“Hands-on” – the new Common Tariff K

The new Joint Tariff K applies to events which have taken place since 01 January 2017. An overview of the changes to the concert tariff in force and some answers to frequently asked questions which have arisen based on the experience gathered with the new provisions in the first few months. Text by Chantal Bolzern

“Hands-on” – the new Common Tariff K

Since January 2017, a new concert tariff has been in force in Switzerland and in Liechtenstein. The picture shows SUISA member Seven (in the middle) on stage at the Tonart Festival in Altdorf, where he performed with a trio in March 2017. More information on Seven is available in the brochure “Where the music is new”, 2017 edition. (Photo: Tabea Hüberli)

What’s new?

There is now one instead of two tariffs. That way, all information that is relevant to customers, and the respective licensing terms and conditions are now combined into one single document. This makes life much easier, especially for event organisers who organise, apart from concerts, also other events such as theatre performances, cabarets etc.

The types of events are defined and explained in more detail and clarity. Apart from concerts, there are now specific event categories for concert-like performances, shows, ballet and theatre. These are intended to help customers to find their type of event and the licensing rates required for calculating the budget more quickly.

The licence fee percentages have been newly defined and reduced for many events depending on the type of event (concert, concert-like performance, show, ballet, theatre).

Apart from concerts, Common Tariff K (CT K) also governs licensing for music appearing in comedy, shows (such as “Art on Ice” or “Masters of Dirt”), sport tournaments with choreographies such as show dances or theatre performances with musical background or bedding. The calculation of the licence fees for comedy, tattoo festivals etc. in particular will become easier since the event is now relevant as a whole for the amount of the licence rate; it is no longer necessary to license individual works at different rates. This also helps making the budgeting process for event organisers easier and reduces the efforts of SUISA.

Small concerts are invoiced based on the works that were actually used (“pro rata temporis” rule) and no longer as a lump-sum. At the same time, licensing based on the costs of the music usage was re-introduced. Thus, the copyright remuneration will be calculated on the basis of the income generated or the costs incurred. The latter specifically applies to concerts which are free of charge and charity events.

Customers may also deduct the costs for external ticket sales up to a lump-sum of 10%, even for small concerts, if they submit the relevant supporting documents. SUISA thus takes into consideration that event organisers nowadays do use external ticket agencies, even for small or non-commercial events.

Performing artists of any recordings that are played by event organisers prior or after the event, or between the live performances, now also grant the event organiser reproduction rights. This entails a slight increase of the licensing rate for neighbouring rights from 0.2% to 0.25%.

Following the afore-mentioned lowering of the licensing fees, there was a review of the discount system. The volume discount is now only granted for small concerts and the contractual customer must be a member of a recognised association of event organisers in order to qualify for a discount.

What has not changed?

Services to concert goers by third parties that are included in the entrance fee, such as the use of public transport, a voucher for an inclusive drink etc. as well as ticket and value-added tax may still be deducted from the income if the relevant supporting documents are submitted.

The minimum licence fee has remained the same and still amounts to CHF 40 per event. Our contractual customers continue to receive the association discount as well as a 2% cash discount if they pay their invoice within 10 days.

Event organisers must submit set lists or lists of the performed works to SUISA. Firstly, SUISA requires such lists so that it can calculate a correct licensing amount. If SUISA does not hold the rights in all the titles, because, for example, copyright protection has already lapsed, the licensing amount is reduced on a pro rata temporis basis. The licensing rate also gets reduced on a pro rata temporis base if music is not used throughout the entire performance, as is the case quite regularly for theatre performances or comedy. Secondly, SUISA requires the lists in order to distribute the income collected to those composers and publishers whose music has been performed during the event.

Answers to frequently asked questions

Why does the new tariff create more administrative effort?
Introducing a new tariff is always an opportunity to check with long-term customers whether the modalities for the notifications of the events are still suitable for both parties. Furthermore, it is possible that with the partial changes to the licensing rates or conditions under the tariff, SUISA requires different information from customers. This mainly affects such concerts for which event organisers had received a licence based on the Common Tariff Kb between 2009 and 2016 (small concerts). Unfortunately, this is linked to an increased administrative effort for customers as well as for SUISA during a transitional period. As soon as we have clarified with individual customers in each case how we can licence and distribute correctly, this will get easier again.

What is a small concert and why is there no longer a specific tariff for it?
Between 2009 and 2016, a proper tariff applied for small concerts, Common Tariff Kb. Since the beginning of this year, small concerts are governed by the same tariff again as major concerts, theatre performances or comedy events.

In order to continue to fall under the “small concert” category, the capacity of the event venue must be no bigger than 999 people, and the income generated from ticket sales may not exceed CHF 15,000 per event. In this segment, the basic licensing rates were lowered from 10% until 2008 via 9.5% in 2016 to 9% for this year. Until 2008 the same rules have applied, and now, from 2017 onwards, apply again for the declaration of the concerts and licensing such as major concerts. This means that customers deliver the same information to us and don’t have to ask themselves each time which category the event falls under and how they should submit their documentation to SUISA.

This is especially a simplification of matters for medium-sized clubs whose capacity is just less than 1,000 people and which have generated more than CHF 15,000 in ticket sales in one instance and less in another. It’s also facilitating matters immensely for the venues that organise cabarets and concerts. Until now, you had to adhere to CT Ka for comedy, dance, acrobatics etc., and CT Kb for concerts.

Why are sponsoring monies or subsidies suddenly taken into consideration as income in the case of small concerts?
The basic idea of copyright is that authors participate in the collections which have been generated from the exploitation of their works. In the event business, the main income source are usually the ticket sales. If an event organiser’s plans for their budget only caters for the music costs such as payment for musicians to be covered by way of third party means, such third party means (sponsoring, subsidies etc.) must be taken into consideration as an income. This rule has already been established in concert tariffs as early as 20 years ago. It applies for all major concerts, comedy and theatre performances and used to apply to small concerts up until 2008. Due to the combination of the two tariffs CT Ka and CT Kb, it now applies to small concerts again since the beginning of this year.

Many non-commercial clubs and stages create annual budgets, where they make a hybrid calculation. They receive subsidies from their municipalities or cantons, but finance themselves from ticket income and turnover generated by the gastronomy on top of that. As long as they assume in their annual budgets that their ticket sales cover the artists’ performance salaries, the new tariff entails no changes for them. For long-term customers it therefore suffices to glance over their old invoices (up until 2008) to see whether a change has taken place. During the tariff negotiations, we undertook thorough calculations and research together with the associations whose results are now confirmed when implementing the tariff: for the vast majority of the event organisers of the non-commercial sector and especially clubs and stages, nothing will change.

The changes do, however, affect event organisers of corporate events or events that are free of charge, but also categories which can only pay artists’ salaries and other costs related to music by means of subsidies or sponsors’ subsidies.

What are non-musical performances at major concerts and what do they entail?
Both the old Common Tariff Ka (item 25 CT Ka) as well as the new Common Tariff K (item 14.1 CT K) include the term “non-musical performances”. We found out in everyday application of the tariff, that it wasn’t always clear to event organisers what is meant by this term. In order to answer these questions in the tariff, we have clarified this term in the new tariff text: it includes sophisticated choreographies, elaborate costumes and costume changes, video installations or light shows which go beyond the ‘must-have’. By doing so, we want to – as is required by copyright law – take performance-related activities into consideration which are not music but are still protected by copyright.

In practice, this means that the entire concept is taken into consideration for concerts of artists such as Beyoncé or bands like Archive, and the event organiser has to pay a lower licensing rate for the copyright in musical works. It also means that even in big stadiums, concerts sometimes will take place without elaborate artistic production and the event organiser will pay the usual basic licensing rate. That does not only apply to big classical concerts but can also be the case for concerts of certain singer songwriters, like Bruce Springsteen or Neil Diamond.

Why were the new provisions of the concert tariff made known so shortly before its introduction?
In June 2016, SUISA had announced that a new tariff had been negotiated with the relevant user associations such as SMPA, petzi, KTV, ATP etc. and that an agreement had been made. The result of the negotiations was submitted to the Federal Arbitration Commission for copyright and neighbouring rights (ESchK) for approval. The EschK approved the new Common Tariff K on 20 December 2016 and the tariff could thus come into force on 01 January 2017. The relevant tariff documents could not be officially published prior the approval had been given by the ESchK. SUISA had no influence on the date of the approval.

Further information:
«Concerts, comedy shows, shows, ballets, etc.» on www.suisa.ch

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