FAQs on the new distribution system for phono producers

Answers

What is this system change-over about?

SWISSPERFORM is migrating its previous “turnover-based” distribution system to a “usage-based” distribution system with respect to its phono producers’ sector. Under the “turnover-based” system, the distribution to rights holders in the past took place on the basis of their market sharemarket share
Market share = turnover achieved from sales of commercially published phonograms...
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in Switzerland and Liechtenstein. To this end, rights holders had to report their turnover with respect to the domestic sales of sound recordings to SWISSPERFORM. In the “usage-based” system, SWISSPERFORM is now paying out remuneration in line with the air-play. In other words, its distribution is now made on the basis of broadcast reports which it receives from selected radio and TV stations (SRG and private broadcastersbroadcasters
This category includes companies broadcasting radio or TV programmes that are subject to an obligation to notify and obtain a licence pursuant to Art. 3 of the Swiss Federal Act on Radio and Television (RTVA).

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). A list of the broadcastersbroadcasters
This category includes companies broadcasting radio or TV programmes that are subject to an obligation to notify and obtain a licence pursuant to Art. 3 of the Swiss Federal Act on Radio and Television (RTVA).

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that are taken into account for distribution purposes is documented in our distribution rules, namely Annex PPH on page 61.

 

A relatively low share of the distributable amount will still be distributed in proportion to the rel-evant market sharemarket share
Market share = turnover achieved from sales of commercially published phonograms...
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- i.e. on a “turnover basis” - in future. The share of the distributable amount in question is made up of the private copying collections payable to domestic rights holders.

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When does the system change-over take effect?

Collections made in usage year 2017 shall be distributed for the first time in 2018 on the basis of the new system. The distribution letters will be mailed out at the end of November 2018. The payment transfer of the remuneration shall be made two weeks later.

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Why does SWISSPERFORM undertake this system change-over?

As early as during the launch of SWISSPERFORM’s first set of distribution rules in 1996, the opinion was voiced that a distribution system based on airplay reports would generally better reflect actual usage than a turnover-based system - at least with regards to the performing and broadcasting rights. Unlike in the “turnover-based” distribution system, a “usage-based” distribution allows the actual sound recording usage (airplay) to be documented in detail, i.e. by track title. Accordingly, the remuneration for each individual used sound recording can be allocated and paid out. 

 

SWISSPERFORM has now created the technical requirements for such a system by setting up a recordings database with detailed information on the owners of the producers’ rights regarding individual sound recordings. This database is complemented and updated regularly.

 

Furthermore, SWISSPERFORM has, based on the new system, the option to enter into reciprocal agreements with sister societies abroad in future. Due to the change-over, the distribution system for the rights of the phono producers will become compatible with most of the collective management organisations based abroad.

Finally, these changes in the phono producers’ sector culminates in their equal treatment with the audio performersaudio performers
This category primarily includes musicians, conductors, choirmasters and singers.

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, for whom SWISSPERFORM has been carrying out “usage-based” distributions on the basis of broadcast reports since 2004.

 

The “turnover-based” system shall, however, remain in place for the distribution of private copying collections to rights holders in Switzerland and Liechtenstein. By doing so, SWISSPERFORM intends to prevent the change-over of the system to lead to adverse results for those rights holders whose recordings are broadcast very rarely but copied a lot. An example would be the effect on the rather significant market with childrens’ productions, radio plays and audio books. As a consequence, the general assumption can be made that a distribution based on airplay in the private copying sector would reflect the actual circumstances less than a distribution based on market shares.

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I am a rights holder - do I have to continue reporting my turnover of not?

Under certain circumstances, you need to continue submitting your turnover notifications. A small share of the distributable amount is thus going to be distributed on a turnover basis in future. The share of the distributable amount in question is made up of the private copying collections payable to domestic rights holders. If you are therefore a phono producer and have your registered office in Switzerland or Liechtenstein, or if you represent Swiss or Liechtenstein producers and/or distribute their sound recordings, we will continue to require a notification from you with respect to your annual turnover from said sound recordings. Please only submit turnover details regarding Swiss or Liechtenstein producers to us. You thus participate in a “turnover-based” distribution of the remuneration from private copying.

 

We do no longer require turnover notifications regarding sound recordings by non-domestic (foreign) producers. If you are a phono producer and have your registered office outside of Switzerland, or if you exclusively distribute sound recordings of producers who have their office outside of Switzerland, you no longer have to submit any turnover notifications to us. In that case, you will receive your remuneration entirely (i.e. including your private copying collection share) based on airplay information.

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I am a Swiss distributor - what does this mean for me?

You can continue to collect SWISSPERFORM remuneration if you hold the respective authorisation from the owner of the producers’ rights. In such cases you need to enter into an agreement regarding the authorisation to receive remuneration with us. You can order such an agreement from us here.

If you also distribute recordings of Swiss or Liechtenstein producers, you should submit your turnover for these producers in order to receive remuneration from the “turnover-based” distribution allocation for sound recordings of Swiss and Liechtenstein producers. Should you, however, exclusively distribute recordings of foreign producers, you no longer have to submit turnover notifications to us, since this repertoire is entirely distributed on the basis of airplay (i.e. including your private copying collections’ share).

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Why does SWISSPERFORM retain the “turnover-based” distribution only with regards to recordings of Swiss and Liechtenstein producers?

There are no reliable officially accessible sources which would regularly provide details on the market shares of the various domestic and foreign rights holders in the phono producers’ sector in Switzerland and Liechtenstein.  Market shares thus continue to be determined via direct turnover notifications submitted by the rights holders.  As a consequence, foreign producers of sound recordings would have to complete the notification forms in order to participate in the private copying collections. That is, however, not a feasible option. On the one hand, such an arrangement would be rejected by the majority of sister societies abroad, since they expect completely compatible distribution systems when entering into reciprocal agreements with SWISSPERFORM in future, without having to follow a separate procedure in order to receive remuneration from specific usage areas. On the other hand, SWISSPERFORM must keep its expenditure at reasonable levels. Considering that the amount collected from private copying tariffs is relatively small, it would be unreasonably expensive if SWISSPERFORM also would have to check turnover notifications from producers abroad on top of the turnover notification forms relating to Swiss and Liechtenstein sound recordings. As a consequence, foreign rights shall be paid for the collections arising from private copying - just like from all other collection sources - on the basis of airplay information.

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What are the requirements to participate in the distribution on the basis of the new system?

In order to receive remuneration from SWISSPERFORM (both in the course of the “usage-based distribution and the share of the “turnover-based” distribution for sound recordings of Swiss and Liechtenstein producers), a new requirement is that each rights holder (producer of sound recordings, distributor/collection agent etc.) enters into an agreement with SWIS-SPERFORM. If SWISSPERFORM has allocated remuneration for you but you have not en-tered into an agreement with us, we shall get in touch. If you are already sure that you have not got an agreement with us yet, you can order such an agreement here.

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What type of agreement with SWISSPERFORM do I require to participate in the distribution on the basis of the new system?

That depends on the type of activity you carry out in the context of the distribution for phono producers:

as an original producer, i.e. a producer of the first-time fixation of the recording on an audio or audiovisual medium

as a person who has acquired producersí rights retroactively (acquired rights), e.g. via acquisition or merger

and/or

as a party entitled to collect i.e. a person who has merely received an authorisation from the rights holder to collect the remuneration e.g. as a distributor

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I am an original producer on the one hand and owner of acquired producers’ rights on the other hand. Do I need two agreements?

Yes, if you are an original producer of specific recordings besides being an owner of acquired producersí rights for other specific recordings, you require two agreements with us: on the one hand the agreement as original producer, on the other hand the agreement as owner of acquired rights and/or as a party entitled to collect (cf. here).

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I am a producer on the one hand and distributor on the other hand. Do I need two agreements?

It depends on whether you are an original producer or an owner of acquired producers' rights:

 

If you are an original producer of specific recordings besides being a distributor for other specific recordings, you require two agreements with us: on the one hand the agreement as original producer, on the other hand the agreement as owner of acquired rights and/or as a party entitled to collect (cf. here).

 

If you are exclusively an owner of acquired producers' rights of specific recordings besides being a distributor for other specific recordings, you do not need an additional agreement. The agreement as owner of acquired rights and/or as a party entitled to collect covers all (cf. here).

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What else do I need to do when I register with SWISSPERFORM for an agreement?

In addition to your request to enter into an agreement, we would like you to complete the questionnaire for the registration as a producer of sound recordings.

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How can I register my claims and entitlements in specific recordings?

With respect to the “usage-based distribution, SWISSPERFORM requires information on the recordings for which you claim neighbouring rightsneighbouring rights
Also referred to as related rights, these are the rights for performing artists...
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and/or remuneration rights. We have already invited the relevant rights holders to submit the respective data at various times in the past. You may continue to complete this tabl . SWISSPERFORM can, however, only accept such notifications if all the mandatory details required via the table have been provided.

 

SWISSPERFORM also offers access to a claiming tool. It enables rights holders to search recordings that had airplay during the usage year due for distribution for repertoire which they wish to lodge claims for. Rights holders will regularly receive information on and be invited to use this online claiming tool.

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What happens if several parties register a claim for the same recording?

Such cases are handled by SWISSPERFORM as “Conflicting Claims”. The pay-out by SWISSPERFORM for the respective recording will be held in suspense for as long as it takes to resolve the conflict.

To sum up, the conflict resolution process includes the following steps:

  • SWISSPERFORM informs the affected parties and invites them to find a mutually acceptable solution to the conflict.
  • If the conflict is not resolved within the given deadline, the following rules shall apply in general (subject to deviations in specific cases):
  • In the case of conflicts with a non-membernon-member
    Performers, producers and broadcasters can become members of SWISSPERFORM pursuant to Art. 3 of the Articles of Association (german version).

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    or cases of conflicts among several membersmembers
    Performers, producers and broadcasters can become members of SWISSPERFORM pursuant to Art. 3 of the Articles of Association (german version).

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    , SWISSPERFORM will pay the party who registered their claim/entitlement first. The remaining affected parties do have the opportunity to provide causes for their established claim and submit the relevant evidence within the deadline. These will then be evaluated by SWISSPERFORM.
  • If, at the end of the process, the disputed rights remain unrecognised, the pay-out for the relevant recording shall remain in suspense. The respective amount shall remain on hold for five years and subsequently be dissolved on the basis of the standard provisions as per the distribution rules.
  • Finally, the affected parties are free to take legal measures.

The affected parties will receive information on the exact procedures and requirements regarding the conflict resolution process from SWISSPERFORM at the relevant point in time.

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When does SWISSPERFORM dispatch the payment statements from the distribution for phono producers?

The payment statements from both distributions (“usage-based” distribution and “turnover-based” distribution to Swiss and Liechtenstein producers) are dispatched at the same time. Regarding usage year 2017, the distribution letters will be mailed out at the end of November 2018. The payment transfer of the remuneration shall be made two weeks later.

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Who is my contact for further questions?

If you have any further queries, we are happy to assist you. Please send an e-mail to pph@STOP-SPAM.swissperform.ch or phone +41 (0)44 269 70 50.

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SWISSPERFORM
Kasernenstrasse 23
CH-8004 Zürich
T +41 (0)44 269 70 50
F +41 (0)44 269 70 60
E-mail

 

Antenne Romande
David Johnson
Av. du Grammont 11bis
1007 Lausanne
T +41 (0)32 724 31 25
E-mail