Tag Archives: Copyright remuneration

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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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

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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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.

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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

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The revision of the existing Copyright Act is entering the decisive phase this year. After seven years’ preparatory work, parliamentary debates have now started. The revised act could come into force on 1.1.2020 if both federal houses respect the delicate compromise. Text by Andreas Wegelin

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The jurisprudence in Switzerland and Europe is clear: when a hotel receives radio or television broadcasts and retransmits them into its guest rooms, it is a use which is relevant for copyright purposes. (Photo: Piovesempre / iStock)

The long road to a minor partial revision started nine years’ ago: in 2010, State Councillor Géraldine Savary asked the Federal Council to propose solutions to prevent the use of illegal online offers. The Federal Council rejected the request arguing that authors could simply give more concerts to make up for the loss in earnings caused by the slump in CD sales. This answer outraged musicians, and rightly so: not all composers can perform their own works.

In summer 2012, Federal Councillor Sommaruga responded to the protests by creating a working group to prepare proposals for the revision of the Copyright Act. AGUR12, as the working group was called, submitted its recommendations in December 2013. Based on those recommendations and on a wealth of additional unacceptable proposals, the Federal Council produced a preliminary bill in 2015 which met with widespread criticism in the consultation process. FC Sommaruga was obliged to reconvene the AGUR in autumn 2016. AGUR12 II concluded its work in March 2017 with a compromise. At the end of 2017, relying largely upon this compromise, the Federal Council submitted a revised bill to Parliament.

Main points of the revised bill

The relevant key elements of the compromise for musical authors are:

  • Obligation for the hosting provider to remove illegal content and to prevent further uploading of such content (Article 39d); provision for processing personal data to facilitate prosecution of illegal uploading of protected music (Article 77i). Additional demands by authors and producers, e.g. to block access to illegal offers on the Internet, met with strong resistance from consumers and network operators, and were disregarded in the compromise. In this context, one should also consider that such blocking in the musical field would in any event have come ten years too late. Thanks to a wide range of affordable, legal and easy-to-use music streaming services, file-sharing networks and illegal services in the musical field have been greatly reduced.
  • SUISA’s right to information from users in tariff negotiations and accelerated procedure for the approval of copyright tariffs (Articles 51 and 74(2))
  • Extended collective licence (Article 43a): this provision, for instance, enables users to obtain a licence from the collecting societies for publications from archives.

Remuneration for video on demand – unnecessary for composers

The Federal Council also proposed to introduce a remuneration claim for music with regard to video on demand (Articles 13a and 35a). Music creators do not, however, need this: Article 10(2) already entitles them to authorise or refuse the use of their works (in this case, film music). SUISA has already concluded licence agreements for VoD services with all main providers. No new remuneration claims are needed. The existing legislation is adequate.

The VoD remuneration claim was primarily designed to enable Swiss filmmakers to receive fair compensation when their films are viewed on new platforms like Netflix. This would reduce the “value gap” that filmmakers suffer because they participate neither in the direct “pay per view” revenue nor in the platforms’ indirect revenues from advertising and the sale of usage data. Conversely to film music composers who are well organised in rights’ management organisations worldwide, Swiss filmmakers have very limited bargaining power and are therefore dependent on this new remuneration claim.

Against the recommendations of AGUR12 II, the Federal Council extended this claim to music authors who, as mentioned above, do not need this special entitlement. Regrettably, the National Council did not follow our reasoning in the detailed discussion of the law in December 2018 and failed to provide for an exception for music authors. The last hope now lies with the Council of States, which will probably deal with the subject in its March session.

New exemption from the obligation to pay remuneration for radio and TV reception in hotel rooms?

In December 2018, the National Council decided, via the back door so to speak, to follow the parliamentary initiative of Valais FDP MP Nantermod and add a new clause in Article 19(1)(d) FCA providing that the retransmission of radio and TV broadcasts, but also of music or video channels, on demand in hotel rooms, rented holiday apartments, hospital rooms and prison cells, are exempted from copyright fees. As a result, authors would be in a worse position than under the existing legislation, and the revision of the law would work largely to their disadvantage.

What is at stake? If a hotel retransmits radio or TV broadcasts to its guest rooms, the retransmission qualifies as a “rebroadcast” within the meaning of Article 10(2)(e) FCA. This was decided by the Federal Supreme Court in 2017. The providers of TV sets and audio players in guest rooms are hoteliers, landlords of holiday apartments, or hospital operators. All of them operate for profit. Such usage does not, therefore, qualify as private use. The jurisprudence in Switzerland and Europe is clear: this is a relevant usage under copyright law.

The decisions are based on the Bern Convention, the most important international treaty in copyright law, and on other international treaties such as the WCT and the WPPT. Switzerland cannot disregard these treaties. If it did, it would expose itself to sanctions because the obligations under the Bern Convention are also enshrined in the WTO Agreement on the Protection of Intellectual Property (TRIPS). To avoid sanctions if Switzerland were to incorporate this new exception into its law, the exception could only apply to the works of Swiss authors – a totally unacceptable discrimination.

“Hotel rooms would hardly be cheaper if the small copyright fee was eliminated.”

What does it cost hoteliers today? Fees are calculated based on the surface area covered by the TV/audio usage. Up to 1000 m2, the monthly licence fee is CHF 38. Hotels with up to 50 rooms of 20m2 each pay less than CHF 1 per room per month. The rate is slightly higher for larger areas. Hotels with 100 rooms pay CHF 91.80, which is still less than CHF 1 per room per month. The cost for hotels is therefore modest. However, all things being equal, the shortfall for authors and other rightholders would add up to some CHF 1 million per year.

Hoteliers pay their other suppliers for all other services delivered to their hotels. These range from electricity and cleaning to soap in the bathrooms. These goods and services are not provided free of charge – they are part of the hotel supply chain. Hoteliers run their hotels for profit, and in-room entertainment contributes to the price of a room and, therefore, to the added value of the hotel. Why should hoteliers who offer this service to their guests not have to pay the music and film rightholders? Exempting hotel rooms from the copyright remuneration obligation would discriminate against authors and other rightholders compared with other suppliers. And consumers would not even benefit from the exemption because hotel rooms would hardly be cheaper if the small copyright fee was eliminated.

The compromise and the FCA revision both at jeopardy

As mentioned above, the compromise bill for the revision of copyright law put together by AGUR12 II and the Federal Council is now on the finishing straight. If Parliament were to significantly worsen authors’ situation by introducing the hotel room exception, authors would feel slighted and might present further demands for revision. With the risk that no new law is adopted and nearly nine years’ revision efforts will all have been for nothing in the end.

If the revision were to deprive them of the right to allow their works to be rebroadcast in hotel rooms against remuneration, music authors would probably be better off under the existing law.

It is essential that we defend the delicate compromise in the coming months and impress on the Councils that no further changes to the detriment of authors are admissible.

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The revision of the existing Copyright Act is entering the decisive phase this year. After seven years’ preparatory work, parliamentary debates have now started. The revised act could come into force on 1.1.2020 if both federal houses respect the delicate compromise. Text by Andreas Wegelin

Copyright law revision: compromise is the key to success – no exceptions for hotel rooms

The jurisprudence in Switzerland and Europe is clear: when a hotel receives radio or television broadcasts and retransmits them into its guest rooms, it is a use which is relevant for copyright purposes. (Photo: Piovesempre / iStock)

The long road to a minor partial revision started nine years’ ago: in 2010, State Councillor Géraldine Savary asked the Federal Council to propose solutions to prevent the use of illegal online offers. The Federal Council rejected the request arguing that authors could simply give more concerts to make up for...read more

Changes in the distribution of revenues from radio uses

The classifications for radio broadcasting stations have been changed. Starting with the 2019 settlements, a uniform factor of 0.25 will be applied for level D uses (sound logos, jingles, background music, etc.), and a factor of 1.5 for level E (other music). In addition, calculations will be made on a per-second instead of a per-minute basis. Text by Irène Philipp Ziebold

Changes in the distribution of revenues from radio uses

The rules for the distribution of revenues from radio uses have been changed. (Photo: T.Dallas / Shutterstock.com)

In 2015, the factors for the distribution of revenues from television broadcasts were changed. The classifications for radio broadcasts have now been changed as well. The rules are set out in points 3.2 and 3.3 of SUISA’s Distribution Rules.

The new rules are based on an essential principle: radio classifications must be appropriate, and at the same time they must be proportionate with existing rules for TV broadcasts.

In practice, this has been achieved as follows: firstly, billing is now on a per-second basis for radio as well; secondly, in level D, degressive rates have also been abolished for radio and replaced by a uniform factor of 0.25; finally, a factor of 1.5 has been introduced for level E (other music) to bring it into a more appropriate relationship with level D.

The reasoning and main arguments for each point are outlined below:

Billing per second

Billing per second ensures more accurate distribution, and better reflects actual usage. Thanks to the Echolon monitoring system, this is now possible at no additional cost. The playing duration of works can now be determined in a uniform manner for radio and television.

Level D (sound logos, jingles, background music, etc.)

Hitherto, degressive rates were still applicable in level D for radio broadcasters although they had been abolished for television broadcasters. The three existing factors (1, 0.5 and 0.05) are relatively arbitrary and are likely to produce inappropriate results. This is more particularly true for the factor of 0.05 in the case of successful productions with over 52 broadcasts in a single distribution period. In other words: the beneficiaries concerned receive too little compared with the other degressive rates. By introducing a uniform rate of 0.25, an appropriate factor – one that is proportionate with the other levels – has been chosen for the music uses in level D. It is also the same factor as for television.

Level E (other music)

Once a uniform factor of 0.25 is introduced in level D, the existing factor of 1 for other music is no longer proportionate to the other factors, taking into account the television classifications. This was remedied by applying a new factor of 1.5. This factor is appropriate both with regard to TV broadcast classifications (“Concerts”: factor 2, “Music in films”: factor 1 and “Sound logos, jingles, background music, etc.”: factor 0.25) and with regard to the radio broadcast classifications (level D: now 0.25)

For further information:
www.suisa.ch/verteilungsreglement (in German)

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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.

The classifications for radio broadcasting stations have been changed. Starting with the 2019 settlements, a uniform factor of 0.25 will be applied for level D uses (sound logos, jingles, background music, etc.), and a factor of 1.5 for level E (other music). In addition, calculations will be made on a per-second instead of a per-minute basis. Text by Irène Philipp Ziebold

Changes in the distribution of revenues from radio uses

The rules for the distribution of revenues from radio uses have been changed. (Photo: T.Dallas / Shutterstock.com)

In 2015, the factors for the distribution of revenues from television broadcasts were changed. The classifications for radio broadcasts have now been changed as well. The rules are set out in points 3.2 and 3.3 of SUISA’s Distribution Rules.

The new rules are based on an essential principle: radio classifications must be appropriate, and at the...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. 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.

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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

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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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

SUISA settlement dates 2018 – and one improvement

SUISA shall stick to its established settlement dates in 2018. They comprise, in the main, four quarterly settlements as well as various supplementary settlements spread across the coming year in analogy to the previous year. From the 2nd semester of 2018 onwards, settlements of international collections shall be switched over to a quarterly distribution frequency. Text by Wolfgang Rudigier and Manu Leuenberger

SUISA settlement dates 2018 - and one improvement

Always staying on top of their copyright remuneration: SUISA members get online access to their settlements via the portal “My Account” and can take a look by simply clicking their way through. (Photo: Denis Nata / Shutterstock.com)

The first settlement for international collections shall be paid out at the usual date, at the end of May, in 2018. Later on, after the 2nd semester, the payment of the remuneration from abroad will be switched over to quarterly settlements: Thanks to this improvement, two dates for international settlements will be added in September and December instead of the previous November pay-out.

Another enhancement in terms of international settlements had already been introduced successfully with the recent settlement of November 2017: By way of a new application, the settlements for the remuneration from abroad now also reflect the variety of usage categories of the works (e.g. live, radio, TV, sound recordings, downloads, streaming etc.). Moreover, further usage details (such as online provider, radio channel etc.) are now visible. This requires that such details have been passed on to SUISA by its sister society.

SUISA settlement dates 2018 – an overview

Settlement Date
Quarterly settlement 2018-1 15/03/2018
Domestic performing rights, tariffs: D, K, Z (3rd quarter 2017)
Domestic broadcasting rights, tariff: A (SRG Radio & TV 3rd quarter 2017)
Reproduction rights, tariffs: PA, PI, PN, VI, VN (3rd quarter 2017)
Reproduction rights online (Downloads & Streaming)
Supplementary settlements
Adjustments 2018, 1st settlement End of March
Settlements from abroad: Performing, broadcasting and reproduction rights 2018, 1st settlement End of May
Quarterly settlement 2018-2 15/06/2018
Domestic performing rights, tariffs: B, C, D, E, H, Hb, HV, K, Z (2017)
Domestic broadcasting rights, tariff: A (SRG Radio & TV 4rd quarter 2017)
Domestic broadcasting rights, tariff: A (SRG commercials 2017)
Domestic broadcasting rights, tariffs: S, Y (2017)
Reproduction rights, tariffs: PA, PI, PN, VI, VN (4th quarter 2017)
Reproduction rights, central licensing (2nd semester 2017)
Reproduction rights, online (Downloads & Streaming)
Supplementary settlements
Publisher’s pension benefits Beginning of July
Author’s pension benefits Mid-July
Quarterly settlement 2018-3 15/09/2018
Domestic performing rights, tariffs: D, K, Z (1st quarter 2018)
Domestic broadcasting rights, tariff: A (SRG Radio & TV 1st quarter 2018)
Advertising windows (2016)
Reproduction rights, tariffs: PA, PI, PN, VI, VN (1st quarter 2018)
Reproduction rights, online (Downloads & Streaming)
Supplementary settlements
Settlements from abroad: Performing, broadcasting and reproduction rights 2018, 2nd settlement Mid-September
Blank media levy (CT 4), settlement 2018 Mid-September
Sub-publisher shares cable networks, settlement 2018 Mid-September
Adjustments 2018, 2nd settlement End of September
Re-recording rights settlement, 2018 End of October
Quarterly settlement 2018-4 15/12/2018
Domestic performing rights, tariffs: D, K, Z (2nd quarter 2018)
Domestic broadcasting rights, tariff: A (SRG Radio & TV 2nd quarter 2018)
Reproduction rights, tariffs: PA, PI, PN, VI, VN (2nd quarter 2018)
Reproduction rights, central licensing (1st semester 2018)
Reproduction rights, online (Downloads & Streaming)
Supplementary settlements
Settlements from abroad: Performing, broadcasting and reproduction rights 2018, 3rd settlement Mid-December

Further information on the SUISA settlements can be accessed at:
www.suisa.ch/settlementdates

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SUISA shall stick to its established settlement dates in 2018. They comprise, in the main, four quarterly settlements as well as various supplementary settlements spread across the coming year in analogy to the previous year. From the 2nd semester of 2018 onwards, settlements of international collections shall be switched over to a quarterly distribution frequency. Text by Wolfgang Rudigier and Manu Leuenberger

SUISA settlement dates 2018 - and one improvement

Always staying on top of their copyright remuneration: SUISA members get online access to their settlements via the portal “My Account” and can take a look by simply clicking their way through. (Photo: Denis Nata / Shutterstock.com)

The first settlement for international collections shall be paid out at the usual date, at the end of May, in 2018. Later on, after the 2nd semester, the payment of the remuneration from abroad...read more

Blockchain – an ending or future for collective management organisations?

Dear members, everyone in the music industry is talking about “Blockchain” at the moment. But it’s not easy to find anyone who can explain in simple terms what it’s all about … By Vincent Salvadé, Deputy CEO

Blockchain - an ending or future for collective management organisations?

British singer songwriter Imogen Heap is said to be the pioneer in the practical application of Blockchain technology for music distribution: Since October 2015, her single “Tiny Human” can be purchased and licensed online via the platform Ujomusic. The payment of the parties involved is based on pre-defined distribution rules via crypto currency. (Photo: Screenshot ujomusic.com)

Blockchain is a technology, a database, a register. It enables the secure exchange of information in a network which is based on the contribution of qualified participants (miners) who check the validity of the transaction by means of the processing power of their computers. All transactions are grouped into blocks which are linked with one another and each participant can check whether the validation operation is correct. This is also how Bitcoin works.

You haven’t quite grasped all of the above? Me neither. It appears, however, that this technology which is based on “smart contracts” gets away without intermediaries: The composer could therefore be paid for concert tickets or music streaming directly. There is even word in the street that this could be the end of collective management organisations.

“Collective management of rights is more than just pure technology. It is based on an important value: a joint defence of creative work.”

Same old story: Since online music emerged about 20 years ago, people predicted that the internet would free authors and help them to become independent of intermediaries. Well, collective management organisations are still here and they constitute an indispensable counterweight to internet giants.

Collective management of rights is, after all, more than just pure technology. It is based on an important value: a joint defence of creative work. Authors will always need an organisation which supports them, which negotiates contracts for them (including smart contracts) and campaign for fair transaction conditions (even if they have been certified by the Blockchain).

But hold on a minute: This statement does not allow us to rest on our laurels. It’s the duty of collective management organisations to be interested in the Blockchain, to understand it and to try and use it for the utmost advantage of authors and publishers.

“Collective management organisations hold essential information which ensures that the remuneration is transferred to the right persons.”

SUISA collaborates with its sister societies to achieve this aim – in Switzerland and abroad. This technology could, after all, be instrumental in avoiding conflicts among rights holders with respect to a work or regarding their due remuneration.

Collective management organisations hold essential information which ensures that the remuneration is transferred to the right persons, and they also possess powerful IT instruments. So how would it be possible that they’re skipped in the transaction validation process?

One thing is for sure: You must not leave the technology companies alone to deal with these questions. Otherwise the Blockchain would become a blocking chain – at the detriment of creative work!

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Dear members, everyone in the music industry is talking about “Blockchain” at the moment. But it’s not easy to find anyone who can explain in simple terms what it’s all about … By Vincent Salvadé, Deputy CEO

Blockchain - an ending or future for collective management organisations?

British singer songwriter Imogen Heap is said to be the pioneer in the practical application of Blockchain technology for music distribution: Since October 2015, her single “Tiny Human” can be purchased and licensed online via the platform Ujomusic. The payment of the parties involved is based on pre-defined distribution rules via crypto currency. (Photo: Screenshot ujomusic.com)

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SUISA remuneration is subject to AHV (pension) contributions

Copyright royalties paid out by SUISA are deemed as earned income from independent activities and therefore have to be taken into consideration for the Swiss Compensation Office (pension funds). That way, later claims and pension reductions at a later stage in life can be avoided. Text by Martin Korrodi

SUISA remuneration is subject to AHV (pension) contributions

Many musicians have several income streams. These can include concert fees, honorariums for commissioned compositions as well as salaries for working at a music school or in an orchestra. Copyright royalties paid out by SUISA are yet another income category. It is worth making retirement provisions and therefore to pay AHV contributions (pension scheme contributions) on the relevant income. (Photo: Crafft)

All authors who receive remuneration from SUISA for the usage of their works have to declare it as income and pay taxes on it as well as settle the respective social security payment contributions with the pension funds. The remuneration paid out by SUISA is deemed as earned income from independent activities and are thus subject to AHV (pension) contributions.

If the income from independent activities within a year do not amount to more than CHF 2,300, the Compensation Office will only claim the amounts upon request (see info box at the end of the text). Nevertheless it is recommended that members settle smaller amounts, too: This helps to avoid potential contribution gaps which would lead to pension reductions at a later stage in life.

Especially in the case of freelance music creatives it is worth the effort to request a statement of account from the respective Compensation Office branch in order to discover any contribution gaps they might have. If these gaps have arisen over the last five years, the missing amounts can still be paid in.

The tax authorities notify the data in relation to the assessable income to the compensation offices. Based on this data, the Compensation Office can then determine that no AHV contributions were paid in relation to certain portions of the earned income. They can then claim the missing amounts retrospectively. In the case of such later claims, interest on arrears is due on top. It therefore is well worth while to notify the SUISA remuneration to the Compensation Office in good time and to pay the contributions.

AHV (pensions) – obligatory insurance for all

In the case of the federal retirement, death and disability insurance, insurance is mandatory for all persons who live in Switzerland or work in this country. All insured parties – with the exception of children – are obliged to pay in AHV contributions. In this case the yielded earned income usually acts as the basis for calculation.

In the case of earned income arising from employment this is the salary that the employer has paid out. In the case of self-employment, the amounts are due in relation to the income that has been yielded from self-organised entrepreneurial, operational or business activities.

The following directive can be used as a rule of thumb: AHV contributions must always be paid out on those amounts which you declare in your tax assessment as arising from an occupation. The situation is different regarding income such as revenue gained from capital investment or real estate which are – in terms of tax law – regarded as income but not as earned income in the sense of attracting an obligation to pay AHV contributions.

Copyright royalties are earned income

Not only the composition of commissioned music and stage appearances of performing artists but also the exploitation of rights are a type of occupation by means of which income is generated. As a consequence all authors who claim their rights vis-a-vis users and thus generate licence income are deemed to be self-employed.

This also applies in cases when you have assigned your rights for management to third parties – in this case, this is the norm in the area of non-theatrical music, via collective management by a collective management organisation such as SUISA. If you register with SUISA, you sign a rights administration agreement. With this agreement, members assign their rights to SUISA combined with the instruction to SUISA to carry out the rights management.

In such cases it does not matter, by the way, whether composers – whether as a fixed employee or via a one-off honorarium – have already been paid for the creation of the works and whether AHV contributions have already been paid on said type of income. The exploitation of the rights of your own works is an activity which is independent of the former and it leads to additional earned income. As such, it must be settled with the Compensation Office.

“Exemption limit” up to CHF 2,300 per calendar year

In the case of the exemption limit it is important to take into consideration that this amount includes all income from self-employed activities (cumulative). If SUISA income in a specific year were CHF 1,600 but additional income was generated from independent activities (whether as a main or subsidiary occupation) these types of income must be added to the amount above. If the final total lies above the tax exemption limit, AHV contributions must be paid out to the entire amount – including SUISA remuneration.

In the case of employees (those with a dependent occupation) the tax exemption limit shall also be applicable, but separately on a per-employment basis. If the respective salary is below the amount of CHF 2,300, the amounts will only be collected by request of theemployee. In such cases it is recommended to demand the statement, in particular on occasions when you have held several employments with minimal salaries. Certain employers in the creative sector are obliged to settle AHV contributions from the first CHF 1.00 of salary in order to protect the employees. These include dance and theatre producers, orchestras, audio and audiovisual producers, radio and TV as well as schools offering artistic educations.

If the income is made up of self-employed (independent) and non-self-employed (dependent) activities, the tax exemption limit is usually applicable on a per income category basis. The limit of CHF 2,300 applies for the total of all income from independent activities which includes SUISA remuneration. Salaries that have been paid to you as an employee do not have to be added since the income from dependent (employed) occupation can be regarded separately with respect to the exemption limit as described before.

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Copyright royalties paid out by SUISA are deemed as earned income from independent activities and therefore have to be taken into consideration for the Swiss Compensation Office (pension funds). That way, later claims and pension reductions at a later stage in life can be avoided. Text by Martin Korrodi

SUISA remuneration is subject to AHV (pension) contributions

Many musicians have several income streams. These can include concert fees, honorariums for commissioned compositions as well as salaries for working at a music school or in an orchestra. Copyright royalties paid out by SUISA are yet another income category. It is worth making retirement provisions and therefore to pay AHV contributions (pension scheme contributions) on the relevant income. (Photo: Crafft)

All authors who receive remuneration from SUISA for the usage of their works have to declare it as income and pay taxes on...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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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