A Q&A guide to media law in Australia.
The country-specific Q&A looks at the following sectors:
In each section, the Q&A guide considers a number of issues, such as a sector overview (including major companies, recent trends, and main trade bodies/associations, regulation and classification, legal protection and contractual structures, and areas of litigation).
To compare answers across multiple jurisdictions, visit the Media Country Q&A tool.
This Q&A guide is part of the PLC and DLA Piper multi-jurisdictional guide to media law. For a full list of jurisdictional Q&As visit www.practicallaw.com/media-mjg.
For a full list of recommended law firms and lawyers over a range of jurisdictions and subjects, please visit PLC Which lawyer?
Major companies.
Recent trends.
Main trade bodies/associations.
The Australian film industry is characterised by a large number of small independent production companies.
Although there is a high concentration of small independent companies in the film industry, there are also a number of large production and post-production companies and distributors. These include:
Village Roadshow.
Omnilab Media.
Kennedy Miller Productions.
Animal Logic.
Rising Sun Pictures.
Hoyts Distribution.
Beyond International.
Major Hollywood studios have also been active in the market. Large scale studio facilities are available at:
Fox Studios Australia in Sydney, New South Wales.
Docklands Studios in Melbourne, Victoria.
Village Roadshow Studios on the Gold Coast, Queensland.
In the financial year 2009/2010, total production expenditure in Australia was A$731 million (as at 1 July 2011, US$1 was about A$1.07), which was higher than the historical annual average of A$547 million.
More recently, a strong Australian dollar has resulted in fewer large scale films being filmed in Australia.
Through the Australian Screen Production Incentive in 2007 (see Questions 2 and 9), the Australian government has introduced a policy of building a sustainable production industry with a greater emphasis on commercial viability.
Screen Australia is the leading screen agency in Australia. It provides funding to independent producers for the development and production of Australian screen productions. It also provides limited assistance to producers for the marketing and distribution of their productions.
Other trade bodies and associations in Australia include:
Ausfilm.
Screen Producers Association of Australia (SPAA).
Independent Producers Initiative Inc.
Screenrights.
The Australian Film Institute.
National Association of Cinema Operators - Australasia.
Australian Directors Guild (ADG).
Australian Writers Guild (AWG).
Media Entertainment and Arts Alliance (MEAA).
The Australian Screen Production Incentive provides tax incentives for film-making in Australia. The incentive is available in three streams:
Producer offset. A 40% rebate on the qualifying Australian production expenditure (QAPE) incurred on a feature film and a 20% rebate on the QAPE incurred on a film that is not a feature film.
The producer offset is administered by Screen Australia. For a film to be eligible for the producer offset, it must be in an eligible format, have significant Australian content and meet other required eligibility criteria.
Location offset. For productions commencing after 1 July 2011, a 16.5% rebate on the QAPE incurred on a film. To be eligible for the location offset:
film productions must have a minimum level of QAPE of A$15 million;
if the film is a TV series, the QAPE must also average at least A$1 million per hour of the series.
The location offset is administered by the Department of the Prime Minister and Cabinet, Office for the Arts.
Post, digital and visual effects (PDV) offset. For productions commencing after 1 July 2011, there will be a 30% rebate on the QAPE incurred on PDV production. The PDV offset provides a 30% rebate on all qualifying PDV expenditure for an eligible film or TV programme, regardless of where the production is filmed. The PDV offset is administered by the Department of the Prime Minister and Cabinet, Office for the Arts.
Screen Australia and the state screen agencies also provide direct funding for film development and production. Some Australian states also provide incentives in the form of payroll tax rebates.
The main legislation regulating the film industry in your jurisdiction.
Film co-production treaties between your jurisdiction and other jurisdictions.
National regulatory authorities.
The main legislation regulating the film industry in Australia is the:
Copyright Act 1968 (Cth) (Copyright Act).
Screen Australia Act 2008 (Cth).
Division 376 of the Income Tax Assessment Act 1997 (Cth) (Income Tax Assessment Act).
Classification (Publications, Films and Computer Games) Act 1995 (Cth) (Classification Act).
Australia has entered into film (and TV) co-production treaties with:
Canada.
China.
Germany.
Ireland.
Israel.
Italy.
Singapore.
The UK.
In addition, Australia is a signatory to a Memorandum of Understanding with:
France.
New Zealand.
A co-production treaty between Australia and South Africa was signed on 18 June 2010 but is yet to come into force.
Australia is currently negotiating co-production treaties with India, Denmark, Malaysia and South Korea, and is renegotiating the treaty with the UK.
The following are the national regulatory authorities:
Screen Australia (see Question 1, Main trade bodies/associations).
Department of the Prime Minister and Cabinet, Office for the Arts.
Australian Communications and Media Authority (ACMA).
The Attorney-General's Department, Classification Board and the Classification Review Board.
National Film and Sound Archive Australia.
The following are the state and territory regulatory authorities:
Screen NSW.
Screen Queensland.
Film Victoria.
South Australian Film Corporation.
ScreenWest.
Screen Tasmania.
Northern Territory Film Office.
Screen ACT.
Australia has a national classification scheme which is based on:
The Classification Act.
A co-operative agreement between Commonwealth, State and Territory governments.
The National Classification Code (NCC).
The Classification Guidelines (Guidelines).
Under the scheme, the Commonwealth makes the classification decisions, and the states and territory governments enforce them.
The Classification Act requires films and computer games to be classified, using the NCC and the Guidelines, before they are released or advertised. The Classification Board is the independent statutory body responsible for making classification decisions about film classifications, computer games and publications.
The Classification Act sets out the following classification categories:
G (General). Films that are suitable for a general audience. The content is very mild in impact.
PG (Parental guidance). Films that can be viewed with parental guidance. The content is mild in impact.
M (Mature). Films that are recommended for mature audiences. The content is moderate in impact.
MA 15+ (Mature accompanied). Films that are not suitable for persons under 15 years old. Any persons under 15 must be accompanied by a parent or guardian. The content is strong in impact.
R 18+ (Restricted). Films that are restricted to 18 years old and over. The content is high in impact.
X 18+ (Restricted). This category only applies in the Australian Capital Territory and the Northern Territory and is a legally restricted category for material which contains sexually explicit material. The content is high in impact.
RC (Refused classification). Films that are banned for sale, hire or public exhibition. Distribution of films that are refused classification may attract fines and jail terms of up to two years.
Films are subject to copyright protection under the Copyright Act. The Copyright Act protects:
Literary works (such as novels).
Artistic works (such as paintings, drawings, cartoons and photographs).
Musical works.
Dramatic works (such as dance, plays and screenplays).
Computer programs.
Sound recordings.
Cinematograph films.
The owner of copyright in a film is the person who makes the arrangements for the film to be made (section 98(2), Copyright Act). In practice, this means the individual producer or production company that makes the film.
The duration of copyright protection is 70 years from the first publication of the film (section 94, Copyright Act).
The owner of copyright in a film has the exclusive right to (section 86, Copyright Act):
Make a copy of the film.
Cause the film to be seen or heard in public.
Communicate the film to the public.
In addition, the author of copyright material in a film has the following moral rights (Copyright Act):
To be attributed as the author of his work.
Not to have his work falsely attributed to someone else.
Not to have his work altered or otherwise treated in a manner that is prejudicial to the author's reputation or honour (derogatory treatment).
The authors of a film, for the purposes of moral rights, are the producer, the screenwriter and the director. A screenwriter also has a separate set of moral rights in his script.
Moral rights are personal to the authors, irrespective of copyright ownership, and cannot be waived or assigned. However, to permit production companies to commercially exploit films, the SPAA, the ADG and the AWG have agreed on a consents regime whereby authors can consent to certain acts and omissions that may otherwise breach their moral rights.
The contractual structures necessary for a film production are aligned to the different stages of production:
Development.
Financing.
Production.
Exploitation.
From a legal and contractual perspective, the common element across all stages of production is the IP rights that are created, used or exploited.
The nature of the source material dictates what kind of contractual arrangements are necessary. If, for example, a producer has generated the idea for a film, the producer will engage a writer to write the script on his behalf. Conversely, if the writer has generated the idea, written an original script and taken the script to the producer, the producer will enter into an option and purchase agreement. The option and purchase agreement is one agreement with two elements. Firstly, it secures the exclusive rights in the script to the producer during the option period during which a producer develops the project or raises the finance for it. Secondly, when a producer elects to exercise the option, he assigns the rights in the script to a producer. The normal trigger for exercising the option is when a film is financed and/or enters into principal photography (that is, the stage where the production is filmed).
Australian producers typically finance their films through a combination of:
Equity investment from Screen Australia, the state agencies or private investors.
Pre-sales of the film to distributors in major territories.
Debt finance from banks or niche financiers.
Screen Australia routinely provides equity investment in Australian feature films and its production and investment agreement (PIA) is often the main agreement used by all investors in a film. The PIA generally sets out:
The investors' respective copyright shares.
The recoupment schedule for the disbursements of receipts derived from the exploitation of the film between the investors.
The investors' approval rights.
Credit entitlements of the investors.
Generally, there are three types of loan facilities which producers use to finance the production of their films:
Producer offset facility. This is used to finance the refundable tax offset which is payable to a production company on completion of a film (Division 376, Income Tax Assessment Act).
Discounted pre-sale facility. This is used to finance minimum guarantees, advances or licence fees payable by distributors or licensees following delivery of a film.
Gap facility. A form of mezzanine debt financing where producers obtain a loan that is secured against the film's unsold territories and rights.
At the production stage the producer enters into agreements with:
Cast members.
Key creatives.
Crew members.
Suppliers of equipment and facilities.
Suppliers of goods and services.
There are also rental agreements, location agreements, releases and clearances, insurance contracts and agreements with a variety of suppliers of ancillary services.
Producers exploit their films by:
Appointing a sales agent to sell or license the rights in the film on their behalf into different territories around the world.
Directly licensing the rights in the film to distributors or broadcasters in different territories.
Ancillary exploitation of a film is also another important source of revenue. Film soundtracks and adaptations for the stage can be lucrative forms of exploitation.
There are various legal issues that can arise from the production of a film, including:
Copyright claims.
Employment disputes with the cast or crew members.
Insurance claims.
If the film is based on real life events, defamation or contempt of court.
Disputes concerning the calculation and disbursement of gross receipts.
Piracy is also an issue that is confronting the Australian film industry. Hollywood film studios started proceedings against iiNet, Australia's third largest internet service provider, arguing that iiNet had authorised copyright infringement by not suspending or terminating users' accounts in cases of copyright infringement. The Full Federal Court found in favour of iiNet but the decision is being appealed to the High Court for final determination (Roadshow Films Pty Ltd v iiNet Ltd [2011] FCAFC 23).
Major companies.
Recent trends.
Main trade bodies/associations.
Due to the small size of the Australian population and market relative to the rest of the world, there tends to be a high degree of cross over between the Australian film and TV industries. Independent producers, larger production companies and distributors routinely work across film and TV.
The key companies in the Australian broadcast industry are as follows:
Free-to-air broadcasters. These are:
Seven Network;
Nine Network; and
Network Ten.
Government funded broadcasters. These are:
Australian Broadcasting Corporation (ABC); and
Special Broadcasting Service (SBS).
Subscription TV. Foxtel and Austar are the main operators of subscription TV in Australia. However, a number of internet services providers, such as Telstra, Optus and iiNet (see Question 7), are emerging as alternative suppliers of content.
Production companies. The main TV production companies are:
Seven Network;
Southern Star Entertainment;
FreemantleMedia Australia; and
Shine Australia.
The introduction of the producer offset (see Question 2) has been the catalyst for increased levels of drama production. There has been a return to the production of telemovies and mini-series which were subordinated to reality TV for many years.
With the introduction of digital TV, each of the broadcasters have established multi-channels and are building other platforms such as catch-up TV and subscription-free internet connected TV.
Australia is also moving towards completing digital switchover and by the end of 2012 broadcasting of analogue TV will cease.
The main trade bodies/associations are the:
SPAA.
Screenrights.
Australian Interactive Media Industry Association.
Internet Industry Association.
Australian Subscription Television and Radio Association.
ADG.
AWG.
MEAA.
Australian Children's Television Foundation.
Australian Teachers of Media Inc.
The Australian Screen Production Incentive provides tax incentives for TV programme making in Australia. The refundable tax offsets are:
Producer offset. A 20% rebate on the QAPE incurred on a film that is not a feature film, TV series, telemovies, short-form animations, non-feature documentaries and direct-to-DVD and web-distributed programming. The producer offset is administered by Screen Australia. To be eligible for the producer offset, a TV programme must be in an eligible format, have significant Australian content and meet other required criteria (see Question 2, Producer offset).
Location offset. A 16.5% rebate on the QAPE incurred on a TV programme (see Question 2, Location offset).
PDV offset. A 30% rebate on the QAPE incurred on PDV production (see Question 2, Post, digital and visual effects (PDV) offset).
The main legislation regulating the broadcast and internet TV sectors in your jurisdiction.
TV co-production treaties between your jurisdiction and other jurisdictions.
National regulatory authorities.
The main legislation regulating the broadcast and internet TV sectors in Australia is the:
Broadcasting Services Act 1992 (Cth) (Broadcasting Services Act).
Broadcasting Services Amendment (Media Ownership) Act 2006 (Cth).
Copyright Act.
Division 376 of the Income Tax Assessment Act.
Classification Act.
Defamation Act 2005 (uniform defamation laws have been passed in each Australian state meaning that Australia effectively has a national defamation code).
As part of licence requirements under the Broadcasting Services Act, broadcasters must meet the Australian Content Standard which requires all commercial free-to-air TV licensees to broadcast an annual minimum transmission quota of 55% Australian programming between 6:00 am and midnight. In addition, there are specific minimum annual sub-quotas for Australian (adult) drama, documentary and children's programmes. Programming for children is subject to additional requirements.
Commercial TV networks must also broadcast at least 20 hours of Australian documentary programmes each year.
Subscription TV licensees that broadcast drama channels, and drama channel package providers, must invest at least 10% of their total programme expenditure in new Australian drama (Broadcasting Services Act).
Industry groups have also developed codes of practice in consultation with ACMA. ACMA monitors these codes and deals with unresolved complaints made under them. Current codes include the:
Commercial Television Industry Code of Practice 2010.
ABC Code of Practice.
SBS Code of Practice.
Subscription Broadcast Code of Practice 2007.
Internet Industry Code of Practice 2002.
See Question 3, Film co-production treaties.
The national regulatory authorities are:
ACMA.
Screen Australia.
Department of the Prime Minister and Cabinet, Office for the Arts.
Attorney-General's Department, Classification Board and the Classification Review Board.
National Film and Sound Archive Australia.
ACMA monitors complaints made to the TV broadcasters to assess whether the codes of practice are consistent with prevailing community standards.
The Broadcasting Services Act sets out a self-regulatory regime for broadcasters to respond to complaints. Subscription TV stations classify content according to the Australian Subscription Television and Radio Association (ASTRA) Code of Practice. The classification categories generally are:
G (General). TV programmes that are suitable for a general audience. The content is very mild in impact.
PG (Parental guidance). TV programmes that can be viewed with parental guidance. The content is mild in impact.
M (Mature). TV programmes that are not recommended for mature audiences. The content is moderate in impact.
MA 15+ (Mature accompanied). TV programmes that are not suitable for people under 15 years old. Any persons under 15 must be accompanied by a parent or guardian. The content is strong in impact.
R 18+ (Restricted). TV programmes that are restricted to 18 years old and over. The content is high in impact.
The X 18+ and RC categories are not used for TV programmes (see Question 4).
TV programmes are given copyright protection under the Copyright Act. The Copyright Act does not distinguish between feature films or TV programmes, which are both "cinematograph films" (see Question 5). In addition, under the Copyright Act, broadcasters have a separate copyright in the broadcast of a TV programme.
Like in film, the contractual structures necessary for TV programme production are aligned to the different stages of production.
Australian producers typically finance their programmes through a combination of:
Equity investment from Screen Australia, the state agencies or private investors.
Licence acquisition fee from a broadcaster.
Debt finance from banks or specialised financiers.
Screen Australia invests in Australian TV drama or documentary programmes but not in other forms of TV, such as reality TV, game shows or sports programmes.
Production and licence agreements between producers and broadcasters typically include:
The respective copyright shares of the producer and broadcaster.
The recoupment schedule or for the disbursements of receipts derived from the exploitation of the programme.
The broadcaster's approval rights.
Credit entitlements of the producer and broadcaster.
Producers often use some form of debt finance to assist with the cost of producing a programme. In relation to the producer offset, however, it is not uncommon for broadcasters to finance the anticipated producer offset themselves. For Australian TV programmes, debt finance normally comes in:
Producer offset facility (see Question 6).
Discounted pre-sale facility (see Question 6).
Producers typically exploit the completed programmes by licensing either:
The rights in the programme to broadcasters in different territories.
The format of the programme.
Main legal issues arising in TV programme production transactions?
Main areas of litigation?
The legal issues that can arise in TV programme production transactions include:
Copyright claims or other IP infringement claims.
Third party claims in respect of underlying rights, particularly in relation to so called "format rights" (that is, disputes concerning the creation or appropriation of the structure, style, design, look and feel of a programme).
Complaints in relation to programme content.
Employment disputes with the cast or crew members.
Insurance claims.
If the programme is based on real life events, defamation or contempt of court.
Major companies.
Recent trends.
Main trade bodies/associations.
Book publishing. The book publishing industry has many small publishers and is dominated by several major international publishers. The book publishing market is generally divided into the following categories:
Educational books.
General non-fiction.
General fiction.
Specialised children's books.
The major book publishers in Australia are:
ABC Books.
Allen & Unwin.
Harper Collins Publishers Australia.
Macmillan Publishers Australia.
Random House Australia.
Penguin Books Australia.
Queensland University Press.
Fontaine Press.
Brandl & Schlesinger.
Griffin Press.
Scholastic Australia.
Pearson Australia Holdings.
Reed Elsevier Australia.
Hachette Australia.
Newspaper and magazine publishing. The major magazine and newspaper publishers in Australia include:
ACP Magazines.
Fairfax Media.
News Corporation.
Pacific Magazines.
West Australian Newspapers.
The magazine publishing market is dominated, in terms of market share, by women's weekly magazines followed by food and entertainment, and home and lifestyle.
The newspaper publishing market is generally divided into:
Metropolitan and national daily newspapers.
Metropolitan Sunday newspapers and magazines.
Regional daily newspapers.
Regional non-daily newspapers.
Suburban newspapers.
In each publishing sector, print publication remains the main platform used by consumers. However, electronic publishing is becoming increasingly important with all major Australian newspapers now having a significant online presence.
Print newspapers and books face increasing competition from online substitutes. E-book and e-magazine publishing are becoming more mainstream. However, according to figures released by The Newspaper Works in 2010, circulation of print newspapers in Australia has decreased by less than 1% per year over the last ten years. Similarly, readership of print magazines remains strong and data from a recent Roy Morgan Readership Survey indicates that magazine readership in Australia grew by 5% in 2010.
Considerable uncertainty remains as to how the introduction of electronic tablets and online publishing will generally impact on traditional publishing models.
The main trade bodies/associations are:
Australian Press Council.
Australian Society of Authors.
Small Press Network (SPUNC).
Australian Publishers Association.
Newspaper Publishers' Association.
Newspaper Works.
Magazine Publishers of Australia.
MEAA.
The Copyright Act provides the legislative framework for the copying and communication of works by educational institutions, federal, state and territory governments, and organisations assisting people with disabilities.
The Copyright Agency Ltd (CAL) is the body that administers these statutory licences on behalf of copyright owners (Copyright Act). CAL represents authors and publishers, among other copyright owners, and administers the statutory licence scheme for the copying and communication carried out by government agencies and educational institutions of print material.
The main legislation regulating the publishing industry in your jurisdiction.
National regulatory authorities.
The main legislation regulating the publishing industry in Australia is the:
Copyright Act.
Broadcasting Services Act, which places limits on cross-ownership of newspapers.
Broadcasting Services Amendment (Media Ownership) Act 2006, which regulates the concentration of ownership within broadcasting sectors and ownership across different media, including newspapers.
Foreign Acquisitions and Takeovers Act 1975, which may apply to restrict foreign control and ownership of newspapers.
Classification Act.
Defamation Act 2005.
The following state and territory laws impose registration and identification requirements on printers and newspapers:
Printing and Newspapers Act 1973 (NSW).
Printing and Newspapers Act 1981 (QLD).
Printers and Newspapers Act 1984 (NT).
Wrongs Act (VIC).
The publishing industry is also subject to the Competition and Consumer Act 2010 (Cth) and various state laws governing competition and consumer protection generally.
There are three main regulatory bodies in the publishing industry:
ACMA. ACMA regulates content on the internet, including internet news sites.
The Australian Press Council. This is a self-regulatory body which deals with the print media, including all commercially available newspapers and magazines, and the internet news sites.
MEAA. This is a registered trade union and professional organisation which covers everyone in the media, entertainment, sports and arts industries. Among other things, MEAA regulates and decides all questions of professional conduct and enforces a code of ethics to ensure that ethical standards in journalism are maintained.
An author typically enters into a contract with a publisher under which the author grants the publisher an exclusive licence to publish the author's work in return for a payment of royalties from sales.
Outside of trade publishing, the contract may contain a full assignment of rights. The primary right will be to publish the work itself in agreed formats (the author can also grant subsidiary rights of exploitation which are usually licensed to third parties). Although the contract is usually for a limited number of titles, it can contain restrictions on the author publishing competing works with other publishers.
The contract is usually entered into before the work is written and often the publisher pays an advance against royalties. In trade publishing, authors are usually represented by specialist agents who:
Negotiate the contract, often on standard boilerplate terms agreed with the larger publishers.
Receive and forward payment (from which a commission is retained) on the author's behalf.
The publisher usually incurs all costs in relation to the publication but also retains control over the style and manner of the publication.
The publisher enters into contracts for distribution to retailers in physical and online book shops. Wholesalers and distributors (the latter often connected with larger publisher groups) act as the "middlemen" in the chain of distribution. Sometimes these contracts allow for the return of unsold stock to the publisher. The decline of independent book shops and the increased importance of supermarkets and large retailers have resulted in larger discounts.
In e-book publishing, the large trade publishers have tried to maintain control over the pricing of this new market by establishing agreements under which the e-book retailer is appointed as agent.
Main legal issues arising in print and electronic publishing?
Main areas of litigation?
The two main legal issues that typically arise in publishing are copyright infringement and defamation.
Due to the developments in electronic publishing, the nature and scope of rights granted to publishers have become a key issue. There have been arguments over whether older contracts included appropriate rights to enable exploitation in new digital formats and the appropriate rights to be included in new forms of contract.
Litigation is rare. Authors often do not have the resources to engage in protracted legal disputes and publishers are reluctant to be seen to litigate against their authors. Complaints often arise between publishers over competing activities and the use of each other's material.
Major companies.
Recent trends.
Main trade bodies/associations.
Major companies are generally divided between the large publishers (such as Activision Blizzard, Electronic Arts and Mindscape) and smaller developers that develop the content for the game and enter into distribution agreements with large publishers.
There is significant growth in online gaming as consumers move away from an older style retail model of acquiring a game from a physical retail outlet.
This trend is set to continue with the construction of the National Broadband Network, which will deliver fibre to the premises of 93% of the Australian population with speeds of up to one gigabit per second.
The main trade bodies/associations include the:
Interactive Games and Entertainment Association.
Australian Interactive Media Industry Association.
Australia has no direct form of tax relief for making video games. However, limited funding is available from:
Screen Australia, which supports innovative, non-linear, interactive storytelling or game content that has a significant narrative component.
Film Victoria, which provides up to A$100,000 for game development on any distribution platform (but not more than 50% of the budget for the game).
Video games and amusement arcade games must be classified before they can be sold, hired, demonstrated or made available for play in Australia. The Classification Board classifies games to determine:
The age recommendations and restrictions that apply to the sale or hire of computer games.
The classification markings that must be displayed.
The conditions for advertising computer games.
The classification categories are:
G (General). A game with no legal restrictions on the sale or hire. The game is very mild in impact.
PG (Parental guidance). A game with no legal restrictions on the sale or hire of the game. However, it is not recommended for people under 15 years old without guidance from a parent or guardian. The game is mild in impact.
M (Mature). A game with no legal restrictions on the sale or hire of the game. However, it is not recommended for people under 15 years old. The game is moderate in impact.
MA 15+ (Mature accompanied). A game that cannot be sold or hired to people under 15 years old, unless accompanied by a parent or guardian. The game is strong in impact.
R 18+, X 18+ or RC classification categories are not used for computer games (see Question 4).
Video games are subject to copyright protection under the Copyright Act (see Question 5).
Video games normally contain various copyrighted material, including:
Computer programs.
Cinematograph films (such as moving images and any sound tracks).
Artistic works (such as clip-art and other digital images).
Music.
Sound recordings.
The author of copyright material also has certain moral rights (see Question 5).
It is common for smaller games developers to approach a larger publisher for an advance on royalties to finance the development and production of the video game. The developer delivers its code to the publisher in stages and the publisher advances further funds to finance the next stage of development or production. Once completed, the finished game is delivered to the publisher for publication.
From a developer's perspective, this structure means that the developer is reliant on the publisher and therefore the publisher inevitably obtains a wide grant of rights, while the developer is unable to even build a catalogue of rights. An alternative structure is for publishers to use in-house developers.
Main legal issues arising in video game development and production transactions?
Main areas of litigation?
The main legal issues arising in video game development and production transactions concern ownership of IP rights.
To the extent that video games incorporate material from a variety of sources, it can result in issues over whether the necessary underlying rights have been appropriately licensed or cleared.
To date, there has not been a great deal of litigation in Australia in this industry sector.
Major companies.
Recent trends.
Main trade bodies/associations.
The major companies in the recorded and live music industry are:
Australian Music Group Holdings.
Centenary Australia.
Yamaha Music Australia.
Warner Music Australia.
Technicolor.
SCA Music Holdings (Australia) (commonly known as Sony Music).
Figures released by the Australian Recording Industry Association (ARIA) indicate that the music industry has experienced a steady decrease in physical product sales over the past ten years, while digital product sales have skyrocketed in the past five years. However, that significant increase in digital distribution of music is from a very small base and does not make up for the shortfall in physical product sales. The most pressing problem for the music industry in Australia, which mirrors the trend overseas, is the problem of illegal music downloads and a perception among some consumers that accessing music through the internet is, or should be, free.
The main trade bodies/associations are:
ARIA.
The Australasian Music Publishers Association.
Australian Music Association (which represents the music products sector, for example, wholesalers, manufacturers, retailers, pro audio, print music, lighting and computer music).
Music Council of Australia.
Australasian Performing Right Association (APRA).
Australasian Mechanical Copyright Owners Society (AMCOS).
APRA:
Administers the public performance and communication rights for its members' musical works (including lyrics).
Collects and distributes licence fees for the public performance and communication of its members' musical works.
The members of APRA include composers, songwriters and music publishers.
AMCOS:
Administers the right of reproduction of its members' musical works.
Collects and distributes mechanical royalties for the manufacture of CDs, digital downloads, music videos and DVDs, and the making of radio and TV programmes.
Phonographic Performance Company of Australia (PPCA) licenses the communication and public performance of sound recordings, including CDs, records, digital downloads, webcasting and music videos.
There is no specific tax relief for the music industry. However, there are many grants available through various government agencies and industry bodies, including:
The Export Market Development Grant (EMDG). The EMDG is a rebate scheme for those who have invested marketing expenditure into promoting their music business internationally.
Australia Council grants. The Australia Council offers various schemes, many of them aimed at supporting artists and industry in their international endeavours.
Grants from state and territory based government arts departments. These include Arts ACT, Arts NSW, Arts VIC, Arts Tasmania, Arts NT, Arts QLD, Arts SA and the Department of Culture and the Arts WA.
State based music associations' grants. These include Victoria Rocks, QMusic and Trade Qld, and WAM grants.
APRA grants. APRA has an annual fund for projects and organisations promoting the use and recognition of Australian or New Zealand musical compositions.
PPCA Performers Trust Foundation grants. This provides grants to promote and encourage music and the performing arts.
The JB Seed Fund. This is an independent fund financed by artists and industry investors.
Musical compositions are protected as musical works and lyrics of a song are protected separately by copyright as literary works (section 32, Copyright Act). The author of the lyrics and the creator of the musical composition are the owners of the copyrights respectively (section 35(2), Copyright Act).
Sound recordings are protected separately by copyright and in addition to the copyrights in the music and lyrics (section 89, Copyright Act). The owner of copyright in a sound recording is the person who makes or arranges the making of the sound recording (section 97, Copyright Act). In practice, this means the recording company that makes the record.
The Copyright Act confers certain moral rights on the creators of musical or literary works (see Question 5).
The copyright owner (composer of musical compositions) enters into a publishing contract with a publisher who then exploits the reproduction (including mechanical and synchronisation rights) and adaptation rights (including translation and arrangement rights) on the copyright owner's behalf. The publisher also:
Collects fees or royalties from APRA and the AMCOS for the use of the composition.
Pays a proportion of the fees collected as royalties to the composers.
Traditional recording contracts. Recording contracts govern the relationship between the recording artist and the record label. Usually, the artist is given an advance by the label and is required to record exclusively for the label until the agreed minimum product commitment is fulfilled. The label usually owns the copyright in the sound recordings. The PPCA collects the mechanical royalties for the public performance or broadcast of the recording.
Record labels typically have distribution contracts with music distributors who deliver physical media, such as CDs, from the manufacturer to the retailer.
360 degree deals. In some cases, the record label and the music publisher are the same entity and provide a range of comprehensive services and financial support in return for an interest and financial income stream in all aspects of the artists work, including live performances, recorded music and merchandise sales. These arrangements are commonly known as "360 degree deals" or "multiple rights deals" because the artist's IP is entirely controlled by one entity.
Production and distribution contracts. Some recording labels offer production and distribution contracts to artists who have the financial resources to pay for the production of the sound recording up to the final masters and video stage. Under these contracts, the artist generally grants the label an exclusive three to five year licence to manufacture and distribute the physical media of the sound recording.
The internet and the ease of digital distribution of music media are redefining the traditional relationship between artists, music publishers and record labels. This is particularly the case for less well-known artists who use social media websites and electronic resources to establish their own business entities to successfully produce, promote and distribute their music globally at a relatively low cost.
Main legal issues arising in the contracts for the exploitation of rights in musical compositions and recorded music?
Main areas of litigation?
The main legal issues facing the music industry in Australia are the increasing proliferation of online piracy and the industry's challenge to create a value-added proposition to attract younger consumers who have not had a tradition of paying for online music.
The main areas of litigation are music piracy and copyright infringement.
Main sporting bodies.
Recent trends.
Main trade bodies/associations.
The sporting industry in Australia consists of a range of inter-related activities, including:
Sports and sporting clubs facilitated at the community level.
Sports involving elite sports people at national and international levels.
The provision of services to the sporting industry.
The four largest operators (in income terms) in the sporting industry account for well under 20% of the industry's revenue. There are a large number of small operators in the industry and according to data from the Australian Bureau of Statistics, organisations with fewer than 100 employees account for approximately 69.1% of the industry's income, and 76% of the industry's employment.
Large operators include:
Australian Football League (AFL).
National Rugby League (NRL).
Cricket Australia (formerly the Australian Cricket Board).
Tennis Australia.
Australian Rugby Union Ltd.
Australian Grand Prix Corporation (AGPC).
Football Federation Australia (FFA).
The IBISWorld report (an industry market research report) on Sport Organisations and Other Sports Services in Australia states that the sporting industry in Australia generates revenue of A$6.2 billion per year. In 2015 to 2016, there is expected revenue of A$7.6 billion per year as a result of more private money flowing through to the industry.
The sporting industry's growth is consistently driven by improving attitudes towards health and fitness, and the introduction of new sporting associations. Recent growth is supported by lucrative TV broadcasting and online rights agreements, corporate sponsorships and spectator interest, and is often triggered by major sporting events. Major sporting events (for example, the Commonwealth Games, the Olympics, developments in cricket (including the expansion of twenty twenty cricket), the introduction of A-League Soccer and the addition of new AFL, NRL and Super Rugby teams) attract public funding and private spending, assisting with the expansion of the Australian sporting industry.
The Australian Sports Commission (ASC) is a statutory authority of the Australian government responsible for the funding and development of sport in Australia. The Australian government provides funding for sport as an investment in the community in terms of national pride, improved health, economic activity and stronger communities.
The Australian Institute of Sport (AIS) is a key component of the ASC, being Australia's leading centre for the training and development of high performance athletes and coaches.
Other main associations in Australia include:
Australian Commonwealth Games Association.
Australian Olympics Committee.
Confederation of Australian Sport.
AFL Players' Association.
The main legislation regulating the sports sector in your jurisdiction.
National regulatory authorities.
The main legislation regulating the sports sector in Australia is the:
Australian Sports Commission Act 1989 (Cth).
Australian Sports Anti-Doping Authority Act 2006 (Cth).
Broadcasting Services Act.
Competition and Consumer Act 2010 (Cth).
Sex Discrimination Act 1984 (Cth).
Racial Discrimination Act 1975 (Cth).
Disability Discrimination Act 1992 (Cth).
The national regulatory authority is the Australian Sports Anti-Doping Authority.
In economic terms, the broadcast rights associated with a sport can be more important than the sport itself.
The event organiser or sports rights owners have the ability to sell the right for a broadcaster to attend a sporting event and produce and disseminate a broadcast of the sporting event. The relationship between members of the media, such as TV broadcasters, photographers, radio or print media and the promoter is defined by contract. In the case of a TV broadcaster, the contract is generally known as a broadcasting licence agreement. The broadcasting licence agreement addresses matters, including:
Exclusivity.
Duration.
Territory.
Licensed rights.
Medium (radio, free-to-air TV, pay TV, mobile or online).
Access to the event.
Licensor's and licensee's obligations.
Sponsorship.
Insurance.
Non-broadcast rights (including use of IP).
Limitations.
In a broadcasting licence agreement, the grant of exclusive rights to a broadcaster can constitute anti-competitive conduct infringing the Competition and Consumer Act 2010, which contains provisions prohibiting arrangements and practices that substantially lessen competition.
In addition, under the Australian government's anti-siphoning scheme, pay TV broadcasters are prevented from buying the rights to televise particular domestic and international sporting events before free-to-air TV broadcasters have purchased the rights. The aim of the scheme is to enable events of national importance and cultural significance to remain available on free-to-air TV.
A sporting event cannot be owned in the ordinary sense of the word as an event organiser does not create any IP rights by staging a sporting event.
An event organiser does, however, have something to sell: a licence for the rights to broadcast a sporting event. The broadcast of a sporting event is a significant source of revenue for TV networks.
A licence agreement in this sense is not a licence agreement to use IP rights, but it creates valuable exclusive rights for a licensee or broadcaster to attend the sporting event and disseminate the event generally on a TV network.
The rights in sporting events are generally owned by the event promoter given, in the case of stadium events, that the event promoter can control entry into the event.
Main legal issues arising from the acquisition and ownership of rights in sporting events?
Main areas of litigation?
The main legal issues arising from the acquisition and ownership of rights in sporting events relate to IP. In particular, if a licence agreement is silent or brief on the subject of IP, disputes may arise concerning who owns any:
Copyright or trade marks in a sporting event (including the name of the event, musical themes for the event and pre-game entertainment).
Copyright in the broadcast of the event.
The owner of IP has, unless licensed to another party, the sole right to use, reproduce and disseminate the IP. The event organiser, therefore, must consider who will have the right to make, distribute and sell copies of the sporting event after the event and if this is to be the sole right of the event organiser, the licence agreement should recognise this.
The main disputes in the sports industry concern player behaviour (including the use of illegal performance enhancing and recreational drugs), player movement and clubs and other sporting organisations responsibilities to regulate these by contract.
Disputes are less frequent between an exclusive broadcaster and other media outlets in relation to their ability to disseminate footage of an event (including as part of a news service) for which exclusive rights have been granted.
T +612 9286 8581
F +612 9283 4144
E judith.miller@dlapiper.com
W www.dlapiper.com
Qualified. Australia (Queensland), 2000
Areas of practice. IP; sports, media and entertainment; privacy; commercial; media finance.
Recent transactions
T +613 9274 5247
F +613 9274 5111
E scott.buchanan@dlapiper.com
W www.dlapiper.com
Qualified. Australia (Victoria), 1998
Areas of practice. IP; sports, media and entertainment; privacy; commercial; media finance.
Recent transactions
T +612 9286 8510
F +612 9283 4144
E nicholas.cole@dlapiper.com
W www.dlapiper.com
Qualified. Australia (New South Wales), 2002
Areas of practice. IP; sports, media and entertainment; privacy; commercial; media finance.
Recent transactions
T +612 9286 8490
F +612 9283 4144
E julijana.markoska@dlapiper.com
W www.dlapiper.com
Qualified. Australia (New South Wales), 2011
Areas of practice. IP; privacy; commercial; media and entertainment.
Recent transactions. Assisted Screen NSW in relation to the financing and production of the children's TV series, The Woodlies.
