What are its main benefits?
An important source of income for creators
Private copying remuneration is a very important source of income for creators. It represents on average 5% of authors’ revenues, with significant differences from one country to the other. In France for example, 179 million Euros in private copying levies for all rightholders were collected by Copie France in 2012. 47.3% of this amount was distributed to authors across all repertoires. SACD and Scam, two French audiovisual authors’ collective management organisations respectively collected 8.8 and 5.16 million Euros for their authors.
In a very uncertain environment for audiovisual authors, it is a reliable source of remuneration which is often invaluable during unpaid time spent developing projects.
Private copying remuneration operates in the virtuous economy of copyright which generates income distributed directly to authors. This remuneration helps authors achieve financial independence, stimulating their creativity and artistic freedom whilst allowing them to focus entirely on their art.
- In 2010, private copying generated 648 million Euros in Europe, distributed among authors, performers and producers of musical and audiovisual works. WIPO and Thuiskopie publish annually an international study on private copying which details the products liable, the tariffs and the amounts collected country by country. (Link)
Collective management of the fair compensation
Private copying remuneration is a guaranteed remuneration for audiovisual authors because it comes directly from the collective management organisations (CMOs) and does not go through the contractual chain of rights which, in the audiovisual sector, can involve many intermediaries (producers, co-producers, international sellers, local distributors, broadcasters, DVD publishers, VOD services, etc.) which represent blocking points in the ascent of the remuneration to authors.
In most countries, the audiovisual private copying remuneration is distributed to authors, performers and producers of audiovisual works according to fixed shares (sometimes stipulated in the law), which guarantees that audiovisual authors receive a fair share (no less than 30% of the collections).
- The CJEU ruling in the Luksan-case (C-277/10) clarified that the EU 2001/29 Copyright Directive could not be interpreted as allowing Member States to provide for a presumption of transfer to the producer of the right to fair compensation for private copies vested in the author (the film director in this case).
- Collective management allows authors to negotiate in the best possible conditions their remuneration and guarantees that this remuneration benefits them and not other categories.
Funding for cultural and social activities
Audiovisual authors are also attached to the possibility of allocating part of the private copying remuneration collected for social and/or cultural purposes. Said possibility exists in most Member States where the exception has been implemented and some of them have even made it compulsory. 17 SAA members out of 25 apply cultural and social deductions which range from 2% to 50% of the private copying remuneration collected. Where it is not imposed by law, it is the decision of the creators’ community of the CMO.
- These funds contribute to the financing of social and/or cultural activities and circulation and breakthrough of authors and works. Out of 192 million Euros collected in France in 2011 in respect of private copying, 48 million were used for cultural actions, which represent support for 5.000 cultural events and initiatives. At a time when countries are cutting their public expenditure dedicated to supporting the cultural sector, these funds are essential for cultural activities to continue.
- The CJEU confirmed in the recent Austro-Mechana ruling (C-521/11) on 11 July 2013, in a case regarding the Austrian law which stipulates that 50% of the private copying levies collected must be used for social and cultural purposes, that distribution of part of the private copying remuneration to social and cultural institutions to the benefit of rightholders is compatible with EU law.
- The CJEU noted "that such a system of indirect compensation meets one of the objectives of the appropriate legal protection of intellectual property (…) which is to ensure that European cultural creativity and production receive the necessary resources to continue their creative and artistic work and to safeguard the independence and dignity of artistic creators and performers" (para 52).
No impact on the cost of devices
Even though the ones who are liable to pay the fair compensation, i.e. the manufacturers and importers of recording media and devices, can pass the burden of financing it on to private users, it is noticeable that prices of such products across Europe do not vary in proportion to the levy rates.
In Spain, the removal of private copying levies in 2012 has had no effect on the prices of the devices and media and allowed manufacturers and retailers to increase their profit margin. Consumers did not at all benefit from removal of the private copying levies. The cherry on the cake is the fact that the Spanish government is now thinking of reducing the scope of the exception for private copying in order to justify the very little amount of the fair compensation it put in place from 2012: 5 million Euros (in contrast to the 115 million collected in 2011) out of the State budget.
- SAA and other Spanish and European right holders' organisations lodged a complaint to the European Commission against Spain for breach of the 2001/29 Copyright Directive.
- The level of private copying levies must not compromise the commercial development of a product. However, European rightholders refuse a direct link between levies and the selling price of products, which would be set as a cap for these levies (e.g. a maximum of 20% of the sale price). This would conflict with the principle of fair compensation calculated on the basis of the amount of private copies actually carried out via these products.
- The prices of devices seem to be more linked to commercial strategies and exchange rate policies of manufacturers and importers than to the level of the levies. A comparison of the prices of devices in the UK, where there are no private copying levies, and France proves it.