In 2016, we revised our strategy and strengthened partnerships.
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In 2016, we revised our strategy and strengthened partnerships. Our operating environment is changing rapidly and we wanted to clarify the direction in which we are heading.
During the strategy revision process, we specified three objectives for the Finnish Composers' Copyright Society Teosto: We provide a convenient interface for everyone to experience and use music. For professionals, we provide an easy way to safeguard their rights. Furthermore, we provide an efficient marketplace for various players in the music market and a community for various music authors, whose interests we supervise.
We want to offer competitive, easy-to-use services to our customers and rightholders. For this, we need strong networks. We do not try to do everything ourselves – instead, we find the best partners for each task.
A good example of this is the joint venture company between Gramex and Teosto, GT Music Licences Ltd (GTM), which started its operations in the latter half of 2016. In 2017, background music customers will become customers of GT Music Licences. In accordance with the new operating model, the company provides a one stop shopping point for background music licences and the related customer service.
International partnerships constitute an important part of our activities, and Teosto continued its close co-operation with the Danish Koda and Norwegian TONO in the Polaris Nordic alliance. We worked together to establish our policies as a customer of the international ICE work database and maintained joint distribution and reporting systems. We also started to examine opportunities for the licensing of cross-border online services.
In addition to our established partnerships, we want to increasingly promote new ways of conducting music business. We follow startup companies in the industry closely and participate in a number of research and development projects. We were the main partner in the Slush Music event, arranged for the first time in 2016 in connection with the Slush startup event.
The new Act on joint administration of copyright came into effect on 1 January. It is based on an EU directive and increases choice for rightholders. In practice, the Act regulates all the commercial activity of copyright organisations (joint administrative organisations), in particular the dealings between rightholders and organisations.
Last year, once again, proved that change is permanent, but our goals are clear. The implementation of our new strategy requires readiness for change, goal-directed leadership, cross-border co-operation and new ways of operating from everyone. We are ready – you are welcome to join in!
Teosto Prize awarded to a rap album and a chamber opera
The 2016 Teosto Prize was awarded to two magnificent works: the rap album Malarian pelko (‘Fear of malaria’) by Paperi T and the chamber opera Autuus (‘Bliss’) composed by Antti Auvinen.
The winners were chosen by a jury of three judges, chaired by the Minister of Education and Culture Sanni Grahn-Laasonen.
‘At first, it might seem like the winning works represent two musical extremes. However, a careful listening reveals that the undertone of the two works is fairly similar, although their methods and tools for expressing it differ greatly,’ said chairperson Grahn-Laasonen.
The Teosto Prize was awarded to Antti Auvinen’s composition and Harry Salmenniemi’s libretto in the chamber opera Autuus. Henri Pulkkinen, Niko Liinamaa, Miska Soini, Roope Kinnunen, Kristo Laanti, Sandra Tervonen and Juuso Malin were awarded for Paperi T’s album Malarian pelko.
Awarded since 2003, the Teosto Prize is one of the most noteworthy art prizes in the Nordic countries. Each winning team received EUR 20,000 of the total award sum of EUR 40,000.
Teosto’s strategy, which was revised in 2016, emphasises readiness for change and new ways of operating. The music industry and media market are developing fast, which is why Teosto must also change. In addition, the new Act on joint administration of copyright was a trigger for the revision of the strategy. The Act, which is based on an EU directive, will influence the Society’s services and rules.
Board members and executive directors of our member organisations, Teosto’s Board and Teosto’s personnel participated in a joint virtual brainstorming session, which helped to define the direction of the strategy work.
Finnish Composers’ Copyright Society Teosto aims to be:
In order to promote the implementation of the strategy, we launched pilot projects that studied and modelled new operating models and future scenarios. The projects examined possibilities to provide music licensing services in new ways, simulated an alternative distribution process and outlined the Futures Lab platform for innovation and development activities in the music industry.
Futures Lab was launched in November at the Slush Music event, arranged for the first time by the leading European startup event Slush. Teosto was the main collaboration partner of Slush Music. The themes of the event were music, technology and entrepreneurship.
Finnish music played on radio and TV
Radio and television remained the leaders in the use of music in 2016. They covered 54 per cent of all royalties collected by Teosto, including online royalties from radio and television companies.
Online royalties on the increase – Finns are now paying for content
Music authors’ income from the use of online services increased by approximately 79 per cent from the previous year. This was the area in which income related to the use of music increased the most. The increase is the result of the greater willingness of Finns to pay for online music and video services.
Concerts and festivals found their audience – income increased slightly
In summer 2016, festivals attracted large audiences in spite of the unstable weather conditions. Finnish artists were strongly represented at these events, and income from live music increased slightly compared with 2015. Furthermore, income from large concerts was higher than expected.
Background music for a good atmosphere at restaurants and sports centres
The amount of royalties collected from the use of background music remained unchanged in 2016. Music was played at restaurants as before, and the use of background music at sports centres continued to increase, boosted by the well-being trend.
In September, the European Commission published a proposal for a directive concerning copyright in the digital single market. In its proposal, the Commission highlighted the significance of culture and the problem associated with the so-called value gap. Teosto and other players in the creative industry have brought out the problem in the public debate and at meetings with the authorities and politicians.
The value gap refers to the fact that various platform services on the internet, such as Facebook and YouTube, use content made by others to attract audiences and collect advertising revenues. These services make money, but nothing is paid to the original authors of the content, or only a little is paid for some of the content. In its draft directive, the Commission proposes that platform services must observe copyright when publishing content created by others.
Teosto followed the preparation of the directive and influenced its content in close co-operation with IFPI Finland and the European umbrella organisation, GESAC.
The Commission’s proposal for amendment of legislation has been submitted for review by the European Parliament and the Council of the European Union. It is estimated that the process will last until July 2017.
In 2016, Teosto focused on improving customer satisfaction and developed its services.
A convenient online service for publishers was launched as a completely new service. Digital services for music authors were also developed, and a new visual distribution view was added to the online service. The view works on mobile devices as well. It shows charts and map visualisations, providing users with information on distributions made to them.
During the year, we also launched an Android version of the Keikkamobiili mobile phone application.
Teosto aims to improve the efficiency of the distribution processes and to speed up the payment of the collected royalties to the rightholder. Rightholder services improved considerably in autumn 2016, as Teosto started paying performing right royalties for radio play four times a year. Previously, royalties collected from commercial radio channels were paid to the authors and publishers twice a year and royalties from YLE radio channels once a year.
In connection with this change, background music was established as a distribution category of its own. Previously, royalties collected for background music were distributed together with live, radio and TV music distributions.
GT Music Licences Ltd, a joint venture formed by Teosto and Gramex, started its operations at the beginning of October. GT Music Licences is responsible for the selling, marketing and invoicing of background music licences of Teosto and Gramex, as well as the related customer service. Companies and organisations that use background music in their business will gradually become customers of GT Music Licences in 2017. Royalties for the use of background music will be paid to authors and publishers through Teosto also in the future.
In the picture: Stefan Kajanus, CEO, GT Musiikkiluvat Oy