Screenrights determines the total amount collected in a financial year and then deducts its operating expenses for that year from this amount. Once these expenses have been deducted, an allocation of 0.25% of the total distributable amount is made to a fund known as the IBNR Fund. This fund is used to meet “claims Incurred But Not Reported”. A further deduction is then made to an Artistic Works fund (1.9% for Australian educational royalties) to pay rightsholders in artistic works.
After these deductions have been made, all copied programs are categorised as either ephemeral in nature (that is, programs that are not likely to be kept as an ongoing resource, such as news and magazine style current affairs programs) or as “other”. This category affects the dollar value allocated to each minute copied, with ephemeral programs receiving less than other programs. Screenrights can then determine the total amount that should be allocated to each title identified as having been copied.
The next task is to determine how much should be allocated to each copyright in a copied title. Because each film and television program contains a number of copyrights, the total amount allocated to a title must be divided among the copyright owners. This is done according to a scheme of allocation determined by the Screenrights Board. For Australian educational copying royalties, the allocation is as follows:
- to the copyright in the film: 68.5%
- to the copyright in the literary and dramatic work: 22.1%
- to the copyright in the sound recordings of musical works: 2.0%
- to the copyright in the musical works: 7.4%
The Australian educational service also allows for the communication of copied titles, provided an additional fee is paid. Programs that are identified as having been communicated are also allocated royalties. The allocation is split between each of the copyright owners in the program in the same manner as copying royalties.
Screenrights must identify the people who own or control each of these relevant copyrights from its extensive database and from various other sources, allowing it to distribute the royalties it has collected to these rightsholders.