MR BARNETT: Really, royalties will vary by contract, by author contract, so there’s no hard and fast or uniform percentages to apply, it really depends on the individual author contracts. MS CHESTER: Okay. So when Pearson is looking at a business case to go with the local content and then making that assessment based on some sort of required rate of return to Pearson, are there different rates of return that are required for local content in Australia versus the imported offshore content given that cross subsidy that you discussed in your submission? can you just repeat the question? MR BARNETT: MS CHESTER: So I’m just trying to work out if there’s a cross subsidy happening that would suggest that there might be a different required rate of return on publication sales from local content versus publication sales here in Australia from offshore content? MR BARNETT: Obviously anything that we’re building ourselves here generally speaking will sell mostly in Australia. We have to carry the business case based on the performance of that product within the Australian geography. MS CHESTER: So does that mean that you have the same required rate of return in a business sense on imported content being published and sold in Australia and local - - - MR BARNETT: That business case would be carried by the originating geography for a wholly, you know, US or UK developed product. MR COPPEL: I’m going to be brutal on timing. We’ve just passed the allocated time so thank you, very much, David. MR BARNETT: Thank you. MS CHESTER: And if you could come back as soon as possible with those numbers that would be really helpful, thank you. MR BARNETT: Thank you. Our next participant is Kane Waterworth from Kawat MR COPPEL: Enterprises. So welcome, when you’re comfortable if you give for the purpose of the transcript your name and who you represent and then a brief opening statement.
MR BARNETT: Really, royalties will vary by contract, by author contract, so there’s no hard and fast or uniform percentages to apply, it really depends on the individual author contracts. MS CHESTER: Okay. So when Pearson is looking at a business case to go with the local content and then making that assessment based on some sort of required rate of return to Pearson, are there different rates of return that are required for local content in Australia versus the imported offshore content given that cross subsidy that you discussed in your submission? MR BARNETT: can you just repeat the question? MS CHESTER: So I’m just trying to work out if there’s a cross subsidy happening that would suggest that there might be a different required rate of return on publication sales from local content versus publication sales here in Australia from offshore content? MR BARNETT: Obviously anything that we’re building ourselves here generally speaking will sell mostly in Australia. We have to carry the business case based on the performance of that product within the Australian geography. MS CHESTER: So does that mean that you have the same required rate of return in a business sense on imported content being published and sold in Australia and local - - - MR BARNETT: That business case would be carried by the originating geography for a wholly, you know, US or UK developed product. MR COPPEL: I’m going to be brutal on timing. We’ve just passed the allocated time so thank you, very much, David. MR BARNETT: Thank you. MS CHESTER: And if you could come back as soon as possible with those numbers that would be really helpful, thank you. MR BARNETT: Thank you. MR COPPEL: Our next participant is Kane Waterworth from Kawat Enterprises. So welcome, when you’re comfortable if you give for the purpose of the transcript your name and who you represent and then a brief opening statement.
20160627-sydney-intellectual-property.docx