At the gala for the 13th Swiss Music Awards on 28 February 2020, of all things, the Swiss-wide restrictions of events with music kicked in. That evening, only a maximum of 1,000 people were permitted to attend the live event. Those who believed that the Covid-19 pandemic would have disappeared with the cold winter air, just like a flu virus, were soon proved wrong: From 13 March 2020, no live concerts, no parties in clubs were allowed any longer. The music business, made up of composers, performing artists, event organisers and suppliers for the event sector was forcibly deprived of its existential basis.
Meanwhile, we find ourselves in the second Covid-19 year and have been experiencing enormous difficulties when it comes to holding music events with a physical audience. How is SUISA as a cooperative society for authors and publishers of music and as a collective management organisation dealing with that?
Financial losses and unpredictability
About a month after the first lockdown had been ordered, the Executive Committee and Board of Directors of SUISA revised the budget for 2020. This so-called “Covid-19 budget” target which forecast 23% less in terms of collections and 8.5% more in terms of costs, could be met. As the annual accounts finally showed, the overall turnover losses were fortunately limited: The collections of SUISA in Switzerland and from abroad amounted to CHF 138.5m in 2020 which was 12% less than the previous record year (CHF 155.2m). Costs rose by only 1.1% compared to the previous year and therefore less dramatically as anticipated in the Covid-19 budget.
The drastic effects of the Covid-19 ordinances only become apparent when you look at the sectors individually: The decrease of the collections from concerts (–51%), entertainment events (–47%), the hospitality industry (–46%) and cinemas (–58%) is blatant compared to the 2019 results. The good results achieved for broadcasting rights, compensation claims and online usages partially offset these losses. However, rights owners whose income mainly stems from the success of live events had to face huge losses in terms of their distribution amounts.
Due to the second wave of the pandemic, all events were banned again in December 2020. Again, a Covid-19 budget had to be created where the expectations are lower yet again on the income side for the 2021 financial year: compared to 2020, 11% less. At the same time, savings of 11% in terms of costs should be achieved compared to the year before. Particularly with regard to the collections from concerts (tariff K), a further slump must be expected. The prognosis for the second Covid-19 year projects CHF 6m collections in this area. In 2020, this tariff generated CHF 11m and before the crisis in 2019, CHF 23m in remuneration for authors and publishers of music.
Two “buffers” help in this situation; they are expected to cushion the inclement framework conditions in the financial results as per the current status of the 2021 financial year: On the one hand, the situation regarding the securities investments is good. On the other hand, the money which could not be allocated to any rights owners during the last five years is used to cover costs. If possible it is paid out in the form of a supplementary distribution once this period has expired.
Relief measures for rights owners
Due to the effect of the pandemic, all collective management organisations in Europe decided to set up aid measures in favour of their rights holders. The aid measures launched by SUISA are based on three “columns”: First, advance payments on the distribution settlements with an extended payback period, second, contributions from the Covid-19 emergency fund which had been specially set up, and third and last, the emergency assistance for authors from the Pension Fund for Authors and Publishers (UVF).
These aid measures are gratefully received: Since the beginning of the Covid-19 crisis in March 2020, CHF 1,416,084 advance payments were made up to 25 October 2021. CHF 251,250 were awarded as contributions from the emergency fund and CHF 170,500 were granted as emergency assistance via the UVF fund. You can continue to submit applications via “My account”. Due to the high number of rights owners, the extent of the losses only become apparent when it comes to the distributions in the years 2021 or 2022 which will be much lower for many since the events in 2020 and 2021 could not be held. Publishing companies have the option to request advance payments or contributions from the Covid-19 emergency fund. The UVF fund emergency assistance is only possible to be granted to authors due to legal reasons.
Just like if you had a short circuit, the lights went out for the entire event sector regarding public performances. From one day to the next, performers, event organisers, stage technicians and other staff in the public event sector were without work and income. For authors the concert stoppage meant that their works were no longer performed live and therefore no licence fees were paid for the performance of their music any longer. The collections from live events slumped to their lowest ever as described further above. These copyright royalties are, however, an important basis for the existence of many rights owners.
The first aid measures by the Swiss Confederation were insufficient and also not really tailored to resolve the problems in the cultural sector. Lobbying therefore became rather important during the crisis. It has been and still continues to be paramount to persuade public authorities, parliaments and the government that culture is vitally important for society, just like shops for your daily needs. If, therefore, cultural performances may no longer take place due to event bans, the creatives, event organisers but also the publishers and suppliers affected must be compensated accordingly. What needs to be taken into account in such situations is that, particularly in the culture sector, many work as self-employed freelancers or in the form of small organisations, e.g. associations.
Furthermore, the understanding needs to be firmed up that there are different types of events: Studies show that there often is a lower risk of getting infected at cultural events than at large sports events or funfairs. Lobbyists have not yet managed to anchor this differentiation in the minds of the decision-makers so far. Nevertheless, the “Taskforce Culture” which had been spontaneously set up during the crisis, has achieved a lot and has become an important contact point for authorities, parliaments and the government. SUISA is a part of the extended support circle of the Taskforce.
Manage from a distance and work remotely
The Cooperative Society SUISA employs about 250 people. They share 187 full time positions. All staff whose tasks could be done by working remotely had to be sent home in the week of 16 to 23 March 2020. The IT team created the required plans for such a completely unexpected process from scratch and made sure that staff could continue to work from home on devices provided by the employer, without major difficulties.
Working in your home office, a recommendation issued by the authorities, later turned from being optional to mandatory. As such, it was not just a challenge it also entailed completely new experiences in terms of managing and organising the operations. How do you reach your co-workers and colleagues if you cannot simply pop over to the next office space if the meeting and break out rooms cannot be used?
The previously existing and used options to hold virtual meetings and one-to-one conversations via video conference were expanded. Thanks to these technical means the connection which is so important for a good collaboration between management and staff but also among colleagues could be maintained. Executive staff were trained in how to lead and manage their staff from home. Every two weeks, a web meeting with the Executive Committee, the HR manager and the IT manager took place, moderated by the communications manager. All staff could participate in this meeting and ask questions via the chat function. We thus managed to transition the collaboration “across the distance” into a daily work routine.
Business operations were functioning, thanks to the flexible, committed and disciplined staff as well as the advanced digitisation. SUISA was always available to its members and its customers. This new experience made the Executive Committee decided to also enable home office work in future, up to 50% of the work time. Home office deployments must, however, be coordinated within the teams and this cannot be carried out for some positions in the extent reflecting a maximum.
More self-service – process automation
The obligation to work from home particularly highlighted how indispensable and important digitisation has been for a collective management organisation like SUISA. Working from home is only possible if the necessary data is available electronically and extensive paper dossiers do not have to be accessed. The immense advantages in terms of availability of the required information was proven as a consequence of the digitisation of all member and customer files in the last few years. The developments in terms of computerisation further contributed that it was possible to quickly switch to working from home in a successful manner.
Customers and members of SUISA also benefited from progress for efficient and satisfying contacts with the company triggered by the digitisation. Due to the closure months for the hospitality industry and shops ordered by the authorities, many customers had requested a refund of the unusable licence for music performances. The process of refunding licence fees can now simply be triggered via a web form.
Since the middle of 2020, members can access the royalty report via “my account”. All members who have a valid online access can retrieve the up-to-date data for their works and the licences issued for them and view and arrange them according to selected criteria. More recently, the login process for members and customers was enhanced via a two-factor authentication which means that the digital business exchange with SUISA offers an even higher security standard. Further developments will follow.
The applications and digitisation projects mentioned above were only implemented in such a successful and timely manner because the staff continued to work on them at full steam and without any limitations during the pandemic. After some lengthy discussions, Executive Committee and Board of Directors had decided that SUISA would not apply for and introduce short-time work. A wise decision, as the situation which we have been experiencing since March 2020, shows more and more clearly: In a roundabout way under pressure from the authorities’ ordinances regarding the pandemic, SUISA was able to develop its services much further over the last few months. Despite the losses in collections, we are ready with digitised and automated processes to manage the music licences for event organisers and to distribute the royalties to rights owners reliably and, above all, cost-effectively.