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Going through times of crisis with strong cooperational partners

Going through times of crisis with strong cooperational partners
Round table discussion with Christoph Bill , Irène Philipp Ziebold (SUISA COO) and Alexander Bücheli (Managing Director Bar & Club Commission Zurich). (Photos: Manu Leuenberger)
Heitere Events AG and President SMPA [Swiss Music Promoters Association]
Presentation and transcript: Markus Ganz, guest author
At a round table discussion, Christoph Bill and Alexander Bücheli, two representatives of SUISA customers from the promoter and event organising sector, and Irène Philipp Ziebold, SUISA COO, spoke about crisis management during the pandemic. Cooperation with SUISA was also a topic.

How have you and the companies you represent experienced the COVID-19 crisis so far?

Christoph Bill: As president of the industry association SMPA, I believe it caught all our members on the wrong foot; we were not prepared for such a scenario. But we reacted relatively quickly as an industry, got together, defined immediate measures (e.g. regarding tickets in the event of postponements and cancellations) and continuously discussed the next steps. The rest is history.
Alexander Bücheli: We were also caught on the wrong foot; these were simply conditions and situations that could not be foreseen, let alone anticipated. After that, the associations gained importance for their members; with us, they specifically gained an important function of translating civil servants’ German into the language of our members. Another, moral component occurred in our case: In the pandemic, we realised that we are considered a fun society, that parties have a different reputation compared to festivals or concerts. After the incidents in Ischgl in March 2020, we were made to feel that without us, COVID-19 would not exist; this was also emotionally difficult for our members. And, against this moral question, we are afraid again now that the case numbers are on the rise again: Will there be a call for club closures again?
Irène Philipp Ziebold: Recent times have also been challenging for SUISA. On both sides that we serve, namely that of our members (authorsand publishers) and that of our customers (music users), revenues have declined very quickly and sharply in certain markets. One segment of revenues was hit hard where we had not expected such a decline: in the performing rights, where collections had been rising steadily in recent years, especially in the concert sector, while they had been declining for years in the reproduction sector. As a consequence, we were not prepared for that and could not simply compensate for this with other revenues.
The new situation has also challenged us greatly in providing our services, especially when it comes to giving advice and counsel. But it has also brought about positive sides. Firstly, it showed us that we can see ourselves as a partner to our members and customers, because we acted relatively quickly and took action. And secondly, from an internal perspective: Within two weeks, 90 percent of our employees were working from their home offices. In the process, we also realised that we are technologically capable of continuing to run the company with around 250 employees by working remotely. The changeover was more difficult on a human level, the social element, which has a dynamic effect even in such a large company, and which fell away from one day to the next.

Were there no emergency scenarios in case everything was closing?

Christoph Bill: I have often wondered if we should not have made our members aware of such a potential risk. But such a scenario was very far away, even if it appeared in a few contingency plans. I have also accused myself of this from time to time, but what would we have done differently? We reacted immediately and got involved as an industry in a straightforward manner. By that I don’t just mean the SMPA, in fact we have managed to give a voice to the culture and events industry as a whole. This is a great advantage on the political and media level, and we should have done this a long time ago, now it has just triggered the pandemic. And it turns out that despite the breadth of culture represented, we have a lot of common denominators.

Insurance and streamed concerts

Mr. Bücheli, in the club scene, there have been problems on a small scale for years, such as threatened closures because of drugs and noise complaints – that’s why the Bar & Club Commission Zurich was founded …

Alexander Bücheli: Yes, but the pandemic is a whole different problem because you can’t get a defence counsel against it like you do with noise complaints. And that’s what’s so extreme about it: You just have to grin and bear it. For example, we tried to learn something (regarding virus transmission in bars and clubs) by sending inquiries to the Science Taskforce but to no avail. None of the businesses had contingency plans, but 80 to 90 percent had epidemic or pandemic insurance, but many insurers dodged paying. In Zurich, we were fortunate that many members had participated in a pool solution that covered the pandemic period, even twice: the second lockdown was considered a second claim. This type of insurance was, however, cancelled then by the insurance companies at the end of 2021 – and no longer exists.
We also had no alternatives to just closing like the restaurants: We were not able to offer take-away club nights. We did organise the virtual club festival “Limmatstream” in March 2021, where people could dance through the clubs as avatars. This attracted over 3,000 participants and you could also do video chats with other avatars there. That was kind of great, but couldn’t replace a real club experience. In addition, there was the question of whether people would have been willing to pay 10 to 15 francs for such a virtual experience, which you would need, as an organiser, to get by financially; we offered it for free.
Christoph Bill: Regarding the insurance issue: With our members, it was exactly the other way around; at most, 20 percent had insurance and they usually paid up. But if we look back, the beginning of the pandemic was actually easier because there was a clear ban on major events. As early as at the end of April 2020, we knew that the “Heitere” festival could not take place in August, which is a comfortable situation for organisers in terms of time. All colleagues knew at that time that they would have to postpone their events within a certain period of time. This means a huge effort, but there was a lot of understanding from all sides. Things did, however, get difficult after that, when waiting times for specifications for the subsequent periods were long and there were no clear requirements and information, or they differed from canton to canton. Accordingly, we had to plan at shorter notice and taking different scenarios into account.

Alienation from practice and lack of planability

Alexander Bücheli: This is an important point: There was no clear announcement by the Federal Government. Once you know whether you can remain open or have to close, then you can adapt accordingly. We still had an intermediate phase during which the Zurich cantonal government said you shouldn’t go dancing any more, that the clubs should actually be closed, but they didn’t give us the directive to close. The moral pressure became so great as we had never experienced before; there were even anonymous insults and threats.
Christoph Bill: At that time, I also noticed a lack of practical experience on the part of the authorities, and for a long time also a lack of willingness to engage in dialogue. We also approached many agencies, but they passed the buck to each other and nothing came back to us, it would have been better if they had involved us for comprehensible, practical measures with some lead time. It took so long before we were able to talk to people from the Federal Office of Public Health for the first time! After all, we are the last ones who want to pull off an event at any cost. But we have to have support from the authorities so that we can say in time that an event has to be cancelled or postponed. Roll-over planning out to three months would have been ideal for us. You might be able to open a club from one week to the next, but for a big concert or a festival, you do need this lead time.

So by banning events, you could more or less adjust to a situation. Did this lead to short-time work, lay-offs or even bankruptcies?

Christoph Bill: There has not been a single bankruptcy among our members so far. The aid packages worked quickly and well; we also expressed our thanks for them. But the problems are far from over: Demand is still subdued, for example, and supports are being cut and we are lacking skilled workers. That’s why I’m not so confident in the short term; the moment of truth is yet to come.

Rapid assistance and few redundancies

Alexander Bücheli: The speed of Covid loans and short-time work support: That was very important for us, also how unbureaucratic the process was how it was allocated- a key experience. With regard to the so-called “A-fonds-perdu” money [loans which the lender writes off as bad debt and do not have to be paid back], which is important for survival, it must be said, however, that it took six to eight months before the first amounts were paid out; moreover, they were only compensations for cultural enterprises. We had to do a lot to ensure that clubs were also recognised and compensated as cultural enterprises – and this only succeeded in certain cantons. Businesses that then received hardship funds had to wait over a year for assistance.
Christoph Bill: The cantonal differences in interpretation were also a problem among our members, and continue to be that to this day. Instruments that are in themselves effective, such as the current protective shield for public events, have not been introduced at all in some cantons and are applied very differently in many others. The reserves that you have built up over 20 or 30 years in a business with very thin margins are used up pretty soon. After all, the response to short-time work was very quick and unbureaucratic.
Alexander Bücheli: There were only a few redundancies in our space. It was more like employees were asking to be made redundant because they wanted to work in a different sector. Bankruptcies occurred in companies that were already not doing so well, or those that had just entered the market. Thanks to private and company reserves, there were few bankruptcies.

There have been much fewer concerts in the last 20 months, so one could assume that there was also much less to do at SUISA …

Irène Philipp Ziebold: No dismissals occurred at our company because of COVID-19. In cases where we no longer replaced people, it was for general reasons, mainly because we can automate many simple jobs, that is, replace them with computers. But there was talk about short-time work, precisely with the argumentation of the cancelled concerts. We then took a close look at this. The membership and documentation department as well as the customer service for the media and online area were hit less hard by COVID-19 and we had more work there because many people sought advice and we also set up an emergency fund.
Only the customer service for the performing rights or events had less to do. This provided an opportunity to work through backlogs and staff could be deployed in other departments, such as online, where more work was required due to COVID-19. That’s why we didn’t have to lay anyone off or put them on short-time work contracts because of COVID-19. And if you look at the 2020 operating result, we also achieved a relatively good result in this crisis.

Emergency budget and additional work

Does this also have to do with the fact that SUISA worked with an emergency budget that was adjusted on a rolling basis?

Irène Philipp Ziebold: Absolutely. The Board wanted to know where the journey was headed: Can we reduce costs at the same rate our collections are collapsing? This would only have been possible with a massive reduction in staff. We knew, however, that if we laid people off, they would be missing on day X when business returned to normal. A great deal of expertise needed for these tasks would no longer be available; new employees always need a certain training period. It would therefore have been negligent to lay off many people in such a situation.

How much extra work do organisers have to do due to ever-changing COVID-19 regulations?

Christoph Bill: It is an unbelievable level of additional work that the members of the SMPA have to do because of this, I can also say that from personal experience from the “Heitere” festival. Developing and adapting a number of scenarios, obtaining, negotiating and implementing the permit from the health authorities, drawing up and implementing the precautionary measures, safeguarding against risks, dealing with uncertainty and keeping everyone involved at it was and remains an enormous amount of work for an event organiser, not to mention the additional expenses on site for infrastructure and personnel. At the “Heitere”, we launched a virtual festival in 2021 in addition to the on-site edition, which was a valuable experience, but at the same time also an enormous effort.

What is the situation in neighbouring sectors, such as technicians and security?

Christoph Bill: The shortage of skilled workers is likely to become an increasing problem, on the one hand due to lay-offs that some companies had to announce despite everything. On the other hand, more and more people from these sectors are orienting themselves differently the longer the crisis lasts, even if you would like to keep them. And those who are now working as electricians, for example, will wait a while before returning to the audio engineering profession; they may also have come to appreciate the more regulated working hours.
If anything, the need will be even greater than before, because our members have postponed many events until 2022; this will give a big ramp up of demand at certain times, because the postponed and new events will come together. You have to manage that somehow. And someone has to buy these tickets.
Alexander Bücheli: Early 2022 will be crucial for us, depending also on how pre-Christmas business will fare with corporate events, which in some companies can account for 30 to 50 percent of annual sales.

A single voice and rapid response

How important was it that various associations got together early on to have a single voice, especially with the federal government?

Christoph Bill: That was absolutely crucial. Even though there was no real dialogue for a long time, many of our messages got through faster than we felt they did. What was implemented was largely in the right direction. It was important to bring together the voices from the cultural and event sectors instead of rushing forward individually. It is enormously important, especially for politicians, that they are not bombarded with statements from all sides, but that there is a lowest common denominator – that is what we have always been looking for. As an association, we suddenly played a bigger and more visible role. We have already created a climate of openness and togetherness over the last six to ten years. We were able to build on that.

How has SUISA’s position changed during this time of crisis?

Irène Philipp Ziebold: On the side of our members and publishers, we were strengthened because we were there for them and did not disappear into short-time work. Advice and counsel were immensely important to the members. We continued to do our job to generate money – the 2020 financial statements show that we did not do badly. We have also created an emergency fund, where we are still a bit more pragmatic, especially in contrast to certain federal support measures. We are neither superficial nor negligent, but we ask for less information and can therefore provide certain support more quickly. We have also changed our advance payment rules, made them more generous, but always weighing up the risk. We also have a Pension Fund for authors and publishers that provides support as well. In other words, we acted, and this has once again strengthened our standing among our members.

And among the customers?

Irène Philipp Ziebold: There, too, we reacted very quickly and also took measures that we would not have had to take, such as extending payment deadlines and suspending reminders. We were quite agile and acted in a cooperative way on that. This has brought us a lot of goodwill.

And what about one single voice?

Irène Philipp Ziebold: Here I can refer to the Swiss Music Council. As its member, we are well represented in the “Taskforce Culture”. For the first time, organisers and members have come to the same table with the same demand with a single voice, so to speak, and this has also worked well with politics. The “Taskforce Culture” was able to exert a certain influence and was involved in discussions with Federal Councillor Berset. It was and remains a success that should be carried forward.

Uncomplicated solutions and delayed normalisation

How do the organisers rate the crisis cooperation with SUISA?

Christoph Bill: Even if it has affected SMPA members less, SUISA has found quick and straightforward solutions in some areas. Thank you, my compliments! The dialogue with us as an association was already good before, but it got even better. We felt there was an awareness of being in the same boat. And it also became clear that the future can only be mastered together and that perhaps new paths must be followed.
Alexander Bücheli: It was a bit like the “Taskforce Culture”. We wrote to SUISA at the beginning because we have the problem that clubs pay invoices on a quarterly basis and not on the basis of events that take place. SUISA has found a very straightforward solution for which we are very grateful. Regardless of COVID-19, we should increasingly try to understand each other and also meet [face to face]. And it’s a good sign that none of our members have complained to me about SUISA since the pandemic, so it’s working.

What are the expectations for normalisation of the situation, has there been a pent-up need among the public for events?

Christoph Bill: This still feels like looking into the crystal ball for me. No, I don’t think there’s a lot that has been pent up there. Many people will only slowly and hesitantly return to concerts and festivals. This is reflected in the fact that, with a few exceptions, demand for our members’ events is 20 to 30 percent lower than usual and that a higher proportion of guests who have a ticket do not show up. This delay must be considered in addition to the lead time required for organising the events: We are trying to get live operations going again. But we can’t just pull the lever. This will probably also require start-up support and instruments such as SUISA continuing to extend payment deadlines.

The roundtable discussion was held on 12 November 2021. The participants were: Christoph Bill, Heitere Events AG and SMPA President(Swiss Music Promoters Association); Alexander Bücheli, Managing Director Bar & Club Commission Zurich; Irène Philipp Ziebold, SUISA COO and Vice President Swiss Music Council.

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