Recorded Music NZ and Copyright Licencing NZ submission: Review of section 36 of the Commerce Act and other matters

Submission template: Review of section 36 of the

Commerce Act and other matters

Your details

Name Jo Oliver and Paula Browning

Email jo@recordedmusic.co.nz paula@copyright.co.nz

Organisation Recorded Music NZ and Copyright Licensing New Zealand

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my reasons and grounds under the Official Information Act 1982 that I believe apply, for consideration by

MBIE.

The Submitters

1. This is a joint submission on behalf of Recorded Music New Zealand Limited and Copyright

Licensing Limited (CLNZ). Both organisations are major collective management organisations

(CMOs) in New Zealand in respect of intellectual property rights in (respectively) sound

recordings and published books & journals.

2. Recorded Music New Zealand is a non-profit organisation which acts on behalf of sound

recording copyright owners and exclusive licensees (generally record companies, digital

aggregators and individual recording artists) to license and collect for certain uses of sound

recordings including in public performance.

3. At the time of writing Recorded Music represents approximately 2,125 individual “master

rights holders” (copyright owners or exclusive licensees of sound recordings), ranging from

the New Zealand branches of the three major record companies, to independent record

companies and distributors including DRM Limited and Flying Nun Records; smaller

independent companies which are owned by individual recording artists and bands, and

over 2,000 other independent master rights holders representing all genres and styles,

including current and legacy artists and located throughout New Zealand.

4. CLNZ provides licences to help make copying, scanning and sharing printed works easy and

legal. CLNZ is jointly owned by the Publishers Association of New Zealand (PANZ) and the

New Zealand Society of Authors (NZSA) and are members of the International Federation of

Reproduction Rights Organisations (IFRRO), which makes it part of a global network that

represents the interests of publishers and authors from around the world. CLNZ is a not-for-

profit organisation, and the net revenue generated from licences is distributed to the

creators of the materials copied by our licensees.

Responses to discussion paper questions

Our response is limited to the IPR section of the Discussion Paper. Collective Management

Organisations (CMOs) and their function within the copyright system do not appear to have been

considered in the preparation of the Discussion Paper and we make this submission to outline the

functions of Recorded Music New Zealand and Copyright Licensing New Zealand as CMOs operating

in New Zealand, that can be referenced during the next stages of MBIE’s review of section 36 of the

Commerce Act. We also draw attention to any inter-play between this review and MBIE’s Review of

the Copyright Act for which an Issues Paper has been published.

1. The importance of CMOs to a well-functioning copyright system has been recognised around

the world. In January 2018 WIPO stated that:

“CMOs provide appropriate mechanisms for the exercise of copyright and

related rights, in cases where the individual exercise by the rightholder

would be impossible or impractical. Collective management is an important

part of a functioning copyright and related right system, complementing

individual licensing of rights, resting on robust substantive rights and

corresponding enforcement measures. In this vein, CMOs are a policy

bridge between rightholders and users.”

2. The practical efficiencies of CMOs have been recognised and CMOs have been described as

being “the most realistic way for copyright owners to exercise many of their rights”:

“collecting societies are practically, economically, and legally both viable

and essential: practically, because copyright owners cannot be in an

indefinite number of places at the same time exercising individual rights,

and foreign right owners would be unable to exercise their rights outside

their country of origin without extreme expense and difficulty;

economically, because it is cheaper to share the financial expenses of

negotiation, supervision and collection among the greatest possible number

of right owners; and, legally, because it is impossible for users of works to

obtain permission from every individual copyright owner, both national and

foreign.”

3. CMOs provide a particular benefit for smaller right holders who lack the bargaining power to

negotiate a licence with large users of music. This has been recognised by the European

Parliament:

“Collective management organizations play … an important role as

promoters of the diversity of cultural expression, both by enabling the

smallest and less popular repertories to access the market and by providing

social, cultural and educational services for the benefit of their rightholders

in public.”

4. In addition to collecting royalties on behalf of their members, CMOs act as advocacy bodies

and industry representatives and undertake a variety of industry related and charitable

activities.

5. Finally, music CMOs play an important role in educating members and users about copyright.

As well as assisting members who may not know about copyright and how to claim their

royalties, music CMOs regularly provide information (but not legal advice) on copyright to

music users and assist in connecting users with services that suit their needs. This information

World Intellectual Property Organization, ‘Working Document – WIPO Good Practice Toolkit for CMOs’, January 2018, p6

<https://www.wipo.int/edocs/mdocs/copyright/en/wipo_ccm_ge_18/wipo_ccm_ge_18_toolkit.pdf>.

Gillian Davies et al, Copinger and Skone James on Copyright (17

ed, Sweet & Maxwell Ltd, London: 2016) at 27-02, 27-07.

Recital 3, Directive 2014/26/EU on collective rights management and multi-territorial licensing of rights in musical works

for online uses (EU Directive 2014/26/EU).