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CEO’s review 2020: How quickly everything can change

The Finnish music industry suffered an unparalleled blow due to COVID-19. All in all, our industry lost a total of EUR 255 million in 2020.

The exceptional times and wide range of restrictions affecting the practice of music as a profession were also reflected in the copyright royalties that Teosto collects.

The remuneration plummeted by approximately 7 million euros (-9.1%) from the previous year, totalling EUR 65.6 million. The concert sector’s remuneration collapsed due to the lockdown of society caused by COVID-19. Remunerations from concerts dropped to EUR 850,000, that is, by about 84 per cent (2019: MEUR 5.2).

Online music use clearly increased last year. The use of film and music streaming services grew significantly as cancelled events and concerts no longer competed for households’ free time.

Likewise, performing right royalties collected by Teosto from abroad grew by 13 per cent, amounting to EUR 3.8 million. We expect the impacts of the COVID-19 pandemic to be reflected in international revenues during 2021.

Year of adjusted operations

Due to the sudden and dramatic decline in remuneration, we were forced to evaluate Teosto’s operative structure and review our operating expenses in order to adjust them. We sold our holding in Mind Your Rights Oy, the company developing an innovative service for information exchange.

In addition, we carried out employee-employer cooperation negotiations for the entire personnel towards the end of the year to enable us to find solutions for both short-term adjustments and long-term structural changes. As a whole, we managed to reduce our operating expenses by approximately 9.6% in 2020 year-on-year.

The amount of distributions paid to our rightsholders remained at the 2019 level, at about EUR 51.5 million. The impact of lockdown measures will be reflected in copyright royalty distributions in 2021. 

Active influencing and promotion of interests

We swiftly changed the focus of the promotion of interests as the COVID-19 restrictions imposed by the government wreaked havoc in the cultural sector. We cooperated closely with other music and cultural sector operators in the promotion of interests, including the music sector’s proposal for the crisis and recovery package submitted to the Finnish Government in April.

The COVID-19 pandemic also highlighted the problems in performers’ unemployment security. We submitted a petition to the Ministry of Social Affairs and Health to remedy the matter, together with 20 other organisations.  The work to reform the unemployment and social security of actors in the creative industries continues.

In addition to COVID-19, the main priority in the promotion of interests was to advance the views of music authors and music publishers in the preparation process of the Copyright Directive.   

Teosto paid COVID-19 financial support in December 2020.

Teosto’s Annual General Spring Meeting approved the distribution of a maximum of EUR 1 million of financial support to alleviate the impacts of the pandemic. We received more than 1,000 applications and over half a million euros of support was granted. As the COVID-19 pandemic continued, Teosto’s General Meeting on 12 April 2021 decided to distribute COVID-19 financial support in 2021 as well.

Teosto’s Annual General Spring Meeting also approved the payment of EUR 150,000 in additional support to the Finnish Music Foundation for the separate COVID-19 support distributed by the Foundation. We also continued outlining future promotion activities in the project that prepares the turning of the Teosto Fund into a foundation.

Development project and strengthening of branch cooperation

Last year, we continued the digitalisation of our services in the web service project. We continued the analysis of the distribution and reporting system renewal in cooperation with the Danish copyright organisation Koda. Our personnel enhanced their competencies in the Teosto Academy training programme. 

Last spring, the development of music sector cooperation took a major step forward as we signed a tenancy agreement for new office premises in Keilaniemi, Espoo. At the beginning of April 2021, we moved into Port of Music, the shared office premises of Finnish organisations in the music industry, together with Gramex, GT Music Licences Ltd, the Society of Finnish Composers, Finnish Music Creators’ Association, the Finnish Music Publishers Association, IFPI Finland, Music Finland and the Copyright Information and Anti-Piracy Centre. The move enables the better development of cooperation between the actors. The move to new office premises will bring significant annual cost savings to Teosto.

Looking ahead

I wish to thank your personnel for reacting quickly to the changing situation and for their unwavering commitment and effort in the exceptional year of 2020. I also thank our rightsholders for their trust in our operations, and our music user customers for the excellent cooperation in the exceptional circumstances.  In 2021, we will continue our systematic development effort to continuously improve our services and update the digital systems.

In the national legislation work pursuant to the Copyright Directive, we aim at balanced regulation to secure the rights and negotiating position of our rightsholders. Together with other music industry operators, we will do our utmost to enable society to reopen after the COVID-19 crisis and facilitate earnings for music specialists.

It is crucial that all means available are used to restore the operations of the music sector and the government will also support the recovery of the industry. 

Risto Salminen
CEO of Teosto

Read more:

Key figures in 2020

Financial Statements 2020

Transparency report 2020

Previous Annual Reports

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