Tag Archives: Common tariff

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

Music in companies: What to bear in mind

Music plays an important role in many businesses. It creates a pleasant atmosphere for customers, guests, and employees, it enhances advertising messages, and is an important part of corporate events. The rights to use music are easy to obtain from SUISA. Depending on the type of use, different tariffs and rates apply. Text by Liane Paasila, Martin Korrodi and Giorgio Tebaldi

Music in companies: What to bear in mind

By playing the right background music in your shop, you assure your customers a pleasant shopping experience and may even influence their buying behaviour. (Photo: Tana888 / Shutterstock.com)

Companies are aware of the impact music has on their business. Retailers employ professional sound companies to offer their customers a pleasant shopping experience – and encourage them to buy your products. Medical practices play soothing background music to help their patients relax – none wants to listen to heavy metal during a medical examination or treatment. And commercials too only work with the right music, often specially commissioned. In short, there are any number of examples of the ways in which music can contribute to the success of a business.

Remuneration for composers, lyricists, and publishers

It follows that those who compose the music and write the lyrics – the authors – are entitled to payment. This is done through SUISA, which grants licences for the different music uses and collects the fees in exchange. The amount of the licence fees depends essentially on the value status of the music in the corresponding use. For example, in the case of a symphonic concert, which one generally attends just for the music, the fees will be higher than for the background music in the waiting room at the doctor’s where listening to music is not the main purpose of the visit.

Music from all over the world thanks to SUISA

The tariffs for the different music uses are negotiated at regular intervals between SUISA and the associations of users (e.g. Gastrosuisse for music uses in the hospitality industry); they are jointly set, and then approved by the Federal Arbitration Commission for Copyrights and Neighbouring Rights.

And because SUISA represents the entire world repertoire in Switzerland and Liechtenstein, a licence from SUISA allows the holder to use virtually any music, from anywhere the world over. SUISA distributes the proceeds worldwide to the authors and publishers of the music thus used. For each CHF 100 it collects, SUISA distributes CHF 87 to music authors and publishers.

SUISA issues licences to over 120.000 users, including radio and TV broadcasters, concert organisers, clubs, cafés and restaurants, event and party organisers, shop owners, and online music services. This year, SUISA is planning to conduct a targeted market campaign covering music uses in businesses and will be contacting potential customers directly with its offerings.

Music uses in companies

Three of the most common music uses in businesses are explained below:

1. Background music in sales rooms and offices

In Switzerland, over 100,000 businesses play music via different technologies to create the desired atmosphere on their premises – sales rooms, offices, waiting rooms, etc. In company cars, when on hold, or in the lift, music entertains your customers and employees. Various studies show that music also serves to steer consumer behaviour.

Such uses of music in businesses qualify as public uses and are subject to a fee. Businesses accordingly pay a fee under Common Tariff 3a (CT 3a) to the authors, publishers, artists, or producers. “Common” means that in addition to covering the copyrights managed by SUISA, the tariff also covers those of the other copyright administration societies like Swissperform (for performing artists and producers) and Suissimage (for film creators). SUISA acts as central collecting agent for this tariff on behalf of all the Swiss collecting societies and distributes their share of the collected revenues to the authors and publishers of the music.

Examples of background music uses (CT 3a)
Where?
• Office premises (e.g. common rooms, offices, meeting rooms)
• Sales areas (e.g. sales rooms, restaurants, inns and hotels)
• Company vehicles
• Lines on hold
• Museums, exhibitions
• Medical practices (patient rooms, surgeries, waiting rooms)
How?
• Retransmission of radio broadcasts and music recordings
• Retransmission of TV broadcasts and films (film projections with announced time and venue; public viewings on giant screens with a diagonal exceeding 3 metres are regulated separately).
• Operation of interactive multimedia terminals
Further information background music uses (CT 3a)
CT 3a portal
SUISA website, about CT 3a: www.suisa.ch/3a
Distribution of CT 3a revenues:
www.suisablog.ch/en/how-suisa-distributes-fees-collected-for-background-entertainment/

2. Videos and films with music on the Internet

Ever more businesses are relying on digital formats to reach their customers through professional websites or contributions to social media. Digital communication is important to reach and maintain a connection with customers and other target groups, and not only in extra-ordinary times like during this pandemic. Videos with a musical backdrop play an essential role in this regard, contributing to make a product or service more appealing to customers.

Persons wishing to use a music recording in a video must first understand the distinction between the two types of licensable rights, namely:

  • on the one hand, the rights in the audio recording which are held by the record label;
  • on the other, the copyrights in the work itself, i.e. the composition and lyrics, if any, which are held by the music publisher and/or the authors.

The record label is responsible for the neighbouring rights in the audio recording. In the case of a video recording with music, permission and licences for the synchronisation and re-recording of the recording must be obtained from the label.

For the author’s rights in the work, the music publisher and SUISA are responsible. SUISA grants licences for the reproduction of the work as part of the video production, and for the making available of the work in the video on an own website and/or on social media platforms. The music publisher grants the licence for the synchronisation right in a work. To publish a video with a musical backdrop, one must first contact the publisher and ask whether the song can actually be used in a video.

The licensing procedure is basically the same for any company. For smaller firms with no more than 49 employees and annual turnover up to CHF 9 million, SUISA offers an all-in solution with its partner Audion. You can purchase a licence covering both the author’s rights and those of the label/producer for an annual fee of CHF 344. Thanks to this all-in arrangement, small businesses may use as many short videos with music as they wish to promote their image, products, and services on their website and social media profiles. This arrangement ensures easy access to a licence for the use of music protected by copyright.

Further information about the use of videos with music on websites
Customer portal Music on websites
FAQs:
www.suisa.ch/en/customers/online/music-on-the-internet-for-small-businesses/questions-answers.html
SUISAblog articles about the all-in arrangement:
www.suisablog.ch/en/collective-management-is-a-service-for-music-creators-and-music-users-alike/

3. Music for company events

Christmas parties, general meetings, product presentations – music is often an important component of company events. These are licensed under Common Tariff Hb (CT Hb) which regulates music for dance and entertainment outside the hospitality industry. CT Hb applies to live performances: a band hired for the Christmas party, for example, or a DJ at a staff party, as well as events with musical intermissions such as general meetings, or company events organised for customers.

In terms of rates, the tariff distinguishes between small and large events. Small events are those organised in venues with a capacity of up to 400 people. The fees here are flat fees, per day and per event, depending on the number of persons attending. In the case of large events, since companies do not generally sell tickets for admission, tariff rates are calculated based on the costs sustained in connection with the use of the music. These costs typically consist of the artists’ fees and expenses, instrument rental fees, and the rent charged for the venue. If admission is charged, other calculation bases may apply.

The tariff also provides for a number of discounts – for example, for companies that conclude a contract with SUISA under CT Hb for all their events, or which organise more than 10 events per year.

Companies in the hospitality industry
Inns, pubs, and restaurants:
For entertainment and dance events in restaurants and the like, the applicable tariff is CT H, not CT Hb. CT H applies to the same events as CT Hb, but because of the association with food and beverage, another calculation model is used which takes into account the price of the cheapest alcoholic beverage in addition to the number of persons attending and the admission price.
Hotels:
It is not always clear for hotels what surface areas to use as the calculation basis, so the following should be helpful: CT 3a also applies to the surface area of hotel rooms. SUISA often receives reports from hotels where the surface areas of the rooms have not been included in the total usage area. For hotel rooms, depending on the total area concerned (rooms and common rooms), an additional fee is charged on top of the base fee (Common Tariff 3a, section 6).
Further information about music events
Outside the hospitality industry, CT Hb:
www.suisa.ch/en/customers/organisers-of-events/events-parties/parties-and-other-dance-events.html
For the hospitality industry, CT H:
www.suisa.ch/en/customers/restaurants-hotels/clubs-bars-restaurants/djs-or-musicians.html
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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.

Music plays an important role in many businesses. It creates a pleasant atmosphere for customers, guests, and employees, it enhances advertising messages, and is an important part of corporate events. The rights to use music are easy to obtain from SUISA. Depending on the type of use, different tariffs and rates apply. Text by Liane Paasila, Martin Korrodi and Giorgio Tebaldi

Music in companies: What to bear in mind

By playing the right background music in your shop, you assure your customers a pleasant shopping experience and may even influence their buying behaviour. (Photo: Tana888 / Shutterstock.com)

Companies are aware of the impact music has on their business. Retailers employ professional sound companies to offer their customers a pleasant shopping experience – and encourage them to buy your products. Medical practices play soothing background music to help their patients relax –...read more

Collective management is a service for music creators and music users alike

Whether it’s background music in businesses or the new blanket license deal covering videos with music on the internet for small businesses: In both cases, a lot of music by a lot of rightsholders (composers, lyricists, music publishers) is used by a large number of companies. SUISA acts as a point of contact for these companies as well as for the beneficiaries, simplifying the authorisation for the use of works and processing the due copyright royalties. By Irène Philipp Ziebold, COO

Collective management is a service for music creators and music users alike

With offers such as the newly introduced annual flat rate for online use of music in web videos, SUISA is simplifying how copyright royalties are processed, for customers and beneficiaries alike. (Photo: one photo / Shutterstock.com)

Up to now, you had to obtain a licence from SUISA for the copyright in accordance with Tariff VN for every single video with music on the internet. With this, the copyright was settled, and additional action was also required with regard to neighbouring rights (related rights). The whole licensing process was therefore complex and sometimes difficult to understand.

Joint licence for copyright and neighbouring rights

Together with Audion GmbH, SUISA has now developed a simpler, attractive licensing model for small enterprises of up to 49 staff and up to CHF 9m turnover. Against payment of an annual fee of CHF 344.00 (excl. VAT), small enterprises and individuals can put videos with music onto their own website as well as publish them on their own social media channels. Thanks to the collaboration between SUISA and Audion GmbH, the annual blanket fee is covering the acquisition of both copyright and neighbouring rights.

Not included in the package are advertising videos, pure music videos, videos with a production budget of more than CHF 15,000 and videos with a total playing time of more than 10 minutes. In addition, synchronisation rights must continue to be obtained directly from the publishers or the authors.

Audion GmbH – a rights agency

Audion GmbH is an independent rights agency founded in 2015 by IFPI Switzerland (the industry umbrella association of music labels in Switzerland), which brokers licenses for marginal uses of music recordings between users and music labels.

It is characteristic of Audion’s field of activity that it restricts itself selectively to niches where smaller and non-commercial users in particular face the administrative challenge of obtaining the necessary licences from a large number of music labels. Audion thus meets a user requirement and offers the choice of acquiring the necessary rights either directly from the rightsholders or as a rights bundle from Audion.

The landscape of music labels has changed dramatically with the development of digital distribution and marketing opportunities. Booking agencies, for example, are increasingly taking over label functions. It is therefore partly unclear where the rights need to be obtained from. Audion can help here by acquiring the rights for the user from the various labels.

Joint collection: Background music and videos on websites

As of 1 January 2019, SUISA will once again be responsible for all customers for the Common Tariff 3a (CT 3a, background music). Prior to this, Billag AG had been issuing the invoice. These customers are companies that play background music on their premises, broadcast TV programmes, use music on hold and/or publish videos with music on their websites. Customers can therefore be the same when it comes to using the music in background entertainment and in videos on websites. In both cases, a lot of music by a lot of rightsholders music publishers is used by a large customer group.

This inevitably leads to the requirement that we simplify the licensing of both uses and, in particular, to offer them together. For this purpose, the existing web portal for CT 3a licences is to be adapted in such a way that customers can register both uses at the same time and thus easily license their respective uses.

Outlook: Large enterprises

The newly introduced annual flat rate for the online use of music in web videos applies to small businesses. An offer for large companies – i.e. companies that employ more than 49 people or generate more than CHF 9m in annual sales – is currently being prepared with the aim of offering these companies a simple and adequate solution. As soon as all necessary measures and decisions have been taken on this issue, we will inform you.

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  1. Liebe Frau Ziebold

    Ich bin einerseits Mitglied der SUISA und froh, dass diese meine Interessen als Urheber wahrnimmt. Andrerseits bin ich auch eine 1-Mann-Firma, allein in einem Büro. Alles, was ich über GT 3a lese, erscheint mir plausibel, trifft aber auf mein Unternehmen nicht zu. Ich hasse Hintergrundmusik, weil sie mich beim Arbeiten stört, und selbst wenn ich ein Radio während der Arbeit laufen liesse, wäre ich der einzige, der es hört. Von einer gewerblichen Nutzung, die ja wenigsten ein Ohrenpaar eines Mitarbeiters oder eines Kunden voraussetzt, bin ich also weit entfernt. Ich verfüge auch nicht über ein Geschäftsauto, das – wie ich mir von einer SUISA Mitarbeiterin habe sagen lassen – auch als Büroraum zählen würde. Sie meinte dann auch, dass ich wohl nicht zahlungspflichtig sei.

    Der zuständige Sachbearbeiter sieht das aber ganz anders und meint, ich müsse einfach zahlen. Er glaubt nicht, dass er das näher begründen müsste und weigert sich auch, mir die rechtlichen Grundlagen zuzustellen. Er bezeichnet aber die GT 3a-FAQs auf Ihrer Website als nicht verbindlich, die meiner Meinung nach deutlich machen, dass ich nicht unter die GT 3a Zahlungspflicht falle. Also, wenn ich einem Kunden eine Rechnung schicke, muss ich das immer begründen können. Ich habe nun eine Betreibungsandrohung ihres Inkasso-Büros im Haus, nachdem eine Rechnung und 1 Mahnung nicht beantwortet wurden, die gar nie bei mir eigetroffen sind. Aber das ist eine andere Geschichte.

    Meine Frage an Sie lautet nun: Hat ihr Mitarbeiter recht? Muss einfach jede Firma GT3a zahlen? Wenn ja, warum gibt man sich dann so Mühe mit der Spezifizierung der Fälle, wenn es gar keine Ausnahmen gibt? Gibt es für diese Null-Ausnahme-Regelung eine rechtliche Grundlage, die Sie mir anstelle Ihres Mitarbeiters zustellen können? Sind Ihre Mitarbeitenden angehalten, nach dem Versand 1 Rechnung und 1 (nicht eingeschriebenen) Mahnung Ihr Inkasso-Büro in Gang zu setzen mit entsprechenden Mehrgebühren? Warum erhalten nicht einfach alle Firmen eine Rechnung?

    Ihre Meinung dazu interessiert mich sehr.

    Mit freundlichen Grüssen

    M. Gabriel

    • Manu Leuenberger says:

      Lieber Herr Gabriel
      Wir danken Ihnen für Ihre konstruktive Rückmeldung. Ihr Anliegen ist uns wichtig und wir werden die spezifische Sachlage hinsichtlich Ihrer 1-Mann-Firma und der erfolgten Kommunikation inklusive der vorhandenen Informationen dazu intern betrachten. Gerne setzen wir uns mit Ihnen in Kürze noch persönlich in Verbindung, um weitere konkrete Falldetails von Ihnen zu erfahren und mit Ihnen zu besprechen.
      Bis dahin wünschen wir Ihnen alles Gute.
      Freundliche Grüsse, Manu Leuenberger / SUISA Kommunikation

Leave a Reply

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Whether it’s background music in businesses or the new blanket license deal covering videos with music on the internet for small businesses: In both cases, a lot of music by a lot of rightsholders (composers, lyricists, music publishers) is used by a large number of companies. SUISA acts as a point of contact for these companies as well as for the beneficiaries, simplifying the authorisation for the use of works and processing the due copyright royalties. By Irène Philipp Ziebold, COO

Collective management is a service for music creators and music users alike

With offers such as the newly introduced annual flat rate for online use of music in web videos, SUISA is simplifying how copyright royalties are processed, for customers and beneficiaries alike. (Photo: one photo / Shutterstock.com)

Up to now, you had to obtain a licence from SUISA for the copyright in accordance...read more

How SUISA distributes fees collected for background entertainment

More than 100,000 companies in Switzerland use music, TV and films for background entertainment purposes. For these usages, the companies pay a fee based on Common Tariff 3a to authors, publishers, performers or producers. How and to whom are these revenues paid? Text by Giorgio Tebaldi

How SUISA distributes fees collected for background entertainment

Considered by many to be part of the pub atmosphere just like teak furniture or dartboards: premier league games on the telly. Producers of the broadcasts have the right to receive a remuneration for usages outside domestic and private circles or home life. (Photo: Nomad_Soul / Shutterstock.com)

Just like lighting or decoration, suitable background music is an important contributing factor to make customers and guests feel good in a shop, hairdresser or restaurant. Plus, live transmissions of a football or cricket match are equally part of the interior décor of a pub, just like dark furniture, wooden shields and the dartboard.

Similar to the obligation to pay makers of the furniture, the decoration or the lighting, composers, lyricists, performers, scriptwriters or producers are entitled by law to receive a remuneration for the use of their works and performances outside the private circle. The five Swiss collective management organisations Pro Litteris, SSA, SUISA, Suissimage and Swissperform are responsible for this task. SUISA collects the remuneration for the use of music, films and TV broadcasts pursuant to the Common Tariff 3a (CT 3a) on their behalves.

What does SUISA do with the collected money from background entertainment?

The first step is that the collected money is split among the five Swiss collective management organisations based on a fixed distribution key. The SUISA share for the coverage of music contents is slightly more than half of the income. Each society is then responsible in a second step to pay out these collected fees to authors and artists, publishers and producers.

In the case of SUISA, 88% of the above-mentioned fifty percent is distributed to the rightsholders. This means that of the CHF 100 that were collected, CHF 88 are paid out to creators and their publishers.

How and to whom are these revenues paid? SUISA usually knows three different possibilities of distribution: direct distribution, blanket distribution with programme material and blanket distribution without programme material (see box). Programme material consists of lists with the works which were performed or broadcast.

In the case of the CT 3a, the money is nearly exclusively paid by way of a lump-sum without programme material. Submitting and processing the work lists in this category would be linked to an enormous effort for customers and SUISA alike, and they would be in no proportion to the actual benefit. Instead, SUISA uses the programme material already available from various sources to allocate the collections made on the basis of the CT 3a. SUISA ensures during this process that lists and/or usages are considered for this allocation, enabling that the remuneration is distributed as fairly as possible.

A distribution which is as fair as possible – even without a list of the performed works

Based on empirical data there are cases where it is assumed that a major part of the companies, shops, restaurants etc. uses works which are also broadcast on the radio, resp. TV. Accordingly, a major part of the income from CT 3a is allocated on the basis of the programme material for the use of music, TV broadcasts and films from radio and TV transmissions. SUISA also takes into account that not just pop, rock or urban is played but also other genres such as traditional or folk music and even church music. A part of the collections is thus also distributed on the basis of programme lists for church performances, brass music or yodelling clubs.

In order to distribute the money to the creators and artists, it is thus allocated to other similar distribution categories for performing and broadcasting rights (see distribution rules, Art. 5.5.2).
Should a member receive a payment from one of these distribution categories, it also receives a share from the income for background music entertainment from CT 3a.

In some exceptional cases in background entertainment, there is a direct accounting process for the distribution of collected fees. This happens, for example, for music which is used in a museum for an exhibition, or music which is used in a company’s phone loop for a longer period. In such cases, the music in question is usually commissioned.

SUISA distributes four times a year. In 2018, more than CHF 132m were paid out to composers, lyricists and publishers of music.

Types of distribution and distribution categories

SUISA distributes the collections from authors’ rights in three different ways:

  1. In a direct accounting scenario, copyright remuneration can be allocated directly across the available lists of works that have been performed. This is also possible for concerts, for example: If songs of five co-authors are performed during a concert, these five rightsholders receive the fees collected for this concert.
  2. In the case of a blanket distribution with programme material, copyright remuneration is calculated on the basis of a point value. For SRG broadcasts, for example, SUISA receives a lump-sum payment on the one hand and detailed broadcast reports on the other hand. The broadcast reports include details on how many seconds of music have been transmitted in total, plus the exact duration of each work. A point value per second is determined based on these details and the remuneration is paid to authors and publishers of the played works.
  3. A blanket distribution without programme material takes place when it comes to collections based on tariffs where there is no information provided on the works that have actually been used, or if that information cannot be established. The distribution of such income is made on the basis of available programme material from several sources. The exact allocation of the money is specified in the SUISA distribution rules in detail.

The collected revenue is distributed on the basis of distribution categories. The latter correspond to various usages, e.g. music in concerts, on radio and TV channels of the SRG, or private broadcasters, in churches etc.

Details can be found in the SUISA distribution rules.

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Changes in distribution for Common Tariff K and Z revenuesChanges in distribution for Common Tariff K and Z revenues The CHF 20 limit for the distribution of revenues under Common Tariffs K (concerts) and Z (circuses) has been eliminated. As a result, amounts previously allocated to distribution category 4C will be otherwise regulated. The changes concern points 4.1, 4.2, 5.4 and 5.5 of SUISA’s Distribution Rules. Read more
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More than 100,000 companies in Switzerland use music, TV and films for background entertainment purposes. For these usages, the companies pay a fee based on Common Tariff 3a to authors, publishers, performers or producers. How and to whom are these revenues paid? Text by Giorgio Tebaldi

How SUISA distributes fees collected for background entertainment

Considered by many to be part of the pub atmosphere just like teak furniture or dartboards: premier league games on the telly. Producers of the broadcasts have the right to receive a remuneration for usages outside domestic and private circles or home life. (Photo: Nomad_Soul / Shutterstock.com)

Just like lighting or decoration, suitable background music is an important contributing factor to make customers and guests feel good in a shop, hairdresser or restaurant. Plus, live transmissions of a football or cricket match are equally part of the...read more

Changes in distribution for Common Tariff K and Z revenues

The CHF 20 limit for the distribution of revenues under Common Tariffs K (concerts) and Z (circuses) has been eliminated. As a result, amounts previously allocated to distribution category 4C will be otherwise regulated. The changes concern points 4.1, 4.2, 5.4 and 5.5 of SUISA’s Distribution Rules. Text by Irène Philipp Ziebold

Changes in distribution for Common Tariff K and Z revenues

SUISA has optimised its distribution rules for revenues from live performances. (Photo: Tabea Hüberli)

Revenues from CT K and CT Z had hitherto been allocated to two different distribution categories. Amounts over CHF 20 per work were allocated to DC 4B “Concerts and other performances with revenues of more than CHF 20 per work”. Distribution in this category was made on a per file basis. On the other hand, performance revenues of less than CHF 20 per work were allocated to DC 4C “Concerts with revenues of up to CHF 20 per work” and were then distributed on a flat-rate basis.

As is in the nature of flat-rate solutions which at best only approximate real circumstances, this practice did not always produce satisfactory results. In the case of DC 4C, a flat point value, calculated based on the revenues and programme information of all the events assigned to this distribution category, was applied.

Distribution based on actual usage is more advantageous

The flat point value actually applied could be higher or lower than the actual point value of an individual event. Therefore, it could happen that entitled parties would receive a higher amount than that actually paid by the organiser in respect of an event for which only the minimum fee under Tariff K had been paid. Naturally, the opposite was equally possible. The changes made in the Distribution Rules now eliminate the potential disadvantage or advantage for the beneficiaries of DC 4C.

In practice, these changes remove the CHF 20 limit and eliminate distribution category 4C altogether. Henceforth, all revenues from CT K and CT Z – regardless of amount or point value per work – will be allocated to and distributed in DC 4B. The rules for DC 4B itself remain unchanged; only the name of this category has been changed. It is now called: “Concerts & concert-like performances.”

The revenues previously allocated to DC 4C will henceforth flow into DC 4B as well. These consist in the allocations from revenues without programme information from Tariffs Hb, L, Ma, 3a, 7, 8, K and Z, as well as Tariff B revenues from orchestra consortia (with programme information).

Overview of changes in Distribution Rules

Here, in a nutshell, are the advantages of the changes in the Distribution Rules:

  • Even smaller amounts will be equitably distributed per file when programme information is available. This corresponds to a per-work distribution where the proceeds from an event will be distributed directly to the entitled parties.
  • Hitherto, only the entitled parties under DC 4C had the benefit of the above-listed allocations. Since both distribution categories (4B and 4C) relate to concert repertoires, there is no objective reason not to take into account DC 4B works in the distribution of allocations. Thanks to these changes, this will now be the case.
  • By introducing per-file distribution for all performances subject to Tariffs K and Z, settlement statements will be more transparent. Members will now be able to clearly see the make-up of their revenues from live performances under this Tariff.

The changes in the Distribution Rules will first be implemented in the September 2019 distribution.

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The CHF 20 limit for the distribution of revenues under Common Tariffs K (concerts) and Z (circuses) has been eliminated. As a result, amounts previously allocated to distribution category 4C will be otherwise regulated. The changes concern points 4.1, 4.2, 5.4 and 5.5 of SUISA’s Distribution Rules. Text by Irène Philipp Ziebold

Changes in distribution for Common Tariff K and Z revenues

SUISA has optimised its distribution rules for revenues from live performances. (Photo: Tabea Hüberli)

Revenues from CT K and CT Z had hitherto been allocated to two different distribution categories. Amounts over CHF 20 per work were allocated to DC 4B “Concerts and other performances with revenues of more than CHF 20 per work”. Distribution in this category was made on a per file basis. On the other hand, performance revenues of less than CHF 20 per work were allocated to...read more

Common Tariff 3a: A hundred thousand new SUISA business customers | plus video

With regards to Common Tariff 3a (CT 3a), SUISA has been managing all customers directly again since 01 January 2019. In order to do so, data of about 100,000 customers which received their 3a invoices via Billag in the past years, has been migrated into the SUISA systems. A new team of 16 staff is responsible for all customers of this tariff and provides customer service in four languages. In the meantime, more than 58,000 invoices have left the building – time to take a first provisional look back. Text by Martin Korrodi; Video by Sibylle Roth

On 15 February 2019, SUISA dispatched the first 1,000 CT 3a invoices for usage period 2019 to customers such as selling businesses, shopping malls, catering outlets or guesthouse landlords. Prior to the first dispatch, the migrated Billag data was analysed and manually cleaned up in order to ensure that the invoices were going to be correctly generated. The dispatch scope was intentionally kept small so that any technical or organisational problems could be detected and resolved quickly.

With increasing experience, the dispatch volume could be increased step by step – this way, after five months (February to June), more than half of the 3a customers have already received an invoice. Until mid-June, about 58,000 invoices were sent out with a total invoiced of nearly CHF 17 million. From April onwards, and in addition to the invoices, the first reminders had to be dispatched, from May the second reminders so that up to 20,000 mailings per month left the building.

CT 3a customer service in numbers

In line with the big number of invoices and reminders, the customer service must process a lot of feedback and queries. More than 2,000 phone conversations with customers were held in May alone, and about 600 electronic messages (contact forms and e-mails) were processed. Add to that about 160 mailings that reach us per month via traditional post.

What’s great is that many of our customers visit our website www.suisa.ch/3a and use the online portal for their queries and issues. Since the beginning of the year, 504 new customers registered online and obtained a CT3a licence, and 1,419 customers asked questions regarding their invoices via the online portal. The tariff allows a 5% discount to those customers who use the online portal for processing their CT 3a business with SUISA.

Under the leadership of Nevio Tebaldi, a team of 16 people is looking after the 3a customers; they share 12 full-time positions (1,200 in job percent). During the development phase, three additional people who support the team and take over duties in the field of data cleanup are available temporarily.

Frequently asked questions

The most frequently asked questions by the customers affect the new responsibility for the invoicing process from 2019. The systems change in terms of the radio and TV reception fees and the closure of the Billag AG seem to have created confusion so that customers do not always understand why they receive an invoice from SUISA and what the purpose of the owed fee is.

The confusion of the copyright fee with the radio and TV reception fees is probably due to the fact that Billag had dispatched both invoices until the end of 2018 – one of them on behalf of the Federal Office of Communication (Bakom) and the other one on behalf of SUISA. Within the commercial field, this co-operation made absolute sense since businesses which run a radio or TV set in their business location do not just have to pay the fee to the Bakom but – unlike private persons – require an additional licence for copyright pursuant to CT 3a.

From 2019, the starting point for radio and TV reception fees has changed fundamentally: A general fee is replacing the previously device-based reception fee. This general fee will be levied nationwide to all households and businesses. The obligation to pay the fee as well as the amount of the levy is, additionally, depending on the turnover of businesses: Businesses with a turnover of less than CHF 500,000 are exempt of the fee – businesses with higher turnovers are automatically invoiced by the Federal Tax Administration Office in a six-tier tariff category system.

With regards to the copyright fees based on CT 3a, there are, however, no major changes: The tariff continues to depend on the actual usage scope and is thus based on the area music is piped to. There is no turnover threshold – even businesses with less than CHF 500,000 have to pay a fee for copyright. The only “change” affects the sender of the invoices which is no longer Billag but SUISA.

The “successor” of Billag, Serafe AG plays no role for business customers since it exclusively invoices private households with the radio and TV reception fees on behalf of Bakom and has therefore nothing to do with businesses.

New contacts for businesses from 2019. (Graphics: Sibylle Roth)

 

Usage scope covered by CT 3a
The following usages are relevant for CT 3a: all exploitations in venues outside domestic and private circle or home life, such as in selling businesses, shopping malls, restaurants, lounges, office spaces, work spaces, storage spaces, company vehicles (car radio), ski lift stations, meeting rooms, seminar rooms, guest rooms (these are defined as guest and patient rooms as well as holiday homes), museums, exhibitions etc.
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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.

With regards to Common Tariff 3a (CT 3a), SUISA has been managing all customers directly again since 01 January 2019. In order to do so, data of about 100,000 customers which received their 3a invoices via Billag in the past years, has been migrated into the SUISA systems. A new team of 16 staff is responsible for all customers of this tariff and provides customer service in four languages. In the meantime, more than 58,000 invoices have left the building – time to take a first provisional look back. Text by Martin Korrodi; Video by Sibylle Roth

On 15 February 2019, SUISA dispatched the first 1,000 CT 3a invoices for usage period 2019 to customers such as selling businesses, shopping malls, catering outlets or guesthouse landlords. Prior to the first dispatch, the migrated...read more

Invoicing licence fees for background music and TV reception in businesses as of 2019

Businesses that play background music on their premises or show broadcasts on screens are required to pay licence fees in accordance with Common Tariff 3a. As of 2019, SUISA will once again manage all customers under this Tariff directly. Text by Martin Korrodi

Invoicing licence fees for background music and TV reception in businesses as of 2019

Under copyright law, playing background music in a shopping centre like in the above example qualifies as a use outside the private sphere. That is why businesses need a licence, which they can obtain from SUISA in accordance with Common Tariff 3a. (Photo: Unsplash, Victor Xok)

Pursuant to the Federal Copyright Act (Article 10(2)(f)), the reception of broadcasts in businesses is a use outside the private sphere and is therefore subject to a licence. As a result, in addition to paying Billag reception fees – and conversely to private households – businesses which play radio or TV sets on their premises need to licence the authors’ rights under Common Tariff 3a (CT 3a). These licences are granted by SUISA.

Hitherto, Billag AG would invoice the licence fees under CT 3a for SUISA’s account. Since Billag was also responsible for invoicing radio and TV reception fees, the cooperation generated advantageous synergies. Both invoices could be issued to customers from a single source, saving time and effort on all sides.

Meanwhile, owing to a number of developments, this cooperation cannot be continued after the end of this year: thus in 2015, the Federal Act on Radio and Television was revised and the device-based reception fee was replaced by a general levy. This levy is collected from all households – regardless whether or not they actually possess a reception device.

Uses outside the private sphere are subject to licence fees

Under the new system, only businesses with turnover in excess of CHF 500,000 have to pay the licence fee. The State estimates that about 75% of Swiss businesses will not be required to pay the licence fee even if they receive broadcasts on their premises.

The minimum turnover limit does not, however, apply to authors’ rights. All uses of works outside the private sphere are relevant in terms of copyright law. In public areas like shops and restaurants, for example, background music – whether piped in from the radio, internet or a sound recording – is subject to a fee in accordance with CT 3a. And the showing of broadcasts or videoclips, from Youtube for example, also requires a licence from SUISA. Accordingly, many small businesses that do not pay radio and TV fees will still have to pay fees under CT 3a.

In addition to the change in the radio and TV remuneration system, in March 2017 the Federal Office of Communications (OFCOM) decided not to renew Billag’s collection agency mandate. Henceforth, household radio and TV fees will be collected by Serafe AG. For businesses, the fees will be collected by the Federal tax authorities in the framework of the VAT collection procedure. As a result, Billag has lost its main business activity and will wind up operations at the end of 2018. This is another reason why SUISA is obliged to reorganise its CT 3a-invoicing system as of the coming year.

SUISA to manage CT 3a for businesses as of 2019

After considering a number of options, it was decided in autumn 2016 that SUISA would once again manage CT 3a for businesses starting in January 2019. SUISA already issues invoices to about 2000 companies which do not have radio and TV reception but play background music from other sources (CDs, DVDs, etc.).

As of 2019, Billag’s 106,000 business customers will be taken over by SUISA; this six-fold increase in SUISA’s active customer count – realised in a single stroke – will trigger huge growth in processing volumes. Therefore task-oriented processes and largely automated IT infrastructure solutions will be essential to ensure the smooth and proper functioning of customer relations in the CT 3a area.

The necessary steps in this regard were initiated in the current year: a project team working in close cooperation with Billag is preparing the take-over of the customer portfolio at the technical and organisational levels. A customer centre is being established with the equivalent of 12 full-time positions (17 persons overall) to provide support and guidance, in writing or by phone, to CT 3a customers.

Multilingual CT 3a customer centre

To ensure as little change as possible for customers, the customer centre will take over Billag’s existing hotline number (0844 234 234). Moreover, an online portal will be set up to secure access to all relevant services. The customer centre will cater to all users, nationwide, in four languages (English, German, French, Italian).

The new team will also be responsible for market coverage. Since there are very few spontaneous declarations from users of background music, potential customers will be contacted and questioned about their practices as regards background entertainment. SUISA plans to conduct four direct mailing campaigns per year, each designed to reach about 10,000 businesses across all economic sectors.

The customer centre team started work on 1 November 2018. By the end of the year, the team will have received appropriate training, and systems and processes will be in place and fully tested. Officially, the customer centre is to open in the new year; it will be at the disposal of 3a customers as of 7 January 2019.

Complaints procedure
The tariff for background music and TV reception, CT 3a, was negotiated with the representative user associations (Gastrosuisse, Hotelleriesuisse, the umbrella association for rights’ users DUN, the Swiss Retail Federation, inter alia) in 2015 and 2016. It proved impossible to reach a consensus, and the proposed tariff was submitted to the Federal Arbitration Commission for Copyrights and Neighbouring Rights (ESchK). The draft tariff submitted by the Swiss collecting societies proposed an average increase of 14% in the fees for Billag customers. In November 2016, the Federal Arbitration Commission decided in favour of the collecting societies and approved the proposed tariff. However, several user associations appealed the decision to the Federal Administrative Court; proceedings are still pending. The appeal does not have suspensive effect and SUISA can start collecting fees based on the new CT3a in 2019. However, the distribution of the proceeds to the entitled parties must be stayed until a definitive ruling on the tariff is handed down.
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  1. Thomas Ernst says:

    Zu begrüssen wäre, wenn die Rechnung spätestens ab 2021 elektronisch zugestellt werden könnte.

    • Sehr geehrter Herr Ernst

      Danke für Ihren Kommentar. Die SUISA ist dabei, Ihre Systeme umzustellen und wird im Laufe des nächsten Jahres ihren Kunden elektronische Rechnungen für die Hintergrundunterhaltung anbieten. Wir haben bei Ihnen im System vermerkt, dass Sie die nächste Rechnung elektronisch erhalten werden.

      Freundliche Grüsse

      Nevio Tebaldi, SUISA, Leiter Kundendienst

  2. Reto says:

    Genau. Viel bla bla keinerlei Inhalt!
    1 Seite Text und die 2-3 Sätze die alle die das lesen interessieren sind nicht dabei!
    A Muss ich zahlen
    B Wieviel!

    A la Betriebe mit bis zu 60 Plätzen zahlen monatlich X Fr
    Betriebe mit bis zu 120 Plätzen zahlen monatlich X Fr
    Betriebe mit über 120 Plätzen zahlen monatlich X Fr

    Fertig!

    • Giorgio Tebaldi says:

      Guten Tag Reto

      Ausführliche Informationen zur Hintergrundunterhaltung finden Sie unter http://www.suisa.ch/3a sowie unter https://www.suisa.ch/de/kunden/verkauf-gewerbe/verkaufs-und-dienstleistungsbetriebe/hintergrundmusik-music-on-hold-gt3a/faq-gt-3a.html.

      Sie müssen eine Vergütung gemäss GT 3a bezahlen, wenn mindestens einer der folgenden Punkte zutrifft:

      – In Ihrem Restaurant, Ladenlokal oder sonstigen Räumen Ihres Betriebes läuft Hintergrundmusik.
      – Sie geben in Ihren Betriebsräumen Filme, Radio- oder Fernsehsendungen wieder.
      – Sie betreiben Gästezimmer, Ferienwohnungen, Patientenzimmer oder ähnliches und stellen dort entsprechende Geräte für die Wiedergabe von Filmen, Radio- und Fernsehsendungen zur Verfügung.
      – Sie spielen Musik in Ihrer Telefonwarteschleife ab.

      Wenn sie also Werke und Leistungen nutzen, die Komponistinnen, Textautoren, Interpretinnen, Drehbuchautoren oder Produzentinnen geschaffen haben, haben diese laut Gesetz ein Recht darauf, für die Nutzung ihrer Werke und Leistungen eine Vergütung zu erhalten.

      Wieviel Sie bezahlen müssen, hängt von der Fläche ab, auf der Hintergrundmusik läuft, bzw. auf der Filme und Fernsehsendungen wiedergegeben werden.

      Für Hintergrundmusik beträgt die Vergütung auf einer Fläche von bis zu 1000 m2 CHF 19.20 pro Monat (zuzügl. MWSt). Für die Nutzung audiovisueller Werke und Leistungen (Filme und Fernsehsendungen) beträgt die Vergütung auf einer Fläche bis 1000 m2 CHF 20.80 pro Monat (zuzügl. MWSt). Für grössere Flächen gelten zusätzliche Entschädigungen gemäss Ziffer 6 des Tarifs. Diese Pauschalen gelten jeweils auch für die Musik in Telefonwarteschleifen, abgestuft nach Anzahl Amtslinien.

      Die Flächen pro Standort werden addiert, einschliesslich allfälliger Gästezimmer. Wenn ein Kunde mehrere Standorte (Geschäftslokale, Betriebsstätten, Filialen etc.) betreibt, so ist die Vergütung für jeden Standort separat geschuldet.

      Freundliche Grüsse

      Giorgio Tebaldi / SUISA Kommunikation

  3. Konrad Hugentobler says:

    Typisches juristisches Bla Bla. Definiert zuerst gefälligst mal, was genau Gebührenpflichtig ist und was nicht. Beispielsweise wird eine Firma ja wohl kaum Suisa bezahlen müssen, wenn ihre Mitarbeiter auf privaten Geräten Musik mit Kopfhörer hören. Was ist genau Berieselung? Ist es nun doch (noch) von Geräten abhängig? Muss eine Firma Suisa bezahlen, wenn Mitarbeiter auf ihrem Arbeitscomputer YouTube Videos schauen? Das wäre ja an Absurdität nicht zu übertreffen.

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.

Businesses that play background music on their premises or show broadcasts on screens are required to pay licence fees in accordance with Common Tariff 3a. As of 2019, SUISA will once again manage all customers under this Tariff directly. Text by Martin Korrodi

Invoicing licence fees for background music and TV reception in businesses as of 2019

Under copyright law, playing background music in a shopping centre like in the above example qualifies as a use outside the private sphere. That is why businesses need a licence, which they can obtain from SUISA in accordance with Common Tariff 3a. (Photo: Unsplash, Victor Xok)

Pursuant to the Federal Copyright Act (Article 10(2)(f)), the reception of broadcasts in businesses is a use outside the private sphere and is therefore subject to a licence. As a result, in addition to paying Billag reception fees – and conversely to private households...read more

Can the blockchain and the bass strike a harmonious chord?

Technological developments that affect the music industry are a constant focus of SUISA’s management committees. Blockchain technology was one of the many important topics on the agenda at the board meetings in October 2018. Report from the Board by Dora Zeller

Can the blockchain and the bass strike a harmonious chord?

To what extent is blockchain technology in harmony with the interests of music copyright holders and publishers? (Photo: Daphne.t / Shutterstock.com)

At the autumn meetings of the SUISA Board of Directors in Lausanne, musician and researcher Steffen Holly from the German Fraunhofer Institute provided a glimpse into the world of blockchain technology. He showed how blockchain was born from of a combination of existing IT possibilities, using practical examples to illustrate the theory behind the system. He also showed how the development of the music industry and technology are closely related: new instruments give rise to new music, new demand and new technical possibilities. Who would have thought it would be possible to rent music? But streaming services are now licensed by SUISA.

The scientist also recommended assessing whether blockchain is a viable solution for every business model. In other words, critically examining whether the blockchain and the bass really can strike a harmonious chord. He provided some prominent real-world examples (Airbnb, Uber, car rental) and also made reference to musicnow.eu. Launched on the basis of the EU Collective Rights Management Directive, this project aims to use blockchain technology to facilitate collaboration between authors, artists, collecting societies and content users.

Technological developments are a permanent area of focus for SUISA’s Board of Directors and management team. In the recently adopted Strategy 2020, SUISA states its intention to step up its research and development under the heading “New technologies give rise to new forms of use”. Following Steffen Holly’s presentation, the collecting society is looking to engage in dialogue with a member of the musicnow.eu project.

Status of tariff negotiations and personnel changes

In addition to addressing the forward-looking topic of blockchain, Vincent Salvadé reported on the current status of the tariff negotiations between the collecting societies and the user organisations. In recent months, the Federal Arbitration Commission has approved the VN (audio-visual media for screening, broadcasting, online use) and CT 3c (public viewing) tariffs. Approval of CT 4i (integrated digital storage media) is pending, while GT 12 (set-top boxes, virtual video recorders) was appealed by the broadcasting companies.

Other important items on the agenda related to the HR department and the 2019 board elections. Monica Hernandez took over as Head of Human Resources/Training & Development in mid-June. Thanks to her dedication, extensive expertise and wealth of experience, she has quickly settled into her new role. Her colleagues value her professionalism, service mindset and customer-oriented approach, as well as her open, positive attitude.

General board elections will be held at the 2019 Annual General Meeting. With the exception of Bertrand Liechti and Marco Zanotta, who are both stepping down after serving for the maximum period, all directors are eligible for a further term of office. The Board of Directors has appointed a Nomination Committee to look for suitable successors. Its members reported on the status of this search for candidates.

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Technological developments that affect the music industry are a constant focus of SUISA’s management committees. Blockchain technology was one of the many important topics on the agenda at the board meetings in October 2018. Report from the Board by Dora Zeller

Can the blockchain and the bass strike a harmonious chord?

To what extent is blockchain technology in harmony with the interests of music copyright holders and publishers? (Photo: Daphne.t / Shutterstock.com)

At the autumn meetings of the SUISA Board of Directors in Lausanne, musician and researcher Steffen Holly from the German Fraunhofer Institute provided a glimpse into the world of blockchain technology. He showed how blockchain was born from of a combination of existing IT possibilities, using practical examples to illustrate the theory behind the system. He also showed how the development of the music industry and technology are closely related: new...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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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.

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

Why SUISA members should also consider joining SWISSPERFORM

Composers and lyricists who are SUISA members and are also active as artists and/or producers and whose performances are broadcast by Swiss or foreign radio and TV channels are entitled to receive a remuneration from SWISSPERFORM. For all those authors-composers-artists/producers, a membership with SWISSPERFORM is thus a necessary addition to their SUISA affiliation in order to safeguard their rights and the full remuneration they are entitled to. Text by David Johnson, SWISSPERFORM/SIG antenne romande, guest author

Why SUISA members should also consider joining SWISSPERFORM

It is recommended that SUISA authors such as Seven (pictured), who are also artists and whose performances are broadcast on radio and TV become SWISSPERFORM members. (Photo: Tabea Hüberli)

Are you a musician and do you contribute to recordings which are used commercially or in music videos? Do you perform your own musical compositions or those of other composers on the radio or on TV? Are you a performing producer in the case of recordings? Do you perform music which is used in films, commercials or as main themes of broadcasts?

In that case, you do hold neighbouring rights and are entitled to receive a remuneration for the transmission of your performances. In order to receive such remuneration, you must be a member of SWISSPERFORM.

Neighbouring rights

The reason neighbouring rights carry their name is that they are in close ‘vicinity’ to copyright. Neighbouring rights do not protect the work itself but the performance of the work.

Artists, whether they are musicians, singers or conductors can at the same time be composers, lyricists and/or arrangers of a work that they perform. The performance of their works is therefore protected independently of the work that they perform.

In cases where artists finance their own recordings, they are also economic producers and therefore hold two different types of neighbouring rights, whose owners are remunerated by SWISSPERFORM in separate distributions for the relevant usages and which require artists to enter into a second membership type (producer). The term of protection in a recorded performance is 50 years. For the calculation of the expiry of the term of protection, the date of the first publication is authoritative, provided that the recording has been published for the first time within 50 years. Should this not be the case, the recording date is authoritative as a calculation basis for the expiry of the term of protection.

SWISSPERFORM

Switzerland is the only country in the world that has a collective management organisation which unites all rightsholders in the neighbouring rights realm under one roof: apart from artists and producers from the music and film sectors, broadcasters are also rightsholders within SWISSPERFORM. Members can pursue various activities and therefore belong to several rightsholder categories, for example musicians whose recordings were produced by themselves, played by their band and broadcast on the radio.

SWISSPERFORM’s activities are similar to those of SUISA. Musicians and producers assign their rights to the society for management purposes. SWISSPERFORM then collects the licence fees from the users based on the statutory tariffs and pays them to the entitled parties on the basis of its distribution rules which have been ratified by the Swiss Federal Institute of Intellectual Property (supervisory authority).

SWISSPERFORM collaborates with SUISA when it comes to the collection of the licence fees. They are usually invoiced on the basis of the Common Tariffs which are set for each type of usage if exploitations affect the areas of activity of more than one collective management organisation and simultaneously affect copyright and neighbouring rights.

On behalf of SWISSPERFORM, SUISA collects, among other income streams, remuneration from private radio and TV stations as well as the levy on blank media and storage media integrated into hardware.

Ten percent of the entire tariff collections of SWISSPERFORM are allocated for the support of various autonomous legal entities with socio-cultural character. One part of these subsidies is used to co-finance the Swiss Artists’ Foundation, SIS, which supports professional musicians by providing them with means for concerts and tours in Switzerland and abroad.

Distribution of radio and TV usages

In the case of artists in the phono (audio) category, i.e. musicians, singers, conductors etc., whose performances were broadcast on the radio and on TV, a distinction is made between several distribution models.

SWISSPERFORM directly distributes the licence fees collected for the usage of commercially released sound recordings (sound recordings that are available in the marketplace) and from videoclips used on radio/TV. The income is allocated in proportion to the actual usage of the recordings. Main criteria for the distribution are the duration of the broadcast of a recording as well as the value of the roles of artists who contribute to a broadcast.

The following distributions are made on behalf of the Swiss Artists’ Cooperative Society, SIG, subject to a mandate from SWISSPERFORM. Licensing fees from the following areas are distributed:

  • the direct exploitation of performances and the usage from non-commercially released sound recordings (sound recordings that have not been commercially released or made available). This manual distribution is based on a declaration system and takes into account transmissions of concerts on the radio/TV, own productions of recordings by the radio/TV channels, musical performances in radio plays, commercials, jingles, ident tunes, theme tunes etc.;
  • the usage of music in films: This distribution is based on a declaration system at the same time as on an automatic system (depending on the broadcast on TV) and takes into account the music on sound tracks of films (score music), music from commercial sound recordings on sound tracks of films, music from non-commercial sound recordings (library music) on sound tracks of films, music from TV commercials as well as jingles etc.;
  • the usage of other audiovisual performances. This distribution is based on a declaration system and takes transmissions of concerts and artistic performances in TV shows into consideration, among others.

Please note: If you do not make a declaration to SWISSPERFORM and SIG that you have contributed to sound recordings or the transmission of your artistic performances, in order to receive your remuneration, the amounts that have not been claimed by you will expire after a limitation period of five years and will be re-distributed.

This is how you become a member of SWISSPERFORM

Membership with SWISSPERFORM is free. You can request your membership agreement online:
www.swissperform.ch/en/service/order-an-agreement.html

How do I declare my contribution to commercially available recordings?
www.swissperform.ch/uploads/media/Discography_01.xlsx
www.swissperform.ch/uploads/media/Explanations_on_the_discography_form_02.pdf

How do I declare direct performances, non-commercially released sound recordings, the usage of music in films and other audiovisual usages?
www.interpreten.ch/de/verteilung-ab-2017/info/

Further information:
www.swissperform.ch, SWISSPERFORM website
www.interpreten.ch, Schweizerische Interpretengenossenschaft SIG (Swiss Artists’ Cooperative Society) website

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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.

Composers and lyricists who are SUISA members and are also active as artists and/or producers and whose performances are broadcast by Swiss or foreign radio and TV channels are entitled to receive a remuneration from SWISSPERFORM. For all those authors-composers-artists/producers, a membership with SWISSPERFORM is thus a necessary addition to their SUISA affiliation in order to safeguard their rights and the full remuneration they are entitled to. Text by David Johnson, SWISSPERFORM/SIG antenne romande, guest author

Why SUISA members should also consider joining SWISSPERFORM

It is recommended that SUISA authors such as Seven (pictured), who are also artists and whose performances are broadcast on radio and TV become SWISSPERFORM members. (Photo: Tabea Hüberli)

Are you a musician and do you contribute to recordings which are used commercially or in music videos? Do you perform your own musical compositions or those of...read more