5.9 One way to consider the question of whether unlicensed third parties should be permitted to facilitate such copying is to ask, as the ALRC asked in the Issues Paper in the context of the time-shifting exception, whether it should matter who makes the copies.
5.10 Some stakeholders told the ALRC that it matters very much who makes the copies. Foxtel submitted that it was critically important because if ‘the recording is not made by a private individual, rights holders’ ability to monetise their content may be seriously prejudiced’. The Coalition of Major Professional and Participation Sports said that there is a
fundamental distinction between recordings made by consumers but later stored on a remote server and recordings made by companies, for commercial gain, and stored on remote servers for their subscribers to access. The latter can significantly impact on the ability of content owners to exploit their rights and should not be allowed without the consent of the rights holder.
5.11 Free TV Australia similarly submitted that:
Third parties exploiting free to air signals without the permission or compensation of broadcasters as copyright owners are undermining the economic interests of broadcasters. Broadcasters as copyright owners are entitled to control the exploitation of their signals and should be appropriately compensated by third parties reaping commercial gain from their broadcast signals.
5.12 Many submissions, even some which supported exceptions for private copying, drew the line at unlicensed third parties commercially benefiting from making copies for consumers. This was not confined to time-shifting. Commercial Radio Australia, for example, said consumers should be able to take full advantage of technology, but commercial gain should be reserved for rights holders. Exceptions should be limited
to prevent an erosion of rightholders’ ability to control the commercial exploitation of their content. New uses and technologies should not provide a means by which rightholders might be wrested of such control. …. The time and format shifting exceptions should not cover copying by a company on behalf of an individual, where that company stands to make commercial gain from the copying. Commercial exploitation rights should be reserved for rightholders.
5.13 Tabcorp said that the private copying exceptions ‘should be limited to private individuals and should not be extended to companies who can commercially exploit the recordings so as to prevent the diminution of the value of the broadcasters’ rights’.
5.14 Foxtel stated that expanding the exceptions ‘to allow unlicensed third parties to profit at the expense of those who invest in the creation of content would be entirely inequitable’.
5.15 Telstra also submitted that the time-shifting exception should be clarified, and a distinction made between ‘recordings made by a customer using their own technology and later stored on a remote server; and recordings made by entities, not licensed by rights holders, and stored on remote servers for subscribers to access’. The latter category, Telstra said, is a commercial exploitation and must require a licence from the content owner.
5.16 The Music Council of Australia submitted:
If a service provider is obtaining a commercial benefit from the use of copyright material—that is, capturing the copyright owner’s public—it should obtain a licence and pay remuneration to the copyright owner. Such remuneration is a cost of doing business, like any other.
5.17 One common objection is that these businesses are ‘free riding’.
 The private copying exceptions are considered more broadly in Ch 9.
 Foxtel, Submission 245.
 COMPPS, Submission 266.
 Free TV Australia, Submission 270.
 Commercial Radio Australia, Submission 132.
 Tabcorp Holdings Ltd, Submission 164.
 Foxtel, Submission 245.
 Telstra Corporation Limited, Submission 222.
 Music Council of Australia, Submission 269.