Copyright Tribunal resolves Foxtel licensing dispute as online viewing goes mainstrea

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The latest decision by the Copyright Tribunal of Australia in the dispute between the Phonographic Performance Company of Australia (PPCA) and Foxtel provides valuable insight into how Australian copyright law is adapting to the changing ways Australians consume content, particularly in relation to streaming services.

Background of the dispute between the PPCA and Foxtel

The PPCA is a body representing copyright owners of sound recordings which licenses the recordings for use by, for example, television stations, and then distributes fees derived from these licenses to the copyright owners. Foxtel, an Australian subscription pay television provider, had a licence with the PPCA that dated back to 2001 and covered all uses of recorded music on Foxtel.

The PPCA sought the Copyright Tribunal's approval for a new licensing scheme with Foxtel, as the Tribunal has the authority to modify a scheme if it believes it to be reasonable to do so. The PPCA claimed that the 2001 rates were unfair, while Foxtel resisted the licence fee increase under the new scheme. Crucially, the parties differed on whether the licence, which was entered into before the advent of consumer streaming, allowed Foxtel to stream the sound recordings through its online service, Foxtel Now.

13 May 2016 Copyright Tribunal decision

The Tribunal handed down its primary decision on 13 May 2016, in which it relevantly found that both the 2001 scheme and the new scheme proposed by the PPCA allowed Foxtel to broadcast the sound recordings over the Internet.

The Tribunal also found that a licence fee increase was justified on the basis that Foxtel was using a large amount of the PPCA's catalogue and was doing so more frequently due to its online service. The PPCA sought, and the Tribunal agreed, that the increased fee should be calculated by reference to Foxtel's revenue, rather than its subscriber numbers.

21 July 2017 Copyright Tribunal decision

The recent decision resolved several of the remaining issues between the parties.

Most relevantly, the PPCA resisted Foxtel's claim that users of its streaming service should be permitted to keep a copy of any program in which a licenced sound recording was used. This seems to go towards the possibility of Foxtel offering a DVR-style recording service by which users can record streamed content; however no such service is currently offered by Foxtel.

The Copyright Tribunal found that Foxtel users should be permitted to temporarily store recordings, provided that these recordings are only watchable once. This would, for example, allow users to stream content over a Wi-Fi network and then watch it later when they are without an internet connection.

Similarly the PPCA claimed that users of Foxtel's on-demand service should only be permitted to store content if the content had already been, or would shortly be, broadcast on Foxtel's regular television service. Foxtel also resisted the PPCA's proposed cap of 12 months on any such storage.

The Tribunal found that there was no reason to restrict storage to programs aired on Foxtel's regular television service, or to restrict storage to 12 months, provided again that any stored content could only be watched once.

Legal issues involving streaming content

The issues considered by the Tribunal, and in particular the somewhat restrictive requirement that stored recordings can only be watched once, are representative of the challenges posed by streaming content in relation to copyright.

For example, the website Twitch, where users livestream footage which is often accompanied by music, allows users to store recordings of their content, however as of 2014, the site runs all recordings through an audio recognition system which scans for copyright sound recordings and automatically mutes portions of any video which contain such a recording.

Such a system does not appear to have been considered by Australian services, however it is one potential way of addressing these legal issues, albeit at the cost of user experience.

The rise in popularity of so-called "Kodi Boxes" demonstrates another challenge posed by streaming content. The Android set-top boxes contain the Kodi media streaming platform which, with certain add-ons, may be used to illegally stream copyrighted material.

Authorities around the world have been cracking down on such boxes, with certain add-ons being shut down and shipments of Kodi Boxes being seized in the UK in the wake of a recent EU Court of Justice ruling that anyone who uses a media player to stream copyrighted content is breaking the law.

The basis for the Court of Justice decision was that "temporary files" generated by the process of streaming are not exempt from copyright laws, as the user is "reproducing" the work, even if this reproduction is only temporary.

Current state in Australia

The Court of Justice decision is not binding in Australia, and our courts have yet to directly address the issues posed by streaming illegal content in the context of the Australian Copyright Act.

However the Copyright Tribunal's recent decision involving the PPCA and Foxtel shows that Australian authorities are starting to grapple with these issues, particularly in differentiating between rights in relation to live broadcasts and rights in relation to the storage of copyright material.

As more and more Australians start to consume media via streaming and on-demand services such as Netflix, Foxtel Now, and Stan, these questions have significant practical ramifications, particularly in relation to the ability for consumers to download content and watch it later from local storage, for example while on public transport without Wi-Fi access.