New copyright bill may negatively impact publishers - PASA

Cape Town - The publishing industry in South Africa will experience significant negative consequences should the proposed exceptions of the 2017 Copyright Amendment Bill be introduced, according to the Publishers Association of South Africa (PASA).

The association presented arguments in this regard to Parliament earlier this week, based on an economic impact assessment by PwC on the detrimental impact certain provisions of the bill could have on the publishing industry.

An overwhelming majority of 89% of the publishers surveyed in the assessment believe the promulgation of the bill, as currently worded, will impact negatively on their operations. In many cases the response to these negative impacts would be significant restructuring, retrenchments and – in some cases – business closure, in their view.
The report found that the proposed amendments would result in declining revenue from sales of educational publications, a sharp reduction in licensing income via collective management organisations and an erosion of the incentive for the creation of educational works.
PASA pointed out that these findings are largely consistent with a review of available literature on the impact of copyright reforms in Canada and the potential impact of similar reforms once contemplated in the UK.

According to Brian Wafawarowa, chair of PASA, part of the main concern of the association is whether the Department of Trade and Industry (DTI), which tabled the bill in Parliament earlier this year, took into account the impact it could have on the publishing industry. He questions whether government has done an economic impact study to assess the potential negative effects of the bill.

Educational publishing

PASA is especially concerned about the potential negative impact the bill could have on educational publishing, if it is passed in its current form. According to Wafawarowa, educational publishing forms about 60% of all publishing in SA.

"As the licensing model changes and textbooks are starting to be phased out and replaced by digital tools, one should not confuse the issue of copyright with that of funding," said Wafawarowa at a media briefing on Wednesday.

"The burden of affordability cannot be shifted onto the copyright holders. Copyright is also an incentive to create and publish. There is a lot of unauthorised usage, but we are reluctant to prosecute universities and schools. Some people even 'hijack' businesses and sell (copyrighted) material to schools."

He cautioned that one should avoid generalisation when it comes to opening up access to published material.
PASA has asked Parliament for an independent assessment of the impact that the bill will have, since, to its knowledge, no independent assessment has yet been undertaken in respect of the publishing industry or of many other industries that rely on copyright or that depend on copyright permissions and licences.

According to André Myburgh, PASA's legal adviser, the association is especially concerned about the PwC report findings on the expected impact of the bill's provisions for so-called "fair use" of published material and exceptions for education.

The report investigates whether harm will be caused to the publishing industry by the free-of-charge uses that will be permitted by the "fair use" provision and broad exceptions for educational and academic activities in the bill.

No remuneration

Under these new proposed exceptions, no remuneration will be payable under those circumstances for reproductions and other acts, which would have needed permissions and licences under copyright under the current legislation.

"It seems there was no investigation of the impact across all creative industries that rely on copyright and industries that rely on permissions and licenses under copyright," said Myburgh. "One size does not fit all."

PASA suggests that legal aspects regarding the use of state funds leading to copyright ownership by the state and a blanket override of contractual terms in certain cases, be removed from the bill.

The association also wants to address the use of the US idea of "fair use" to get out of copyright issues. In Myburgh's view the "fair use" approach has mainly benefitted tech companies and can be a bit of a Trojan Horse in terms of the SA bill. On top of that he sees the bill as having been very poorly drafted.

Decline in sales

The report found that the publishing industry would experience significant negative consequences should the proposed exceptions be introduced. It estimates there could be a weighted average decline in sales of 33%.

To the extent that respondents are representative of the entire book publishing sector, it implies a decrease in sales revenue of approximately R2.1bn on the baseline, and concomitant reductions in gross domestic product (GDP), and VAT and corporate tax revenue collections.

The report estimates that imports will increase as a proportion of sales in the domestic market, while exports will decrease as a proportion of total sales.

It also foresees a weighted decline in employment of 30% and associated reductions in personal tax collections, equating to around 1 250 full-time equivalent jobs.

Internet age

Mpuka Radinku, PASA executive director and Copyright Alliance member, explained that the association welcomes one of the main goals of the bill, namely to bring the Copyright Act of 1978 up to date with the internet age.
“PASA supports the principles of access to copyright works if permission is obtained where required by international treaties and practice. We actively support access to published works for the visually impaired as a member of the Accessible Books Consortium of the World Intellectual Property Organization,” said Radinku.  
“PASA, nevertheless, suggests that many of the provisions in the bill will need to be re-evaluated, reconceptualised and rewritten. We strongly feel that new rules allowing the state to assume ownership of copyright works made with state funding and the across-the-board overriding of contractual terms should be rejected."

In PASA's view, the bill must do more to improve the protection of authors and publishers in the internet age.

"Whereas publishers recognise that exceptions to copyright are part of the copyright landscape, we contend that, as the PwC report shows, overly broad exceptions are to the prejudice of authors and publishers and interfere with their legitimate expectations to earn from their work,” said Radinku.

In conclusion Wafawarowa said authors and publishers are those in the business of disseminating information, content and knowledge to the public.

"They do so at great cost of time and resources and need fair compensation to be able to continue to do so. A delicate balance needs to be struck between access and the legitimate expectations of rights holders," said Wafawarowa.

"If it is imbalanced in favour of 'users', this will come at the cost of the production of quality and reliable information."

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