Tag Archives: Mint Digital Services

SUISA Board of Directors holds a physical meeting for the first time in 15 months

On the day before the General Meeting, the SUISA Board and its committees usually hold a physical meeting at the venue of the General Meeting. This year, it was different for the second time in a row. Report from the Board of Directors by Andreas Wegelin

SUISA Board of Directors holds a physical meeting for the first time in 15 months

SUISA partition wall set up at a venue: The meeting of a nearly full Board of Directors took place for its regular June sessions in Muri near Berne. (Photo: Natalie Schlumpf & Wolfgang Rudigier)

While the General Meeting could only take place by postal vote due to the precautionary measures taken in the context with the corona pandemic for the second time, the Board of Directors decided to hold a physical meeting for the first time in 15 months in Muri near Berne on 24 and 25 June 2021, adhering to the prescribed protective measures.

Except for one Board member who did not want to expose itself to a heightened risk of getting infected due to imminent concert performances and therefore took part via video, all of the members of the Board of Directors joined the Executive Committee in the meeting and cherished the opportunity to be able to have an exchange outside the meetings in the evening.

Encouraging perspectives in the online licensing business

The Board of Directors received a thorough report on the annual results of the subsidiary Mint Digital Services, jointly held with SESAC, whose financial year had ended on 31 March. The result is encouraging even if the organisation needs to receive further support. Perspectives for the new financial year are looking up and are going to improve the earnings situation further. It is important to know that the bundling of the copyright of our members with the rights of large publishers and sister societies lead to a situation whereby we can act in the online licensing market with more market power and subsequently negotiate better conditions with the online providers of music.

On 1 July 2021, the Act on Collective Management Organisations entered into force in the Principality of Liechtenstein. It contains, among others, provisions to cater for transparency among collective management organisations. The EU Directive of 2014 has thus been implemented. So that SUISA can take these provisions into account, the code of conduct and the rules on the disclosure of conflicts of interest at Board level were adapted. There are also new disclosure obligations for the Executive Committee. The Board of Directors has passed the respective documents.

Amendments to the budget due to Covid-19

The Board of Directors has adapted the budget to the continuing corona situation for the current year. As early as in December 2020, a cautious budget had been passed for 2021. Nevertheless, the income side must be adjusted to reflect a minus of 1.5% which is expected compared to the original budget. Expenditure is anticipated to be 2.2% less.

Another topic at the meeting was the situation regarding the handling of the double taxation provisions between the Italian sister society SIAE and SUISA. SUISA, just like other European sister societies, is going to approach the Italian tax authorities in order to keep withholding tax deductions for SUISA rights owner members who have their residence outside of Switzerland as low as possible.

Finally, the Board of Directors approved an amendment to the distribution rules regarding the pay-out of licensing income of streaming and download platforms. For another amendment regarding the question how long SUISA can process adjustment distributions for online usages, the Board is going to wait for a more detailed report by the Executive Committee.

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On the day before the General Meeting, the SUISA Board and its committees usually hold a physical meeting at the venue of the General Meeting. This year, it was different for the second time in a row. Report from the Board of Directors by Andreas Wegelin

SUISA Board of Directors holds a physical meeting for the first time in 15 months

SUISA partition wall set up at a venue: The meeting of a nearly full Board of Directors took place for its regular June sessions in Muri near Berne. (Photo: Natalie Schlumpf & Wolfgang Rudigier)

While the General Meeting could only take place by postal vote due to the precautionary measures taken in the context with the corona pandemic for the second time, the Board of Directors decided to hold a physical meeting for the first time in 15 months in Muri near Berne on 24 and 25...read more

A worthy result despite Covid

2020 was an annus horribilis for many music creators. Concerts and other events were by and large prohibited. Most organisers, artists and authors thus lost a large part of their income. Thanks to the good performance in other areas and to its prompt action, SUISA managed to contain the financial damage for many entitled parties. Text by Andreas Wegelin

A worthy result despite COVID

Concerts were hardly possible from February 2020 onwards. However, thanks to an increase in the online sector, SUISA’s annual result turned out relatively good. (Photo: Oleksii Synelnykov / Shutterstock)

After being hit by the Covid pandemic, the world went into a state of shock. The pandemic impacted – and continues to impact – large segments of the economy. The cultural sector, and music creators as part of it, were hit especially hard. “First to close, last to open”. Creators and organisers were the first to be affected by the shutdowns and restrictions, and they will be the last able to fully resume their work.

Needless to say, the difficult situation for the cultural sector also affected SUISA’s annual results. After all, in the past, performance rights, i.e. revenues from concerts and other performances, music usage in businesses and restaurants, and music for parties, accounted for 35% of SUISA’s rights administration revenues. After nearly all events were prohibited in March 2020, it was clear that SUISA’s revenues – especially from performance rights – would fall short of the prior year’s. It was hard to predict, however, how steep the downturn would be, and whether revenues from other rights would also be adversely affected.

The steep downturn in revenues from performance rights was partially compensated by other rights revenues

As it fortunately turned out, SUISA’s turnover was less severely impacted than had been feared. Last year, SUISA recorded total revenues, domestic and international, of CHF 138.5m: this is 12% less than the prior year (CHF 155.2m). As expected, the shortfall in performance rights accounted for greater part of the downturn: while in 2019, revenues from performance rights had attained CHF 51.2m, in 2020 they only reached CHF 34.4m, i.e. 34% less.

SUISA managed to make up for this shortfall in other areas. Revenues from broadcasting rights increased slightly – from CHF 63.6m in 2019 to CHF 64.3m in 2020. Downturns that had been feared, for example in advertising revenues from TV and radio broadcasts following the cancellation of many large events, failed to materialise.

Positive trend in online business thanks to SUISA Digital Licensing and Mint

The trend in revenues from online uses was extremely positive: online revenues climbed from CHF 8.8m in 2019 to CHF 11.4m last year. This was especially thanks to the growth in revenues realised by SUISA’s subsidiary SUISA Digital Licensing. The latter succeeded in acquiring a number of new customers including foreign sister societies and music publishers, and also managed to negotiate improved contract terms with online providers of streaming and downloading platforms.

This satisfactory development in the online area is all to the benefit of the authors and publishers whose works are increasingly streamed on the various platforms. Even Mint, the joint venture with the US society SESAC, continued its expansion last year as a provider of services to various music publishers and foreign sister societies.

SUISA has responded to the crisis

The fact that, from the outset of the pandemic, SUISA responded promptly – with a view to cutting costs on the one hand, and to distributing as much as possible to authors and publishers on the other – also contributed to the relatively good year.

Projects that were not urgent were deferred or even cancelled and, wherever possible, staff departures were not replaced. Certain expenditures, such as sponsoring contributions and travel expenses, disappeared anyway because of the pandemic. And SUISA did everything possible to invoice all and every use of music – including those pertaining to prior years – and collect the revenues. At a time when nearly all performances have been barred, the royalties from SUISA are more important than ever for many music creators.

Supplemental distributions from released settlement liabilities

In 2021, SUISA was again able to allocate a supplemental distribution of 7% on all settlement amounts from the released provisions for settlement liabilities which could not be distributed after five years in absence of the necessary information on the entitled parties.

Understanding for customers

Its efforts to collect the greatest amount in revenues does not mean, however, that SUISA is blind to the circumstances of its customers. On the contrary: precisely in the case of the inns and restaurants which were severely affected by the shutdowns ordered by the authorities, SUISA demonstrated goodwill with regard to invoice payments, granting extended payment terms for example, and permitted refunds to customers who had made down payments but had no music usage in the period. Ultimately, it is in the interest of SUISA and its members to ensure that businesses, organisers, and other music users survive and continue to use music. After all, there will be a time after the Covid-pandemic, and SUISA must do its utmost to ensure that, in that future, it can continue to distribute the largest possible amount in royalties to the authors and publishers of music.

SUISA’s detailed 2020 results can be found in the 2020 Annual Report, in which this article (on pages 9/10) also appeared: www.suisa.ch/annualreport

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2020 was an annus horribilis for many music creators. Concerts and other events were by and large prohibited. Most organisers, artists and authors thus lost a large part of their income. Thanks to the good performance in other areas and to its prompt action, SUISA managed to contain the financial damage for many entitled parties. Text by Andreas Wegelin

A worthy result despite COVID

Concerts were hardly possible from February 2020 onwards. However, thanks to an increase in the online sector, SUISA’s annual result turned out relatively good. (Photo: Oleksii Synelnykov / Shutterstock)

After being hit by the Covid pandemic, the world went into a state of shock. The pandemic impacted – and continues to impact – large segments of the economy. The cultural sector, and music creators as part of it, were hit especially hard. “First to...read more

Full speed ahead

The Corona pandemic continues to direct the course of SUISA’s business. This was clearly perceptible at the Board meeting in April. Which is why it is all the more important to set the course for the future. Report from the Board of Directors by Andreas Wegelin

Report from the Board of Directors: Full speed ahead

Despite adverse circumstances, the Cooperative Society SUISA stayed its course in the interest of its members and principals. (Photo: Lobroart / Shutterstock.com)

Business as usual – this expression may sound odd in Corona year 2. And yet, at the last spring meeting, much remained the (new) same. After one year of Corona, SUISA’s Board and Executive Committee have grown accustomed to meeting via videoconference. Just as they have become inured to the rolling budgeting rendered necessary by the uncertain situation in the cultural sector.

And yet, this year, the first Board meeting was special. After a bumper year in 2019, SUISA saw a downturn in revenues in 2020 – as was only to be expected given the pandemic. However, the decline was less steep than had been feared. Turnover dropped 12% overall. This was primarily due to the drastic fall in revenues from performance rights. Corona-related bans on events, and recurrent business shutdowns led to a 34% decline in revenues from this sector. The most affected were concert licence fees (–51%), restaurants (–46%), entertainment events (–47%) and cinemas (–59%).

Relatively good performance thanks to broadcasting rights and online uses

That total sales “only” declined by 12% was due to a slight increase in broadcasting rights and, above all, to the growth in revenues from online business. Good secondary income and strong cost awareness within SUISA also contributed.

It follows, therefore, that the amount distributable to authors and publishers also declined – by 10.5% overall. Moreover, the Board decided to allocate an unchanged additional distribution of 7% from the released settlement provisions on all uses of works to be settled in 2021.

The business activities of our subsidiary SUISA Digital Licensing, responsible for global online licensing, developed satisfactorily. In 2020, SUISA Digital Licensing generated about CHF 5.5m in revenues. The Board acknowledged the financial situation of SUISA Digital Licensing and the current status of the joint venture Mint Digital Services. Since both companies are still in development, the Board decided the necessary measures to ensure the equilibrium of SUISA Digital Licensing’s balance sheet. SUISA’s claims on Mint for business development costs (under del credere provisions) were extended for an additional year and the additional claim from 2020 was in its turn written off in the financial statements.

The 2021 General Meeting will take place by written correspondence again

In view of the continuing uncertainty with regard to indoor assemblies, the Board decided that the General Meeting would perforce be held for a second time by written correspondence. The Board nominated State Councillor (FDP/Freibourg) to succeed Géraldine Savary who was withdrawing. Video messages from Johanna Gapany, SUISA President Xavier Dayer, and CEO Andreas Wegelin, and information about the 2021 General Meeting to be held by written correspondence is available under www.suisa.ch/en/members/general-assembly.html and on the SUISAblog.

Status of 2021 budget with the ongoing Corona crisis

The uncertain situation in the cultural sector owing to the Corona crisis continues to cause concern. When and how performances will be able to be staged anew, and music halls and theatres will be able to open, is still unknown. As a result, rolling budget planning continues to be the order of the day as in past months. The Board’s Finance Committee will decide in early June 2021 whether the budget approved in December 2020 needs re-adjusting because of Corona.

Thanks to the emergency Corona fund, the Pension Fund for authors and publishers, and the extended rules on advances, SUISA has been able to support its members in these difficult times. In this regard, the Board decided to extend the time limit for the repayment or compensation of advances against current settlements until the end of June 2022.

Mint joint venture to be strengthened

Apart from music publishers – including BMG for Australia, Africa and India – Mint’s customers for online licensing now also include European sister societies. Mint offers their repertoires in bundles to online providers such as Spotify, Apple Music, or Youtube.

By bundling repertoires, Mint is strengthening its market position in online music rights. Despite the small Swiss repertoire, SUISA has become a serious negotiating partner thanks to Mint and SUISA Digital Licensing and the bundling of its repertoire. Depending on the country, its market share of the global repertoire varies between 4 and 10%. At the meeting, the Board defined the conditions to be applied to large European collecting societies wishing to participate in the Mint joint venture. This will further strengthen Mint’s market position in the constantly growing market for online music rights.

Adapting the range of services for members and principals

In the Report on the December meeting, we mentioned that the Board was looking to reorganise the services provided to members and principals with a view to saving costs. As of 2022, principals will only be able to access SUISA’s extended range of services through the online service portal. Comprehensive information on revenues and invoicing will be even easier for principals to find on the portal thanks to the new functionalities. Instead of time-consuming inquiries by phone, letter or email, principals will be able to call up all the data on their relationship with SUISA online through their individual “My account” access. Voting members will have access to these same services via the online service portal; in addition, however, they will continue to be entitled to personal advisory services.

As the above-mentioned Report says, in December 2020, the Board decided that authors and publishers would be admitted as members with full voting rights once they have been principals for at least one year and have received over CHF 3000 (previously 2000) in settlements since first registering as principals. Moreover, members who have received distributions totalling less than CHF 3000 over the last ten years would revert back to the status of principal. This change is in accordance with Article 5.5.4 of SUISA’s Articles of Association. Principals do not have voting rights in the Society, but they are entitled to the same licensing and distribution of revenues from the use of their works; principals have no financial disadvantage over voting members.

These measures – especially the upgrading of services through the members portal – are designed to further enhance SUISA’s efficiency. And, as a result, to distribute a higher share of revenues to authors and publishers.

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The Corona pandemic continues to direct the course of SUISA’s business. This was clearly perceptible at the Board meeting in April. Which is why it is all the more important to set the course for the future. Report from the Board of Directors by Andreas Wegelin

Report from the Board of Directors: Full speed ahead

Despite adverse circumstances, the Cooperative Society SUISA stayed its course in the interest of its members and principals. (Photo: Lobroart / Shutterstock.com)

Business as usual – this expression may sound odd in Corona year 2. And yet, at the last spring meeting, much remained the (new) same. After one year of Corona, SUISA’s Board and Executive Committee have grown accustomed to meeting via videoconference. Just as they have become inured to the rolling budgeting rendered necessary by the uncertain situation in the cultural sector.

And yet, this year,...read more

Income and expenditure, investments and an anniversary

A wide-ranging list of topics was on the agenda for discussion at the meetings of the SUISA Board on 28 and 29 September 2020. For the first time after the disruption caused by corona, a part of the meeting participants met in Lausanne while respecting the protective measures in person, while some members of the Board of Directors joined via videoconferencing from their home office. Report from the Board of Directors by Andreas Wegelin

Report from the Board: Income and expenditure, investments and an anniversary

Snapshot of the Label Suisse Festival 2020 in Lausanne (to be seen in the picture: Corin Curschellas and Ursina Giger from the trio La Triada). The rights management monopoly of SUISA has a central significance for the cultural development and promotion of music in its entire diversity in Switzerland; that is the persuasion of the SUISA Board of Directors. (Photo: Tabea Hüberli & Dirk Hoogendoorn)

The Board of Directors took note of the fact that the situation regarding the collections in the crisis year have, so far, remained stable compared to the assumptions made in April. Expectations made in the corona budget that had been created in the spring during lockdown were even slightly exceeded on the collections side. Nevertheless, it is very likely that SUISA will close its 2020 financial year with a decrease in income of about 25% compared to the previous year. The expenditure so far is also within the economy budget, and at 12.7% less expenses even better than anticipated.

Christoph Trummer, Head of Political Projects at the Professional Association of Freelance Musicians, Sonoart, informed the Board members about the current state of affairs and the future development of the support measures for music creators. It shows that the cultural associations managed during the covid-19 crisis to take a joint and persistent stance vis-à-vis Parliament, but also offices and authorities, to speak with one voice and to obtain the support for creators and artists that is so urgently needed.

Expenses per tariff from collections to distribution

A rather pleasant result of the cost unit calculation was presented. Said calculation shows how high the expenditure per tariff is from collection to distribution. As a matter of fact, expenses are not the same for all tariffs, depending whether we must issue invoices to many individual customers or just a few, and whether the market survey and coverage is costly.

The costs for the collections and the distribution of copyright remuneration for concerts are, for example, lower than for events held by clubs or associations. In the former case, we often deal with professional event organisers and promoters who usually are aware of their duties when it comes to authors. In the case of events held by associations, sports clubs or office parties the people in charge organising these events often have to be made aware of their obligations.

Cost shares overall did, however, fall per tariff in the survey year 2019. This is because higher secondary income from securities income could be used to cover a large part of the costs. The SUISA Executive Committee is going to continue to explore all possibilities to process collections and distributions in a more cost-effective way. An important element for this shall be the continued automation of the licensing process: Event organisers and promoters shall be able to send online notifications for their events, in an uncomplicated manner. If they do not do so, the system is set to find events on the basis of key word searches and initiate the collection process.

Financial affairs

For the subsidiary Mint Digital Services, the SUISA Board of Directors approved the hypothecation of a securities depot as a guarantee, instead of the guarantee of surety planned for the summer for the licensing of large publishing catalogues.

The Board of Directors is, pursuant to the Articles of Association, responsible for the financial matters of SUISA. In general, the monies are supposed to be invested for the period which lies between the time of receipt of payment from the licensees until the distribution work has been finished and the payments have been made to rights owners. The investments are made on the basis of regulations. Due to the initiative of a member of the Board of Directors, this set of regulations including “security” and “reasonable return of investment” was extended by the criterion “sustainability”.

Past and future

SUISA turns 100 in 2023. The first preliminary preparations and planning work for the anniversary were launched. Inspired by a suggestion of the SUISA Communications Department, deliberations were made how the round birthday of the cooperative could be celebrated adequately. Possible jubilee projects are set to be worked on further.

Furthermore, the Board took note of a legal expert opinion on SUISA’s monopoly position and its future on a licensing market for copyright which has begun to open up. The rights management monopoly has already disappeared in the online rights sector. Latest developments show that SUISA is also facing increased competition in other rights management areas such as by foreign agencies which directly license concerts that take place in Switzerland. In the meantime, SUISA remains, due to the statutory provisions, obliged to a large degree to manage the rights belonging to its field of activity as comprehensively as possible, the expert opinion states.

The Board of Directors holds the view that the rights management monopoly of SUISA needs to be strengthened because it has a central significance for the cultural development, the promotion of music in its entire diversity in Switzerland for authors, music promoters and for consumers. The Executive Committee was tasked to take the necessary measures to inform the authorities and the public.

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A wide-ranging list of topics was on the agenda for discussion at the meetings of the SUISA Board on 28 and 29 September 2020. For the first time after the disruption caused by corona, a part of the meeting participants met in Lausanne while respecting the protective measures in person, while some members of the Board of Directors joined via videoconferencing from their home office. Report from the Board of Directors by Andreas Wegelin

Report from the Board: Income and expenditure, investments and an anniversary

Snapshot of the Label Suisse Festival 2020 in Lausanne (to be seen in the picture: Corin Curschellas and Ursina Giger from the trio La Triada). The rights management monopoly of SUISA has a central significance for the cultural development and promotion of music in its entire diversity in Switzerland; that is the persuasion of the SUISA Board of...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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A Board Meeting focused on the coronavirusA Board Meeting focused on the coronavirus To comply with coronavirus regulations, SUISA’s Board met for the first time by video conference on 28 and 29 April 2020. Board members were connected by sound and video from their respective home offices. After a short period of accustomation, the meeting proceeded apace without any significant communications problems. Even thorny issues were debated and decided in this way. 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

A Board Meeting focused on the coronavirus

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

A Board Meeting focused on the coronavirus

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

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

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

Written vote instead of a 2020 General Meeting

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

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

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

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

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

Developments in the online licensing market

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

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

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

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  1. Yannick Popesco says:

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

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

    Salutations,
    Yannick Popesco (artiste indépendant)

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

A Board Meeting focused on the coronavirus

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

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

Penny-pinching in digital music distribution

Business in the online sector has been subject to constant change – not only for copyright societies. In the second part of the interview, SUISA CEO Andreas Wegelin reports on the status quo and provides an outlook on the scenarios that are being discussed. Interview by guest author Silvano Cerutti

Penny-pinching in digital music distribution

Music is now consumed rather differently to how it was consumed 15 years ago: From the turnover of the Digital Service Providers, about 12 to 15 percent are allocated to authors, which results in royalties at a micro-penny -level per play. (Photo: LikeBerry)

Andreas Wegelin, let’s talk about proportions and size ratios. Streaming service providers such as Spotify, for example, pay composers micro-penny -amounts per play. If you extrapolate this, what is the percentage of the turnover?
Andreas Wegelin: If you only consider authors’ rights, that is about 12 to 15 percent of about 70% of the service provider’s total turnover. The rest is allocated to the recording, the producer, the artist. This roughly corresponds to the offline situation in Switzerland. Copyright for authors is governed by state-approved tariffs there. They are actually slightly lower. A monopoly thus does not bring about a better result for authors.

Why is there so little that comes together for the author? Without the author, the piece would not even exist for others to perform.
I completely agree with you. If a composer happens to be a good singer as well and thus performs his own songs, he gets more. But this is the same case for the offline sector. A singing author gets more from his record company than from us – because the producer provides the service provider with the music recording which can be played. It is not SUISA that does that but companies such as Sony, Universal etc. which therefore also hold the relevant market power.
Furthermore: Let’s compare the situation to the radio broadcasters: Radio addresses a multitude of listeners, streams one individual listener. If you break down the radio remuneration to listener levels, the amount is not much higher than that for streaming. A reason why streaming is even lower is that I nearly only have mainstream music on the radio. The selection of songs is therefore limited. In the case of streaming services, I also have niche repertoire. In other words (please don’t quote me on the figures), I have a “heavy rotation” on the radio with about 50 songs per month, and 1,000 songs on Spotify.

Can I assume that a service such as YouTube pays out to a similar extent as Spotify?
In the case of YouTube, one question needs to be asked which is difficult to answer: What do the 12 to 15 percent relate to? Spotify has subscription fees while YouTube only has advertising income: Is it thus 12 to 15% of the advertising revenue which has been generated in a specific country for a specific video during a specific period of time? And if there is no advertising shown on the video, is there no money, irrespective of how many thousands of clicks are shown in total?

With YouTube, you have the additional problem that everyone can upload everything without having to supply any rights information. How can you find out what belongs to whom?
YouTube’s approach is automation. This works to some extent, but there are also blatant mistakes with regards to the allocations. For such data volumes, however, it is only possible to do so by way of automation. For a total control, you would have to be able to track all sound files.

Does this mean, the future must be the upload filter?
There’s a huge debate on this topic at EU level. So far, the “safe harbor” principle has been applied in the EU, which said: A Digital Service Provider (DSP) is not responsible for the contents which are uploaded to their platforms. The regulation stems from 2002 and was intended to promote the development of the online data exchange. YouTube did not exist in those days. YouTube could then benefit from this regulation even though masses of protected contents are distributed via YouTube. In the meantime, the protection of the author has been enjoying greater importance again. YouTube, however, threatens now to block contents arguing it would be too complicated to provide for a settlement of the rights in each case. That way, certain contents would no longer be available and this would be a grave restriction of freedom of opinion.

Are there any alternatives?
You could introduce a statutory compensation claim for authors, similar to blank media levies for private copies. This would mean: YouTube is allowed to distribute contents but YouTube would have to pay for it by law. In the case of the blank media levy, the argumentation used to be: You cannot control what someone records onto a music cassette, so a blanket solution is required and it could be that you pay a remuneration of e.g. 5 Rappen for each blank medium per hour in favour of the authors. Something like this would also be possible for online usages but it is a topic that is highly controversial.

Which solution would be better for the authors?
For authors of our scale, a blanket arrangement would be better, for bigger rights holders, the right of interdiction currently in force would be better. It gives them enough power to negotiate with YouTube or Google directly. Google cannot just ignore them. We, however, had to first become active ourselves in order to speak with YouTube about a licence. That was also a reason for our Joint Venture and our approach to expand the repertoire we represent.

How long does it take to negotiate an agreement with a platform of such a magnitude?
Since we have been part of the Joint License and have been processing via Mint, we could shorten the duration. Depending on the provider, it lasts between one and eight months. And if you want to renew an agreement, you are looking at four to five months.

What kind of strategy does SUISA pursue in cases where agreement negotiations with a provider fail?
In such a case – it is rather rare, because, among reasonable business partners, you do find a solution – we must fight in court to get the recognition and the adequate remuneration for the use of the rights of our members.

How many DSPs are there in total?
Actually, there are too many (laughs). There are dozens. Of course, you start with the most important ones, i.e. the biggest. There are about 15. But Mint is planning to expand into other territories. In India, for example, the two big telecoms companies are also important music providers which results in new and different constellations.

I am a cooperative member of SUISA, may I see such agreements?
No. A provider wants to prevent competitors seeing their contracts. That is why there is always a confidentiality clause. SUISA cooperative members do, however, see what they get in the end. If they do not like this situation, they can always assign their rights to someone else. I doubt very much that they will be given access to such contracts there. That is a result of the competitive market.

In December 2019, it became known that Gema has bought a majority stake in Zebralution GmbH, a digital distributor. What does this development mean for SUISA?
Gema tries this way to be increasingly active in the business with data for the works of its members. By cooperating with a digital distributor, Gema can succeed in providing its members with 360-degree-service, which does not just include the management of copyright but also neighbouring rights. SUISA is also going to consider what kind of steps are sensible for a rather comprehensive service to its members in the digital music distribution sector.

Züri West has earned money with “I schänke dir mis Härz”, whereas “079” by Lo & Leduc has yielded much less, even though it is at least as successful.
That may well be the case. This difference does not just apply to Lo & Leduc but for all, worldwide, because music consumption is different to what it was 15 years ago. That is why concerts have become more important and that is why the entire broadcasting sector is so important because we still have relatively stable conditions there …

But?
The problem is that more and more advertising is moving towards the internet. Licensing fees for broadcasting rights depend on the turnover of the broadcaster, and that turnover mainly comes from advertising. The income is falling drastically because advertising is shifting more and more towards the internet.

A similar scenario as we had it in the newspaper sector.
Exactly. This is hard to manage. The next online agreements will need to focus more on that. It is actually very fascinating. And of course we do not always succeed immediately, sometimes it takes tough negotiations and, if necessary, even legal proceedings. We also had this situation in the 70ies and 80ies when the task at hand was to collect remuneration for cable retransmission. New developments and types of services for music keep popping up. We need to keep an eye on them and it is our exciting and rewarding task to negotiate remunerations on behalf of our members.

To the first part of the interview: “Brave new world”

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The first year of SUISA Digital Licensing AGThe first year of SUISA Digital Licensing AG A little more than one and a half years ago, SUISA founded its subsidiary company, SUISA Digital Licensing AG. The subsidiary company has now completed its first business year. A year which was under the auspices of development and brought about a multitude of new findings. It is time for retrospection and a first interim summary. Read more
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  1. Rolf Hug says:

    Very interesting. Also to mention that the big publishing companies don’t play by the code of conduct and
    can get away with anything.

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Business in the online sector has been subject to constant change – not only for copyright societies. In the second part of the interview, SUISA CEO Andreas Wegelin reports on the status quo and provides an outlook on the scenarios that are being discussed. Interview by guest author Silvano Cerutti

Penny-pinching in digital music distribution

Music is now consumed rather differently to how it was consumed 15 years ago: From the turnover of the Digital Service Providers, about 12 to 15 percent are allocated to authors, which results in royalties at a micro-penny -level per play. (Photo: LikeBerry)

Andreas Wegelin, let’s talk about proportions and size ratios. Streaming service providers such as Spotify, for example, pay composers micro-penny -amounts per play. If you extrapolate this, what is the percentage of the turnover?
Andreas Wegelin: If you only consider authors’...read more

Outlooks and insights

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

Report from the Board: Outlooks and insights

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

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

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

Budget approved, future discussed

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

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

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

Distribution rules and by-elections

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

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

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The first year of SUISA Digital Licensing AGThe first year of SUISA Digital Licensing AG A little more than one and a half years ago, SUISA founded its subsidiary company, SUISA Digital Licensing AG. The subsidiary company has now completed its first business year. A year which was under the auspices of development and brought about a multitude of new findings. It is time for retrospection and a first interim summary. Read more
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In its meetings on 10 and 11 December 2019, the Board focussed on the budget for 2020 and SUISA’s strategy for the next five years. Report from the Board by Andreas Wegelin

Report from the Board: Outlooks and insights

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

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

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

Summer meeting of the SUISA Board

As in previous years, the summer meeting of the SUISA Board took place on the day before the General Assembly, on Thursday, 20 June 2019, in Biel. Report from the Board by Andreas Wegelin

Summer meeting of the SUISA Board

The SUISA Board held its summer meeting the day before the General Assembly that took place at the Biel/Bienne Congress Centre, as shown in the image. (Photo: Natalie Schlumpf)

In addition to the usual final preparations for the General Assembly, the SUISA Board also noted the comprehensive report by the statutory auditors for the 2018 financial year. In general, the audit gave the management team a good report. However, it also suggested some improvements. The management team has now been tasked by the Board with actioning the proposed improvements.

The prospects for the Mint joint venture, which completed its second year of operation at the end of March 2019, was another important topic for discussion at the board meeting. The Board decided that, as the parent company of Mint, the SUISA cooperative shall provisionally waive the assertion of any claims for work and IT services provided in support of the joint venture company Mint, in the same way as the American partner SESAC.

The Board also addressed the issue of whether SUISA could offer services abroad in the future, in the event that the local collecting society is not working satisfactorily. It will decide in greater detail based on specific cases.

The first year of SUISA Digital Licensing AGThe first year of SUISA Digital Licensing AG
A little more than one and a half years ago, SUISA founded its subsidiary company, SUISA Digital Licensing AG. The subsidiary company has now completed its first business year. A year which was under the auspices of development and brought about a multitude of new findings. It is time for retrospection and a first interim summary. Read more

The Board was once again able to note pleasing distribution results. In June 2019, beneficiaries in Switzerland and abroad received CHF 43.7 million.

Finally, the Board approved changes to the distribution rules and several adjustments to the General terms and conditions of the rights administration agreement, made necessary by the Liechtenstein collecting society regulation and the EU directive on collecting societies. The updated General terms and conditions for rights administration will be supplied to all members shortly. The changes to the distribution rules will be presented via the SUISA publishing channels once they have been approved by the regulatory authority.

After the meetings, the Board members met with heads of department and managers for an evening meal, providing the opportunity for discussion and for getting to know some new senior managers.

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As in previous years, the summer meeting of the SUISA Board took place on the day before the General Assembly, on Thursday, 20 June 2019, in Biel. Report from the Board by Andreas Wegelin

Summer meeting of the SUISA Board

The SUISA Board held its summer meeting the day before the General Assembly that took place at the Biel/Bienne Congress Centre, as shown in the image. (Photo: Natalie Schlumpf)

In addition to the usual final preparations for the General Assembly, the SUISA Board also noted the comprehensive report by the statutory auditors for the 2018 financial year. In general, the audit gave the management team a good report. However, it also suggested some improvements. The management team has now been tasked by the Board with actioning the proposed improvements.

The prospects for the Mint joint venture, which completed its second...read more

The first year of SUISA Digital Licensing AG

A little more than one and a half years ago, SUISA founded its subsidiary company, SUISA Digital Licensing AG. The subsidiary company has now completed its first business year. A year which was under the auspices of development and brought about a multitude of new findings. It is time for retrospection and a first interim summary. Text by Fabian Niggemeier

The first year of SUISA Digital Licensing AG

The first business year of SUISA Digital Licensing AG was influenced by negotiations with many music service providers, successfully and jointly held with the SESAC Digital Licensing AG. (Photo: MichaelJayBerlin / Shutterstock.com)

By launching the subsidiary company, in short SUISA Digital, SUISA has outsourced cross-border and international online licensing in its entirety. SUISA is, from now, only responsible for the licensing of music uses on homepages and music services which only address a Swiss audience.

SUISA Digital’s responsibilities

SUISA has, for nearly six years, issued pan-European licences for online uses. In other words, the rights of SUISA members in the online world are not granted just for Switzerland, but directly for the whole of Europe. Thanks to the outstanding IT systems in this sector, SUISA was able to significantly increase the income of its members.

Another step followed in 2017: SUISA founded the Joint Venture, Mint Digital Services, with US collective management organisation SESAC. Until then, SUISA negotiated agreements with internet music providers (music service providers, abbreviated to MSPs) and managed the agreements itself upon their conclusion. With the creation of the Joint Venture, these two fundamental activities were split and outsourced. Mint Digital Services is responsible for the administration of the agreements i.e. the technical processing and invoicing in the name of the rights holders, whereas SUISA Digital is responsible for market monitoring, market penetration and the negotiation of the agreements. By way of another new introduction, the territory where the agreements apply was extended from Europe to nearly the whole world.

SUISA Digital is thus building a global licensing system and also offers this system to third parties. Collective management organisations from other countries can instruct SUISA Digital just like publishers can (for their Anglo-American repertoire), or authors from all over the world. That way, a cost-efficient management of rights can be ensured in the best possible manner.

Joint licences

SUISA Digital does not pursue this task by itself. It is in the interest of the rights holders as well as the MSPs to structure the negotiations in as efficient a manner as possible. That means to cover and govern as many rights as possible with as few agreements as possible. For this reason, SUISA Digital offers all MSPs to extend their agreements to the repertoire of SESAC Digital Licensing AG (in short: SESAC Digital). Provided that the MSP agrees, SUISA Digital and SESAC Digital jointly lead the negotiations and bundle their repertoire into a joint licence.

This is in the interest of the MSPs since it means they have to undertake less negotiation efforts, but also in the interest of SUISA Digital and SESAC Digital since a highly interesting “package” can be offered to the providers by joining up the repertoires. The advantage of this package is also that it does not just contain compositions which are used in Switzerland or Europe but also create a high demand globally.

The negotiations

At the end of 2017, a small but motivated team only focussed on preparing the negotiations. A multitude of information and figures had to be gathered and linked. Designing the agreement for areas outside Switzerland and Europe presented some challenges to the negotiation team. The parties agreed that the price of music should be linked mainly to the local significance of the music and the local buying power. It can thus be ensured that an adequate remuneration can be invoiced which remains affordable to the consumers.

Economic deliberations also made it clear that the big MSPs had to be approached first. The six biggest providers are responsible for 80% of the turnover. This statistical average does, of course, not apply for the music of all members: Those who are active in a specific music genre will at best have a bigger turnover on the platforms that focus specially on that genre. It was nevertheless paramount to prioritise the providers in line with their market share; knowing that certain big providers would be among the negotiation partners that would be harder to deal with.

Involving a mix of consistency, comprehension and rigour it was possible to make good progress in the negotiations. After twelve months, agreements could be entered into with all big MSPs or the negotiations are close to being concluded. Since these agreements are now ‘safe’, the next task is to complete the market penetration.

Until now, agreements with the following providers were jointly entered into with SESAC Digital:
YouTube, Spotify, Apple Music, Apple iTunes, Google Play, Deezer, Beatport, Facebook, Soundcloud, Melody VR, and Qobuz.

Joint negotiations are underway with the following providers:
Amazon, Napster, Tidal, Juke, 7Digital, dailymotion, Mixcloud, Red Karaoke, Soundtrack your Brand, What people play, Anghami, Auro, Bleep, Emoticast, Idagio, Smule, Xtendamix, Yousician, Better Day Wireless, DJ City, Juno, Linn Record, Musically, Recisio und Radionomy.

Add to that another approximately 20 MSPs from which feedback is due, as well as about 10 MSPs which are only active on a national level in the selected territories.

Distribution

As mentioned at the outset, the relevant agreements are processed and administered by the Joint Venture Mint Digital Services. The distribution of the income is, however, done by SUISA Digital and SUISA. A minimum of six months lies between the usage period and the distribution. The reason for this is that we do not represent the global repertoire, compared to the traditional offline sector. We can thus not invoice everything and then distribute, but only what we identify.

In this context, we depend on the collaboration by our members: The quicker they notify us of their works, the faster we can generate the invoices. For this reason, we are waiting between 60 and 100 days before we process the reports, depending on the MSP. That way, we can ensure that the majority of the new works and thus works with the highest usage levels has been registered and can be distributed by us. The distribution of the income is then made, at the latest, in the quarter after the payment from the MSPs has reached us.

There are going to be bigger settlements in due course. Since all agreements had to be renegotiated, no invoices could be sent out during the ongoing negotiations. In the cases of Spotify or Deezer, this led to the fact that the uses of the entire year 2018 were only invoiced at the beginning of 2019.

Outlook

During the second business year, SUISA Digital is going to focus firstly on achieving a coverage of the internet music market which is as complete as possible. Secondly, it is paramount that new markets, also outside of Europe, will be opened up and to ensure that SUISA members receive the remuneration they are due from anywhere in the world. For this purpose, we are constantly collaborating with Mint to improve systems and processes in order to continue providing our members with the best possible services in future.

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  1. Walter Thut says:

    Guten Tag,
    einen Fall welcher mich und andere von der SUISA vertretene Komponisten betrifft, und die oben genannten Zeitverschiebungen bei den Abrechnungungen fuer Urheber stark in Frage stellt, moechte ich gerne hier beschreiben:

    Die Urheber des bei dere SUISA angemeldeten Songs BACK TO THE DIRTY TOWN haben viele Millionen Clicks uf Youtube, und viele Screenshots Belege dass dieser Song seit 2017 z.B. in der Schweiz, Frankreich und den USA dauernd Webungen vorgeschaltet hat.

    Leider haben die Urherber von der SUISA noch keine einzige Ueberweisung erhalten. Obwohl die SUISA uns vor mehr als einem Jahr bestatigt hat, dass sie cies Clicks auch erfasst haben, und dass wir Verguetungen von der SUISA bis spaetestens Ende 2018 bekommen werden, haben wir noch keine einzige Abrechung dazu, und keinen einzigen Rappen ueberwiesen erhalten.

    Bei unserem digitalen Vertrieb funktioniert hingegen die Abrechnung sehr gut, und liegt bei mehreren Tausend CHF pro Jahr.

    Was stimmt hier nicht?

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A little more than one and a half years ago, SUISA founded its subsidiary company, SUISA Digital Licensing AG. The subsidiary company has now completed its first business year. A year which was under the auspices of development and brought about a multitude of new findings. It is time for retrospection and a first interim summary. Text by Fabian Niggemeier

The first year of SUISA Digital Licensing AG

The first business year of SUISA Digital Licensing AG was influenced by negotiations with many music service providers, successfully and jointly held with the SESAC Digital Licensing AG. (Photo: MichaelJayBerlin / Shutterstock.com)

By launching the subsidiary company, in short SUISA Digital, SUISA has outsourced cross-border and international online licensing in its entirety. SUISA is, from now, only responsible for the licensing of music uses on homepages and music services which only address a...read more