Before we distribute funds to copyright owners, we first need to know what has been copied.
Understanding what has been copied
Each year, we carry out sampling surveys with a selected number of licensees. The fees we collect (less operating costs) are distributed to copyright owners on the basis of the information gathered during such surveys. The sampling surveys themselves are structured by a statistician to be representative of the copying conducted over the term of each license and to account for variations such as location, size and enrolments amongst licensee groups.
Licensees participating in sampling surveys are fully briefed by us; they are required to keep complete copying records during the
survey period. The data obtained is then processed by us and the recorded copyright owner details are used to make annual distributions of licence fees to the publishers and authors whose works are shown to be copied. We also use the sampling records to
set appropriate licence fees for users based on the volume of copying being done.
It would be logistically impossible to require all licensees to keep full records of all the copying they undertake in any given sampling period. The cost to us to then process such data would quickly soak up any monies available to distribute back to copyright holders. Working on a sampling survey basis, we gather data from a representative ‘basket’ of licensees, who are able to maintain strictly accurate records without assuming onerous and costly administrative responsibilities.
In some circumstances, copying records are also obtained from select licensees via usage report software that is provided to us digitally and uploaded in our systems to be processed.
In addition to this, working this way we follow an international precedent: the majority of RRO’s use sampling surveys as the basis for licence fee distribution.
Paying copyright owners
We represent publishers and authors whose works are copied under our licensing schemes and copyright clearance services operating in New Zealand. We also have mandate agreements with New Zealand publishers and reciprocal agreements with Reproduction Rights Organisations (RROs) overseas that provide the repertoire that can be copied under their licensing and clearance services.
Once we know what works have been copied and we have received all variations of licensing revenue, the funds are then held in different distribution pools ready for us to process.
Calculation of the amount allocated
Distribution of funds are based on the copying records provided by licensees and overseas RROs. Funds are then allocated to copying records on a 'per page' basis by dividing the distribution pool by the total number of copy pages in the copying records, collected from each licence sector to calculate the page rate and then multiplying the copy pages for each record by the page rate:
Sector Distribution Pool $
--------------------------------- (divided by)
Total # copy pages
= Page rate X copy pages per record
The allocation of revenue from copyright clearance services is based on copying records provided by licensees.
For a full understanding of the distribution process, check out our Distribution Policy here.
Administration charges and others costs
The revenue we collect from licensing, after operating costs, is distributed to the owners of the works copied. A small percentage amount is deducted from the gross distributable funds we receive each year. These fees and costs are detailed in our Distribution policy and vary based on a number of factors (eg. source of revenue, mandated/non-mandated etc). This fees are for operating costs incurred in the processing and distribution of revenue from copyright clearance services and overseas RRO's.
We also allocate 2% of revenue to the CLNZ Cultural Fund and 1% of revenue to the CLNZ Legal Reserve fund from blanket licensing schemes.
For detailed information about our administrative charges and other costs, please read our Distribution Policy here.