Music in video games: Licensing and Addendum to Rights Administration Agreement

What is a video game without sound? Video games are hard to imagine without music. Many games become huge hits precisely because of their music which is often even released as a separate soundtrack. What is the proper licensing procedure for music in video games and what is the purpose of the new Addendum to the Rights Administration Agreement? Text by Michael Wohlgemuth

Music in video games: Licensing and Addendum to Rights Administration Agreement

Gaming corner at the internet café: every game has to have the right sound. (Photo: OHishiapply / Shutterstock.com)

The video-game industry has been chalking up continuous growth for years. The corona crisis gave earnings in this sector an additional boost. Never before have so many people consumed video games, whether on their smartphones, tablets, consoles, or PCs.

Although music plays a significant part in this success story, video-game producers have so far only cooperated with collective management organisations in isolated cases. Instead, the producers have worked directly with authors and artists who do not belong to a collective management organisation, which has enabled them to sign what are known as “buy-out dealsˮ.

This is mostly still the case today. To improve its members’ competitive chances in this flourishing market, SUISA has prepared a new addendum to the rights management agreement.

Buy-out
In a buy-out, the author transfers all their rights of use in their works to the producer against payment of a single lump-sum amount. As a result, once the purchase price is paid, the author is not entitled to any further revenues from royalties or neighbouring rights. As a rule, members of collective management organisations cannot sign buy-out agreements because they have transferred their rights of use to their collective management organisation. The very purpose of the collective management organisation is to ensure that its members receive royalties for every new use of their works. Clearly, a compromise had to be found in the case of video games (see text).

Basic principles

What music rights must a video-game producer acquire?

To produce or reproduce a video game, the producer must acquire the following rights:

  • Synchronisation right: This is the right to set an audiovisual work (in this case, a video game) to music. SUISA members (or their publishers) may settle the synchronisation rights directly with the video-game producer.
  • Reproduction and physical distribution rights: These rights are necessary to reproduce a musical work on a video or data carrier and to distribute the recording thereafter. SUISA manages the reproduction and distribution rights. The new addendum provides that these rights may be excluded from the rights administration agreement (for more, see the section “New Addendum to the Rights Administration Agreement for SUISA members”).
  • Online rights (download and streaming): Nowadays, most games are also – or only – sold on Internet for the buyer to download. In order to make a game available for downloading, the video-game producer or the online distributor (e.g. the platforms Steam or Origin) need to acquire a downloading licence.
    Certain video games can only be played by streaming on a browser, for example. This then requires a streaming licence.
    SUISA manages these online rights. Such rights cannot be excluded from the rights administration agreement by the addendum.
  • Neighbouring rights: Neighbouring rights are the rights of the performers and the rights in the sound recording. These two rights are collectively referred to as “Master Rights”.
    Authors who play their compositions themselves and produce their own recordings may licence these rights, as a performer and recording producer combined, directly to the video-game producer for all uses. Otherwise, the owner of the Master Rights must license them separately to the video-game producer. SUISA does not manage these rights.

For legal questions relating to video games, please contact our Legal Department: legalservices (at) suisa (dot) ch

New Addendum to the Rights Administration Agreement for SUISA members

Buy-outs are, as we stated above, customary practice for video-game producers. This has repeatedly placed SUISA members at a competitive disadvantage on the video-game music market because of their membership. Producers have preferred to work with authors who do not belong to a collective management organisation and who can therefore freely dispose of their rights.

The new addendum is designed to eliminate the competitive disadvantage for our members while maintaining the basic fundamentals of collective management. Since buy-outs cannot be reconciled with the basic principles of fair and usage-based remuneration, SUISA has opted for a compromise solution.

The new addendum to the rights administration agreement enables SUISA members for the first time to settle the synchronisation, reproduction, and distribution rights for commissioned compositions in one package directly with the video-game producers. At the same time, SUISA will continue to manage online uses like downloads or streamings – as is also the case in the film sector.

All other rights of use remain with SUISA in accordance with the rights administration agreement. Thus, when music from a video game is broadcast on the radio or performed at events, for example, SUISA will assert the rights of its member composer.

In practice, for the reproduction and distribution rights to be excluded from the rights administration agreement, the following criteria must be satisfied:

  • the work must be a commissioned composition. Pre-existing works that have already been published cannot be excluded from the rights administration agreement.
  • • When the work is commissioned, the following particulars must be communicated to SUISA:
    • title of the work and video game;
    • playing time of the work;
    • name and address of the principal;
    • name and address of the game producer;
    • nature and aim of the game.
  • The exclusion cannot apply to games which are used by a company for advertising, sponsoring or other purposes in association with presentations about the company itself or its products and services.

The Addendum can be obtained from the Members’ Department: authors (at) suisa (dot) ch

Licences and tariffs

What fees does SUISA apply for online uses?

Online platforms (domestic*)

These licence fees apply to online platforms offering video games for streaming or downloading.

Downloads 2% of total revenues Minimum fee
Generally CHF 500 per 100,000 downloads or streams
Subscription 2% of total revenues Minimum fee
CHF 0.15 per subscriber per month

*The licensing for international platforms like Steam, Uplay, Playstation Store etc. is handled through our subsidiary SUISA Digital Licensing AG.

Other online uses (e.g. game-playing via live-streaming or browser)

The following licence fees only apply if the producer or publisher itself distributes the game (e.g. via its own website):

General 2% of total revenues Minimum fee
A. Music only in the game menu and intro or outro sequences
CHF 400 per 100,000 downloads or streams
B. Games with in-game background music
CHF 500 per 100,000 downloads or streams
C. Games with a focus on music
CHF 600 per 100,000 downloads or streams
Advertising games 2% of total revenues Minimum fee
A. Music only in the game menu and intro or outro sequences
CHF 800 per 100,000 downloads or streams
B. Games with in-game background music
CHF 1,000 per 100,000 downloads or streams
C. Games with a focus on music
CHF 1,200 per 100,000 downloads or streams

What fees does SUISA apply for reproduction and distribution rights?

Since video games are audiovisual productions, Tariff VI applies. The main points of this tariff are:

Physical reproduction for sale

  • 3.3% of the retail sales price, or of costs (if the game is distributed for free)
  • 4.4% of the actual invoiced price (AIP) if the customer has concluded a multiannual contract with SUISA covering royalty settlements and can furnish to SUISA the breakdown of its sales with the number of units and sales price per audiovisual recording per accounting period. The AIP is the price invoiced by the customer to the retailer or, if the customer does not distribute the recordings itself, the actual wholesale price invoiced by the customer’s official distributor.
  • The applicable rate is reduced as follows:
    storage space of the protected music to total storage capacity of the carrier
    (e.g. 500 MB protected music to 2000 MB storage capacity of the carrier = 75% fee reduction)
  • Minimum fee:
    29 centimes per game with music, regardless of its playing time,
    2.2 centimes per minute of music and per audiovisual recording, subject to a maximum of 29 centimes per audiovisual recording if the customer provides SUISA with an accurate breakdown of the music in the game.

Special case: Commissioned music by SUISA members

If a member of SUISA composes commissioned music for a game and signs the Video Game Addendum to the Rights Administration Agreement, the licence fee can be negotiated directly with the game producer without involving SUISA.

Production music mark-up

The use of production music managed by SUISA is subject to the following mark-ups:

  • for the synchronisation right: 50%
  • for neighbouring rights:
    • 50% of the total remuneration for the reproduction rights under Tariff VI (see above) and the synchronisation rights if the game is distributed only in Switzerland and Liechtenstein.
    • 100% of the total remuneration for the reproduction rights under Tariff VI (see above) and the synchronisation rights if the game is distributed internationally.

For video-game licensing or inquiries, please contact: customerservices (at) suisa (dot) ch

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What is a video game without sound? Video games are hard to imagine without music. Many games become huge hits precisely because of their music which is often even released as a separate soundtrack. What is the proper licensing procedure for music in video games and what is the purpose of the new Addendum to the Rights Administration Agreement? Text by Michael Wohlgemuth

Music in video games: Licensing and Addendum to Rights Administration Agreement

Gaming corner at the internet café: every game has to have the right sound. (Photo: OHishiapply / Shutterstock.com)

The video-game industry has been chalking up continuous growth for years. The corona crisis gave earnings in this sector an additional boost. Never before have so many people consumed video games, whether on their smartphones, tablets, consoles, or PCs.

Although music plays a significant part in this success story, video-game producers have so...read more

Small rights and grand rights: who does what?

If there is one matter that regularly triggers heated debate, it is the distinction between small rights and grand rights. Small rights relate to non-theatrical musical works and fall within SUISA’s sphere of competence, while grand rights relate to dramatico-musical works and certain types of ballet and are managed by the Société Suisse des Auteurs (SSA) or directly by publishers. Text by Vincent Salvadé

Small rights and grand rights: who does what?

In deciding whether a work is a dramatico-musical work or a non-theatrical work, the key question is whether the work has a storyline and whether it involves persons playing roles. What does this abstract definition of small rights and grand rights mean in practice? (Photo: Elnur / Shutterstock.com)

The distinction is frequently at issue because it relies on imprecise criteria which must be construed on a case-by-case basis. Our purpose here is to shed light on this rather hazy subject.

The legal framework

The legal authority granted to SUISA by the Federal Institute of Intellectual Property (IPI) relates to “non-theatrical musical works”. This concept was clarified by an ordinance issued by the Federal Department of Justice and Police on 23 February 1972. Today, that ordinance is no longer formally in force, but the Federal Court deemed that the principles contained therein could still be relied upon to determine what a non-theatrical musical work is: in this regard, current law has simply taken over the former legal provisions (case 2A_180/1994, Judgment of 10 May 1995). SUISA incorporated the criteria of the 1972 ordinance into its General Terms and Conditions of Rights Administration which are part of the contractual documents signed with its members.

Simplifying slightly, one could say that the non-theatrical music in SUISA’s sphere of competence consists of all musical works with the exception of dramatico-musical works and certain ballet musical works. These exceptions give rise to what are known as “grand rights”.

What is the scope of application of grand rights?

There is an abstract definition for grand-rights creations: these are “works with a storyline portrayed by persons playing set roles, which rely on music to such an extent that they cannot generally be used without it”.

No doubt … but what does that mean in practice?

  1. Firstly, the work must have a storyline. But not just any storyline: SUISA is always responsible for concerts, even if there are dancers accompanying the artist, or a light show, costumes, or other staging elements. etc. For grand rights to be attached to a work, there must be persons playing set roles. That is why the rights in operas, operettas and musicals are not managed by SUISA.
    The requirement of “persons playing roles” is basically fulfilled when a story unfolds with performers on stage. But that may not always apply: “abstract ballets” for example, do not have a script but rely on expression through dance. For a work to be deemed a grand-rights work, the dancers would have to play set roles even if they do not “tell” a story. For example: one dancer represents good and the other evil, one symbolises earth, another the moon. This “role-play” needs to bear a significant weight in the representation of the work, it cannot merely be secondary to the music.
  2. Moreover, the storyline must depend heavily on the music. A relatively widespread misconception needs to be clarified in this regard: whether or not the music was especially composed for the staged work is not decisive. Certain pre-existing musical works may become integral parts of a dramatico-musical work (with permission from the authors) if the staged performance relates to grand rights; conversely, however, music that has been especially composed for the stage (for example) will remain a non-theatrical work under certain circumstances. What counts basically is how closely intertwined the music is with the storyline.
    It is customary for lawyers to say that a dramatico-musical work cannot be performed without music, or with different music. This statement may be an over-simplification, but it has the merit of pointing the way: for example, when the lyrics are sung, it is hard to imagine the work could be staged without music or with different music. This is why operas, operettas, and musicals are grand-rights works. Conversely, if a play contains a scene where an actor listens to a song by U2, it is totally conceivable for the same play to be staged with another song by another ‘80s rock group. The U2 song, therefore, is and remains a small-rights work.
    Nevertheless, there are cases where it is more difficult to distinguish between these two extremes. A composer who writes music especially for a show obviously has a clear artistic result in mind when he is composing. The result would not be the same with any other music. The pertinent question is rather the following: if you change the music does the storyline have to be fundamentally changed when the work is staged? Only if the answer is yes can the music and the staging be deemed closely enough intertwined for the work to qualify as a dramatico-musical work.

No choice between SUISA and the SSA

These questions and the implications of the answers to them are important: the management of small rights by SUISA is supervised by the State; that is not the case for the grand rights exploited by the SSA and publishers. It follows that the rights management rules are different, notably in the matter of remuneration. Authors and organisers may be tempted to take advantage of these differences: the former to obtain better remuneration, the latter to pay less.

But they have no choice who to deal with: either the work is a small-rights work, in which case SUISA is responsible, or the work is a grand-rights work and the SSA, or the publishers are. (In practice, there are certain rare exceptions, for example in the case of authors who manage their own rights or publishers who assign special mandates to SUISA relating to grand-right works.) If the SSA or a publisher were to intervene in an area which is subject to federal supervision and for which SUISA is responsible, they would be violating Article 70 of the Copyright Act and committing a criminal offence; conversely, if SUISA were to grant a licence without disposing of the necessary rights, the licence would not be valid, and the organisers would not be released from their liability under copyright law.

From the legal point of view, therefore, the respective spheres of competence of the intervening parties must be observed. In cases of uncertainty, SUISA and the SSA cooperate and work together to find solutions to maximise legal certainty.

Register your grand-rights music with SUISA just the same!

SUISA members who compose music for grand-rights works should still register their works with SUISA. In certain situations, SUISA may well be responsible for managing the music rights, including in the following cases:

  1. the music is used without the storyline, for example in the case of ballet music performed without dancers, or of a dramatico-musical work played in a concert version;
  2. only extracts of a grand-rights work are used, in particular for the radio or TV: under certain conditions, those extracts may be considered non-theatrical music and thus fall into SUISA’s sphere.

By registering their works with SUISA, the necessary steps will have been taken to ensure that the composer’s rights are managed effectively. If alongside, management of the grand rights has been entrusted to the SSA or if a publisher is responsible for it, it will be for the various stakeholders to do their best to resolve any legal difficulties …

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If there is one matter that regularly triggers heated debate, it is the distinction between small rights and grand rights. Small rights relate to non-theatrical musical works and fall within SUISA’s sphere of competence, while grand rights relate to dramatico-musical works and certain types of ballet and are managed by the Société Suisse des Auteurs (SSA) or directly by publishers. Text by Vincent Salvadé

Small rights and grand rights: who does what?

In deciding whether a work is a dramatico-musical work or a non-theatrical work, the key question is whether the work has a storyline and whether it involves persons playing roles. What does this abstract definition of small rights and grand rights mean in practice? (Photo: Elnur / Shutterstock.com)

The distinction is frequently at issue because it relies on imprecise criteria which must be construed on a case-by-case basis. Our...read more

Residuals from online collections – what’s that and how can I participate in them?

In mid-December, we pay our members the fourth settlement of their online revenues this year. But this time, we’ll put a cherry on top! This “cherry” comes from the so-called “residuals” about the distribution of which the SUISA Board had decided in autumn 2021. In this context, here’s the most important piece of advice: Register all works as soon as possible with SUISA! Text by Anke Link

Residuals from online collections – what’s that and how can I participate in them?

Due to an international agreement with online music platforms, SUISA amended its distribution rules in the online collections area. (Photo: MandriaPix / Shutterstock.com)

“Residuals” are amounts paid by online music platforms for works or parts of works which have not been claimed by any collective management organisation. The reason for this is often that the works or parts of works have not been registered by the authors or publishers with their collective management organisations. SUISA can only collect licence fees via the SUISA Digital Licensing AG (SUDL) from the platform for works that have been declared and completely documented. This is why it is important that you register the works as soon as possible! Best before they are published online (details on this also in the blog article “Online licensing activities require early work registrations” of 29 October 2020).

International rules on how to deal with “residuals”

In the summer of 2020, an international working group, consisting of CMOs (SUISA was also part of it), major publishers and the most important platforms agreed on binding rules regarding how to deal with “residuals”: The money attributable to unclaimed works or parts of works is divided among all licensors of a platform in proportion to their respective market share. SUISA thus receives a share for each territory for which it licenses a platform, according to the importance of its repertoire in relation to the other repertoires used in that country.

This is just one more reason why it is important that works are registered as soon as possible, as this increases SUISA’s repertoire share. What needs to be mentioned in this context is that the members undertake towards SUISA to register their works within a certain period anyway: in the case of authors, this is within a month after the work has been created and in the case of publishers within a month after the work has been published.

It will now also be possible via SUISA Digital Licensing to issue an invoice for this period even after the expiry of an already distributed usage period, and this up to a maximum of 18 months after the end of the usage period. For works which have been fully registered with SUISA within the period, SUDL will be able to request the respective licence fee from the platform.

Only when the period within which a retroactive invoice can be issued, has expired, “residuals” will be determined. This means: The contributions for works or part of works which have, by then, still not been claimed by a collective management organisation, will be paid by the online music platforms to all of its licensors in proportion to their repertoire share.

Changes to the SUISA distribution rules

Up to now, only iTunes had paid “residuals” to SUISA. With the agreement made in the summer of 2020, the large platforms are now following suit. This way, a binding provision became necessary in the distribution rules of SUISA, about which the SUISA Board of Directors decided in September 2021. It will be applied to the fourth online distribution 2021 for the first time.

SUISA distributes its share in the “residuals” as a blanket adjustmenton the current online distributions. In contrast to revenues for works that have not been documented or have been only partially documented, which are used offline (e.g. at concerts), the “residuals” will not be reserved for potential late or subsequent settlements at a later point in time.

The reason for this is, on the one hand the disproportionately high costs which such work-based adjustments would entail. On the other hand, our analyses have shown that the works which only get registered fully after the 18-month period has expired, only have little economic significance. Incidentally, even our sister organisations abroad do not reserve “residuals” from the distribution for longer periods.

Whether we are talking about online or offline uses: A fast work registration is an advantage in any case because it facilitates a quick payment of the licensing revenues. Late work registrations, however, always carry the risk of income losses for the respective rightsholders. Additional costs are also created for SUISA which is a disadvantage for all rightsholders.

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  1. Durussel André says:

    Merci pour ces informations claires et intéressantes

Leave a Reply

All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

Your email address will not be published.

In mid-December, we pay our members the fourth settlement of their online revenues this year. But this time, we’ll put a cherry on top! This “cherry” comes from the so-called “residuals” about the distribution of which the SUISA Board had decided in autumn 2021. In this context, here’s the most important piece of advice: Register all works as soon as possible with SUISA! Text by Anke Link

Residuals from online collections – what’s that and how can I participate in them?

Due to an international agreement with online music platforms, SUISA amended its distribution rules in the online collections area. (Photo: MandriaPix / Shutterstock.com)

“Residuals” are amounts paid by online music platforms for works or parts of works which have not been claimed by any collective management organisation. The reason for this is often that the works or parts of works have not been registered by the...read more

The Royalty Report is online

News about “My account”: Thanks to user-friendly graphics, the Royalty Report provides a quick overview of how the copyright royalties developed over the last five years and allows individual analyses per mouse click. Text by Claudia Kempf

The Royalty Report is online

The user interface of the SUISA Royalty Report. The data analysis tool is available to all members via the portal under “My account”. (Photo: SUISA)

The SUISA member portal is very popular and is used a lot. More than two thirds of all members have access to “My account” and use the advantages of the portal. Since May 2021, a significant function has been added to the portal: the Royalty Report. With this newly introduced analysis tool, you can create statistical evaluations of your own SUISA income and turn them into graphics.

After all, there is a lot of information in the SUISA settlements. You can access the settlements in “My account” as navigable PDFs. An accumulated evaluation of this data required manual or, in the case of publishers receiving electronic settlements, technical efforts.

This additional effort is now a thing of the past: With the Royalty Report, all members can, simply by clicking on the right button, get answers to questions such as: Which of my works is doing really well in a specific country? Which of my works generated the highest turnover last year? In which areas was a specific work most used: Radio, online or in discotheques?

The Royalty Report is interactive

The basic setting provides an overview of all work usages of the last five years and the current financial year. It shows at first glance: How many works did it take to reach the turnover I have generated? When were the works used, and where? What are the top works and what is the turnover they generated in that time? Did I earn more as a lyricist or a composer, as an original or sub-publisher? Are my works used more on Spotify or Apple Music?

The Royalty Report is interactive. With just one click on a work or a country, for example, the entire appearance of the display is adjusted to the selected work or country. The link sign (chain symbol) in the work list leads you directly to the works database and provides details how the relevant work has been registered at SUISA.

Thanks to various filter options, the income can be shown by different criteria such as settlement date, usage period, country, distribution category, work or online music providers. In order to gain a deeper insight, the selection criteria can be combined in any way. The program also allows for an export of the filtered data to Excel. The settlements and usage periods can be specified further with a click on the arrows in front of the respective selection criteria so that an evaluation is also possible for an individual settlement.

If you have questions on how to use the Royalty Report, the following functions are available:

  • Info buttons: They appear if you hover over a field with your mouse at the top right in the user interface. They contain information about the data which are shown in this area.
  • A user manual summarises the most important functions and contains tips and tricks on the use of the Royalty Report and explanations on the various displays and distribution categories.
  • A video shows the most important user tips:

The Royalty Report is available in English. The manual contains translations of all terms and info buttons which are used in the report.

The Royalty Report is based on the data analysis tool by Microsoft Office. The software developer recommends to use the application on a computer with a browser of the latest generation. Mobile end devices such as smartphones and tablets are, however, not suitable for processing large data volumes.

The member portal will be expanded in the medium term to become a central point of contact for our members so that core tasks of SUISA can be offered more quickly and cost-efficiently. The Royalty Report is an important step into the digital future. A next step is the renewal of the login process so that members can manage their online accounts completely independently.

The access to “My account” and the Royalty Report is open to all SUISA members. Order your login for a personal online user account now: www.suisa.ch/my-account

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Leave a Reply

All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

Your email address will not be published.

News about “My account”: Thanks to user-friendly graphics, the Royalty Report provides a quick overview of how the copyright royalties developed over the last five years and allows individual analyses per mouse click. Text by Claudia Kempf

The Royalty Report is online

The user interface of the SUISA Royalty Report. The data analysis tool is available to all members via the portal under “My account”. (Photo: SUISA)

The SUISA member portal is very popular and is used a lot. More than two thirds of all members have access to “My account” and use the advantages of the portal. Since May 2021, a significant function has been added to the portal: the Royalty Report. With this newly introduced analysis tool, you can create statistical evaluations of your own SUISA income and turn them into graphics.

After all, there is a...read more

Are royalties subject to social security (AHV/AVS) contributions?

Do royalties qualify as earnings from self-employment? Swiss AHV/AVS compensation offices follow different practices. Text by Michelle Moser

Are royalties subject to social security (AHV/AVS) contributions?

Saving for retirement: Swiss compensation offices do not agree on whether or not royalties are subject to social security contributions. (Photo: Nattapol Sritongcom / Shutterstock.com)

Musicians often earn their living from several different sources: fees from concerts, a teacher’s salary from the music school, fees for commissioned works, or remuneration collected by SUISA on their behalf.

The different cantonal compensation offices have no uniform position on whether the remuneration distributed by SUISA qualifies as income from gainful self-employment – which would be subject to AHV/AVS contributions.

AHV/AVS – mandatory insurance for all

All Swiss residents and persons gainfully employed in Switzerland are subject to mandatory retirement, disability, and survivors’ insurance. And all those insured (except children) are accordingly required to pay social security (AHV/AVS) contributions. The contributions are normally assessed on the income earned from gainful employment.

For persons who are gainfully self-employed, contributions are assessed on the income earned from one’s own entrepreneurial, commercial, or business activities.

In principle, the following guidelines apply: AHV/AVS contributions must be paid on the earnings declared in one’s tax return. This is not the case for income from capital investments or real property, for example, which is taxable income but is not subject to AHV/AVS contributions.

Royalties: income from employment or from capital investment?

For SVA Zurich, the social security institution, royalties basically qualify as income from self-employment and should be declared accordingly. As a result, authors must register as self-employeds.

SVA Zurich does, however, make a distinction between authors who actively exploit their works and authors who do not. Authors who actively exploit their works after creating them (e.g. as a member of a band playing its own compositions) qualify as gainfully employed. This includes collective administration by SUISA. The earnings from such gainful employment are subject to AHV/AVS contributions.

The subsequent royalties received by authors who do not actively exploit their works after creating them, on the other hand, qualify as income from capital investments, and are not subject to AHV/AVS contributions.

In summary, for SVA Zurich what is decisive is whether an author participates in the performance of the works or merely “reaps” the proceeds from his earlier compositions.

Different practice from one canton to the other

Whether AHV/AVS contributions are payable on remuneration distributed by the collecting societies is decided differently by the compensation offices depending on who is asking, and the amount involved.

Unlike SVA Zurich, the compensation office of the canton of Vaud, for example, holds that remuneration for the creation of works is by definition subject to AHV/AVS contributions, while the remuneration from subsequent uses distributed by the collecting societies qualifies as capital gains and is not subject to social security contributions. It follows, therefore, that none of the remuneration distributed by the collecting societies is subject to AHV/AVS contributions.

In the final analysis, the decision on these social insurance issues does not lie with the collecting societies but with the compensation offices. For this reason, the Swiss collecting societies advise their members to contact the competent compensation office to establish what exactly their AHV/AVS contribution obligations are.

The different practices of cantonal compensation offices with regard to social security contributory obligations on royalties offers no legal certainty and is unsatisfactory. The Swiss collecting societies will follow this issue closely and keep their members informed of any changes.

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  1. Ich bin erstaunt bezüglich unterschiedlicher Handhabung von Ausgleichskassen von Urheberrechten/-entschädigungen. Jede AHV-Ausgleichskasse hat die gesetzlichen Grundlagen anzuwenden und wenn etwas unklar ist, ist dies durch das BSV klarzustellen. Der unterschiedlichen Handhabung wären u.a. auch Autoren (mit oder ohne Vorlesung) ausgesetzt. Dies meine Ansicht als Eidg. Dipl. Sozialversicherungsexperte.

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Do royalties qualify as earnings from self-employment? Swiss AHV/AVS compensation offices follow different practices. Text by Michelle Moser

Are royalties subject to social security (AHV/AVS) contributions?

Saving for retirement: Swiss compensation offices do not agree on whether or not royalties are subject to social security contributions. (Photo: Nattapol Sritongcom / Shutterstock.com)

Musicians often earn their living from several different sources: fees from concerts, a teacher’s salary from the music school, fees for commissioned works, or remuneration collected by SUISA on their behalf.

The different cantonal compensation offices have no uniform position on whether the remuneration distributed by SUISA qualifies as income from gainful self-employment – which would be subject to AHV/AVS contributions.

AHV/AVS – mandatory insurance for all

All Swiss residents and persons gainfully employed in Switzerland are subject to mandatory retirement, disability, and survivors’ insurance. And all those insured (except children) are accordingly...read more

How private copying produces revenue – distribution of blank media levies

Nowadays, the lion’s share of private copying is done from the internet rather than from CDs as in the heyday of the record market. SUISA’s Distribution Rules have now been amended to reflect present circumstances. The adjustments are designed to ensure a more equitable distribution of the remuneration from private copying. Text by Anke Link

How private copying produces revenue – distribution of blank media levies

Consumers increasingly source their music from the internet. The move to digital forms of music consumption has caused a shift in the sources of music tapped for private copying. As a result, changes also had to be made in the distribution of blank media revenues. (Photo: Carlos Castilla / Shutterstock.com)

The Federal Copyright Act allows Swiss consumers to make copies for their own use and that of a close circle of friends and relatives, regardless which source is used to copy the music from. Since 1992, Swiss copyright legislation has provided that this form of private copying is subject to remuneration. This remuneration is not levied, however, from those who actually make the copies – i.e. the individual consumer – but from the producers and importers of the blank media used to store such copies.

At the outset, blank audiotapes were the chosen media: you would put one into a recorder and then wait by the radio until your favourite song was played, or you would use them to record music played back from a CD so you could listen to it on the Walkman. VHS tapes, used to record television broadcasts, were also among the first blank media carriers to be subject to the levy. Later came blank CDs and DVDs on which you could record music and films.

Today, the blank media levy applies mostly to digital storage media built into devices like smartphones and tablets. These offer variegated possibilities for storing music, films, and other works. The remuneration is levied as a flat fee per blank medium, regardless of the scope of the copying and the works actually copied. SUISA is responsible for collecting the levy from the producers and importers of the devices and distributing the proceeds to those who provide the content for the copying: music authors and artists, filmmakers, writers, etc.

How are the blank media revenues distributed?

When distributing the proceeds from the blank media levy, a first breakdown has to be made between the five Swiss copyright collecting societies: ProLitteris, SSA, SUISA, Suissimage, and Swissperform. SUISA acts as the central collecting agency for them all. The basis for this breakdown is the share of the copied repertoire represented by each Society.These shares are determined through representative surveys. But the surveys do not provide any information about the works themselves; they only establish whether the works concerned are musical works, films, videos, works of visual art, or texts.

The share that SUISA receives for the private copying of musical works is then distributed to SUISA’s members by allocation to its various distribution categories. Direct distribution is not possible because no one can say in practice which works were copied, stored or downloaded at which frequency by consumers from the internet. Apart from the undesirable intervention in the consumer’s private sphere, the cost of collecting such data would be exorbitant. That is why SUISA allocates the proceeds from the blank media levy to various distribution categories for which detailed programming information is available.

In the past, these allocations relied on the reasoning about the sourcing of private copying. It was assumed, for example, that a portion of the private copying would be sourced from CDs: accordingly, a share of the blank media levy revenues was allocated to the CD production distribution categories. Another share was allocated to the distribution categories for radio and TV broadcasting revenues following the assumption that another portion of private copying would be sourced from such broadcasts.

What sources are used for private copying today?

Today, however, the lion’s share of private copying is sourced from the internet. So basically, one could apply the proceeds of the blank media levy entirely to the distribution categories for online uses? Unfortunately, it is not quite that simple.

On the one hand, SUISA does not manage all the rights for all the music used on the internet. On the internet, SUISA is in competition with foreign rights administration societies and cannot, therefore, offer the entire world repertoire of music online. Only a portion of the works used on the internet produces revenues that flow into the distribution categories for online uses. These are not the only works used for private copying; private copying also taps all the other works in the world repertoire. If the revenues from the blank media levy were all allocated to the online uses distribution categories, a major portion of the privately copied works would be disregarded.

What is more, blank media fees cannot be levied for works copied from a legal source against payment (prohibition of double payment under Article 19(3bis) FAC). This applies to music from download shops like iTunes or from streaming platforms like Spotify. SUISA distributes the revenues collected from these platforms to the corresponding online distribution categories based on the programme reports received from the platforms. Legal prescriptions provide that no blank media levies may be charged for these downloads or for offline storing of streaming services. Therefore, the works involved cannot rightfully be allocated any amounts from the blank media revenues.

Downloaded songs are often re-copied. What about them? – True. Contrary to the original downloading or offline storing of streaming services, these subsequent copies are subject to the blank media levy. But in practice nobody knows which works are involved or how often they are copied. So an indirect method for distributing the revenues from the flat rate blank media levy has to be found for these, and for all the other privately copied works.

How do the Distribution Rules account for the new circumstances?

Since the allocation of revenues based on the private copying sources would lead to the wrong results under present circumstances, we engaged Gfs Zurich, a market research company, to assist us in finding alternative methods for ensuring the most equitable distribution of blank media revenues. Gfs Zurich conducted a representative survey for this purpose. In the survey, consumers were asked where they had “encountered” the last work they had copied for private use – regardless of the source from which they had made the copy: at a concert, the cinema, on the radio, on television, a new CD/LP or a DVD? SUISA has sufficient information about the works used in those distribution channels to be able to use such data as the distribution basis for the blank media revenues.

Henceforth, therefore, the revenues from the blank media levies will be allocated to the distribution categories used to distribute the revenues from these other distribution channels. This is consistent with the principle set forth in point 5.3.2 of the Distribution Rules (DR), namely: “Remuneration where no programmes are provided shall be allocated to such distribution categories in which the same or at least a similar kind of music prevails”. In certain cases, no alternative distribution channel could be determined. The corresponding share of the blank media revenues is therefore assigned to the distribution categories for radio broadcasts; since these are the categories with the broadest repertoire, this system benefits the greatest number of rightholders.

Point 5.5.5 has thus been amended to read:

Point 5.5.5 CT 4 (blank media), 4i (built-in digital storage media) – Blank media levies
Distribution categories
Audio 33.0% 1A
28.0% 2A
(for domestic licensing) 11.5% 21A
(for central licensing) 11.5% 21Z
16.0% 4
Video 16.0% 1C
12.0% 22A
14.0% 2C
8.0% 9A
17.0% 1A
17.0% 2A
The remaining 16% shall be allocated in supplement to the TV remuneration for foreign broadcasters under Tariff CT 1.
In the case of mobile phones and tablets, CT 4i revenues shall be allocated 90% to audio and 10% to video. In respect of the other blank media regulated by CT 4 and CT 4i, the relevant distribution key shall be determined by the type of blank media.

The Intellectual Property Institute approved this amendment on 6 April 2021; we expect to receive approval from the Liechtenstein regulatory authorities in the next few weeks. The amendment is effective three months after it is approved and will therefore be implemented for the next distribution of blank media revenues in September 2021.

Who receives more and who less money from private copying?

The re-allocation of the blank media revenues will have a positive effect overall. At least three times more authors and publishers will receive more money than before. For most members, however, the increase will be only a small amount. Those who will see a decrease in their blank media revenues are likely to be affected more strongly.

Nevertheless, we are convinced that the revision was both necessary and equitable. The decreases are mostly due to the cancellation of allocations to the online distribution categories, and to reduced allocations to the 21Z distribution categories for central licensing of CD productions. We have explained above why allocations to the online distribution classes are no longer justified today.

The same applies to the 33.0% allocation to distribution category 21Z for central licensing which is no longer justified since: the decision dates back to the heyday of the record market when SUISA was collecting about CHF 25 million per year in revenues for CD productions. By 2019, the distributable amount from central licensing was no more than CHF one million, yet CHF 2.3 million in blank media revenues were allocated to distribution category 21Z. Rightholders who earned CHF 1 from the distribution of their works on CD were collecting CHF 2.17 from the blank media levy.

Following the virtual collapse of the record market, these allocations largely overstepped the original intent. As a result a small number of rightholders were being favoured at the expense of the majority. The adjustments now introduced are more equitable for everyone, and we trust that even those who henceforth receive less income from the blank media levy will appreciate this fact.

Further Information:
SUISA Distribution Rules

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Nowadays, the lion’s share of private copying is done from the internet rather than from CDs as in the heyday of the record market. SUISA’s Distribution Rules have now been amended to reflect present circumstances. The adjustments are designed to ensure a more equitable distribution of the remuneration from private copying. Text by Anke Link

How private copying produces revenue – distribution of blank media levies

Consumers increasingly source their music from the internet. The move to digital forms of music consumption has caused a shift in the sources of music tapped for private copying. As a result, changes also had to be made in the distribution of blank media revenues. (Photo: Carlos Castilla / Shutterstock.com)

The Federal Copyright Act allows Swiss consumers to make copies for their own use and that of a close circle of friends and relatives, regardless which source is...read more

Legal consequences of concert cancellations for Covid-19

Regrettably, owing to the coronavirus, some musical events have had to be cancelled. What are the consequences of such cancellations for the artists and organisers concerned? Is the artist still entitled to the contractual fee? Text by Céline Troillet

Legal consequences of concert cancellations for Covid-19

Empty stages and concert halls: what is the legal situation regarding events cancelled because of Covid-19 restrictions? (Photo: Disq)

The coronavirus is a source of discomfort and uncertainty for us all. We must adapt as well as we can to these unprecedented circumstances since they are, for the time being at least, beyond our control. There are no clear answers to the health and economic issues that this crisis has raised, and there is great legal uncertainty. There are many outstanding questions.

Do you have a contract?

If you have a contract (or electronic exchange), see if it regulates the cancellation of the concert on grounds of force majeure or pandemic, and what effect such a cancellation has on fees. Albeit possible, this is seldom the case. Unfortunately, when a contract does provide for such cancellation, the parties usually agree that fees are not due in that event. Contracts rarely provide for a reduction in costs or the repayment of expenses already sustained.

A. Absence of a contract

If there is no written agreement, what legal provisions are applicable? To find out, you must proceed step by step:

1. Consider what type of contract under the Swiss Code of Obligations (CO) might be binding on you: Swiss law, unfortunately, does not prescribe how an artist’s engagement contract is to be legally classified, and there is no precedent or case law in this regard. Therefore, there are several possible interpretations. Moreover, each case must be considered individually and you should seek legal advice in this regard.

The possible types of contract used for artists are: the contract for works and services (Article 363 et seq. CO), the employment contract (Article 319 et seq. CO), or the agency contract (Article 394 et seq. CO). The conditions of the individual contract types, and the differences between them, are described in section B below.

2. Once it is established what type of contract you are bound by, check the following explanatory notes on the types of contract (also see section B) to what extent compensation might be possible.

3. If the contract does not match any of the contract types provided for in the Code of Obligations, reference must be made to a general provision of contract law dealing with the consequences of non-performance of an obligation., i.e. Article 119 CO.

⇒ Principle and conditions of Article 119 CO:

This article stipulates that if, after a contract is concluded, circumstances intervene which make it impossible for one of the parties to perform its obligations (for reasons not attributable to that party), then the party is no longer bound by its contractual obligations. The law considers “subsequent” impossibility (i.e. after the contract is concluded), which presupposes the realisation of the three following conditions:

• the obligor (the party liable for performance of an obligation) is no longer able to perform (objective impossibility);
• the impossibility must arise from circumstances after the conclusion of the contract. Chance occurrences (beyond the control of a party) are a good example;
• the impossibility is not attributable to the obligor (it is not his fault if performance is made impossible).

⇒ Objective impossibility not attributable to the obligor:

It is for the court to determine whether the obligation is impossible to perform for reasons not attributable to the obligor.

When public order or internal security is threatened, as in the case of a pandemic, the Federal Council, for Switzerland, is obligated under the Federal Constitution to issue ordinances and take emergency decisions (Article 185 of the Federal Constitution). Within the framework of its discretionary power, the court is required to take into account the rules and decisions issued by the federal authorities. It follows that, in the case of concert cancellations proceeding from official decisions, the existence of an objective impossibility not attributable to the obligor would probably be recognised.

⇒ Legal consequences for the parties:

An impossibility within the meaning of Article 119 CO releases the obligor (the party who has to perform an obligation) from its obligation as well as the creditor (the party for which the obligor is required to perform) (Article 119(2) CO).

In other words, when a contract is concluded (between an artist and a concert organiser), the parties (the artist and the organiser) are both released from their obligations (the artist is no longer required to perform on stage; the organiser is no longer required to pay the artist a fee) if, through no fault of the artist’s (i.e. because of Covid-19 and not for a reason attributable to the artist), the person who was supposed to act (the artist) is prevented from fulfilling his obligation (to perform on stage).

B. The individual types of contract under the Swiss Code of Obligations

The contract for works and services (Article 363 et seq. CO):

Generally, the performances of an artist or group of artists fall within the scope of the contract for works and services (the artist delivers a single performance, based on a pre-defined programme, which is equated with a work).

Here, the case of force majeure is governed by Article 378 CO. This article provides that, where completion of a work is rendered impossible by a chance occurrence affecting the principal, the contractor is entitled to payment for the work already done and to reimbursement of any expenses incurred that were not included in the price.

If a concert is formally cancelled for coronavirus-related reasons, the impossibility for the principal (the organiser of the concert) to perform the contract should be recognised insofar as the principal is unable to stage the artist’s concert through no fault of his own. As a result, Article 378 CO would apply, and the artist would be entitled to remuneration for any work already performed (e.g. rehearsals) and his expenses.

The employment contract (Article 319et seq. CO):

Under certain circumstances, the artist’s contract can be deemed an employment contract (a subordinate relationship between the artist and the organiser, where the artist’s obligation to play music is determined by the employer’s needs rather than by his own as an artist).

Article 324 CO regulates the employee’s salary if he is prevented from working. Whether or not this provision applies to cases of force majeure, i.e. the cancellation of a concert by reason of coronavirus-related measures, is disputed. Most would answer in the affirmative, which would mean that the artist would be entitled to continued pay.

Agency contract (Article 394 et seq. CO):

If the artist’s contract falls neither under the contract of works and services nor under the employment contract, it will generally be classified as an agency contract (the artist seen as an agent performing a service for the organiser).

The agency contract does not provide for cases of force majeure. As a result, if a concert is cancelled for coronavirus-related reasons, Article 119 CO would probably apply and, accordingly, no remuneration would be payable. A reservation should be made in the event of untimely cancellation (e.g. immediately before the scheduled performance). In that case, compensation (but not the fee) could be granted to the artist for the loss sustained (Article 404 CO).

C. Conclusion

It is important to address the possible cancellation of the concert and the consequences on your legal relationship in the artist’s contract. If these points are regulated and the circumstance occurs, the artist and the organiser know what they can expect and claim from each other and can thus avoid financial and other damages.

In absence of a written contract, or if the contract does not regulate this point, the situation is likely to be more difficult. Since the legal nature of the artist’s contract is not clear, the relationship between the organiser and the artist will have to be interpreted to determine which of the three contract categories it is subject to (contract for works and services, employment contract or agency contract). The legal consequences will vary depending on the applicable rules. Payment of the artist’s fee will be justified in some cases, and not in others.

As you can see, there is no clear-cut answer determining the legal consequences of concert cancellations due to coronavirus. The circumstances must be appraised case by case. In absence of a contract, the ideal solution would be for the parties to agree a compromise. A postponement of the service or the total or partial reimbursement of your expenses could be possible solutions.

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All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

Your email address will not be published.

Regrettably, owing to the coronavirus, some musical events have had to be cancelled. What are the consequences of such cancellations for the artists and organisers concerned? Is the artist still entitled to the contractual fee? Text by Céline Troillet

Legal consequences of concert cancellations for Covid-19

Empty stages and concert halls: what is the legal situation regarding events cancelled because of Covid-19 restrictions? (Photo: Disq)

The coronavirus is a source of discomfort and uncertainty for us all. We must adapt as well as we can to these unprecedented circumstances since they are, for the time being at least, beyond our control. There are no clear answers to the health and economic issues that this crisis has raised, and there is great legal uncertainty. There are many outstanding questions.

Do you have a contract?

If you have a contract (or electronic exchange), see...read more

Online licensing activities require early work registrations

From a sales perspective, online music distribution provides enormous opportunities. With little effort, music can be made available to a global audience within an instant. The distribution of copyright royalties, however, is complex when it comes to online usages. This is also due to the fact that the processes differ from those for performing and broadcasting rights. The most important advice is: First, register the work with SUISA as early as possible, then publish it online. Text by Andreas Wegelin and Manu Leuenberger

Online licensing activities require early work registrations

If you distribute your music via an online provider, it will be advantageous if you stick to the following rule of thumb: First, register the work with SUISA, then publish it online. (Photo: Anutr Yossundara / Shutterstock.com)

When it comes to the internet, trade activities are not halted by national borders. Especially in cases when the goods are not physical but only purely digital in terms of their transport from the provider to the customer – as is the case for music. Online music providers such as Apple Music, Spotify or YouTube take their products directly to the audience via streaming or download: On its journey between the internet platform and the playback devices of the listeners, the music product does not pass customs, nor are there any intermediaries (apart from the telecoms provider of the internet access).

The following is decisive in this chain of commerce: When it comes to online music-distribution, territorial limitations have not only been lifted to a great extent for the consumer but also with regards to the licensing of the copyright. The distribution process differs fundamentally from the existing practice in the “offline sector”, i.e. for performing or broadcasting rights or the licensing of sound recordings. SUISA only issues licences for the territory of Switzerland and the Principality of Liechtenstein in the offline sector, but for all works that have been used, including those of the members of our sister societies abroad. Reciprocal representation agreements ensure that the members of other sister societies obtain the share in the works that have been used in Switzerland. The same also applies vice versa: If works by SUISA members are performed abroad, the sister society in charge for the territory in question collects the remuneration and passes it to SUISA for onward distribution to its rightsholders.

This works differently in the online sector. Another practice has established itself since the Recommendation of the EU Competition Commission from 2005, according to which more competition should be created during the online exploitation of copyright. The corresponding EU Directive which was determined five years ago states that each rightsholder can choose for their online licences whether they want to issue them directly or whether they wish to instruct a partner such as a collective management organisation of their choice to manage them across Europe (also known as pan-European).

SUISA active since 2012 for online direct licensing

The major music publishers have assigned the rights management for the shares in their works on a cross-border basis 10 years ago. This type of licensing is called direct licensing. In the field of cross-border usages, rightsholders, i.e. publishers or collective management organisations, specifically account the royalties for their repertoire directly with the “Digital Service Providers” (in short: DSPs) such as Apple Music, Spotify or YouTube. This means: If users abroad listen to works by SUISA members on platforms by the online music providers, SUISA collects the remuneration for such usages directly from the provider. There are no more “intermediaries” between SUISA and the Digital Service Provider as it exists in the traditional offline sector by way of a foreign sister society.

Many societies in Europe have already transitioned to this global direct licensing practice of their members’ works. Since 2012, SUISA has been licensing the rights of its members not only for Switzerland but also for other territories on a cross-border basis, and that with a constantly increasing number of online music providers. In the beginning, these included the European countries, since 2018, more and more territories are added outside of Europe. In the meantime, SUISA is usually issuing global licences to the DSPs with the exception of the following: USA, Canada, South America, North Korea, South Korea, Japan, Syria and Australasia. There are plans, however, to expand into these territories in the future.

Direct licensing has had the consequence that SUISA could only issue licence invoices for works for which it had the relevant documentation, since it is the individual work share that is now relevant, not just the fact whether an author is a SUISA member or not.

Nevertheless, it happens often that Digital Service Providers receive invoices from several collective management organisations for shares in the same work. This leads to so-called “overclaims” or “underclaims”. Such overclaims or underclaims (in terms of rights) result from a lack of clarity among the societies issuing the invoices who can claim the remuneration for which shares in a work in which territory for their principals. There is often also a situation of “no claims” i.e. when no society issues an invoice.

This has led to a scenario where the providers paid rightsholders more than the agreed remuneration in the case of “overclaims” and too little or nothing in the case of “underclaims” or “no claims”. There are also Service Providers which withhold the payment in the case of “overclaims”. If thus the claims of all invoicing collective management organisations for a work exceed 100% (shares), no royalties are paid as long as it is not defined who is actually permitted to invoice for which share.

Invoicing process with online music providers

A working group of the collective management organisations, major publisher and the most important online music providers has taken care of this issue and agreed to the following solution:

Issuing invoices to a DSP happens in several steps. The collective management organisation receives usage data from the DSP. Based on these usage reports, which contain a period of one or three months, the provider receives an invoice for all work shares in titles for which the society holds the usage rights of an author or a publisher. If the invoices that have been issued by various collective management organisations do not match for one work title, so-called “disputes” arise.

The societies have 18 months to resolve such conflicts of claims. Within said period, SUISA checks the data of the usage reports once more and compares it with the updated SUISA work documentation. If, during this search, new correlating entries are detected, they will be invoiced retroactively. Whatever has not been resolved after 18 months shall fall under the so-called “residuals”; this is the licensing remuneration for work shares which have not or only partially been invoiced (“underclaims” and “no claims”).

The “residuals”, the remuneration that has not been claimed from the DSP from “underclaims” and “no claims” shall be paid out by SUISA as a supplement to the works used in the same distribution period. A work that has not been registered at that point could therefore not receive a supplement.

Register the work first, then publish it online

The most important advice for SUISA members who make their compositions available via online music distribution channels, is: First, register the work with SUISA as early as possible, do not publish it online before!

If you follow this rule of thumb, you create a basis whereby works can be detected from the beginning in online usage reports and can be invoiced to the Digital Service Providers. The distribution process with the online music providers is subject to deadlines and the attention of the audience on the internet is often rather ephemeral. When you register works too late, there is the risk that usages are not detected and royalties cannot be allocated.

If the work registration takes place before the first recording of the work is published for streaming or downloading, SUISA can claim the work shares with the Digital Service Providers from the very beginning. In order to enable a simple automatic identification, the metadata of the works registration should be the same as the data which the DSP has for the work.

Metadata is additional information and particulars which describes other data in more detail. Thanks to such additional information, it is possible to determine and thus find individual elements during searches within big data volumes. A musical work title ideally comprises, apart from the usual details on composer, lyricist, publisher etc., information on the performer(s), and, if applicable, alternative work titles of versions in other languages as well as remix/edit versions, such as “song title – radio edit” or “song title – extended version”. Complete and correct metadata provides a great advantage when it comes to finding a concordance during the automated matching of the usage reports with the works database.

These requirements are vital for a work to be correctly distributed in all of the territories directly licensed by SUISA and with all of the online music providers directly licensed by SUISA.

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Information on live streams for SUISA membersInformation on live streams for SUISA members The corona measures led to a loss of performance and earning opportunities for music creators and to a painful loss of live music for music consumers. Live streaming therefore enjoys great popularity, especially in these times, and takes on a pertinent role in the cultural industry. Read more
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  1. Claire Chalut says:

    Vous ne parlez que de “Apple Music”, “Spotify” et “Youtube” (cette dernière plateforme touche surtout la VIDEO et quid ? de “Soundcloud” (destinée à l’audio). Qu’en est-il avec “Soundcloud” ? (qui est beaucoup utilisé), avez-vous des relations avec eux ??? ET, comment ?? Merci de votre réponse.

    Autre remarque (qui n’a rien à voir avec cet article) : comment se fait-il que l’on ne retrouve pas les oeuvres déposées dans votre banque de données (souvent il est réponde “inconnu” ou “pas trouvé”, etc.

    C. Chalout

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From a sales perspective, online music distribution provides enormous opportunities. With little effort, music can be made available to a global audience within an instant. The distribution of copyright royalties, however, is complex when it comes to online usages. This is also due to the fact that the processes differ from those for performing and broadcasting rights. The most important advice is: First, register the work with SUISA as early as possible, then publish it online. Text by Andreas Wegelin and Manu Leuenberger

Online licensing activities require early work registrations

If you distribute your music via an online provider, it will be advantageous if you stick to the following rule of thumb: First, register the work with SUISA, then publish it online. (Photo: Anutr Yossundara / Shutterstock.com)

When it comes to the internet, trade activities are not halted by national...read more

Information on live streams for SUISA members

The corona measures led to a loss of performance and earning opportunities for music creators and to a painful loss of live music for music consumers. Live streaming therefore enjoys great popularity, especially in these times, and takes on a pertinent role in the cultural industry. Text by Michael Wohlgemuth

Information on live streams for SUISA members

Music via video as a replacement for cancelled concerts: Jazz and improvisation musician Cyril Bondi played his work “We Need To Change” for the series of articles “Music for Tomorrow”; you can listen to it and watch it on the SUISAblog and the social media channels SUISA Music Stories. (Photo: screen shot video Cyril Bondi)

There are numerous possibilities to transmit live streams: The choice ranges from your own website, and social media platforms such as Youtube, Facebook, Instagram or Dailymotion, to pure live streaming platforms such as Twitch. In addition, smaller international and national platforms are currently appearing, where music creators can register for live streaming and share any income generated via the platform.

The following guide is intended to provide SUISA members with assistance in the live streaming jungle:

Information for musicians who organise live streams themselves

Do I/we need a licence from SUISA?
Be it as a band, singer-songwriter, orchestra or choir: If you organise a live stream on your own website or social media channel and only perform music that you have written yourself and/or that is in the public domain (the author has died more than 70 years ago), you do not need a licence from SUISA.

But be careful: This type of “own use” or using your own music yourself, on your own web channels, is only allowed if all songs are 100% written by the performers themselves. As soon as third parties are involved in only one of the performed works, it is no longer considered to be a pure type of “own use”. So if there are co-authors who do not participate in the performance of the live stream, or if a publisher has a stake in the song or otherwise performs protected music by others (e.g. cover versions), you need a licence from SUISA in accordance with the “Licensing Terms and Conditions Live Streams”.

An exception applies to non-commercial live streams on social media platforms: These are covered by the agreements concluded by SUISA and other rights management entities with the social media platforms and therefore do not usually need to be licensed separately. SUISA currently has agreements with Youtube and Facebook (including Instagram). SUISA is currently negotiating with Dailymotion, Vimeo and Twitch, to which the same will apply.

Non-commercial in this context means that no money is demanded for the live stream and it is not produced for a company. SUISA also considers donation campaigns whose income is entirely allocated to people in need to be non-commercial.

Livestreams from DJ sets
DJ sets contain not only compositions, but also recordings whose rights are held by the recording company or “labelˮ. Since very few DJs use exclusively self-composed and self-published music, several licenses must usually be obtained for live streams of DJ sets: Copyright requires a licence from SUISA (with the exception of non-commercial live streams on social media, see section “Does it require a licence from SUISA?”) and the rights to the recordings played – the so-called neighbouring rights – require licences from the record companies/labels. For DJ sets on social media, the platforms themselves are responsible for this.
The only platform currently known to SUISA that has signed contracts for DJ live streams with most major labels is Mixcloud.

The live stream of my concert or DJ set on social media was blocked: Why and how can I avoid that this happens?
The reason for content being blocked is usually the performance of third-party music and related to this the lack of a certain licence agreement of the social media platform with a rightsholder (often a label or a publisher). In principle, social media companies are responsible for the content on their platforms and block unlicensed content using audio recognition technologies for their own protection.

The easiest way to avoid content being blocked on social media is to mainly perform self-composed music in the case of a live concert. Due to complex legal reasons, it is recommended that cover bands host the live streams not on social media but on their own website.

DJ sets on social media platforms should be avoided if possible, unless you use your own recordings. The reason for this is that very few labels allow the live streaming of their recordings on social media. Facebook and YouTube, in particular, have mature audio recognition technologies and thus very quickly detect unlicensed recordings. If you leave a recording of the live stream with unlicensed music on the platform, it will be automatically blocked by the software at the very latest.

Can I earn money with my live streams?
You can earn money with your live streams in many different ways:
The simplest form is to offer the live stream against payment. On your own website, for example, you could publish the link to the live stream against payment of a fee. This payment model could also be transferred to social media platforms by providing the live stream only in a closed group to which the audience only gets access for a fee.

At this point in time, classic payment systems such as bank accounts, for example, which are independent of the social media platform, still have to be used. However, it is to be expected that social media platforms will increasingly offer integrated payment solutions with which viewers can pay directly via the platform. For example, Facebook has announced that it will enable direct payments via the Facebook Live Platform.

Other potential sources of income are, for example, advertising breaks or live stream sponsoring. Merchandising articles could also be offered as part of the live stream or voluntary donations could be made possible.

Information for musicians whose live stream is carried out by an organiser

Who can be considered as the organiser or promoter?
Live stream organisers are mainly concert promoters and club companies, but also (media) companies, foundations, associations or other societies are possible.

Where can I access the live streams of these events?
On the one hand on social media, on the other hand also on own platforms, which were created especially for live streaming events. One national example is Artonair. An international example of such a live stream organizer is Stageit.

I was/we were asked for a live stream: Does the organiser have to pay me for my performance?
SUISA is basically of the opinion that engagements for live streams should be compared to engagements for concerts and that a fee is therefore appropriate. This should be regulated in an engagement contract together with the modalities of appearance.

Are the organisers also responsible for the copyright licence fees?
Yes, just as in the offline area, the organisers must take care of the copyright in the performed music. International providers need a licence from each affected rightsholder of the performed music (collecting societies, publishers etc.). A licence from SUISA is sufficient for national providers.

In this context, it is particularly important to study the general terms and conditions of the respective provider and to make sure that you do not grant the organiser any rights which you cannot or do not want to assign. For example, as a SUISA member, you should take special care not to grant performing rights to the organiser, as SUISA will already take care of this for you.

Does SUISA pay a fee for my appearance in a live stream?
If a live stream has been licensed by SUISA to an organiser, the authors and publishers involved in the music can expect to receive corresponding remuneration from SUISA (less the current cost rate of 15%). The amount of compensation depends primarily on whether and how much income has been generated by the organiser. The royalties are distributed on the basis of the programme, the “set listˮ, which the broadcaster submits to SUISA.

Further information:
As a SUISA member, do you have any legal questions or concerns in connection with live streams? Our legal department is happy to advise you on this: legalservices (at) suisa (dot) ch

Related articles
Penny-pinching in digital music distributionPenny-pinching in digital music distribution Business in the online sector has been subject to constant change – not only for copyright societies. In the second part of the interview, SUISA CEO Andreas Wegelin reports on the status quo and provides an outlook on the scenarios that are being discussed. Read more
The revised copyright law has come into forceThe revised copyright law has come into force The coronavirus pandemic has naturally eclipsed this event. Yet the amended Federal Copyright Act came into force on 1 April 2020 after the Pirate Party failed its attempt to launch a popular referendum. Read more
If bands and event promoters organise a concert togetherIf bands and event promoters organise a concert together The event organiser of a concert has to pay the copyright licence fee. How does it affect the legal situation, if musicians and organisers jointly run the performance by way of a cooperation? The concert organiser is responsible for paying the copyright licence fee in the case of artist engagement agreements. It occurs that events are organised by the bands themselves or in cooperation with third parties. In such cases, the type of cooperation between the band and the organiser determines who has to pay the copyright licence fee. Read more
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  1. WE CAN LIVE on mars - Video Network says:

    Bonjour, avez-vous ces informations disponibles en français et plus particulièrement dans le cadre de live streaming organisés pour le compte de nos clients?

    Merci!

  2. Michael says:

    Wie schaut es bei „nicht-kommerzielle Livestreams” in Bezug mit Gottesdienste aus? Wenn dort Musik gespielt wird und Gesungen als Teil des Gottesdienstes und das auch Live z.b. auf Youtube übertragen wird, inkl. Einbindung von Songtexten zum mitsingen.
    Ist das dann eine nicht-kommerzielle Veranstaltung? Und was ist, wenn in Rahmen dieses Gottesdienstes ein Aufruf zu Spenden, z.b. an Missionsstellen gemacht wird?

    • Guten Tag
      Grundsätzlich werden Livestreams von Kirchen in unserer Praxis mit solchen von Unternehmen gleichgesetzt: Sie benötigen eine Lizenz von der SUISA. Eine Ausnahme gilt momentan für Kirchen, welche bereits eine Vergütung der SUISA auf Basis des Gemeinsamen Tarifs C (GT C) bezahlen. In diesen Fällen erachten wir die Livestreams als bereits abgegolten, sofern diese auf von den Kirchen selbst bewirtschafteten und durch den Tarif GT C abgedeckten Online-Plattformen/-Kanälen übertragen werden. Wenn Kirchen, die keine Vergütung gemäss dem Tarif GT C entrichten, in live gestreamten religiösen Feiern – wozu auch kirchliche Hochzeiten gehören – am Rand der Zeremonie zu Spenden aufrufen, kann der Livestream unter Umständen als nicht-kommerziell behandelt werden. Was das Einblenden von Songtexten betrifft, so muss in jedem Fall eine zusätzliche Lizenz von den Rechteinhabern (in der Regel Verlage) eingeholt werden, da die SUISA diese Rechte nicht vergeben kann – weder direkt, noch über einen Vertrag mit einer Social-Media Plattform.
      Freundliche Grüsse, Michael Wohlgemuth, SUISA Rechtsdienst

  3. M. Badertscher says:

    Was bedeutet “nicht-kommerzielle Livestreams” genau?
    Wenn der Stream für alle sichtbar ist (keine Zugangsbeschränkung), man Musik im Hintergrund laufen lässt und der Zuschauer freiwillig für den Stream etwas bezahlen kann aber nicht muss, dann ist das doch auch kommerziell? Der Streamer verdient ja auch damit. Einfach auf freiwilliger Basis.

    • Michael Wohlgemuth says:

      Besten Dank für die berechtigte Frage. In der Tat würden wir solche Livestreams auch als kommerziell betrachten. Sobald in irgendeiner Form Geld fliesst, handelt es sich aus unserer Sicht um ein kommerzielles Angebot.
      Beste Grüsse, Michael Wohlgemuth, SUISA Rechtsdienst

Leave a Reply

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The corona measures led to a loss of performance and earning opportunities for music creators and to a painful loss of live music for music consumers. Live streaming therefore enjoys great popularity, especially in these times, and takes on a pertinent role in the cultural industry. Text by Michael Wohlgemuth

Information on live streams for SUISA members

Music via video as a replacement for cancelled concerts: Jazz and improvisation musician Cyril Bondi played his work “We Need To Change” for the series of articles “Music for Tomorrow”; you can listen to it and watch it on the SUISAblog and the social media channels SUISA Music Stories. (Photo: screen shot video Cyril Bondi)

There are numerous possibilities to transmit live streams: The choice ranges from your own website, and social media platforms such as Youtube, Facebook, Instagram or Dailymotion, to pure...read more

The Artist’s Agreement compared with the Publishing Agreement

The economic producer (a label, for example) finances the production of sound recordings containing performances by p artists with the intent to subsequently promote and exploit the recordings commercially. The artist’s agreement regulates the resulting rights between the performer and the producer. The artist’s agreement is often confused with the publishing agreement. An overview of the differences between the two contracts. Text by Céline Troillet

The Artist’s Agreement compared with the Publishing Agreement

The artist’s agreement regulates the performer’s rights to their performance; the publishing agreement on the other hand regulates the exclusive rights of the composer and the lyricist in their work. (Photo: Tabea Hüberli)

An artist’s agreement between a performer and an economic producer (a label, for example) can be defined as the transfer by the performer of their performance rights to the producer for the purpose of producing and marketing a sound recording.

Transfer of the artist’s rights

The neighbouring rights transferred by the performer (performance rights) to the producer are the performer’s exclusive rights in their performance. These include the exclusive right:

  • to fix their performance on blank media and to reproduce such fixations (mechanical rights);
  • to offer, transfer or otherwise distribute copies of their performance; (right to market or distribution right);
  • to make their performance perceptible in some place other than that in which it was performed, either directly or through any kind of medium, in such a way that persons may access it from a place and at a time individually chosen by them (the right of recitation, presentation and performance, and the right to make available);
  • to broadcast their performance by radio, television or similar method, including by wire, as well as to retransmit the broadcast performance by means of technical equipment, the provider of which is not the original broadcasting organization, and to make their performance perceptible when they are broadcast, retransmitted or made available to the public (broadcasting right).

Obligations of the producer

The producer’s function is to produce, at their own expense, a recording containing the artist’s performance, and to promote and exploit the recording. The producer is responsible for promoting the recording in accordance with industry practice.

Royalties

In consideration of the transfer of the performer’s rights, the producer is required to pay a fee for each recording sold. The fee is calculated on the wholesale price of every sound recording sold, at varying rates depending on the type of sale. For recordings sold in retail outlets (physical distribution), the rate is generally 8%, but it may go up to 12%. For online sales (internet and other), rates are usually between 15% and 30%. For other uses (e.g. for advertising or use in a film), the fee due to the performer is generally 50% of the amount received by the producer of the sound recording.

Comparison with the publishing agreement

A publishing agreement between an author and a publisher can be defined as the transfer by the author (composer, lyricist, arranger) to the publisher of the rights in the author’s work with a view to its publishing.

Transfer of the author’s rights

The author’s rights transferred to the publisher are the author’s exclusive rights in their work (i.e. in the composition and lyrics). These rights include:

  • the right to produce copies of the work, particularly in printed form, or as sound recordings, audiovisual recordings or on other media carriers (mechanical rights);
  • the right to offer to the public, to sell or otherwise distribute copies of the work (right to market or distribution right);
  • the right to recite, present or perform the work, or enable it to be viewed or heard in a place other than that where the work was presented, and to make it available (the right of recitation, presentation and performance, and the right to make available);
  • the right to broadcast the work via radio or television (broadcasting right).

Other rights may also be transferred by the author, i.e. remuneration claims managed by collecting societies (uses for teaching purposes, for example), graphic rights (the right to publish sheet music and/or lyrics and to distribute such copies of the work), arrangement rights (remixes, arrangement of a work), synchronisation rights (the right to combine the work with works of other genres, in particular with films or video games), or the advertising right (the right to use the work for advertising purposes).

For your information
Publishing agreement: “Publishing agreements: What do I need to consider?” (SUISAblog)
For more about music and films: SUISAinfo 2.09 (PDF, in German)
For more about arrangements: “Arranging works protected by copyright”, “Setting to music” as well as “Sampling and Remixes” (SUISAblog)

Obligations of the publisher

The function of the publisher is to publish, reproduce, and distribute the author’s work, to mediatise it, combine it with other works (in an arrangement, film or commercial), present it to the public (interviews, galas, show-casings), and to conclude contracts with sub-publishers for the publication of the work in other countries.

Royalties

The remuneration for the exclusive rights and for the compensation claims managed by collecting societies are split between the author and the publisher following the distribution key of the competent collecting society, or by mutual agreement. According to SUISA’s Distribution Rules, the publisher’s share of performance and broadcasting rights may not exceed 33.33%. There is no cap on the publisher’s share of the mechanical rights. The remuneration from the management of the other rights is shared between the parties as provided in the publishing contract. As a rule, the remuneration is split on an equal 50: 50 basis. For sheet music, the author is entitled to between 10% and 15% of the retail price.

In a nutshell

The artist’s agreement is different to the publisher’s agreement. The artist’s agreement applies to a performer while the publishing agreement concerns the author (composer, lyricist, arranger). In the artist’s agreement, the performer transfers their neighbouring rights (performance rights) in their performance whereas in the publishing agreement, the author transfers the copyrights in their work. Lastly, the producer and the publisher do not have the same function in respect of their respective co-contractor, and the remuneration deriving from the artist’s agreement and the publishing agreement is specific to each. For example, if a film producer wishes to use a piece of music in their new film, they must obtain the recording rights from the label (which obtained them from the performer under the artist’s agreements) and the copyrights in the work (composition and lyrics) from the publisher (who obtained them from the author under the publishing agreement).

For your information
Specimens of publishing and sub-publishing agreements are available on SUISA’s website. The main points of these agreements are presented in a commented version. www.suisa.ch/en/members/publishers/publishing-agreement.html
SUISA manages authors’ rights for authors and publishers. Swissperform manages the neighbouring rights of performers and producers in their recordings.
“Why SUISA members should also consider joining SWISSPERFORM” (SUISAblog)
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Publishing agreements: What do I need to consider?Publishing agreements: What do I need to consider? Publishing agreements in Switzerland are governed by the Swiss Code of Obligations (OR) The respective statutory provisions on it are, however, not very detailed. In the case of music publishing agreements in particular, you cannot simply rely on the law. Besides, the contractual parties may also stipulate their own arrangements in the agreement. So what do you have to be aware of with respect to publishing agreements? Read more
SUISA membership in numbersSUISA membership in numbers More than 38,000 authors and publishers have instructed SUISA with the management of their rights. Where are they from, how old are they and are there more men or women who are composers? The figures and graphics below provide an insight into SUISA’s membership structure. Read more
SUISA remuneration is subject to AHV (pension) contributionsSUISA remuneration is subject to AHV (pension) contributions Copyright royalties paid out by SUISA are deemed as earned income from independent activities and therefore have to be taken into consideration for the Swiss Compensation Office (pension funds). That way, later claims and pension reductions at a later stage in life can be avoided. Read more
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  1. Mathias Haut says:

    Hallo Liebes SUISA Team,
    ich bin Musiker und möchte mich auch gleichzeitig als Verleger anmelden. Wie sieht es da mit dem Vertragsrecht aus ? Haben Sie ein Musterbeispiel für so ein Anliegen ?
    Vielen Dank
    Mathias

Leave a Reply

All comments will be moderated. This may take some time and we reserve the right not to publish comments that contradict the conditions of use.

Your email address will not be published.

The economic producer (a label, for example) finances the production of sound recordings containing performances by p artists with the intent to subsequently promote and exploit the recordings commercially. The artist’s agreement regulates the resulting rights between the performer and the producer. The artist’s agreement is often confused with the publishing agreement. An overview of the differences between the two contracts. Text by Céline Troillet

The Artist’s Agreement compared with the Publishing Agreement

The artist’s agreement regulates the performer’s rights to their performance; the publishing agreement on the other hand regulates the exclusive rights of the composer and the lyricist in their work. (Photo: Tabea Hüberli)

An artist’s agreement between a performer and an economic producer (a label, for example) can be defined as the transfer by the performer of their performance rights to the producer for the purpose of producing...read more