Australian Copyright Agency Paid Itself More Than It Distributed To Content Creators

from the ah,-bureaucracy dept

One of the key problems we have with any sort of collection agency/performance rights organization/collective licensing scheme is that they introduce an unnecessary bureaucracy into the equation and, as a result, money gets redirected from the actual creators to the bureaucracy itself. It's a giant economic inefficiency that harms content creators. Case in point: Michael Geist points us to the news that the Australian copyright collection group, The Copyright Agency Limited, spent more on its own staff than it gave out directly to content creators. In 2009, it paid its staff $9.4 million, and it disbursed... $9.1 million directly to content creators.

Now, to be fair, the article buries the fact that CAL also gave $76 million to publishers "on the assumption that a proportion of this money will be returned to authors," but it also notes that it has no checks to see if that money is ever distributed. In other words, CAL doesn't actually do anything concerning that $76 million other than pass it on to other bureaucracies (not content creators) -- who might just be keeping it, rather than disbursing it. As the report notes, CAL collected $114 million last year, and can only say, for certain, that $9.1 million got distributed to actual content creators. Now that's efficient! Certainly, some of that $76 million may have reached content creators, but no one knows for sure.

So, again, we're left wondering why such a setup makes sense at all? All that's happening is that money that could go directly from fans/consumers to content creators gets filtered through inefficient bureaucracies that take huge cuts. That harms content creators.

Filed Under: australia, collections, copyright
Companies: copyright agency limited

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  1. icon
    arsebums (profile), 21 Feb 2010 @ 4:14pm

    Listen up folks.

    1. If publishers were to collect the copying royalties they would all have to have their own assesment and collection bureaucracy or pool their resources and have one do it all for them. The first would be grossly inefficient and beyond the capabilities of most publishers....and the second is what CAL is....i.e. CAL is the most efficient option.

    2. How much of a books selling you price do you reckon an author gets ....a couple of bucks maybe or 10% of the selling price. All authors are on differing deals with their publisher - many/most get paid an amount upfront and then no royalty until sales pass 'X' amount and then a percentage of the remainder. Ergo the authors/creators are not entitled to 100% of the revenues from a foregone book sale.

    A collection agency (CAL or any other) cannot have control of all those individual contracts so much of the money collected is paid to the publishers for allocation on a case by case basis. Remember a lot of the authors are overseas based and so are the publishers which adds to the complexity.

    As I have said before I do not work in the publishing industry - I do have an author friend and am aware of the contractual arrangements in the industry.

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