Business status and future development
TONO SA (“TONO”) is a cooperative that manages performance and sound fixation rights to music. In addition to individual management contracts with 35,910 rightholders, TONO has reciprocal representation agreements with 76 foreign sister societies, and thus also manages their rights in the Norwegian territory. TONO has transferred the management of its rightholders’ sound fixation rights to NCB (Nordic Copyright Bureau) in Copenhagen, which is owned by the Nordic management companies Koda (Denmark), Stim (Sweden), STEF (Iceland), Teosto (Finland) and TONO.
TONO is operated from Oslo with the visiting address Tøyenbekken 21, 0134 Oslo.
In 2020, 9 board meetings and 12 board committee meetings were held.
Management contracts
As of 31.12.20, TONO had management contracts with 35,910 licensees. In 2020, 1,678 new rights holders were added, of which 18 were music publishers.
For comparison, the number as of 31.12.19 was 32,590 rights holders. In 2019, 1,642 new rights holders were added, of which 12 were music publishers.
There are 20% female members and 80% male members.
Publisher members make up 1%.
Shareholders
As of December 31.12.2020, 1, there were 828 registered members in TONO.
As of December 31.12.2019, 1, there were 752 registered members in TONO.
Of the cooperative owners who are founders, 16,6% are women.
1% of the cooperative members are music publishers.
Economic circumstances
In 2020, TONO had a gross turnover of kr 712,485,596. This is a decrease of 7,61% compared to 2019. Profit for distribution after deduction of 2% to the Norwegian Composers' Fund, losses and administrative costs was kr 598,117,715, a decrease of 11,29% compared to 2019. The cost percentage for the entire business was 13,83.
The accounts have been prepared in accordance with the requirements of the Accounting Act of 1998, and satisfy the requirements of applicable laws, regulations and generally accepted accounting principles. The Accounting Act of 1998 resulted in significant changes in 1999 for the recognition of pension costs. As a result, TONO records a negative equity.
Originally, this effect of liabilities was minus kr 11,026,446. As of December 31, 2020, the total effect of liabilities recorded against equity is kr 11,387,128. The previous year this obligation was kr 11 387 128
As TONO's distributable profit each year constitutes between 85 and 90 percent of turnover, and as the distributable profit is what remains at any time after all costs have been deducted, the board of directors believes that TONO's financial result for 2020 is good, especially in light of the fact that Norway has been hit hard by the Covid-19 pandemic in 2020, and that the company's financial position is strong overall. Continuing operations are therefore risk-free. There are good prospects for TONO's business to achieve a good result in 2021, although it is expected that parts of TONO's business will be negatively affected by the Covid-19 pandemic.
TONO has a large and liquid management portfolio at all times. The goal is to achieve the highest possible return with the lowest possible risk. TONO's conservative investment strategy ensures stable returns. Each investment should be among the lowest risk within its asset class. Risk is further reduced through a broadly structured portfolio, and TONO uses several financial players to reduce management risk.
TONO manages the ownership of the business's premises in the Galleriet condominium through the wholly owned subsidiary Harmoni AS.
Market development
Norway was hit hard by the Covid-19 pandemic in 2020, and the extensive measures that had to be implemented to limit the spread of the virus have had a severe impact on large parts of the Norwegian business community and, not least, many of TONO's members. TONO's results for 2020 show an overall decrease of 7,61 percent from 2019. It should be mentioned here that the accounts for 2019 were particularly positively affected by an extraordinary back payment from RiksTV of kr 100,5 millions.
Within the individual business areas, we are seeing a Covid-19-related decline in revenue, particularly from cinema, concerts and revues, but also partly within the background music area, which includes hotels, restaurants, cafes and the like. We are also seeing a decline in the distribution of TV broadcasts, but this is because the result in 2019 was extraordinarily high as a result of the settlement following the long-running legal dispute with Riks-TV.
The losses in the aforementioned areas are significant, but their effects are mitigated overall for TONO's revenues by seeing significant revenue growth in the online area, particularly driven by the growth in the use of film streaming services, as well as from performances of TONO members' music abroad. The growth in foreign revenues is 46,21 percent from 2019, and ended at NOK 95,72 million, which is the highest foreign revenues for TONO ever.
Throughout the fourth quarter of 2020, TONO has been in close and constructive dialogue with the Ministry of Culture regarding a compensation scheme for TONO members' losses as a result of the shutdowns in society.
This has resulted in an application from TONO for state support. On March 12th of this year, KUD notified TONO that they will provide state support to TONO's members via TONO on kr 30,500,000. KUD will provide the principles for awarding this support in a grant letter which has not been received as of March 15.
TONO members will be informed on TONO's website, as well as by email, about how and when this will be done in practice.
TONO has had good growth in new members also in 2020, and few are leaving. The trend of direct licensing within the online area continues internationally. In the same way that many of TONO's sister societies directly license their repertoires with streaming services without TONO's help, TONO also directly licenses its repertoire to the major music streaming services together with TONO's sister societies Koda, Teosto and STEF, through the company Polaris Hub AB. TONO does not expect any particular changes to TONO's rights portfolio this year.
After TONO has implemented various measures to limit the spread of the virus, we have stable access to employee resources from home offices, and tasks are carried out in an almost ordinary manner.
NCB
NCB is an independent legal entity, and is managed by a board elected by Koda, Teosto, STIM, STEF and TONO. NCB's operational management is carried out by Koda. This has proven to be an effective solution for the NCB organization and its owners.
NCB's operations showed a profit of DKK 5,8 million in 2020. This has been transferred to equity, which as of 31.12.2020 amounts to DKK 48,7 million. Sales of phonograms are declining overall in line with the increasing use of digital services, and NCB has adapted to the market situation, with significantly reduced turnover.
TONO's staff
At the end of 2020, TONO had 65 permanent employees, of which 3 were part-time. In 2019, the number of permanent employees was 60, of which 3 employees worked part-time.
TONO has a goal of achieving full equality between women and men. This means that there should be no discrimination based on gender in matters such as salary, advancement and recruitment. There are 33 women and 32 men in TONO's workforce. 2 men and 1 woman are employed part-time. The average age for all is 46 years (45,5 years for women and 46,5 years for men).
The average gross monthly salary for all female employees at the end of 2020, including managers, is kr 52,358. The average gross monthly salary for male employees, including managers, is kr 64,076. The higher average salary for men is due to the fact that the proportion of men in management positions is higher than for women.
Internal control, HSE (health, environment and safety)
Through the working environment committee (AMU) for the staff representatives and management, HSE work is systematized. Regular meetings are held in the AMU. Sick leave work must be discussed in at least two meetings annually.
For many years, TONO has had an IA agreement (Including Working Life), a cooperation agreement between the individual company and NAV. The main goal of the agreement was to provide space for everyone who can and wants to work, fully or partially. As of 2019, the IA agreement has been applied to the entire working world, and is therefore no longer entered into separately with individual businesses.
In 2020, sick leave was 2,23%, compared to 4,44% the previous year. Sick leave is monitored in accordance with the IA agreement and the provisions of the Working Environment Act.
TONO does not conduct business that could pollute the external environment.
Employers' duty to promote equality and prevent discrimination
TONO's Code of Conduct, which all TONO employees have signed, contains, among other things, the following:
"TONO shall be a workplace with an inclusive working environment. Employees shall treat each other and those they come into contact with through their work with respect and integrity. TONO shall facilitate a working community free from discrimination, be it due to factors such as religion, skin color, gender, sexual orientation, age, national or ethnic origin or disability. TONO's employees shall also contribute to a working community free from bullying, harassment, bullying and the like. TONO does not tolerate anyone displaying behavior that can be perceived as degrading or threatening."
Over time, TONO has aimed to achieve an approximately equal distribution of women and men in the workforce. As of 31.12.2020, 51% of employees were female and 49% were male. Women and men in comparable positions are paid equally.
3 employees are employed in part-time positions at their own request, partly due to care needs at home and partly due to reduced functional capacity.
Welfare and care leave is distributed equally between genders, but there is a higher proportion of sick leave among women than among men.
TONO pays attention to the area of gender equality, and statistics show that the requirements of the Gender Equality Act have been met.
TONO follows the provisions of the Cooperative Act on gender representation, which means that both genders must be represented by at least 40% on TONO's board.
TONO's 65 employees are ethnically diverse. We have employees from all Scandinavian countries, the rest of Europe, as well as Africa, Asia and the USA.
We therefore believe that TONO promotes equality in accordance with the purpose of the law.
