world.

Private Copying: otherwise referred to as a ‘blank tape levy’, royalties are payable in some territories for recording of programs on ‘blank’ media (such as video / DVD / USB or other recording devices).

Educational Copying: outside of Australia and New Zealand, territories such as the UK, Finland and Norway also provide for royalties for educational copying.

Digital Copying: a ‘new’ class of royalty has emerged in Denmark, Luxembourg, Ireland, Norway and Finland and is being considered in other European countries to cover use of programs across new digital platforms, where content may be accessed simultaneously to or after a primary broadcast (i.e. catch up). This is a space to watch, with the European collecting society AGICOA reviewing their mandate to include new ways consumers or viewers access programs (such as catch up; TV from tablets, smart phones, PCs; set top box/streaming; network PVRs or personal video recorders).

Public Lending and Rental: Public Lending Royalties (to compensate for loss of income as a result of lending in public libraries) are available in some countries, with the cost of the physical copy of the program (e.g. the DVD) being higher if it is purchased for the purpose of renting, as the price includes a royalty component.

Public Performance: In some countries secondary royalties are collected for screenings of programs in ‘public’ places such as bars, clubs, restaurants, fitness and recreation centres, shops, hospitals, prisons and hotels — where a program is made available to a broader audience than a private home.

A FEW FINAL THOUGHTS

How simple or complex receiving royalty entitlements will be depends on your contract. Clear and precise language and identification of ownership outlined in the service contract will ensure royalty payments flow quickly and easily to the correct owner of the copyright work. Everyone has a right to fair payment for the work they do — but the devil is the contractual detail — so it’s important you know your rights before inking the deal.

Navigating the collection of secondary royalties from across the world can be complex and time-consuming. Not all countries have legislation defining all types of royalties, nor systems to fully implement existing legislations to pay remuneration to the rights holders. In many cases it makes sense to appoint someone to do this for you as your agent. In Australia, AWGACS can collect these royalties for writers, and ASDACS can collect for directors – with similar agencies operating in territories around the world. Screenrights also offers a worldwide royalty collection service to production companies, distributors and broadcasters.

If you’re unsure of your rights or whether you’re registered, get in touch with Screenrights.

This article originally appeared in the June/July 2020 edition of IF Magazine.

Screenrights

Rights and royalty management services for the screen industry

Screenrights

Screenrights is a non-profit membership organisation that facilitates access to screen content by licensing teachers in education, administrators in government, and subscription TV providers — and providing royalty payments to members for the programs audiences love.

Maha Ismail

Written by

Maha is a screen industry executive who is passionate about helping people and communities to thrive. She is the Head of Member Services at Screenrights.

Screenrights

Screenrights is a non-profit membership organisation that facilitates access to screen content by licensing teachers in education, administrators in government, and subscription TV providers — and providing royalty payments to members for the programs audiences love.