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Speech to the Australian Digital Alliance: Copyright in 2020
It is a pleasure to speak at this important conference about copyright in Australia.
Today I want to discuss the Morrison Government’s policy agenda in this area, and put it into a broader context.
I want to argue firstly that the last thirty years have seen an extraordinary transformation from an analogue to a digital world – and copyright matters more than ever in a digital world. Next I want to touch on some of the challenges that this transformation presents for copyright law and policy. Thirdly, then, I want to explain how our Government’s policy agenda on copyright seeks to respond to these challenges.
Why Copyright Matters More than Ever
Let me start, then, with the proposition that copyright matters more than ever in a digital age. Of course, the concept first emerged in a very different world. Copyright was devised as a means to protect the economic interests of authors and publishers following the advent of the printing press in the fifteenth century.
This technological innovation – absolutely momentous in its day – made books cheap to produce, widely accessible and easily affordable. The 1710 Statute of Anne vested copyright in the author of a book and broke the monopoly control of the stationers over the printing of books and book trade.
But as technology continued to develop, copyright needed to evolve. The twentieth century brought a revolution in mass entertainment – with movies, radio and then television.
It also brought new ways to record, store, copy and communicate content – from tape recorders and photocopiers through to the widespread use of computers and the emergence of portable devices connected through the internet. Leading cases such as Moorhouse responded to ways of using new technology – such as photocopiers.
I think there are several reasons why we can say that copyright matters more than ever in the digital age.
The first is the global growth of demand for literary, artistic, musical and creative content – linked to increased levels of education, literacy and income around the world. Global literacy rates have risen from around 67 percent of the world population in 1980 to around 86 percent in 2018.
Combined with rising incomes and a growing global population, this means many more people can read, use a digital device, and afford to buy books, music and movie tickets and, more recently, subscriptions to online services. In turn, this boosts the scale of economic activity based on content – that is, the kinds of intangible rights which are protected by the copyright framework.
Partly in response to these demand factors, and partly for other reasons, we have seen a big growth in the cultural and creative sector in our economy. In Australia it was worth over 6.4% of GDP in 2016-17 – which equates to more than $111 billion. Consider the scale of some of the sub-components of this sector: in 2020 cinema is expected to have a value of $1.4 billion; broadcast TV and home video $3.5 billion; books $2.3 billion; and music, radio and podcasts $3.2 billion.
These are substantial segments of our economy – with extensive employment and investment – and they depend on a robust copyright regime where investors can be confident of getting a return. So for this second reason, the Copyright Act 1968, now over 50 years old, is a critically important piece of economic policy architecture, underpinning investment and jobs in our creative and cultural sectors.
A third reason why copyright matters more than ever is the extraordinary internet-driven transformation of every sector of our economy. This has driven profound changes in the way we create and consume copyright material, not least because it means there is near ubiquitous access to content from around the world. Consider some of the indicators of this transformation:
- In 2016-17 86 per cent of Australian households had broadband internet access – up from 56% in 2004-5.
- The average household has more than six internet connected devices.
- Video on demand, practically non-existent just a decade ago, will have an estimated worth of $1.8 billion in 2020.
- In 2015, less than two per cent of Australians had subscription video on demand (SVOD) services; around 57 per cent use these services today, and this number is growing strongly.
- 46 per cent of Australian adults had used a music streaming service such as Spotify or Apple Music in the last seven days, an increase from 37 per cent in 2017. 
- Ubiquitous internet infrastructure is providing growth opportunities for sectors like online education. There are more than one thousand online education providers in Australia - generating an estimated $3.3 billion in revenue.
When people can purchase content easily and legally, online, the evidence shows that the amount of content purchased grows. The music industry is a good example. This industry saw huge digital disruption – and initially a great deal of copyright theft, as people flocked to download music through peer to peer and torrent pirate websites. But, more recently, lawful music streaming services have surged in popularity and the industry has identified a price point which has had the effect of discouraging piracy.
In Australia, total music industry revenue will be an estimated $1.7 billion in 2020 – with 39.6% of that revenue generated by music subscription services such as Spotify, Apple and Google. As industry peak body ARIA pointed out, commenting on 2018 sales figures, it was the fourth year in a row that the Australian recorded music business had seen revenue growth.
As the music industry has consolidated this new business model – which provides lawful remuneration for the holder of the copyright in music – it has created opportunities for new artists to distribute their music and be discovered. The income of Australian artists who distribute their music online is nearly double that of those who do not.
Copyright Policy Challenges in the Digital Age
Having spoken about the magnitude of change, I want to turn now to touch on a couple of issues this presents as we set copyright policy in Australia.
The first issue to mention is the impact of globalisation - and particularly the fact that a huge amount of the content consumed by Australians is generated by huge global digital platforms. According to the ACCC’s recent Digital Platforms Inquiry, every month 19.2 million Australians use Google Search, 17.3 million access Facebook, 17.6 million watch YouTube and 11.2 million access Instagram.
This presents very real and practical challenges. How do Australian rights holders enforce infringements of their rights when, overwhelmingly, they need to deal with these giant global digital platforms to do so? Of course we have built on our successful website blocking laws to provide incentives for search engines like Google to work hand in hand with copyright owners to prevent access to infringing websites.
It also brings into much sharper focus differences in key legal principles such as fair use compared to fair dealing. It is understandable that global businesses would prefer to operate under consistent laws all around the world. But at the same time the Australian Government will always insist on the right to make laws in relation to copyright - as in every other area - which in our judgement best advance the interest of the Australian people.
Governments everywhere have a strong interest in copyright settings which protect and incentivise innovation and investment - but of course governments also want to encourage the dissemination of ideas and information to spur further innovation. The balance which is struck will tend to vary from country to country, influenced by such factors as whether the country is a net importer or exporter of content.
Balancing threats and opportunities
A second important consideration for policy makers is to balance the threats, and the opportunities, that new technology brings. Digital technology allows content to be quickly and cheaply generated, accessed, copied and distributed.
This brings significant economic and social opportunities. It has enabled new business models, with products and services being provided in more affordable and flexible ways. It has given our creative and cultural sector an efficient, low cost way to distribute and promote their works.
Platforms like YouTube, Spotify and TikTok allow emerging artists to take their work to consumers around the world. For example, DJ ‘Flume’ (AKA Harley Streten) is a Grammy and ARIA award winning artist born in Sydney.
In 2006, at the age of fifteen, when he was still a student at Mosman High, this “digital native” was making music in his bedroom and sharing it on MySpace. The internet has made it possible for artists like Flume to connect to their audiences and his success highlights how technology up-ended the traditional record industry business model.
For consumers in Australia, it means you can now access an enormous amount of content online, such as music, movies, and books. The benefit for those in regional and remote Australia particularly is profound.
Digital access is hugely important for libraries, museums, galleries and archives because they play a vital role in enhancing access to information. The National Library’s Trove, for example, is a wonderful resource - a digitised library of newspapers and other content available to anyone connected to the internet.
As part of the 2019-20 Budget, the Australian Government announced funding of $10 million over four years for the National Library’s new digitisation program, which is known as ‘Treasured Voices’. This will provide seed funding for the continued digitisation of the Library’s $1.5 billion collection and make it available online.
The National eDeposit (NED) scheme, launched in 2019, will collect, preserve and provide nationwide access to the digital documentary heritage of Australia. It offers an efficient electronic means to deposit publications; it has been built to benefit publishers, libraries and users of content in Australia and globally.
For all these reasons, our Government has delivered a range of reforms to support access to copyright materials online for socially useful purposes.
But of course the same digital technology that allows all of this also allows for copyright infringement with a speed and efficiency we have never before seen. Digital devices are the modern-day version of the printing press, albeit one that fits in your pocket.
So the great policy challenge with copyright is striking the right balance between these competing considerations. And very often an individual policy measure which is proposed will on the one hand restrict infringing uses of copyright - but on the other hand constrain potential innovative uses of content which creates new economic opportunities.
Now these competing considerations apply to policy makers in every country - but in a country like Australia with a small population, where we are net importers of content, we do also need to think about the right copyright settings to encourage content generation in Australia.
Our Policy Agenda in Copyright
Let me turn then to the Morrison Government’s policy agenda in copyright - which is a key plank in our work to support Australia’s creative and cultural sectors.
Over the last few years, we have made a number of significant changes to copyright law to enhance access to copyright materials. In 2017, reforms to the Copyright Act gave the disability, education, and library and archives sectors greater flexibility in dealing with digital content.
These provisions have removed barriers to using new technologies to gain access to more accessible content – for example, by being able to get a copy of a book in a format that can be read by a screen reading program.
We provided our education sector with a simpler licensing model. This gives educational institutions and copyright collecting societies more flexibility in developing agreements for use of copyright material in the digital environment.
Libraries, archives and key cultural institutions can now deal more effectively with items of historical and cultural significance to Australia that are in their collections.
Our cultural institutions can now make digital preservation copies of copyright material in a version or format that is in line with current best practice and ensure that it is available for future generations.
Importantly by setting a term of protection for unpublished materials, this has freed up large collections of historic and culturally valuable materials held in our cultural institutions for digitisation and communication.
Building on these reforms, further amendments to the Copyright Act in 2018 extended the copyright safe harbour scheme to the education, cultural and disability sectors. These sectors can now confidently provide essential online services to their students and patrons, rather than worrying unnecessarily about the risk of legal action for copyright infringement by users of their systems. The scheme, which incorporates a notice and take-down mechanism, also benefits copyright owners by giving them a quicker and less costly avenue for the removal of online infringing material than going through the courts.
But there remain a series of further issues which the Government continues to examine. These emerge from the 2016 Inquiry conducted by the Productivity Commission into Australia’s intellectual property system, and include flexible exceptions, contracting out of exceptions and access to orphan works.
My Department has undertaken a significant amount of work on these issues and consulted extensively with stakeholders.
Of course, stakeholders hold quite polarised views. Some argue for a more flexible approach, including a US style fair use approach. However I am concerned that such an approach would bring greater ambiguity or uncertainty, impose additional time and cost burdens on both users and copyright owners and lead to either increased litigation or, alternatively, risk averse behaviour by users - with the result that content is not used.
In my view, there is a better case for more specific and targeted reforms. My Department has provided me with advice, which I am considering, and I hope to be able to say more in coming months.
Some of these issues were canvassed in last year’s ACCC Digital Platforms Inquiry. It examined the effect that digital search engines, social media platforms and other digital content aggregation platforms are having on competition in media and advertising services markets.
I think the Inquiry usefully highlighted that, firstly, copyright owners require certainty in the enforcement of their rights online; and, secondly, there is a risk that broad, flexible exceptions could discourage Australian creators from generating premium content in an environment where creative content can be exploited by digital platforms for commercial gain.
Our Government remains strongly committed to further work with stakeholders on practical options to reduce the availability of infringing material on digital platforms. However we did not accept the ACCC’s proposal to develop a mandatory takedown code managed by the ACMA to achieve this goal.
In reaching that view, we were influenced by the concerns of both major copyright owners and users, and the potential unintended effects of a code across a diverse copyright market.
We also remain committed to reviewing copyright enforcement reforms. I expect this review will occur in late 2020, at the same time as reviewing the 2018 website-blocking scheme reforms.
Of course I should also highlight the work underway at the moment, being led by the ACCC, to agree a Code between the major digital platforms and Australian media businesses concerning the terms on which the platforms use content generated by those media businesses. This goes to the issue of how these media businesses can be fairly remunerated for the cost of producing this content. While the policy tool here is not copyright law, this stream of work certainly seeks to address one of the major underlying issues which is of concern to significant Australian rights holders.
Let me touch on our agenda to support content industries in today’s digital world. Copyright is key to the income of Australian artists, musicians and the screen production sector amongst many others. Hence we are looking at copyright enforcement as well as how to strengthen copyright access.
Part of this of course is the importance of measures to discourage copyright infringement and maintain the protections and incentives that copyright owners rely on. The Government’s approach has been that enforcement measures, such as website blocking, should be pursued in parallel with work to create better ways to access affordable content.
Annual surveys commissioned by my Department indicate that online copyright infringement in Australia is declining. We think this reflects the rise of lawful means for people to access digital content at attractive price points - as an alternative to going to pirate sites. The rise of subscription video on demand (SVOD) is one good example of this. SVOD was virtually non‑existent five years ago, but in 2020 it is expected to generate revenue of over $1.5 billion domestically (according to PwC).
But our work on website blocking has clearly also been important. We introduced legislation in 2015, and further strengthened it in 2018, making it easier for copyright owners to seek court injunctions disabling access to overseas online locations as well as the removal of infringing sites from search results.
This gives copyright owners a way to get materials removed quickly, minimizing the impact on the livelihoods of creators. Under this scheme, over a thousand websites that infringe copyright have been blocked so far.
That being said, it must be acknowledged that copyright piracy remains a significant issue – and enforcement settings need regular review to help combat this issue.
Let me conclude then with the observation that we have a continuing policy agenda in this space - reflecting the extraordinary rate of change in the content sector, very much associated with digitisation and the internet.
There are strongly opposed views on many of these issues – in large measure due to the different economic interests and perspectives of different groups of stakeholders.
I expect to have more to say in coming months about our next tranche of copyright reform measures – which, as I have indicated, will be reasonably targeted and defined.
Thank you to all in the sector for your engagement to date - and I expect there will be plenty more in the months and years to come.
 University of NSW v Moorhouse  HCA 26; (1975) 133 CLR 1
 PWC (2018) Global Entertain & Media Outlook 2019 - 2023
 PWC (2018) Global Entertain & Media Outlook 2019 - 2023
 PWC (2018) Global Entertain & Media Outlook 2019 - 2023