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Lifting of Restrictions in the Copyright Act 1968 on Parallel Importation of Sound Recordings

Recently, the Australian government made the controversial decision to lift restrictions in the Copyright Act(1968) on parallel importation of sound recordings. Here, Sony Australia's Dance Pool Label Manager / Dance Music Manager and Sydney DJ John Ferris gives us his own personal position.

The Australian Government wants to change the copyright law to "drop the price of cd's".

How will changing the copyright law effect a change in price? This is a question the government can't really answer. They say that allowing retailers access to cheaper imports that the price will drop. From most of our experience in the dance area since when has a full price cd from the UK or the US been cheaper than the Australian manufactured price (except throught the net)? Not often.

The only cheap cds from the US will be deletions (which are illegal to sell and will not be paying artist royaties) pirate copies (ditto) and the large US chain price. This 3rd source will be when the either large US retail chains move into Australia and bring with them their economies of scale (when they buy CDs made in the US) and directly ship these large quanties of 'product', or the other option will be large buying groups such as HMV buying and squeezing the record companies internationally for a cheap price. This happened recently in Europe where The Prodigy's label XL Records was being squeezed by a large chain who was threaten XL that if they did not drop their price they would not buy the record at all from them (XL) and buy it instead from an unnamed Eastern European manufacturer. In Russia piracy accounts for about 80% of the market. Now all this may be good in the short term as far as price for cds, but it is incredible bad for record companies of any persusion and really bad for artists cause the first to go in most of these transactions is the artist royalties. In australia it will be very bad for small retailers who stock all titles, all record companies, all companies and people that licence artists for australia and manufacturers.

What there (the gov) are proposing is to abolish the rights of owners of master recording copyrights from controlling the exclusive rights to sell the recording in Australia. This means a number of things. For example Central Station will not be able to stop MDS from importing 10,000 copies of the new Klubheads record. Central Station will no doubt not bother with manufacturing here for this very reason and will also import just to stop Mds (or whoever) from importing it themselves. The freight costs and price of buying a finished cd from Holland will make the cd single $10 instead of $7. It means that this cd doesnot get made in Australia. Another example would be say Pendulum get a deal for their album in the US with some medium sized company. The US company (the size and type of company is irrelevant, it could be a Smile or an RCA) presses 100,000 albums in anticipation that its going to be huge. It ships 80,000 to stores and has 20,000 left. The album doesn't do so well cause the single never got commercial FM radio. So the album does sell as well as expected nor do retailers order anymore cause the stock they have is still in the store. In fact 10,000 get returned to the record company unsold. This leaves the record company with 30,000 Pendulum albums. It then gets deleted in the US. All artist royaties are no longer payable on these deletions. These deletions which cannot get sold in the US BUT can now get sold and shipped 'LEGALLY' to Australia and sold minus the artist royalty. The price is cheaper to the retailer here rather than buying it off Mds / Vicious in Australia. Mds / Vicious have to pay artist royalty and sales tax included in the wholesale price of the Australian version. Under the proposed changes to Copyright Law Mds will not be able to stop what is illegal in the US from being shipped and sold here.

Mds will lose a lot of money from this type of transction. They may eventually go out of the business of licencing records from OS cause its too risky, they may also stop trying to sell their artists OS cause it just isn't worth it coming back into the country.

Also for a record comapny if there is no gareentee that the retailer will buy your release casue they can get it from their head office in Ney York or China cheaper (cause it has no asles tax and royalties) then the said record company will not be spending money on marketing and promotion. This directly effects spending at Street press, radio advertising, TV ads, fylers, street posters etc..

There will be less money spent in Australia promoting music!

The government is saying this will change of the copyright law will drop prices from the so-called expensive point they are now at...

1. Prices.

In 1993 Australian CD wholesale prices were the 5th cheapest amounst 23 countries surveyed. 1997 remains the same. In Australia there is Government sales tax included in the wholesale price BY LAW. In the US, sales tax is lower and is paid after the purchase, and so is songwriter royalties. When (Australia gov.) people mention the US cheaper prices they also forget to mention that the retailer then adds his own post sale tax. Australia has a mandatory songwriter royalty included in the price.

In 1996 Choice mag. compared the average cd full prices. In the US the price was $23.95 without the sales tax and songwriter royalty. In Australia the Average price was (in 1996) $27.00 including the sales tax and songwriter royalty.

Australia is a much smaller market and will never have the economies of scale that the US does. In Australia most titles are already discounted.

So when is something too expensive? Are record companies making too much money (That includes major and indie labels)? Is a Playstation game cheap or expensive. It too is a cd and sells for twice as much as a music cd! If the Goverment really believes that the price of a music cd is too expensive why don't they drop the sales tax? Is a pair of Nikes too expensive? They cost fuck all to make? And we pay $100-200 for a pair of latex and fabric shoes! What is really going on here?

So why is the government changing a law that benefits some consumers, some Multi-national retailers and the multi national music companies ex-Australia short term but creates havoc for lots of people and potentially destroys the Australia music production, manufacturing, licencing, music media and more???

The only reason I can think is that it's an easy target for a Government that is fucking up. This way they can go round saying 'WE ARE GOING TO DROP THE PRICES OF CD FOR YOU ALL" and not answer the real questions.

Imports are already available. This is not an issue.

John

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