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Phone: +61 2 9904 0133
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How Royalties are Calculated

How Royalties are Calculated 2018-04-28T14:10:31+00:00
Screenrights has a Distribution Policy that sets out how royalties are calculated in detail. Read the overview below or the full Distribution Policy here.

Australian and New Zealand educational royalties

Australian and New Zealand educational royalties are generated when educational institutions copy from radio and television, email these copies or put them on an internal network. Screenrights takes the following steps to work out how much a rightsholder should be paid:

Separating pools of royalties for each sector

The money collected from Australian institutions is dealt with separately to the New Zealand money. Within each of these larger pools, there is a further separation between each of the sectors – i.e. university money is separate to school money, which is separate to TAFE money.

The value of a program is influenced by the money available in the pool for the sector and how much copying and communication activity has been recorded for the sector across the year.

Calculating the value of a program within a pool

Throughout the year, Screenrights gathers records of which programs have been used in each sector. This is usually done by survey, although a few institutions do keep full records of their copying. The next task is to work out how much each program that was copied, or communicated (emailed or put online) should be paid:

  • The first factor that determines the amount a program earns is the number of minutes copied or communicated. In most cases, a school will copy an entire program, but sometimes they might copy part of a program. The more minutes that are copied or communicated, the higher the value of the royalties.
  • The second factor that determines how many royalties a program earns is the type of program itself. Programs are classified as either ephemeral in nature (for example, the news) and therefore less likely to be kept as a resource, or not, such as documentaries and movies. The category affects the dollar value allocated to each minute. Programs that are likely to be kept as an educational resource are allocated more than three times as much as a program that only has transitory value.
  • The third factor that determines how many royalties a program earns is the copy format. A program copied onto an analogue format, such as VHS, is of lesser quality and has a shorter shelf life than a program copied onto a hard drive. A program copied onto a hard drive earns more royalties than a program copied onto DVD which in turn earns more royalties than a program copied onto VHS.

Balancing the relative value of representative programs

The final step in calculating the royalties earned by a program involves applying a “weight” to increase the value of the copying or communication reported in the survey. This is because programs that are reported in the survey are best understood as representative of what’s happening in the entire sector. They are therefore worth more than a program that is copied or communicated by a record-keeping institution.

Once these factors have been taken into account, each program can then be allocated a total amount.

Allocation to copyrights in a program

Each program contains a number of different copyrights. The total amount for a program is divided between the distinct copyrights. The division differs slightly for New Zealand and Australian royalties because each of the Copyright Acts is different. The allocations are determined by the Screenrights Board.

Australia

Copyright component Percentage
Film 68.50%
Script 22.10%
Musical Works 7.40%
Sound recordings of commercial music 1.11%
Sound recordings of commissioned music 0.67%
Sound recordings of library music 0.21%
Broadcast signal 0.00%

New Zealand

Copyright component Percentage
Film 67.10%
Script 21.70%
Musical Works 7.30%
Sound recordings of commercial music 1.06%
Sound recordings of commissioned music 0.64%
Sound recordings of library music 0.20%
Broadcast signal 2.00%

Australian Retransmission royalties

These are generated when free to air broadcasts are retransmitted by another service, such as pay television. Screenrights takes the following steps to work out how much a rightsholder should be paid:

Royalties for each Network are separated into different pools.

The money collected from the retransmitters is divided into two pools, one for TV royalties and one for radio royalties. These pools are further divided into individual TV network and radio channel pools. This means money collected for the retransmission of each network is held separately, for instance ABC1 is separate to the money for SBS ONE.

The amount paid to each program is therefore influenced by the money available in the pool for that TV network.

In the case of radio, royalties are paid on a channel basis.

Details of retransmitted programs including regional variations are obtained.

Screenrights can find out which programs have been retransmitted by obtaining details of all programs broadcast in metropolitan and regional areas, or it can take a representative sample of this data and use this. Obtaining details of all broadcast programs involves processing considerably more records, many of which are duplicates. This is a much more costly option, and as administrative costs are deducted from the royalties paid to rightsholders, the Screenrights Board has elected to use the sample method.

To take into account the regional variations in programming on most free-to-air networks in Australia, Screenrights monitors each retransmitted regional signal throughout the year and compiles a representative sample of 365 days. The representative sample is based on relative cable subscriber numbers in each region. The more subscribers in a region, the greater number of days are picked up in the representative sample.

The value of a program within a pool is calculated.

The next task is to work out how much each program that was retransmitted should be paid.

The first factor that determines how many royalties a program earns is the number of minutes retransmitted. The more minutes that are retransmitted, the higher the value of the royalties.

The second factor that determines how many royalties a program earns is the time of day the program is broadcast. Programs that are broadcast in primetime earn around three times as much as programs that play during the day or late in the evening, which in turn earn three times as much as programs that are broadcast in the middle of the night.

The third factor that affects payment is the ratings of the channel (not the individual program) retransmitted.

Once these factors have been taken into account, each program can then be allocated a total amount.

Allocation to copyrights in a program

Each program contains a number of different copyrights. The total amount for a program is divided between the distinct copyrights. The division differs slightly for New Zealand and Australian royalties because each of the Copyright Acts is different. The allocations are determined by the Screenrights Board.

Copyright component Percentage
Film 68.50%
Script 22.10%
Musical Works 7.40%
Sound recordings of commercial music 1.11%
Sound recordings of commissioned music 0.67%
Sound recordings of library music 0.21%
Broadcast signal 0.00%