Tag Archives: Copyright remuneration

Hope and commitment

2022 gives rise to hope with regard to overcoming the pandemic and, above all, improving the working situation for our members. Larger concerts should be possible again this summer and the public is showing more interest in attending festivals and concerts once more. Some festivals and events sold out very quickly this spring. By Andreas Wegelin, CEO

Hope and commitment

Andreas Wegelin, SUISA CEO. (Photo: Lisa Burth)

The SUISA General Meeting on 17 June 2022 will mark the first opportunity in two years for our members to meet with other members, with SUISA’s Board of Directors, its Executive Committee and staff. If you are a member and entitled to vote, do take advantage of this opportunity and do get involved in our common cause so that we can ensure that authors receive a fair compensation for their work.

Thanks to the commitment of the SUISA staff and the good cooperation with our customers, the music users, the 2021 business year result reflected only a slight decline overall compared to our all-time record of 2019. The biggest drop occurred in live music performances: Since they could not take place, SUISA also recorded less licensing income from this sector. With a great deal of patience and commitment, our employees nevertheless did everything they could to ensure that music uses were licensed as comprehensively as possible. For this, they certainly deserve our thanks on your behalf as well.

Thanks to the commitment among many of you and of politicians, we were also able to fend off an attack on the enforcement of appropriate compensation in more recent times. On 8 March 2022, the Swiss Council of States finally rejected the parliamentary initiative Nantermod. The initiative demanded that hotels should no longer have to pay any fees for broadcasting radio and TV programmes in guest rooms. This would have resulted in authors losing at least 1 million Swiss francs.

What we are concerned about is the war situation in Europe. It cannot and must not be that cultural achievements are destroyed senselessly and that peaceful coexistence among people is rendered impossible. Let us all see to it that music will triumph over barbarism. For our professional colleagues, you can get involved and give them hope through the coordinated #creatorsforUkraine relief campaign via our umbrella organisation CISAC.

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2022 gives rise to hope with regard to overcoming the pandemic and, above all, improving the working situation for our members. Larger concerts should be possible again this summer and the public is showing more interest in attending festivals and concerts once more. Some festivals and events sold out very quickly this spring. By Andreas Wegelin, CEO

Hope and commitment

Andreas Wegelin, SUISA CEO. (Photo: Lisa Burth)

The SUISA General Meeting on 17 June 2022 will mark the first opportunity in two years for our members to meet with other members, with SUISA’s Board of Directors, its Executive Committee and staff. If you are a member and entitled to vote, do take advantage of this opportunity and do get involved in our common cause so that we can ensure that authors receive a fair compensation for their...read more

Remuneration for private copying – new CT 4i as of 1 July 2022

Copying music, videos and e-books for their personal entertainment: Consumers in Switzerland have been enjoying this freedom for a very long time. For several years, rightsholders have been paid royalties for copies made on smartphones and tablets. Starting this summer, they are now also going to receive remuneration for copies on laptops and external hard drives. Text by Anke Link

Remuneration for private copying – new CT 4i as of 1 July 2022

With the expansion of Common Tariff 4i, rightsholders will also receive remuneration for private copies of their works on laptops and external hard drives from July 2022. (Photo: Rawpixel / Shutterstock.com)

Some 30 years ago, the fact that you could make tons of music copies on audio cassettes kicked off private copying levies to be anchored into legislation. Since then, it has been permitted in line with the Swiss Copyright Act to make copies of protected works for the use in people’s private circles or home lives. The range of blank media subject to a licence fee has increased in the course of technological developments; today, digital storage built into devices such as smartphones, tablets and laptops is predominantly relevant.

In return for the many ways in which music, films and other works can be stored, authors and performers of music, filmmakers, writers, etc. are entitled by law to remuneration for these private copies.

Such a levy must be paid by the manufacturers and importers of the recording and storage devices. The collective management organisation regularly negotiate with the associations of these companies about the level of the levy and for which memories it must be paid. The licence fee for private copying is then collected by SUISA according to so-called “Common Tariffs” for all Swiss collective management organisation and distributed to the respective rightsholders.

Levy for private copies on laptops and external hard disks

In the summer of last year, the associations agreed with the collective management organisation that from 1 July 2022 memory in laptops and notebooks as well as external hard drives is also going to be considered blank media subject to a mandatory levy. These storage facilities therefore now also fall within the scope of Common Tariff 4i (CT 4i). In the case of external hard disks, it does not matter whether they are magnetic hard disks (hard disk drives) or contain another storage technology (solid state drive or a combination of both). It only matters that they are intended for connection to personal computers (desktop computers, laptops, notebooks or tablets). Connections like these can be made via cable (e.g. USB or Firewire) and via ports such as BUS and PCI slots of personal computers. External hard disks are all storage extensions for personal computers, regardless of whether they are connected or installed outside of the computer. However, so-called “server grade” hard disks, which are intended for the server infrastructure of companies, are exempt from the obligation to pay a fee.

In contrast to the previous CT 4i, which still provided for different fees according to the equipment category, uniform remuneration rates will apply to almost all storage facilities covered by the tariff from 1 July 2022. The fees were based on the corresponding price of the devices and external hard disks, and the proportion of the respective storage devices used in connection with private copying. On this basis, uniform fees were calculated and negotiated, which are now only dependent on storage capacity and apply per device or per external hard disk. Only MP3 players are still subject to separate levies:

For MP3 players and the like:

Storage capacity per device
up to and including 4 GB CHF 2.40
up to and including 8 GB CHF 4.20
up to and including 16 GB CHF 4.70
up to and including 32 GB CHF 7.80
more than 32 GB CHF 12.40

For all other devices covered by the CT 4i or for external hard disks:

Storage capacity per device/hard disk
over 16 GB up to and including 32 GB CHF 2.10
up to and including 64 GB CHF 2.90
up to and including 128 GB CHF 3.85
up to and including 256 GB CHF 4.80
up to and including 512 GB CHF 5.60
up to and including 1 TB CHF 6.50
up to and including 2 TB CHF 7.50
more than 2 TB CHF 8.30

With the exception of MP3 players, the fees are only due for devices or external hard drives with a storage capacity of more than 16 GB. For external hard disks, a maximum fee of CHF 4.50 also applies, even if the storage capacity is very high. This takes into account the fact that the prices of external hard drives are lower compared to the other devices covered by the levy. Value-added-tax is owed in addition in each case.

Registration of storage devices subject to a mandatory levy

Even though there is such a uniform levy for almost all storage devices, it is important in the context of the correct distribution of the collected amounts to the rightsholders that the manufacturing and importing companies distinguish between the device categories when registering their storage devices that are subject to a mandatory levy. This is due to the fact that films and movies are copied to laptops, tablets and external hard drives more frequently than to smartphones, for example. Levies collected for these memories must thus be split in a different way than the fees collected for smartphones. Only in this way is the money allocated to the correct creators and any other rightsholders who are entitled to it. SUISA will provide its clients with corresponding reporting forms from July 2022, which will form the basis for invoicing.

This extension of CT 4i ensures that consumers can continue to copy their favourite works to the devices of their choice without having to have a guilty conscience and that those who create these works are compensated for doing so.

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Copying music, videos and e-books for their personal entertainment: Consumers in Switzerland have been enjoying this freedom for a very long time. For several years, rightsholders have been paid royalties for copies made on smartphones and tablets. Starting this summer, they are now also going to receive remuneration for copies on laptops and external hard drives. Text by Anke Link

Remuneration for private copying – new CT 4i as of 1 July 2022

With the expansion of Common Tariff 4i, rightsholders will also receive remuneration for private copies of their works on laptops and external hard drives from July 2022. (Photo: Rawpixel / Shutterstock.com)

Some 30 years ago, the fact that you could make tons of music copies on audio cassettes kicked off private copying levies to be anchored into legislation. Since then, it has been permitted in line with the Swiss Copyright Act to make...read more

Background on SUISA Digital’s lawsuit against Snapchat operators

Today, SUISA Digital Licensing (SUISA Digital) announced that it is suing Snap for copyright infringement. Snap operates the successful platform Snapchat. In a written interview, Fabian Niggemeier, CEO of SUISA Digital, comments on the background of the lawsuit. Interview by Giorgio Tebaldi

Background on SUISA Digitalʼs lawsuit against Snapchat operators

Snapchat offers its users the possibility of adding music to their messages. Very few authors receive any remuneration from Snap, the operator of Snapchat, for this. (Photo: Postmodern Studio / Shutterstock)

Fabian Niggemeier, why is SUISA Digital suing Snap?
Like every online platform that makes music available to its users, Snap also requires a license for Snapchat in order to be able to use this music commercially. However, Snap does not own a license for our repertoire and does not pay any compensation to the creators and publishers we represent for the music in the videos on Snapchat. Thus, Snap is clearly in violation of copyright law, which is why we filed a lawsuit against the company.

Was there no other way to get Snap to pay copyright royalties?
Unfortunately, there was no other option. We conduct contract negotiations with every online music provider – we now have such contracts with around 80 providers. We have also been trying to negotiate such a contract with Snap for about two years. So far, the attempts have been unsuccessful. Snap takes the position that they do not use any of our authorsʼ and publishersʼ songs. But we can prove that this statement is false. In fact, there are thousands of songs available on Snapchat that have been composed and written by creators and publishers who have entrusted us with their rights.

Snap introduced the new “Sounds” feature for Snapchat – embedding music in Snaps – some time ago. At launch, Snap stated that it had entered into licensing agreements with rights holders for this offering. Does Snap not pay any royalties to other collecting societies? Is SUISA Digital an isolated case?
Unfortunately, we donʼt know. We only know that Snap offers the works of numerous authors and publishers, who are represented by us, to users on the Snapchat service and thus reproduces them publicly. Snap has not acquired a license for this.

How much compensation does Snap have to pay for the use of the works of the authors and publishers represented by SUISA Digital?
We are yet to calculate the exact amount. Unfortunately, we currently lack the necessary information for this. One demand of our lawsuit is therefore that Snap discloses Snapchatʼs revenues and streaming figures without restriction and without gaps. Based on these figures, we will calculate the actual amount of compensation owed.

What does this lawsuit mean for Snapchat users? Will the repertoire represented by SUISA Digital be blocked?
There is no reason for a blocking of the repertoire we represent as long as Snap abides by the rules. So far, our repertoire can only be accessed illegally on Snapchat. We appeal to Snap, for the benefit of its users, to talk to us about licensing our repertoire and not to escalate the situation any further.

SUISA Digital is a Liechtenstein company owned by a Swiss cooperative, but the lawsuit is being brought before the Hamburg Regional Court. Why?
There are several reasons. SUISA Digital represents copyrights not just for uses in Switzerland and Liechtenstein but for the whole of Europe. Therefore, it is possible to institute proceedings in a large German-speaking country. The markets in Switzerland and Liechtenstein are too small for a lawsuit to have any external effect here. Lastly there is always the risk in a small market like Liechtenstein that Snap would take its service off the market. This scenario is extremely unlikely in the case of a lawsuit in Germany.

PRESS RELEASE: SUISA Digital suing Snapchat for copyright infringement

SUISA Digital Licensing
The music licensing organisation SUISA Digital Licensing (SUISA Digital for short) is a subsidiary of SUISA, the cooperative society for authors and publishers of music in Switzerland and Liechtenstein. SUISA Digital, having its registered office in Vaduz, Liechtenstein, represents the online rights to musical works by composers, lyricists and publishers from 15 copyright societies and several publishers worldwide. SUISA Digital licenses internet platforms worldwide and has contracts with over 80 online service providers, amongst others Youtube, Spotify, Apple Music or Meta (formerly Facebook).
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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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Today, SUISA Digital Licensing (SUISA Digital) announced that it is suing Snap for copyright infringement. Snap operates the successful platform Snapchat. In a written interview, Fabian Niggemeier, CEO of SUISA Digital, comments on the background of the lawsuit. Interview by Giorgio Tebaldi

Background on SUISA Digitalʼs lawsuit against Snapchat operators

Snapchat offers its users the possibility of adding music to their messages. Very few authors receive any remuneration from Snap, the operator of Snapchat, for this. (Photo: Postmodern Studio / Shutterstock)

Fabian Niggemeier, why is SUISA Digital suing Snap?
Like every online platform that makes music available to its users, Snap also requires a license for Snapchat in order to be able to use this music commercially. However, Snap does not own a license for our repertoire and does not pay any compensation to the creators and publishers we represent for the...read more

The Royalty Report is online

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

The Royalty Report is online

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

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

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

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

The Royalty Report is interactive

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

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

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

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

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

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

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

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

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

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Leave a Reply

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

Your email address will not be published.

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

The Royalty Report is online

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

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

After all, there is a...read more

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

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

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

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

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

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

AHV/AVS – mandatory insurance for all

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

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

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

Royalties: income from employment or from capital investment?

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

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

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

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

Different practice from one canton to the other

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

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

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

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

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

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.

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

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

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

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

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

AHV/AVS – mandatory insurance for all

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

How private copying produces revenue – distribution of blank media levies

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

How private copying produces revenue – distribution of blank media levies

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

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

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

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

How are the blank media revenues distributed?

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

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

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

What sources are used for private copying today?

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

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

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

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

How do the Distribution Rules account for the new circumstances?

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

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

Point 5.5.5 has thus been amended to read:

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

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

Who receives more and who less money from private copying?

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

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

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

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

Further Information:
SUISA Distribution Rules

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Negotiating in the age of corona … and with coronaNegotiating in the age of corona … and with corona Negotiating is one of SUISA’s key functions. SUISA negotiates tariffs and contracts inter alia. It must safeguard the interests of its members, ensure their legitimate demands are understood and accepted, and obtain the best possible terms for musical creation. It does this through discussion and compromise: in a nutshell, through human relations. But last spring, a new player invited itself to the negotiating table: Covid-19. Read more
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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

Negotiating in the age of corona … and with corona

Negotiating is one of SUISA’s key functions. SUISA negotiates tariffs and contracts inter alia. It must safeguard the interests of its members, ensure their legitimate demands are understood and accepted, and obtain the best possible terms for musical creation. It does this through discussion and compromise: in a nutshell, through human relations. But last spring, a new player invited itself to the negotiating table: Covid-19. By Vincent Salvadé, Deputy CEO

Negotiating in the age of corona … and with corona

The tariffs that are being negotiated now, during the corona crisis, are intended to apply in better times when music will hopefully be played again. (Photo: Tabea Hüberli & Dirk Hoogendoorn)

The dynamics have changed. Talks are now held mostly by videoconference. In other words, human relations take place through an interposed screen. This makes it more difficult to observe non-verbal reactions to a proposal, or simply to understand one’s counterparts. We must adapt … and regret the days when a handshake symbolised agreement.

Moreover, the crisis tends to freeze negotiating positions. On the one hand, the economy is in trouble: large events are banned, and the country goes from lockdown, to unlockdown, to re-lockdown. On the other, artists’ and creators’ revenues are in free fall. Under the circumstances, it is more difficult to make concessions and reach a compromise. Everyone is determined to protect what little they have left.

So what strategy should SUISA now adopt?

Firstly, certain sectors are clearly less impacted by the crisis than others. Online usages, for example, are not lagging: people are too scared – or are not allowed – to go to the cinema, so they watch a film on VoD. Music streaming is also doing well. These are therefore the areas SUISA should focus on to negotiate the best terms for its members. Who, for their part, are having a truly hard time.

“It is our duty today to prepare for the future and to support the equitable implementation of legal principles in favour of our members.”

We must, however, avoid one pitfall. In many areas, the fall in users’ revenues automatically has negative consequences for authors: after all, authors’ royalties are calculated as a percentage of users’ revenues. Users should not take advantage of the crisis to obtain better terms from SUISA. Otherwise authors will lose twice. We have had to remind our partners of this.

But the hard truth is that the live entertainment sector is in agony. Last spring, we interrupted certain negotiations hoping to start them again when the sun came back. After a short reprieve, the clouds are now building up again … and the tariff process takes time. Now, at the end of 2020, we are negotiating tariffs which will only come into force in 2022 when (as we dare hope) the crisis will be well behind us. It is our duty today to prepare for the future and to support the equitable implementation of legal principles in favour of our members. That is certainly not easy when our partners are losing money. But it is our responsibility for a better future.

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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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Negotiating is one of SUISA’s key functions. SUISA negotiates tariffs and contracts inter alia. It must safeguard the interests of its members, ensure their legitimate demands are understood and accepted, and obtain the best possible terms for musical creation. It does this through discussion and compromise: in a nutshell, through human relations. But last spring, a new player invited itself to the negotiating table: Covid-19. By Vincent Salvadé, Deputy CEO

Negotiating in the age of corona … and with corona

The tariffs that are being negotiated now, during the corona crisis, are intended to apply in better times when music will hopefully be played again. (Photo: Tabea Hüberli & Dirk Hoogendoorn)

The dynamics have changed. Talks are now held mostly by videoconference. In other words, human relations take place through an interposed screen. This makes it more difficult to observe non-verbal reactions to...read more

Support for SUISA members during the corona crisis

Following the federal COVID-19 ordinances, music usage plummeted depriving authors and publishers of a significant portion of their royalty revenues. SUISA offers its members financial support to bridge the loss in earnings. Text by Irène Philipp Ziebold

Support for SUISA members during the corona crisis

No concerts means no revenues from performing rights. Instead, Kety Fusco played live music from her home for the SUISAblog “Music for Tomorrow” series and for SUISA Music Stories on social media. (Photo: screen shot video Kety Fusco)

Cancelled concerts, closed shops and cinema theatres, reduced advertising on radio and TV – the consequences of the federal measures against the spread of the coronavirus have a direct impact on rights management revenues: if there is no music usage, there is no royalty income.

SUISA offers its members financial support to bridge the loss in earnings:

Advances

First and foremost, SUISA has the option, as it has always had, to grant advances to its members. Both authors and publishers can qualify for an advance. The amount of the advance is based on the member’s average revenues in the preceding years. Advances can only be granted to members who have earned more than CHF 500 on average in royalties in recent years. Members may apply for an advance by email. Applications are processed within seven days. The decision is communicated in writing by email. If the applicant satisfies the qualification criteria, the advance will be paid immediately by bank transfer.

Under normal circumstances, advances are offset against the member’s next settlement. This means that the amount advanced is deducted from the distributable amount. As an immediate measure in the exceptional context of the corona pandemic, SUISA’s Board has decided that advances would not be offset before June 2022 at the earliest. The Board and the Executive Committee are keeping a close eye on the crisis situation and, depending on economic developments, may decide to further postpone the offsetting of such advances. In any event, repayment of these advances will not be due before June 2022 at the earliest.

Support payments for members

If an advance is insufficient to alleviate the existential financial hardship suffered by a member as a result of the loss in royalty revenues, the member may apply to SUISA for support payments. SUISA’s Pension Fund makes funds available to authors in the event of an emergency. As a further immediate measure, the Executive Committee has decided to create an additional emergency relief fund from which support payments can be made to authors and publishers alike. The emergency relief fund still has to be ratified by the General Meeting by postal voting. (Addendum added on 27.08.2020: The General Meeting approved the relief fund by a large majority. For more information, see article: “SUISA General Meeting: Emergency fund for authors and publishers approved”.)

In the framework of its rights administration responsibilities, SUISA provides support to members who suffer a loss in their royalty revenues. However, only limited funds are available for support payments. SUISA members who are not already receiving hardship relief from the emergency fund of Suisseculture Sociale or under other cantonal measures may apply for support payments from SUISA.

Applicants must prove their financial hardship. Applications for support payments can be submitted via the members’ portal “My account”. Application documentation will be processed within seven days. Decisions are communicated in writing by email. Payment is made by bank transfer as soon as an application is approved. Support payments do not have to be repaid.

Federal support measures and other aid

The financial support provided by SUISA is designed to help bridge a shortfall in royalty income. SUISA’s support is supplemental – not in lieu of or as an alternative to federal support measures. Information about the measures introduced by the Swiss government to alleviate the economic consequences of the corona pandemic on the cultural sector is available (in German, French and Italian) on the website of the Federal Office of Culture (FOC): www.bak.admin.ch/bak/de/home/themen/coronavirus.html

The Swiss cultural foundation Pro Helvetia also publishes continuously updated information at: www.prohelvetia.ch/en/dossier/info-hub-covid-19/

Go to: www.suisseculture.ch for information about the emergency relief fund for cultural workers, and a link to the application portal. Applications for immediate aid can be submitted through this portal.

Helpful information for musicians is also available on the website of Sonart, the professional association of freelance musicians in Switzerland.

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Following the federal COVID-19 ordinances, music usage plummeted depriving authors and publishers of a significant portion of their royalty revenues. SUISA offers its members financial support to bridge the loss in earnings. Text by Irène Philipp Ziebold

Support for SUISA members during the corona crisis

No concerts means no revenues from performing rights. Instead, Kety Fusco played live music from her home for the SUISAblog “Music for Tomorrow” series and for SUISA Music Stories on social media. (Photo: screen shot video Kety Fusco)

Cancelled concerts, closed shops and cinema theatres, reduced advertising on radio and TV – the consequences of the federal measures against the spread of the coronavirus have a direct impact on rights management revenues: if there is no music usage, there is no royalty income.

SUISA offers its members financial support to bridge the loss in earnings:

Advances

First and foremost,...read more

Brave new world

There is hardly any other technical development that has turned the music business upside down as much as the success of platforms such as YouTube. And hardly any technical development has been as remiss in the treatment of authors’ rights as the internet. In this interview, SUISA CEO Andreas Wegelin explores opportunities and difficulties of this rather young business sector. Interview by guest author Silvano Cerutti

Brave new world

“If I compare SUISA with other organisations that are still in their early days when it comes to online, we are already well underway”, SUISA CEO Andreas Wegelin is convinced. (Photo: Günter Bolzern)

Andreas Wegelin, the distribution of online royalties is affected by delays which caused disappointment in some members. Can you empathise with that?
Andreas Wegelin: It is our job to get as much collected on behalf of our members as possible, not just online but for all usage categories. If there is a cause for criticism, we take it seriously and examine it. There is, however, also the aspect that some members have received more than before, and they are not disappointed.

Maybe the question needs rephrasing?
Well, maybe the level of expectation is too high. Today, music is consumed in much smaller units, there are possibly one or two songs from a CD and that is reflected in the turnover, of course.

But members should receive a settlement four times per year. That did not quite work out in 2019. Why?
That’s right. One of the reasons for this is that the payment of one major customer was late. The amounts in the June distribution would thus have been far too small: On the one hand, the settlement would have fallen under the so-called payout threshold, they would therefore have received nothing. On the other hand, the administration costs would have been too high. We subsequently decided to postpone the settlement. Our goal, however, remains to pay out on a quarterly basis.

So, you don’t have a problem with the data volume you received that you need for the calculation of the online royalties?
No, we don’t. Yes, the data volume we receive is rather huge and requires complex processing with respect to many countries and currencies, but our systems have proved to be extremely efficient in this regard.

I can now upload my work on platforms such as iMusician, from where it is distributed to various service providers (Spotify etc.) and I can see how much my work is used, and where. Can SUISA also do that?
These are two different business models. iMusician monitors where an individual recording is played. That is, of course, much easier to track than having to simultaneously trace dozens, if not hundreds of recordings of one single work. What’s more, music providers know exactly who the artists of a recording are, but don’t have information on the composers of the song.

So SUISA’s job is more complex?
Of course. Add to that the obligation to provide clear information on the rights whenever you upload a song to such a distribution service. At our end, however, we also get notifications of works which have been uploaded by a fan without any details at all. If I do compare our administration costs with the fees that a service such as iMusician charges, I think to myself: we can keep up very well. But – such distribution services show us how we could improve our service in future and what is in demand on the market.

Which is?
The key word is tracking. I give you an example: If commercials with music of Swiss authors are broadcast abroad, the best way for me to get information on the number of broadcasts is via a tracking system. Today, not least on the grounds of cost, we have a system where the broadcasters deliver the information to us. Which could be something like “Nivea spot”. Well, which one? If I already have the melody as a sound file, I can track that. That is our future, even if it is not the most pressing measure we need to take for the online sector.

Automation is therefore only as good as the data that are available to it?
Exactly. And they are often incomplete.

What about monitoring service providers such as Utopia Music which can track songs across the internet?
Monitoring is a huge topic. We follow this very closely and are also planning a pilot project. Yet again, this is a matter of the relevant cost-benefit ratio. That ratio may well be good for an international hit producer but when it comes to an overall repertoire such as ours, the expense can push the administration costs up to silly levels.

The ‘rucksack of completeness’ has been around for the offline sector for many years and the distribution works rather well in that area. In the online sector, however, where everything could be measured, things are complicated.
That is annoying, yes. The offline system has been functioning well for nearly 100 years. But we only cover Switzerland and Liechtenstein for that. Online, we need to take a global approach and are also facing competition, because, according to the EU, each rights holder can choose who they are represented by.

What are the consequences?
In the past, rights holders assigned their rights to SUISA via so-called reciprocal representation agreements for the perception of their work in Switzerland and the Principality of Liechtenstein. Based on that system it was possible to pass on the relevant share from Switzerland to any composer, whether English or American, and one subsequently received the relevant shares from abroad for Swiss authors.

Online, on the other hand….
…. it is only possible for a society to collect for the rights holder whom it represents directly, even though this can be done at a global level. All of a sudden, the documentation must be more accurate and also completed for other countries since it otherwise won’t match. One collective management organisation might declare that their share of a work amounts to 80 percent, another organisation claims to hold 40 percent, which adds up to 120. Such cases happen all the time.

And what’s the consequence of this?
The provider says: As long as you do not know who sends an invoice for what, I won’t pay you. Or we do not get any money, but the info: I have already paid someone else!

How do disputes among rights representatives arise?
Let’s take an example: I have a work with a composer, a lyricist and a publisher. The latter, however, has an agreement with a sub-publisher and has, for another territory, instructed a third publisher, and now all of these entitled parties can choose their own collective management organisation for the online exploitation. This means that there might be four or five collective management organisations which are then in charge for their respective part of the work. Now, I have to agree exactly which part belongs to me. This is where the “disputes” start, because the entry may be different at their end.

Is there no regulation among the copyright management organisations how you can proceed in such situations?
The societies are trying to coordinate their collaboration better in technical working groups. Due to the new competition situation among the organisations, a complete solution for these difficulties has not been found yet.

Music is consumed in small units, the rights representation happens at an even smaller scale, international competition and no smooth processes – doesn’t that frustrate you?
No, that is what makes this job so interesting! Changes such as the internet come to you from outside. You can either put your head in the sand or try to make the most of it. If I compare SUISA with other organisations that are still in their early days when it comes to online, we are already well underway.

But you do understand that authors are stressed out by such a situation?
Of course, it stresses us, too (laughs). We are building a new service here, which will hopefully be profitable and in demand and which gets the most out of it for our members. This can only happen in small steps and with setbacks, but there is also progress: We were able to improve the agreements, modernise infrastructure and the duration between the usage date and the distribution date could be halved since 2012. I am very optimistic.

To the second part of the interview: “Penny-pinching in digital music distribution”

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There is hardly any other technical development that has turned the music business upside down as much as the success of platforms such as YouTube. And hardly any technical development has been as remiss in the treatment of authors’ rights as the internet. In this interview, SUISA CEO Andreas Wegelin explores opportunities and difficulties of this rather young business sector. Interview by guest author Silvano Cerutti

Brave new world

“If I compare SUISA with other organisations that are still in their early days when it comes to online, we are already well underway”, SUISA CEO Andreas Wegelin is convinced. (Photo: Günter Bolzern)

Andreas Wegelin, the distribution of online royalties is affected by delays which caused disappointment in some members. Can you empathise with that?
Andreas Wegelin: It is our job to get as much collected on behalf...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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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