Skip to content
Teoston taloudellinen vastuu
Financial Responsibility

Financial responsibility at Teosto means ensuring the efficiency and competitiveness of our operations as well as protecting the financial interests of our rightsholder members. This allows us to be a reliable partner, employer and corporate citizen. Thanks to its financial stability, Teosto is able to meet the needs of its stakeholders, take care of its environment and obligations and strengthen the role of music and creative musical art in society.

Teosto protects its rightsholder members’ interests by negotiating with parties that use music, from Finnish media companies to international online platforms. We make agreements on the use of music and the level of royalties, collect royalties and distribute them to our members.

COVID-19 restrictions, which started to be introduced in 2020, continued in 2021. This also affected the royalties we collect: we collected a total of EUR 70.1 million in royalties.

As the pandemic subsided slightly in autumn 2021, we were able to increase the amount of royalties collected by EUR 6.9 million from the previous year’s amount of EUR 65.6 million. The growth came especially from the strong development of the online category and the partial recovery of the events category amid the restrictions. Revenue from background music and commercial radio also grew.

Distributions to music authors and publishers

We make distributions to our rightsholder members according to the Distribution Rules valid at the time of distribution. The Distribution Rules are approved by Teosto’s General Meeting.

In 2021, we paid composers, lyricists, arrangers and music publishers EUR 53.4 million (EUR 51.5 million in 2020) in royalties for the use of their music. Of the total amount, EUR 23.5 million (2020: EUR 26.6 million) was paid to Finnish music authors and publishers and EUR 29.9 million (2020: EUR 24.9 million) to foreign music authors and publishers.

We always seek to operate as cost-efficiently as possible, while ensuring the quality of our services and optimising the distributions made to our members. Our goal is to increase the royalties paid to rightsholders for the use of their music. We are continuously exploring opportunities to operate more efficiently.

A key financial indicator of our operations’ efficiency is the expense percentage. We aim to provide high-quality, reliable copyright services with a reasonable expense percentage. Thanks to the growth in revenue and cost-cutting, Teosto’s expense percentage decreased. Our average expense percentage in 2021 was 13.7%, down from 15.6% in the previous year.

A competitive expense percentage is important in the competition for the management of rightsholders’ rights.  The total costs of a collective management organisation’s management services for rightsholders consist of the administrative expense percentage and the withholding of cultural contributions. Based on a decision by its members, Teosto’s withholding percentage for cultural contributions is 6% of the net royalties, which is a moderate rate when compared internationally.

The Teosto Fund was established for the purpose of promoting Finnish music and improving the conditions for it. The purpose of the Fund is to maintain and secure the continuity of the funding of these promotion activities in a situation where previous sources of funding are reduced or eliminated.

The Fund’s primary funding source is cultural contributions, which Teosto withholds on the basis of decisions by its members and in accordance with the agreements it has made with its rightsholders and foreign collective management organisations.  In 2021, the share of cultural contributions withheld from collected royalties was 6.0% (2020: 6.0%) after the deduction of costs, i.e. about EUR 2.9 million.

Some of the cultural contributions are used directly to promote music (see the section “Cultural responsibility”). The Fund has also grown through increases in the value of assets as well as private copying compensation paid from the state budget.

Teosto carries out investing activities in two separate investment portfolios:

  • The activities and investing principles of Teosto ry’s portfolio comply with the Act on the Collective Management of Copyright and are confirmed by the General Meeting. The portfolio consists of funds that are waiting for distribution to rightsholders.
  • The Teosto Fund’s portfolio is a self-financed fund, the capital of which is intended for the promotion of Finnish creative music. The use and investing principles of the portfolio have been confirmed by the General Meeting.

Our investment activities are based on an investment policy built around the central principles of a long-term investment horizon and diversification. Thanks to these principles, our portfolios are resilient to short-term changes in value. We require asset managers who take part in our investing activities to commit to the UN Principles for Responsible Investment (PRI). We examine our asset managers’ performance from this perspective annually and expect active reporting on ESG matters.

2021 was a very good year for our investing activities. In addition to shares, our alternative investments also yielded good returns. At the end of 2021, the market value of the Teosto Fund’s investments was about EUR 41.7 million and the rate of return was about 21.1% p.a. (2020: EUR 36.4 million and 7.7% p.a.).  At the end of 2021, the capital in Teosto ry’s fund, calculated on the basis of market value, was about EUR 45.1 million and the rate of return was about 15.9% p.a. (2020: EUR 36.5 million and 5.9% p.a.)

The state pays private copying compensation from its budget to music authors for the copies made of their works for private use. In 2015–2021, the amount of private copying compensation was EUR 11 million a year. The compensation was set up to compensate for the losses caused by making copies of works for private use.

For 2021, Teosto received a total of EUR 2.3 million of private copying compensation (2020: EUR 2.3 million). Of this amount, we paid about EUR 1.2 million to Teosto’s rightsholders as distributions and allocated about EUR 1.1 million to music authors’ common goals through the Teosto Fund.

The state pays lending compensation through Teosto for the library loans of sheet music, scores and recordings. The lending compensation is based on the EU Rental and Lending Directive and the Copyright Act. The compensation is paid from the state budget and the Ministry of Education and Culture is responsible for paying it. In 2021, EUR 0.54 million in lending compensation (2020: EUR 0.58 million) was paid to Teosto, of which we distributed EUR 0.43 million to composers, lyricists and arrangers.

Teosto’s budget and financial statements are approved annually by the General Meeting. In addition, we also prepare a transparency report on our operations in accordance with the Act on the Collective Management of Copyright. In the report, we examine our financial indicators from a wider perspective than in our financial statements.

Teosto’s financial added value
DISTRIBUTIONS TO RIGHTSHOLDERS

We produce immediate financial impacts mainly for our rightsholder members. Teosto’s most important financial added value is its distributions to rightsholders. In 2021, we withheld a total of EUR 4.2 million from distributions as taxes and contributions.

MORE EFFICIENT SOCIETY

We increase efficiency by managing the financial rights of composers, lyricists, arrangers and music publishers globally.

GOOD WORKPLACE

We employ about 65 people. The wages and salaries paid by Teosto in 2021 amounted to a total of about EUR 4 million, of which about EUR 1.2 million was withheld as taxes and contributions. Our goal is to be a desirable workplace where employees like to work and feel that their work is meaningful.

GOOD PARTNER

In 2021, we spent a total of about EUR 3.5 million on services and supplies. This includes outsourcing to various joint ventures and service providers, IT production and development costs and other external procurement.

READ MORE:

Give us feedback!

Feedback from users is important when we develop our web services. Let us know your experiences of our service!

Change cookie settings

A cookie is a small text file that is stored on your computer or other device and records information about your visit to the Website. Teosto uses cookies to improve the usability of its services.

Information collected by cookies is not usually connected with the personal data of an identified person, but some information collected by cookies may be indirectly connected with the personal data of an identified person.

Learn more by reading our Privacy Policy and Cookie Policy

Cookie categories
Strictly necessary cookies

These cookies are strictly necessary to ensure the availability of our website. They do things such as load some of our website’s functions in advance to make the website load faster. Strictly necessary cookies are also used to determine and remember your settings. You can disable strictly necessary cookies in your browser settings, but please note that all of the website’s functions and parts may not work properly after that.
More information about cookies

Analytics cookies

We use analytics cookies to improve the functioning of our website. Analytics cookies collect information about things such as how visitors use our website and how they navigate from one page to another. The information is used in anonymous form.
More information: Privacy Policy and Cookie Policy

Functionality cookies

Functionality cookies allow us to offer various functions, such as playlists and a live chat service, on our website. If you disable functionality cookies, some or all of these functions may not work properly. More information about cookies

Marketing cookies

Marketing cookies help us tailor marketing and offer the users of our website more personalised services in the future. We use marketing cookies to collect information about the user’s behaviour and preferences on our website.
More information about cookies