Ceo’s review: Taking rights management services to the next level
This spring, the mood at Teosto has been conflicted. While I am very happy about last year’s results and the steps our organisation has taken, I cannot help but think about the impact the coronavirus pandemic is having on our society.
The cultural sector was among the first to feel the effects of the pandemic. The full impact of the coronavirus on composers, lyricists, arrangers and publishers who receive copyright royalties will become apparent only after a delay, starting from late 2020.
The effect of the coronavirus on Teosto’s result in 2020 will also be significant. With this in mind, we have actively taken part in protecting the interests of the creative sector and the music industry so that the difficult situation of our rightholders would be taken into account in the government’s decisions on support measures.
The coronavirus pandemic has also meant that we are unable to hold our members’ Spring General Meeting. However, because openness is one of our key values, we will exceptionally publish the annual report and our transparency report before the General Meeting has been held and the operations and figures for 2019 have been approved at the meeting.
Good results in 2019
Teosto saw good results in 2019. Based on turnover, the year broke records. Turnover grew by 2.9% compared to the previous year and reached EUR 72.1 million. We achieved these results by collecting music copyright royalties, cutting costs and making our operations more efficient. However, we did not make our operations more efficient at the cost of development, as we also carried out important development projects.
We updated Teosto’s strategy in early 2019. One of our main goals is to take our rights management services to the next level. We built our strategy together – Teosto’s personnel and Board of Directors took part in efforts to create a new strategy in a digital workspace and also through meetings and “strategy coffees”.
Flexible services for customers, first-class competence in digital rights management and the development of our personnel’s competence and skills to meet the changing requirements of work life are at the heart of our new strategy.
We also created a new membership agreement for our rightholder members last spring. The new membership agreement is based on discussions with the Finnish Competition and Consumer Authority over many years, and the end result is an agreement that is exceptionally flexible from the perspective of the rightholder.
Digitalisation boosts development efforts
In the future, a key prerequisite and success factor for rights management will be its ability to digitalise processes and automatically process the data streams of music and royalty distribution while maintaining high quality.
Last year, we started preparing to update our reporting and distribution system in the future. The requirements for the efficiency of data stream processing, level of automation and analysis capability mean that the project will take several years, and we have now started preparing for this project.
In 2019, we also sold our majority stake in Mind Your Rights Oy to the German IT company NKDS GmbH. Mind Your Rights focused on developing a platform for information exchange regarding global live music, but after selling the company, we will focus our efforts more on the digital development of our most important services.
Cooperation networks are still one of our main ways of operating, and, related to this, we established Polaris Hub AB, a company that focuses on the licensing of international online music services, together with the Norwegian Tono and the Danish Koda. The Hub makes the licensing of music services that operate in several market areas easier and more efficient.
Promotion of interests in 2019
Last year saw the Finnish parliamentary election and the European Parliament election. With our government programme goals for 2019–2023, we seek a supportive foundation for music-related work, fair rules for content markets and investments in the creative industries.
We received important news in March, when the European Parliament approved the Copyright Directive. The new directive provides important rules that help clarify the responsibilities related to the use of copyright-protected content as well as rules for online platforms that use copyright-protected content.
Promoting creative Finnish music in the future
Teosto Fund was established in 2010 to support the promotion of creative Finnish music in the future. The capital of Teosto Fund was increased in the 2010s by adding the profits from the sale of the office building and the apartments to the fund as well as through cultural contributions. There is currently over EUR 30 million in the fund.
In spring 2019, a task force was established and given the task of figuring out how the promotion of creative Finnish music and its continuity could best be ensured in the changing circumstances of the future. The Autumn General Meeting approved the task force’s proposal for starting the preparations for turning Teosto Fund into a foundation. The goal is to present the results of the preparations to the 2020 Autumn Annual General Meeting.
Teosto’s success factors
Teosto’s future depends on how well we are able to serve our Finnish rightholders and international rightholders and enable the use of music on the markets. Our organisation’s strength is the trust our diverse rightholders have in us.
In order to achieve our vision of taking rights management services to the next level, we actively invest in the competence of our personnel and focus on what gives us our sense of meaning at work: helping music authors succeed!
CEO of Teosto