Recommendations
89. It is recommended that the Committee:
- Note that a report was produced by LECG in November 2007 which built on a 2005 review which assessed the parallel importing policy and its impact on the creative industries;
- Note that the book, sound recording, computer software and film industries were assessed for the purposes of the 2007 review;
Book Industry
- Note that historic industry concern around the parallel importation of old stock of New Zealand books and in particular New Zealand children's books being resold on the domestic market is no longer considered to be a significant risk;
- Note that, despite parallel importation of books, the domestic book industry is growing;
- Agree to continue to allow the parallel importation of books;
Sound Recording Industry
- Note that the sound recording industry has been heavily impacted by the increase in illegal downloads and the trade in pirated goods;
- Note that there is concern from the sound recording industry that parallel importing is negatively impacting an already weakened domestic market;
- Note that international industry trends indicate an overall decline in music sales;
- Note that the international distribution model for sound recordings is changing, and altering the parallel importing policy is unlikely to provide a solution to the issues faced by the domestic sound recording industry;
- Agree to continue to allow parallel importation of sound recordings;
Computer Software Industry
- Note that most consumer software products sold in New Zealand are imported;
- Note that New Zealand business software creators are unlikely to be affected by parallel importing because of the need for customisation and after-sale services not usually offered by parallel imported products;
- Note that there appears to be no negative effect on the New Zealand software industry as a result of parallel importing;
- Agree to continue to allow parallel importation of computer software.
Film Industry
- Note that the 9 month ban on parallel importation of film from international release date is set to lapse in October 2008;
- Note that the original justifications for the ban were to protect investment in and promotion of the New Zealand film industry and to protect the viability of provincial cinemas;
- Note the distribution format release windows have narrowed since parallel importing occurred for blockbuster films, with New Zealand cinematic release now only 5 to 11 days behind United States release dates on average;
- Note that the industry is concerned regarding the cinematic release of non-blockbuster films in New Zealand at the same time the films are available for sale on the market in New Zealand if the 9 month ban were allowed to lapse;
- Note the average cinematic release date for non-blockbuster films in New Zealand is 1 to 3 months before their international DVD release;
- Note that the industry is concerned regarding the viability of provincial cinemas if the 9 month ban is permitted to lapse;
- Note the uptake of digital projection technology, which would reduce the time it takes some movies to get to New Zealand cinemas, is anticipated to take 5 to 15 years before it becomes widespread in New Zealand;
- Agree to maintain the 9 month ban on the parallel importation of films from their international release date as contained in section 35(3) of the Copyright Act 1994;
- Agree that the sunset clause be renewed for a period of 5 years with an expiry date of October 2013;
- Invite the Associate Minister of Commerce to issue drafting instructions to the Parliamentary Council Office to give effect to the above recommendations;
- Note legislation for these amendments will be included in the Copyright (Commissioning Rule) Amendment Bill, which has a legislative priority 4: to proceed to select committee in 2008;
- Note that this Cabinet paper is to be published on the Ministry of Economic Development website, subject to any appropriate deletions in accordance with the Official Information Act 1982.
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