Tag Archives: Direct licensing

Online licensing activities require early work registrations

From a sales perspective, online music distribution provides enormous opportunities. With little effort, music can be made available to a global audience within an instant. The distribution of copyright royalties, however, is complex when it comes to online usages. This is also due to the fact that the processes differ from those for performing and broadcasting rights. The most important advice is: First, register the work with SUISA as early as possible, then publish it online. Text by Andreas Wegelin and Manu Leuenberger

Online licensing activities require early work registrations

If you distribute your music via an online provider, it will be advantageous if you stick to the following rule of thumb: First, register the work with SUISA, then publish it online. (Photo: Anutr Yossundara / Shutterstock.com)

When it comes to the internet, trade activities are not halted by national borders. Especially in cases when the goods are not physical but only purely digital in terms of their transport from the provider to the customer – as is the case for music. Online music providers such as Apple Music, Spotify or YouTube take their products directly to the audience via streaming or download: On its journey between the internet platform and the playback devices of the listeners, the music product does not pass customs, nor are there any intermediaries (apart from the telecoms provider of the internet access).

The following is decisive in this chain of commerce: When it comes to online music-distribution, territorial limitations have not only been lifted to a great extent for the consumer but also with regards to the licensing of the copyright. The distribution process differs fundamentally from the existing practice in the “offline sector”, i.e. for performing or broadcasting rights or the licensing of sound recordings. SUISA only issues licences for the territory of Switzerland and the Principality of Liechtenstein in the offline sector, but for all works that have been used, including those of the members of our sister societies abroad. Reciprocal representation agreements ensure that the members of other sister societies obtain the share in the works that have been used in Switzerland. The same also applies vice versa: If works by SUISA members are performed abroad, the sister society in charge for the territory in question collects the remuneration and passes it to SUISA for onward distribution to its rightsholders.

This works differently in the online sector. Another practice has established itself since the Recommendation of the EU Competition Commission from 2005, according to which more competition should be created during the online exploitation of copyright. The corresponding EU Directive which was determined five years ago states that each rightsholder can choose for their online licences whether they want to issue them directly or whether they wish to instruct a partner such as a collective management organisation of their choice to manage them across Europe (also known as pan-European).

SUISA active since 2012 for online direct licensing

The major music publishers have assigned the rights management for the shares in their works on a cross-border basis 10 years ago. This type of licensing is called direct licensing. In the field of cross-border usages, rightsholders, i.e. publishers or collective management organisations, specifically account the royalties for their repertoire directly with the “Digital Service Providers” (in short: DSPs) such as Apple Music, Spotify or YouTube. This means: If users abroad listen to works by SUISA members on platforms by the online music providers, SUISA collects the remuneration for such usages directly from the provider. There are no more “intermediaries” between SUISA and the Digital Service Provider as it exists in the traditional offline sector by way of a foreign sister society.

Many societies in Europe have already transitioned to this global direct licensing practice of their members’ works. Since 2012, SUISA has been licensing the rights of its members not only for Switzerland but also for other territories on a cross-border basis, and that with a constantly increasing number of online music providers. In the beginning, these included the European countries, since 2018, more and more territories are added outside of Europe. In the meantime, SUISA is usually issuing global licences to the DSPs with the exception of the following: USA, Canada, South America, North Korea, South Korea, Japan, Syria and Australasia. There are plans, however, to expand into these territories in the future.

Direct licensing has had the consequence that SUISA could only issue licence invoices for works for which it had the relevant documentation, since it is the individual work share that is now relevant, not just the fact whether an author is a SUISA member or not.

Nevertheless, it happens often that Digital Service Providers receive invoices from several collective management organisations for shares in the same work. This leads to so-called “overclaims” or “underclaims”. Such overclaims or underclaims (in terms of rights) result from a lack of clarity among the societies issuing the invoices who can claim the remuneration for which shares in a work in which territory for their principals. There is often also a situation of “no claims” i.e. when no society issues an invoice.

This has led to a scenario where the providers paid rightsholders more than the agreed remuneration in the case of “overclaims” and too little or nothing in the case of “underclaims” or “no claims”. There are also Service Providers which withhold the payment in the case of “overclaims”. If thus the claims of all invoicing collective management organisations for a work exceed 100% (shares), no royalties are paid as long as it is not defined who is actually permitted to invoice for which share.

Invoicing process with online music providers

A working group of the collective management organisations, major publisher and the most important online music providers has taken care of this issue and agreed to the following solution:

Issuing invoices to a DSP happens in several steps. The collective management organisation receives usage data from the DSP. Based on these usage reports, which contain a period of one or three months, the provider receives an invoice for all work shares in titles for which the society holds the usage rights of an author or a publisher. If the invoices that have been issued by various collective management organisations do not match for one work title, so-called “disputes” arise.

The societies have 18 months to resolve such conflicts of claims. Within said period, SUISA checks the data of the usage reports once more and compares it with the updated SUISA work documentation. If, during this search, new correlating entries are detected, they will be invoiced retroactively. Whatever has not been resolved after 18 months shall fall under the so-called “residuals”; this is the licensing remuneration for work shares which have not or only partially been invoiced (“underclaims” and “no claims”).

The “residuals”, the remuneration that has not been claimed from the DSP from “underclaims” and “no claims” shall be paid out by SUISA as a supplement to the works used in the same distribution period. A work that has not been registered at that point could therefore not receive a supplement.

Register the work first, then publish it online

The most important advice for SUISA members who make their compositions available via online music distribution channels, is: First, register the work with SUISA as early as possible, do not publish it online before!

If you follow this rule of thumb, you create a basis whereby works can be detected from the beginning in online usage reports and can be invoiced to the Digital Service Providers. The distribution process with the online music providers is subject to deadlines and the attention of the audience on the internet is often rather ephemeral. When you register works too late, there is the risk that usages are not detected and royalties cannot be allocated.

If the work registration takes place before the first recording of the work is published for streaming or downloading, SUISA can claim the work shares with the Digital Service Providers from the very beginning. In order to enable a simple automatic identification, the metadata of the works registration should be the same as the data which the DSP has for the work.

Metadata is additional information and particulars which describes other data in more detail. Thanks to such additional information, it is possible to determine and thus find individual elements during searches within big data volumes. A musical work title ideally comprises, apart from the usual details on composer, lyricist, publisher etc., information on the performer(s), and, if applicable, alternative work titles of versions in other languages as well as remix/edit versions, such as “song title – radio edit” or “song title – extended version”. Complete and correct metadata provides a great advantage when it comes to finding a concordance during the automated matching of the usage reports with the works database.

These requirements are vital for a work to be correctly distributed in all of the territories directly licensed by SUISA and with all of the online music providers directly licensed by SUISA.

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  1. Claire Chalut says:

    Vous ne parlez que de “Apple Music”, “Spotify” et “Youtube” (cette dernière plateforme touche surtout la VIDEO et quid ? de “Soundcloud” (destinée à l’audio). Qu’en est-il avec “Soundcloud” ? (qui est beaucoup utilisé), avez-vous des relations avec eux ??? ET, comment ?? Merci de votre réponse.

    Autre remarque (qui n’a rien à voir avec cet article) : comment se fait-il que l’on ne retrouve pas les oeuvres déposées dans votre banque de données (souvent il est réponde “inconnu” ou “pas trouvé”, etc.

    C. Chalout

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From a sales perspective, online music distribution provides enormous opportunities. With little effort, music can be made available to a global audience within an instant. The distribution of copyright royalties, however, is complex when it comes to online usages. This is also due to the fact that the processes differ from those for performing and broadcasting rights. The most important advice is: First, register the work with SUISA as early as possible, then publish it online. Text by Andreas Wegelin and Manu Leuenberger

Online licensing activities require early work registrations

If you distribute your music via an online provider, it will be advantageous if you stick to the following rule of thumb: First, register the work with SUISA, then publish it online. (Photo: Anutr Yossundara / Shutterstock.com)

When it comes to the internet, trade activities are not halted by national...read more

Corona budget up to the end of May has been met

For the second time, the Board of Directors had to hold its regular meetings as video conferences due to corona. Of course, the financial situation due to the pandemic was also the most important topic at these meetings. Report from the Board of Directors by Andreas Wegelin

Corona budget up to the end of May has been met

The impact of the corona crisis on the financial situation of the Cooperative was the main topic at the meetings of SUISA’s Board of Directors on 25 and 26 June 2020. (Photo: Bartolomiej Pietrzyk / Shutterstock.com)

The Board of Directors took note of the revenue figures up to the end of May 2020, which have fallen by 15.5% compared to the original budget for performing rights. In terms of total sales, the decline is still 7.7%. The Executive Committee therefore presented a corona budget as early as April. The budget could be met until the end of May. Revenues are even slightly higher (+3.1%).

It is important to know, however, that these revenues generated by the end of May originate from the time before the cancellation of all events. The impact on revenues due to the events that have been cancelled since mid-March will only be felt in the second half of the year. Savings were made on the cost side (–3%), but the current bonds and securities situation had a negative impact.

Audit report, Mint, PRS

The Board of Directors also acknowledged the comprehensive report of the auditors, BDO, and discussed various report points with the Executive Committee.

With regard to the joint venture Mint Digital Services with the American society SESAC, the Board of Directors was informed about the planning of licensing activities in the coming months and the roadmap 2020–24. It is planned to extend the direct licensing of our repertoire to India, Australasia and Africa. In this context, the Board of Directors decided to grant guarantees for the licensing of large publishing catalogues.

The renewal of the reciprocal representation agreement with the English sister society PRS was also a topic at the Board meeting. PRS is taking a critical stance regarding the deductions from revenues for social purposes as provided for in our Articles of Association. This could lead to a revision of the Articles of Association after further negotiations with the PRS.

Waiver of attendance fees in favour of emergency fund

In view of the difficult situation for many cultural performers and especially for SUISA members, the Board of Directors decided to waive its attendance fees in favour of SUISA’s recently established emergency fund. Executive Committee members also waive parts of their salaries in a similar amount in favour of a reduction in personnel costs.

Report of the task force of the SUISA Board of Directors – end of June 2020
In April 2020, SUISA’s Board of Directors set up a working group to respond as quickly as possible to the negative financial impact of the Covid-19 crisis on SUISA and to identify cost-saving measures together with the Executive Committee. Read more
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For the second time, the Board of Directors had to hold its regular meetings as video conferences due to corona. Of course, the financial situation due to the pandemic was also the most important topic at these meetings. Report from the Board of Directors by Andreas Wegelin

Corona budget up to the end of May has been met

The impact of the corona crisis on the financial situation of the Cooperative was the main topic at the meetings of SUISA’s Board of Directors on 25 and 26 June 2020. (Photo: Bartolomiej Pietrzyk / Shutterstock.com)

The Board of Directors took note of the revenue figures up to the end of May 2020, which have fallen by 15.5% compared to the original budget for performing rights. In terms of total sales, the decline is still 7.7%. The Executive Committee therefore presented a corona budget as early...read more

Two new faces for the Board meeting in autumn

At the General Meeting in June 2019, two new members were elected into the SUISA Board. At the first meeting after the elections in the course of the autumn meetings, the Board has reconstituted itself and dealt with cost unit accounting and business strategy. Report from the Board by Andreas Wegelin

Two new faces for the Board meeting in autumn

The newly elected Board members Sylvie Reinhard (left) and Grégoire Liechti. (Photos: Simon Tanner; Sibylle Roth)

In early October, the first meetings of the newly elected Board took place. In June 2019, the General Meeting elected Sylvie Reinhard and Grégoire Liechti to replace the Board members Bertrand Liechti and Marco Zanotta who had stepped down due to the limitation of the term in office. The Board reconstituted itself during its first meeting after the elections. Marco Neeser was elected to be the new Vice President and the three Board Committees were newly appointed.

Cost unit accounting and business strategy

During its autumn meeting, the Board also dealt with the cost unit accounting for 2018 and the business strategy, just like every year. The cost unit accounting shows in detail how high the expenses for each individual usage sector or tariff in the past financial year were. It serves the purpose of identifying particularly cost intensive areas and to introduce the respective measures to improve the situation. In this context, the Executive Committee presented the processes for the licensing of concerts (Tariff K) and sound recordings (Tariff PI) in more detail.

Regarding the business strategy, the Board deliberated on the increasing competition of the collective management organisations and the huge repertoires, represented by the big publishing companies, but also the growing tendency of known authors to collect their authors´ rights directly for their performances – without the “detour” via the collective management organisations. It is expected that competition will grow.

SUISA can, compared to the collective management organisations in Germany or France, not count on its own repertoire when it comes to international fame. As a consequence, SUISA has to offer the most important services at high quality levels and at an attractive price in order to persist in the market.

Other meeting topics

Other items discussed during the meetings were the current tariff negotiations and the distribution results. SUISA´s sponsoring activities in 2020 were also a subject of the meeting in order to consider the respective amounts in time into the budget for 2020.

The Board has, finally, had some thoughts on the 100th Birthday of SUISA which will be celebrated in 2023. A little less far away, it also determined the meeting diary for 2020.

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At the General Meeting in June 2019, two new members were elected into the SUISA Board. At the first meeting after the elections in the course of the autumn meetings, the Board has reconstituted itself and dealt with cost unit accounting and business strategy. Report from the Board by Andreas Wegelin

Two new faces for the Board meeting in autumn

The newly elected Board members Sylvie Reinhard (left) and Grégoire Liechti. (Photos: Simon Tanner; Sibylle Roth)

In early October, the first meetings of the newly elected Board took place. In June 2019, the General Meeting elected Sylvie Reinhard and Grégoire Liechti to replace the Board members Bertrand Liechti and Marco Zanotta who had stepped down due to the limitation of the term in office. The Board reconstituted itself during its first meeting after the elections. Marco Neeser was elected to be the...read more

SUISA Board looks ahead into the future

Initiated by Ticino-based Board member Zeno Gabaglio, the Board of Directors of SUISA held its autumn meeting in Lugano this year. The agenda items for the meetings on 3 and 4 October 2017 were quite exhaustive. A selection of the topics under discussion are included in this report from the Board by Dora Zeller.

SUISA Board looks ahead into the future

The current Board of SUISA in a photoshoot dating back to spring 2017. (Photo: Marc Latzel)

An important agenda point was the ratification of the business strategy. Management is looking ahead into the future with this strategy, defining which objectives it wishes to reach in a specified period of time. SUISA’s strategy usually covers a four-year period, currently 2016-2020. Due to the business events and plans it is subject to review several times a year. It is subdivided in four main areas:

  • Cost & growth (cultivate customer relations, maximise members’ incomes, support and challenge staff members)
  • Trust (members are ‘shareholders’)
  • Develop copyright
  • Align the business with new demands (online and offline)

For each of the main areas, facts are recorded; subsequently, the relevant measures are listed in terms of planning how to reach the strategic goals. For example, in the case of “members are our shareholders”, this means: Rethink and diversify services, standardise documentation and works registration, cultivate transparency and communication, guarantee domestic and international administration of members’ rights and assure quality via automation and process optimisation.

Increased competition in the licensing business requires measures

When it comes to the main area “align the business with new demands”, offline business was added as a new area. In the course of the last few years, there is now competition for music licences and there are new providers in the marketplace, too. These providers are no cooperative societies and do not belong to the authors as is the case for the majority of collective management organisations in Europe. They are profit-making private companies.

There are new developments in the “direct licensing” area for major concerts as well as for the collection of background music (piped music). The task at hand is to tackle the new licensing offers, to create SUISA’s own offers (tariffs) in a competitive manner, to search collaboration and to promote the legal framework conditions.

On the basis of the agreed strategy, management is now going to work on a roadmap. The latter will serve the purpose of splitting the measures into small, specific steps to which deadlines and responsibilities will be allocated.

Distribution: 8,126 members received CHF 11,093,520

SUISA distributes the majority of its tariffs on a quarterly basis. In September, collections for performances (Tariffs D, K; 1st quarter 2017), broadcasts SRG (Tariff A; 1st quarter 2017), “advertising windows” (2015) and reproduction (Tariffs PA, PI, PN, VI, 1st quarter 2017) were included in the distribution.

The remuneration was paid out to SUISA members (CHF 5,729,852.00) and to sister societies (CHF 5,363,669.00). Approx. CHF 1,229,425 were held back due to a lack of details, missing documentation etc. The reserved monies will be paid out in adjustment runs as soon as the necessary data for a correct distribution has been completed.

Collaboration between ProLitteris, SSA, SUISA, Suissimage and Swissperform

In 1993, the five Swiss collective management organisations signed the first written collaboration agreement. This was triggered by the expansion of copyright towards neighbouring rights back in the day. Before that, the societies had entertained informal exchanges and coordinated joint tariff negotiations.

In the coordination committee (KOAU) of the societies, the agreement was recently reviewed. The intention was to reflect the current situation and to simplify the collaboration in complex areas. New provisions include the process of passing resolutions as well as collection principles relating to collections on behalf of other societies. The SUISA Board has approved the revised collaboration agreement.

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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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Initiated by Ticino-based Board member Zeno Gabaglio, the Board of Directors of SUISA held its autumn meeting in Lugano this year. The agenda items for the meetings on 3 and 4 October 2017 were quite exhaustive. A selection of the topics under discussion are included in this report from the Board by Dora Zeller.

SUISA Board looks ahead into the future

The current Board of SUISA in a photoshoot dating back to spring 2017. (Photo: Marc Latzel)

An important agenda point was the ratification of the business strategy. Management is looking ahead into the future with this strategy, defining which objectives it wishes to reach in a specified period of time. SUISA’s strategy usually covers a four-year period, currently 2016-2020. Due to the business events and plans it is subject to review several times a year. It is subdivided in...read more