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From forte to pianissimo in just a few beats

In 2019, SUISA recorded its best results in its 96-yrear history, with total revenues of CHF 171 million. Moreover, thanks to the excellent investment year in 2019, its investment performance also attained record heights. After deducting an average cost-coverage contribution of 13% from total royalty revenues of CHF 155.2 million, SUISA will be able to distribute CHF 135 million to rightholders in Switzerland and abroad. And yet, three months on, everything has changed. By Andreas Wegelin, CEO

From forte to pianissimo in just a few beats

Three months after SUISA’s gratifying 2019 financial statements, instruments in concert halls fell silent. (Photo: VTT Studio / Shutterstock.com)

No sooner had SUISA announced its best results in its 96-year history, than a general ban was imposed on all public events, and all venues were shut down in March 2020, triggering an unprecedented negative record: one after the other, concerts, shows and dance events were cancelled. Overnight, bookings were struck from musicians’ calendars. In concert venues, musical instruments fell silent.

This cannot fail to impact SUISA’s business. Owing to the coronavirus pandemic, we are currently assuming that SUISA’s total revenues – and therefore the amount available for distribution – will fall by up to 25% by the end of 2020. Nobody can tell for sure today, much will depend on how the epidemic develops here and abroad, but a hefty recession seems imminent. It will take time to get back to normalcy, and we expect recovery to be no more than hesitant next year too.

In this crisis, SUISA is determined to prove itself a reliable partner both for music creators and music users. Appropriate measures have been put in place to support musicians, and an accommodating approach has been adopted towards customer payments. Meanwhile, new online forms of music performance are becoming more important as a source of royalties. Streaming may be the technology of the hour, but it only brings authors and music publishers a fraction of the revenues generated by live concerts.

“In this crisis, SUISA is determined to prove itself a reliable partner both for music creators and music users.”

SUISA has remained and remains active during the corona crisis. We are the hub for inquiries from members and customers. Although there are fewer events, we intend to maintain and even expand our services through automation. Unfortunately, the Board and the Executive Committee will not be able to welcome members personally to the General Meeting in Bern this year. To have a say in SUISA’s affairs, members will have to send in their vote by post. We encourage you to make use of this opportunity.

In any event, the employees at our three offices in Zurich, Lugano and Lausanne remain at your disposal. When work is slow, staff will be able to attend training courses; moreover, we are working full speed to develop online self-service services to give you more time to focus on your strengths. Making music, innovating, promoting. Despite the corona crisis, I wish you a challenging and productive summer.

SUISA matters: SUISAinfo 3.20, digital only
This autumn, the News for SUISA members will be sent by e-mail in digital format only. To contain costs in this difficult year, the hardcopy printed version will not be produced. SUISA provides regular news updates via www.suisa.ch, www.suisablog.ch, and SUISA Music Stories on Instagram, Facebook and Youtube. (Manu Leuenberger)
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In 2019, SUISA recorded its best results in its 96-yrear history, with total revenues of CHF 171 million. Moreover, thanks to the excellent investment year in 2019, its investment performance also attained record heights. After deducting an average cost-coverage contribution of 13% from total royalty revenues of CHF 155.2 million, SUISA will be able to distribute CHF 135 million to rightholders in Switzerland and abroad. And yet, three months on, everything has changed. By Andreas Wegelin, CEO

From forte to pianissimo in just a few beats

Three months after SUISA’s gratifying 2019 financial statements, instruments in concert halls fell silent. (Photo: VTT Studio / Shutterstock.com)

No sooner had SUISA announced its best results in its 96-year history, than a general ban was imposed on all public events, and all venues were shut down in March 2020, triggering an unprecedented negative record: one...read more

A Board Meeting focused on the coronavirus

To comply with coronavirus regulations, SUISA’s Board met for the first time by video conference on 28 and 29 April 2020. Board members were connected by sound and video from their respective home offices. After a short period of accustomation, the meeting proceeded apace without any significant communications problems. Even thorny issues were debated and decided in this way. Report from the Board by Andreas Wegelin

A Board Meeting focused on the coronavirus

Based on our current state of knowledge, we expect a 25% drop in total budgeted revenues owing to event cancellations and business shutdowns in the wake of the restrictions ordered by the public authorities to contain the corona pandemic. (Photo: RomeoLu / Shutterstock.com)

The main items on the Board’s spring agenda are the approval of the annual financial statements, status report and business report and their referral to the General Meeting, as well as the preparation of the agenda for the General Meeting.

SUISA’s 2019 financial statements show highly satisfactory results. Royalty revenues totaled CHF 155.25m, a 3% increase over the prior year. As a result, after deducting costs, CHF 129.34m will be distributed to beneficiaries in Switzerland and abroad in 2020. Moreover, thanks to significant investment income, an additional 7% can be distributed on all settlements.

Written vote instead of a 2020 General Meeting

The Board decided that, by way of exception, the business on the agenda for this year’s General Meeting will be put to a written vote since there is no assurance that the meeting scheduled for 26 June at the Bierhübeli in Bern will effectively be able to take place. The documentation for voting by correspondence will be sent to members at the end of May.

Two by-elections to the Committees are also on General Meeting’s agenda – and will be held this time in writing: the Board proposes Michael Hug to succeed Grégoire Liechti in the Distribution and Works Committee. Melanie Oesch is the designated candidate to succeed the late Reto Parolari as Member of the Board.

Course of business during the corona crisis: the Board establishes a task force

Apart from the usual items on the agenda for the spring meeting, discussions in the Board focused on corona-related threats, or rather, on the consequences of business shutdowns and the ban on events. Meanwhile, it is known that no large concerts will take place until the end of August at least, and that smaller events will only be allowed under stringent health and security measures liable to impact audience size. It is quite conceivable that these restrictions will remain in force for a longer period.

Under the circumstances, we expect SUISA’s budget for revenues from concerts, events and music entertainment in the hospitality industry to be cut by half. This translates into a reduction of 25%, or CHF 38m, in SUISA’s total budgeted revenues. A more accurate forecast cannot yet be made given the lack of visibility until the end of the year. The Board has established a task force to examine, together with the Executive Committee, how the loss in revenue will impact the course of business, and to identify the necessary cost-cutting measures.

Developments in the online licensing market

Another important topic in the context of SUISA’s consolidated annual financial statements was the development of the online licensing market. For three years now, SUISA Digital Licensing has been licensing the rights of SUISA members not only in Switzerland and Liechtenstein, but throughout Europe – and even worldwide where the agreements so allow – through Mint Digital Services, SUISA’s joint venture with SESAC, the US rights’ management organisation.

By pooling repertoires, SUISA has become an important provider of services in this field with Mint. The two start-up companies Mint and SUISA Digital Licensing are not yet profitable. The Board has therefore instructed the Executive Committee to prepare and present a detailed evaluation of the break-even prospects, calculated under various scenarios.

The next meetings of the Board, to be held in video conferencing again, are scheduled for 25 May and 25 June 2020.

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  1. Yannick Popesco says:

    Bonjour étant membre de la Suisa et artiste actif je me pose une question importante.

    Y’a-t-il actuellement une lutte en cours pour le statut suisse d’intermittent du spectacle ?
    Quel est le statut légal de l’artiste pour l’instant ?

    Salutations,
    Yannick Popesco (artiste indépendant)

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To comply with coronavirus regulations, SUISA’s Board met for the first time by video conference on 28 and 29 April 2020. Board members were connected by sound and video from their respective home offices. After a short period of accustomation, the meeting proceeded apace without any significant communications problems. Even thorny issues were debated and decided in this way. Report from the Board by Andreas Wegelin

A Board Meeting focused on the coronavirus

Based on our current state of knowledge, we expect a 25% drop in total budgeted revenues owing to event cancellations and business shutdowns in the wake of the restrictions ordered by the public authorities to contain the corona pandemic. (Photo: RomeoLu / Shutterstock.com)

The main items on the Board’s spring agenda are the approval of the annual financial statements, status report and business report and their referral...read more

Outlooks and insights

In its meetings on 10 and 11 December 2019, the Board focussed on the budget for 2020 and SUISA’s strategy for the next five years. Report from the Board by Andreas Wegelin

Report from the Board: Outlooks and insights

Advertising revenues have shifted from the TV towards the online sector. This shift has led to a negative impact on copyright collections. (Photo: Olivier Le Moal / Shutterstock.com)

The budget for the year 2020 had already been discussed in advance on 27 November 2019 at the meeting of the Executive Committee for Finance and Controlling. The Committee and the Board had to establish that the investment and staff requirements remain high. This is due to the fact that SUISA has taken on new tasks.

In the case of the new task fields which entail a higher demand for staff, it is particularly the collection of remuneration for background music and the reception of broadcasts in offices outside the domestic and private circle or home life that are affected. Said collections had been linked to the BILLAG collection of the fees for the reception of commercial broadcasts. Since 2019, SUISA has been carrying out this type of collection directly. Another sector where investments into additional staff resources need to be made is the IT sector. This is because self-service options for customers and members on the SUISA web platform “my account” are due for major enhancements. Expanding activities in terms of global licensing of online music distribution via the subsidiary, SUISA Digital Licensing AG and the Joint Venture for services with SESAC also require more staff.

Budget approved, future discussed

On the income side, the shift of the advertising revenue in the TV sector towards the online sector are noticeable. Revenues from broadcasting rights are stagnating while online usage does not increase proportionally. The Board has therefore approved a budget for 2020 which has a slightly worse cost/income ratio. Executive Management has also been asked to plan measures for 2021 to lower the cost/income ratio again.

The strategic alignment of the company has been discussed further on the basis of a re-defined strategy paper from the October meeting. Strategic focal points for the next years are described by keywords such as services, income/cost ratio, competition and innovation. To this end, the Board determined a roadmap for 2020 in its December meeting.

On top of that, the Board listened to updates on the personal changes at executive level of subsidiary SUISA Digital Licensing AG and Mint Digital Services, the Joint Venture with SESAC and discussed further development steps in the category of licensing of music in online services that is no longer limited per territory.

Distribution rules and by-elections

The Committee for Tariffs and Distribution and the entire Board subsequently decided on two changes to the distribution rules, namely an adaptation of the weighting of music in the case of sales broadcasts in advertising windows of foreign TV channels and the dissolution of distribution category 4A. These decisions are subject to the approval by the IGE (IPI), our supervisory authority. Furthermore, the Board determined the cost deductions for the distributions in 2020. They are to remain the same as in 2019.

After the election of Grégoire Liechti into the SUISA Board by the General Meeting in 2019, a seat in the Distribution and Works Committee has become available and needs to be filled. We are looking for a music publisher. The Board is going to propose Michael Hug, owner of the publishing house Ruh Musik AG, at its General Meeting in 2020.

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In its meetings on 10 and 11 December 2019, the Board focussed on the budget for 2020 and SUISA’s strategy for the next five years. Report from the Board by Andreas Wegelin

Report from the Board: Outlooks and insights

Advertising revenues have shifted from the TV towards the online sector. This shift has led to a negative impact on copyright collections. (Photo: Olivier Le Moal / Shutterstock.com)

The budget for the year 2020 had already been discussed in advance on 27 November 2019 at the meeting of the Executive Committee for Finance and Controlling. The Committee and the Board had to establish that the investment and staff requirements remain high. This is due to the fact that SUISA has taken on new tasks.

In the case of the new task fields which entail a higher demand for staff, it is particularly...read more

Overall, a positive financial year 2018

The SUISA Board and its Committees for Tariffs and Distribution as well as for Organisation and Communication met for their regular spring sessions on 9 and 10 April 2019 at the SUISA head office in Zurich. Report from the Board by Andreas Wegelin

Report from the Board: Overall, a positive financial year 2018

Apart from the Cooperative Society SUISA, there is now also a SUISA group, which includes the subsidiary company SUISA Digital Licensing and the 50% holding in the Joint Venture Mint Digital Services AG. (Photo: Natalie Schlumpf)

The most important topic during the spring meeting are traditionally the resolutions concerning the financial statements of the past year for submission to the General Assembly. SUISA publishes two financial statements in accordance with the Standard Swiss GAAP FER from this year onwards, one for the parent company, the Cooperative Society SUISA, and one consolidated financial statement for the SUISA group. The group comprises the subsidiary company SUISA Digital Licensing with headquarters in Vaduz (FL) and the 50% holding in the company Mint Digital Services AG, Zurich, a Joint Venture by SUISA and the American organisation for music rights, SESAC.

The annual financial statements of the group as well as of the parent company show an overall positive picture. Total collections reached a new high of CHF 160.8m. Income from the licensing of the online music business surpassed CHF 10m for the first time and contributed to this result.

Unfortunately, the secondary income was much lower last year. The reason for this is the bad investment year. Securities income only reached CHF 0.6m in 2018. In 2017, this amount still stood at CHF 3m. As a consequence, this difference now lacks in terms of covering expenditure for 2018. Nevertheless, cost coverage deductions taken from the settlements to members should not increase. The Board therefore decided to use more money from the liabilities that became available for the financing of the costs, and has subsequently reduced the supplementary distribution from 7% to 5%.

Preparations for the General Assembly

Additional topics were the preparation of other business for the General Assembly: the analysis of the organisation’s risks, the resulting management report and the approval of the entire annual report for submission to the GA. Lastly, nominations for two retiring Board members had to be decided upon, and documents relating to the investment policy and the compensation of Board members that had become necessary due to the new Articles of Association had to be resolved.

The Board took notice that Executive Committee was making efforts and got involved with the relevant departments to collect remuneration from abroad. In this context, it is important to take into consideration that the laws, tariffs and distribution rules are different at our sister societies and that SUISA cannot be held responsible for that. The Board therefore rejected the claim for a settlement of a member which held the view that it had not received enough remuneration for usages abroad.

Finally, the Board had to say farewell to executive assistant Dora Zeller, who is going to leave SUISA in order to retire. President Xavier Dayer expressed his thanks in the name of the entire Board for the turntable-like function that Dora Zeller had mastered with distinction throughout the last 10 years, and wished her well for the next, ‘third’ phase in her life.

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The SUISA Board and its Committees for Tariffs and Distribution as well as for Organisation and Communication met for their regular spring sessions on 9 and 10 April 2019 at the SUISA head office in Zurich. Report from the Board by Andreas Wegelin

Report from the Board: Overall, a positive financial year 2018

Apart from the Cooperative Society SUISA, there is now also a SUISA group, which includes the subsidiary company SUISA Digital Licensing and the 50% holding in the Joint Venture Mint Digital Services AG. (Photo: Natalie Schlumpf)

The most important topic during the spring meeting are traditionally the resolutions concerning the financial statements of the past year for submission to the General Assembly. SUISA publishes two financial statements in accordance with the Standard Swiss GAAP FER from this year onwards, one for the parent company, the Cooperative Society SUISA, and one...read more

Income from performing rights set to rise in 2019

SUISA’s December Board meetings usually focus on the figures for the coming year. Budgets, staffing plans and cost coverage deductions for business year 2019 were thus the central discussion point. Report from the Board by Dora Zeller

Report from the Board: Income from performing rights set to rise in 2019

Neuchâtel Reggae band Moonraisers, shown on the main stage of the Label Suisse Festival in Lausanne in September 2018; the event is co-supported by SUISA. Regarding the income from performing rights, including concerts, SUISA expects an increase during business year 2019. (Photo: Anne Bichsel / Label Suisse)

For the second time in SUISA’s history, the Board inspected the group budget of SUISA on top of its regular inspection of the budget of SUISA, the Cooperative Society and parent company. The latter comprises the numbers of the parent company, the 100% subsidiary company SUISA Digital Licensing (SUISA Digital) and the 50% share in the Joint Venture Mint Digital Services AG. The budgets of SUISA Digital and Mint are approved by the respective administrative boards of the two companies; the relevant numbers are then incorporated into the group accounts.

Increase in income thanks to performing rights

SUISA’s budget for 2019 provides for an increase of the income from the exploitation of copyright in Switzerland and Liechtenstein, especially due to the income from performing rights (more events, higher admission charges). The decline in mechanical/reproduction rights is set to continue. In the case of compensation claims, growth is expected; the same applies to online usage income. Foreign income has been calculated analogously to 2018, secondary income has been set higher.

For business year 2019, a total turnover of CHF 166.5m has been budgeted (2018: CHF 152m). Costs are expected to rise from CHF 29.5m in the previous year to CHF 32.5m. This is due to higher staff costs required for collections regarding Tariff CT 3a (background entertainment) and additional positions in the IT department.

Cost deductions, Articles of Association, Regulations

With respect to the cost deductions, the Board sets a percentage each year in relation to the distribution of the income that is to be deducted in the following year. For 2019, the percentages of the previous year will be retained in the offline sector. Cost deductions in the online business, however, are subject to change; the reason for this is the outsourcing of licensing and partially distribution activities to the subsidiary companies.

SUISA members had agreed to various changes to the Articles of Association at the General Assembly in June 2018. The revision of the Articles of Association also took place in the context of the alignment with the Liechtenstein Collecting Societies Act and the EU Directive on Collective Rights Management (CRM Directive). As a consequence, the division of powers and the organisational policies had to be adapted, and rules of procedure for the newly created Complaints Committee had to be drawn up. The Board has ratified all of these policies.

FONDATION SUISA and Revision of the Swiss Copyright Act

The SUISA Board Committee for Organisation and Communication and the responsible parties of the FONDATION SUISA have established an “annual dialogue” which takes place at the end of the year. This time, Marc Savary, President of the Foundation Board of the FONDATION SUISA reported on the amendments in the respective Statutes and regulations/policies. He also provided an overview on the activities of SUISA’s foundation for music promotion and answered questions of the Committee members.

Furthermore, the Board was concerned about the news that the National Council intends not to adhere to the compromise by the Working Group on Copyright (AGUR12) in its deliberations on the Copyright Revision and plans to provide for an exception regarding TV reception in guest rooms in the law. As a consequence, the new law would be worse than the previous one. The Board has instructed Management to undertake measures so that the Council of States corrects the decision of the National Council.

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SUISA’s December Board meetings usually focus on the figures for the coming year. Budgets, staffing plans and cost coverage deductions for business year 2019 were thus the central discussion point. Report from the Board by Dora Zeller

Report from the Board: Income from performing rights set to rise in 2019

Neuchâtel Reggae band Moonraisers, shown on the main stage of the Label Suisse Festival in Lausanne in September 2018; the event is co-supported by SUISA. Regarding the income from performing rights, including concerts, SUISA expects an increase during business year 2019. (Photo: Anne Bichsel / Label Suisse)

For the second time in SUISA’s history, the Board inspected the group budget of SUISA on top of its regular inspection of the budget of SUISA, the Cooperative Society and parent company. The latter comprises the numbers of the parent company, the 100% subsidiary company SUISA Digital Licensing (SUISA...read more

Replay TV: catching up with advertising revenues

Replay TV (also known as time-shift or catch-up TV) offers consumers the option of watching television broadcasts on a time-shifted basis instead of at the regular scheduled time. This function, which is very popular with viewers, is now jeopardised by an ongoing legal and political dispute. Text by Vincent Salvadé

Replay TV: catching up with advertising revenues

Replay TV: Thanks to digital technology, viewers can go back in time up to seven days and catch up on any programmes they may have missed. (Photo: Getty Images / Steve Lawrence)

Broadcasting companies, i.e. TV channels, are demanding veto rights on the time-shifted use of their programmes. What is at stake? Their advertising revenues. After all, who will watch commercials if you can skip them in replay? This dispute is of significance for SUISA and for musical rightholders too.

Current status

In past decisions, the Federal Arbitration Commission for copyright and neighbouring rights has equated subscription to a replay TV service with copying for private use, which is permitted by Article 19(2) FCA. In exchange, rightholders (including, in this case, broadcasting companies) are entitled to remuneration in accordance with Article 20(2) FCA, levied by the collecting societies in accordance with Common Tariff 12 (CT 12).

This has been the status since 2013, and broadcasters have not disputed it before the civil courts. This situation has several advantages: the distributors of the broadcasting programmes (Swisscom TV, UPC, Sunrise, etc) can offer their customers attractive services in exchange for a fee. And the collecting societies collect the fees and pass them on to the copyright and neighbouring rights rightholders.

However, in February 2018, the Federal Arbitration Commission responsible for reviewing the tariffs of the collecting societies approved the new CT 12, which provides for a slight increase in these fees, for the period 2017 to 2020. On 21 March 2018, 23 broadcasting companies appealed this decision before the Federal Administration Court. They argued that replay TV was not governed by the legal regime for private copying, and should be subject to their consent. On 12 September 2018, the Court ruled that the broadcasting companies were not entitled to appeal.

In parallel, however, turning to account the ongoing revision of the Telecommunications Act (TCA), the broadcasting companies had also demanded veto rights for replay TV in that context. In July 2018, the Transport and Telecommunications Committee of the National Council (TTC-N) followed their reasoning and introduced Article 12e TCA. This triggered a number of reactions from stakeholders opposed to the new provision. Finally, the Committee backed down and proposed that the issue be resolved in the framework of the copyright law revision.

The issue

SUISA appreciates that broadcasting companies should seek to safeguard their advertising income. This is also in the interest of the holders of musical rights, since the tariffs governing broadcasting rights (tariff A for the SSR and Common Tariff S for private broadcasters) are based on broadcasters’ revenues.

By way of reminder: based on tariff A and CT S, SUISA collected about CHF 16.8 million in remuneration from Swiss TV broadcasters in 2017, plus an additional CHF 1.3 million from the Swiss advertising windows of foreign broadcasters. By comparison, TC 12 generated slightly over CHF 3 million for musical rightholders. We should be careful not to lop off the branch on which musical rights are sitting.

Solutions

However, granting veto rights to broadcasting companies on replay TV seems unjustified. By refusing their consent, broadcasters would limit the offer available to consumers and, as a result, reduce CT 12 revenues for rightholders. By limiting private copying options, which is now regularly the case on the cloud, we would be sounding the death knell for a system that is the envy of our neighbours and has contributed to developing innovative digital services.

We feel that existing copyright law provides for a well-balanced system: under Articles 59 and 60 FCA, remuneration under CT 12 must be fair. That means on the one hand, that distributors must compensate the broadcasting companies commensurately with the significant revenues generated by replay TV. On the other hand, Articles 59 and 60 FCA are worded in sufficiently flexible terms to take into account, at least partially, the same distributors’ loss in earnings.

At the same time, the law could require distributors to obtain the broadcaster’s consent, not to their offering replay TV services to their customers, but to enabling their customers to skip the commercials. This means distributors would have to take the necessary technical measures to prevent viewers from skipping commercials when the broadcaster withholds its consent. Consumers may at first be reluctant to accept such solutions. But such measures would be the lesser evil compared with a broadcaster veto liable to significantly limit the current offer. And, for a number of stakeholders, it is a win-win solution:

  • providers who distribute the programmes could continue offering full replay TV, while consumers could continue subscribing to that option;
  • distribution companies would be able to preserve or increase their advertising revenues since they would have an additional audience of viewers who are unable to tune into programmes at the scheduled times;
  • other rightholders would continue to collect significant broadcasting distribution revenues (tariff A and CT S in the case of musical rights) while taking advantage of the booming revenue flows from CT 12.

Switzerland always favours balanced solutions. The legal regime for replay TV should be no exception to the rule; the interests of all stakeholders must be taken into account.

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Copyright law revision: work starts in the parliamentary committeesCopyright law revision: work starts in the parliamentary committees On 22 November 2017, the Federal Council presented its Message on the revision of the Federal Copyright Act (FCA), and referred the copyright bill (FCA-B) to the two houses of Parliament. The bill reflects the compromise reached by the AGUR12 II working group at the beginning of March 2017. Parliament has started working on the bill, and SUISA was invited to present its point of view on 12 April 2018 at a hearing organised by the Science, Education and Culture Committee of the National Council. SUISA also had the opportunity to state its views before the Legal Affairs Committee of the National Council, first in writing and then orally on 18 May 2018. Read more
Changes in relation to the distribution of Tariff CT 1 and CT 2 collectionsChanges in relation to the distribution of Tariff CT 1 and CT 2 collections In the last few years, cable network providers switched their offerings from analogue to digital. In order to take these changes into consideration, the distribution of the collections arising from Tariffs CT 1 (cable networks), CT 2a (retransmitters) and CT 2b (IP based networks) was aligned. In item 5.5.1 of the distribution rules the calculation basis of the reference parameter “number of subscribers” was changed to “daily reach”. Read more
Copyright Act Review: Authors and publishers must benefit more from the online exploitation of their worksCopyright Act Review: Authors and publishers must benefit more from the online exploitation of their works The Federal Council has adopted a dispatch on the new Copyright Act. SUISA is in principle content with the current version of the law. The solutions achieved in the working group for the Copyright Act (AGUR12 II) were implemented. In order for authors, performers, publishers and producers to benefit better from the digitisation, it is necessary to adopt important additions. Read more
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Replay TV (also known as time-shift or catch-up TV) offers consumers the option of watching television broadcasts on a time-shifted basis instead of at the regular scheduled time. This function, which is very popular with viewers, is now jeopardised by an ongoing legal and political dispute. Text by Vincent Salvadé

Replay TV: catching up with advertising revenues

Replay TV: Thanks to digital technology, viewers can go back in time up to seven days and catch up on any programmes they may have missed. (Photo: Getty Images / Steve Lawrence)

Broadcasting companies, i.e. TV channels, are demanding veto rights on the time-shifted use of their programmes. What is at stake? Their advertising revenues. After all, who will watch commercials if you can skip them in replay? This dispute is of significance for SUISA and for musical rightholders too.

Current status

In past decisions,...read more

Positive figures for the 2018 financial year to date

The Board meeting held the day before the General Assembly in June 2018 had a multi-layered agenda to handle. In addition to preparing for the General Assembly, the meeting also reviewed the course of business for the year to date. Report from the Board by Dora Zeller

Positive figures for the 2018 financial year to date

Satisfactory revenue and distribution results for composers, lyricists and publishers: SUISA’s 2018 financial year got off to a good start in terms of results. (Photo: Manu Leuenberger)

Key figures for the start of the 2018 financial year are positive: domestic revenues totalled CHF 60.3 million as at 31 May 2018, exceeding the budget by 8% and the prior year by 7%. The amount distributed in the second-quarter settlement in mid-June was CHF 43.8 million. At CHF 13.2 million, expenses were within budget.

Review of business activities

The Board approved the comprehensive report and explanatory notes to the 2017 financial statements prepared by the Auditor. These are part of the documentation that SUISA is required to file with the Federal Intellectual Property Institute (IPI) each year for its review of SUISA’s business activities.

Following changes in the Financial Market Infrastructure Act and its implementing ordinances, SUISA had to amend its investment regulations, in particular as regards due care rules for derivatives trading. The Board laid down clear guidelines regulating SUISA’s activities on the investment market. SUISA is also required to submit any amendments to these regulations each year to the IPI, the competent regulatory authority.

Satisfactory income and distribution results for year-to-date 2018

For the year to date as at 31 May, revenues increased for all classes of rights compared both with the budget and the prior year. The growth in revenues from online uses – plus 174%, or CHF 4.7 million – was particularly noteworthy. When preparing the budget, it had been expected that all online contracts would be transferred to SUISA Digital Licensing or Mint Digital Services, and that the corresponding revenues would flow into these companies. However, negotiations with the online service providers are taking longer than expected. Until the new contracts are signed, the corresponding revenues will continue to flow to SUISA, the parent company.

Initial distribution results for 2018 are also positive. The remuneration collected under most tariffs is meanwhile distributed to rightsholders following a quarterly schedule. The first quarterly settlement comprised 8,879 individual settlements representing a total distribution of CHF 13.8 million; the second, in mid-June, comprised 11,800 individual settlements and a total distribution of CHF 43.8 million.

With regard to revenues from abroad, thanks to a new IT application, we managed to distribute a larger number of settlements from our foreign sister societies than ever before at this time of the year. Remuneration totalling CHF 4.1 million was distributed to SUISA members. Moreover, starting in autumn 2018, foreign revenues will also be distributed on a quarterly basis. This means that the second of the three foreign settlements for 2018 will be distributed in mid-September. The third settlement will then be made in mid-December.

Sponsoring commitments and distribution rules

Figures aside, on to sponsoring: SUISA is making itself seen and heard with a number of actions in the framework of various musical events. The overriding aim is always to inform the public about the purpose and activities of our Cooperative Society and to attract well-deserved attention and esteem for the creative work ofour members. In this context, the members of the Committee for Organisation and Communication learnt about SUISA’s commitment in support of the Walo Prize and the organisation of the successful Songwriting Camp. Other events (co-)sponsored by SUISA include a day of concerts in the “Offen für Neues” (“open for the new”) series at the Festival Murten Classics in August, as well as “Label Suisse” in mid-September in Lausanne.

At the meeting, the Board also spent considerable time debating the amendment of the Distribution Rules. The amendments proposed by the Executive Committee are first examined by the Distribution and Works Committee. They are then referred to the Committee for Tariffs and Distribution before being sent to the Board. Finally, the amendments must be submitted to the IPI and the Liechtenstein Office of Economic Affairs. The amendments come into force once they are approved by both institutions, and the document is published.

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The Board meeting held the day before the General Assembly in June 2018 had a multi-layered agenda to handle. In addition to preparing for the General Assembly, the meeting also reviewed the course of business for the year to date. Report from the Board by Dora Zeller

Positive figures for the 2018 financial year to date

Satisfactory revenue and distribution results for composers, lyricists and publishers: SUISA’s 2018 financial year got off to a good start in terms of results. (Photo: Manu Leuenberger)

Key figures for the start of the 2018 financial year are positive: domestic revenues totalled CHF 60.3 million as at 31 May 2018, exceeding the budget by 8% and the prior year by 7%. The amount distributed in the second-quarter settlement in mid-June was CHF 43.8 million. At CHF 13.2 million, expenses were within budget.

Review of business activities

The Board...read more

131.4m Swiss Francs for composers, lyricists and publishers

It was with satisfaction that members of the SUISA Board approved the results of the previous year during their meeting at the end of March 2017. The total turnover was 3.2% higher than that of the previous year. An overall amount of CHF 131.4m can be paid out to rights holders. The Board has, in addition, decided that a supplementary distribution of 7% shall be carried out on top of all regular distributions in 2018. Report from the Board by Dora Zeller

131.4m Swiss Francs for composers, lyricists and publishers

SUISA managed to yield a total turnover of CHF 159.2m in 2017, including secondary income. Due to the positive outcome, composers, lyricists and publishers receive CHF 2.5m more in royalties for their artistic performances than in the previous year. (Photo: Tabea Hüberli)

Apart from the delightful business result, the Board also received reports on the distribution of the collections of the last year in its meetings in March. As such, CHF 21m were paid to authors and CHF 38.7m to publishers. Transfers to sister societies amounted to CHF 53m.

Further distribution topics featured on the agenda: On the one hand, the Board decided that a supplementary distribution of 7% shall be carried out on top of all regular distributions in 2018. On the other hand, the governing body determined a minimum amount for the distribution of the collections from exploitations by broadcasters. Pursuant to the distribution rules, the distribution per private broadcaster follows the ratio of the licence fee that these broadcasters pay. The prerequisite for this is that the licence fee collected from the broadcaster must be higher than the amount determined by the Board each year. Furthermore, the station logs must be submitted electronically. Last year, the Board had lowered the minimum amount from CHF 15,000 to CHF 5,000. The Board took the decision to maintain this threshold.

General Assembly of SUISA on 22 June 2018 in Berne

The Board members also dedicate a lot of time to the preparation of the General Assembly. It takes place on Friday, 22 June 2018, in Berne. Apart from statutory business, the revision of the Articles of Association is an item on the agenda for the GA. The Articles of Association shall be adapted to the provisions of the EU Directive, which have been implemented into national law in Liechtenstein. Furthermore, such an adaptation is important so that SUISA can continue to carry out cross-border licensing of online usages within the European Union.

A synoptic representation of the changes to the Articles of Association will be posted to the members who are entitled to vote together with the invitation for the GA. The notes to the invitation include further details on the reasons for the intended changes to the provisions. One important issue is the duty to provide members with a complaints procedure. SUISA therefore plans to set up a Complaints Committee. The Board will propose the designated persons to the General Assembly for election.

Further elections are due for the Distribution and Works Committee. Guido Röösli retires and the Board has nominated Natalie Riede for the seat that has become available. She is a young publisher and represents the Swiss electronic music scene.

Mint Digital Services, the joint venture

The Board turned to the international stage with regards to the subject Mint Digital Services. A representative of US partner SESAC explained to Board members what it would take – in his opinion – to be successful in a competitive environment: Tenacity and negotiating skills, paired with intelligent IT software and high data quality are, from his point of view, the necessary tools. These qualities are combined under the joint venture Mint which was launched last year.

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It was with satisfaction that members of the SUISA Board approved the results of the previous year during their meeting at the end of March 2017. The total turnover was 3.2% higher than that of the previous year. An overall amount of CHF 131.4m can be paid out to rights holders. The Board has, in addition, decided that a supplementary distribution of 7% shall be carried out on top of all regular distributions in 2018. Report from the Board by Dora Zeller

131.4m Swiss Francs for composers, lyricists and publishers

SUISA managed to yield a total turnover of CHF 159.2m in 2017, including secondary income. Due to the positive outcome, composers, lyricists and publishers receive CHF 2.5m more in royalties for their artistic performances than in the previous year. (Photo: Tabea Hüberli)

Apart from the delightful business result, the Board also...read more

SUISA’s financial year 2018: an outlook

In the Committee and Board meetings towards the end of the year, framework conditions for the following financial year are set. As such, the meetings of the SUISA Board in December 2017 continued to be characterised by budgets, cost rates, staffing plans, roadmaps, politics and quite a bit more. Report from the Board by Dora Zeller

SUISA’s financial year 2018: an outlook

During the meetings of the SUISA Board in December 2017, the focus was on the figures for the next financial year. (Photo: Kemal Taner / Shutterstock.com)

For the first time in the history of SUISA, the Board presented two budgets in the December meeting: that of the Cooperative Society SUISA and that of the group of companies. The group of companies includes – apart from the parent company – the subsidiary company SUISA Digital Licensing (headquartered in the Principality of Liechtenstein). Furthermore, the group of companies holds a 50% share in the Joint Venture Mint Digital Licensing AG (headquartered in Zurich).

The Board members were given access to the budgeted figures of the affiliated companies. The definitive decision on their business lies, however, with the committees in charge of each society. A new point is therefore added to SUISA’s competency rules in terms of rights and obligations of the Board.

SUISA budget 2018

Back to the numbers: A modest increase is expected for performing and broadcasting rights and a continuation of the downward trend among the reproduction rights. The compensation claims, however, might see a steep rise compared to the 2017 budget (thanks to higher collections from the blank media levy, internal networks in businesses and the rental of set top boxes). Part of the online collections will be allocated to the subsidiary company for accounting purposes. Collections from online use for music on Swiss websites, online advertising campaigns and video on demand services remain in the SUISA budget.

SUISA’s overall turnover budgeted for financial year 2018 amounts to CHF 151.9m. Collections from the use of copyright in Switzerland are budgeted to reach CHF 136.6m. On top of that, net revenues of CHF 11m are expected from abroad. Furthermore, secondary income of CHF 4.3m shall contribute to the overall results.

Expenditure is probably going to increase compared to the previous year, mainly because of the collections of CT 3a (background entertainment). From mid-July, additional staff positions are budgeted to take over this business. The Board has approved the budget for 2018 knowing that it is based on the rejection of the No-Billag-Initiative. Should the voting populace reject the fee for the reception of broadcasts, the changed situation would be met with adapted scenarios.

Regulations and statutory provisions

The auditors regularly supply the governing bodies of SUISA a questionnaire on potential unlawful actions. With this statutory provision, the level of awareness among governing bodies for unlawful acts shall be determined. By way of their answers, management and Board estimate the risk levels and comment on the control procedures. The results were approved and passed on to BDO.

Cost coverage deductions

The Board also decided that the deductions in the off-line sector correspond to those of the previous year. For the online sector it approved slightly changed rates for domestic and international application.

Changes at Board level

Due to the limitation of the period in office, two members of the Board will step down in June 2019. The knowledge acquired over many years in office by the Board members who are now stepping down needs to be replaced and SUISA needs to prepare for future challenges. As early as autumn 2017, a working group has begun with a situational analysis regarding the imminent Board retirements. The Board was informed about the results and the next steps of this analysis.

Copyright Act Review

In November, the Federal Council has passed the message regarding the Copyright Act review together with the legislative proposal on to Swiss parliament. The matter is initially going to be dealt with at National Council level by the Legal Affairs Committee (LAC), and subsequently in the States Council’s Science, Education and Culture Committee (SECC).

The Board was informed about the developments by G. Savary, member of the Board and the SECC. At the same time, he learned from the Executive Committee that the collective management organisations are satisfied with the draft by and large. It corresponds to the compromise developed by the AGUR12-II.

Need for action continues to exist in the sector concerning the online usage of music. In the EU there has been a discussion on the transfer of value on the internet for quite some time. It is high time that this discussion also takes place in Switzerland and that measures are implemented to stop the shift of the value creation away from authors towards internet technology companies.

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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.

In the Committee and Board meetings towards the end of the year, framework conditions for the following financial year are set. As such, the meetings of the SUISA Board in December 2017 continued to be characterised by budgets, cost rates, staffing plans, roadmaps, politics and quite a bit more. Report from the Board by Dora Zeller

SUISA’s financial year 2018: an outlook

During the meetings of the SUISA Board in December 2017, the focus was on the figures for the next financial year. (Photo: Kemal Taner / Shutterstock.com)

For the first time in the history of SUISA, the Board presented two budgets in the December meeting: that of the Cooperative Society SUISA and that of the group of companies. The group of companies includes – apart from the parent company – the subsidiary company SUISA Digital Licensing (headquartered in...read more

Changes in relation to the distribution of Tariff CT 1 and CT 2 collections

In the last few years, cable network providers switched their offerings from analogue to digital. In order to take these changes into consideration, the distribution of the collections arising from Tariffs CT 1 (cable networks), CT 2a (retransmitters) and CT 2b (IP based networks) was aligned. In item 5.5.1 of the distribution rules the calculation basis of the reference parameter “number of subscribers” was changed to “daily reach”. Text by Irène Philipp Ziebold

Changes in relation to the distribution of Tariff CT 1 and CT 2 collections

Even though there is a plethora of digital TV programmes available, only a few of them fill TV screens for a longer period. (Foto: Zeber / Shutterstock.com)

Cable network providers have carried out a migration of their offerings from analogue to digital in the last few years. The number of the radio and TV programmes on offer is now many times higher than before. Until recently, the number of subscribers acted as the calculation basis for the distribution of income from Tariffs CT 1, CT 2a and CT 2b. As a consequence, the distribution depended on the receptability, i.e. on how many subscribers of a cable network provider had the option to receive a specific channel.

With the increase of the broadcaster offerings, the significance of the subscriber numbers regarding the actual work usage has decreased remarkably. This is due to the fact that of the multitude of channels that consumers have at their fingertips today, they only use a few in reality. With the switch of the calculation basis to the reference parameter “daily reach”, what counts in terms of distribution now is what consumers actually watch.

The daily reach corresponds with the share of people who have watched or listened to a specific programme on an average day for at least 30 seconds. The relevant usage is thus registered which goes above and beyond a mere channel hopping.

Distribution more exact based on actual usage

Due to the daily reach as a calculation basis the actual usage is now taken into consideration more: The copyright royalties now flow to those channels that have really been watched or listened to. Channels which were not selected by the consumer or where consumers merely hop through, are not taken into consideration for the allocations into the three broadcaster groupings (SRG SSR, Swiss private channels, foreign channels).

The switch to the reference parameter of the daily reach will entail that more money is going to be distributed to Swiss channels. In the case of the calculation based on subscriber numbers so far, many foreign channels were taken into consideration which are in fact only used by a very small portion of subscribers. This will no longer be the case with a calculation basis in accordance with the daily reach.

IGE (Institute of Intellectual Property) decision dated 26/07/2017 (PDF 1.47 MB, only in German) in relation to “Review of item 5.5.1 distribution rules: Distribution of collections from CT 1, 2a and 2b”
Further information on the distribution keys of SUISA

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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.

In the last few years, cable network providers switched their offerings from analogue to digital. In order to take these changes into consideration, the distribution of the collections arising from Tariffs CT 1 (cable networks), CT 2a (retransmitters) and CT 2b (IP based networks) was aligned. In item 5.5.1 of the distribution rules the calculation basis of the reference parameter “number of subscribers” was changed to “daily reach”. Text by Irène Philipp Ziebold

Changes in relation to the distribution of Tariff CT 1 and CT 2 collections

Even though there is a plethora of digital TV programmes available, only a few of them fill TV screens for a longer period. (Foto: Zeber / Shutterstock.com)

Cable network providers have carried out a migration of their offerings from analogue to digital in the last few years. The number of the radio and TV programmes on offer is now many...read more