A new stimulus package will go a long way towards solving the challenges ahead, but not the loss of income that TONO has already suffered, which will hit Norwegian composers, lyricists and their music publishers with full force in 2021.
/ 16/10/2020 / Kristian DugstadChapter 325, item 77: "Stimulus funds for culture, volunteering and sports in connection with covid-19"
For the composers and lyricists who create the music and lyrics that are performed on concert stages by artists, orchestras, bands, etc., it has been difficult to understand why they have been excluded from the government's compensation scheme for concert organizers and their subcontractors for canceled and postponed concerts.
Pop songs are often written by teams of songwriters, 10-15 is not uncommon. A concert with a pop artist can mean that the concert organizer exploits the TONO rights of dozens of songwriters in their arrangement. Contemporary composers rarely perform their own works on concert stages; orchestras often do. Being a composer and lyricist is different from being an artist and musician, but concerts are still among their most important sources of income. Where organizers pay artists and musicians fees for a concert performance, they pay TONO fees to the composers, lyricists and music publishers for the use of their rights.
The TONO invoice is calculated based on ticket revenues, and the organizers' payments become TONO settlements to the members. Concert activity in Norway in 2019 generated approximately NOK 100 million in revenue for TONO. Activity in 2020, at the time of writing, looks set to end up somewhere between NOK 35 and 40 million. These figures include both foreign and Norwegian rights. We are therefore talking about a total loss from the concert area alone of more than NOK 60 million compared to last year.
Unfortunately, the losses are not limited to the concert market. The infection control measures also affect the authors' TONO income from other market areas, including a 60 percent drop in revenue from the cinema area, 12 percent from the background music area (cafes, restaurants, hotels, pubs, nightclubs, gyms), 45 percent from revues and 3,2 percent from broadcasting. In total, TONO currently estimates the losses at close to NOK 80 million, of which Norwegian rights account for approximately NOK 43 million. The result of all these losses on the income side is that TONO will have far less money to pay out to Norwegian authors and music publishers in 2021.
A new stimulus package will go a long way towards solving the challenges ahead, but not the loss of income that TONO has already suffered, which will hit Norwegian composers, lyricists and their music publishers with full force in 2021.
The incentive scheme must include the originators
The above-mentioned compensation scheme will be phased out in favor of a temporary incentive scheme that will contribute to the implementation of events. TONO has submitted consultation input to the Ministry of Culture for this temporary scheme, in which we express our support for it. We nevertheless clarify there that it is necessary to clarify in the scheme's purpose clause that it shall include the rights holders. The Government proposes in the State Budget that this temporary scheme be continued in 2021 and that it shall have the same structure as the incentive scheme in 2020 and be seen in the context of other instruments in the cultural field, cf. Bill 142 S (2020-2021).
This is gratifying, as we see it as a clear signal to the entire music value chain that the creators are a natural part of the industry chain, and should have their share of the support that will now accrue to the Norwegian concert industry. In this context, we point to Parliamentary Bill 142 S, which states that "Rights holders, for example composers (…) will largely fall outside a scheme aimed at organizers." We also wish to point out the following, also from Parliamentary Bill 142 S:
«The Grants may be granted for the implementation of public cultural events where ordinary ticket sales and other income from the event as a result of audience restrictions will not provide a sufficient income basis for the implementation of the event" (…) "It is assumed that the applicant/organizer pays remuneration to involved subcontractors and rights holders in accordance with ordinary agreements entered into."
As we understand it, a concert organizer who would normally have sold 200 concert tickets, but who, due to infection control reasons, can only admit 50 audience members, will be compensated for the 150 tickets that could not be sold. The total economy for the concert will therefore still be 200 tickets. For TONO, this means that we license concert organizers' events in the ordinary way based on a total economy that includes ticket revenue + supportThis is a very positive solution for the creators, and probably also a solution concert organizers will support.
A new and good stimulus scheme notwithstanding: It does not solve the fact that the state budget does not outline any concrete solution to the great loss TONO, and thus TONO's members, have suffered as a result of canceled and postponed concerts throughout 2020. We propose the following solution:
The Ministry of Culture and TONO already have an agreement where the Ministry pays approximately NOK 2 million annually to TONO, earmarked for music performances in church services and other religious ceremonies. In other words, there is already a scheme where TONO distributes earmarked funds from the Ministry of Culture. We believe that the loss that TONO will have a full overview of at the end of the 2020 financial year should be compensated through a corresponding allocation from the Ministry of Culture earmarked for concert payments to TONO's members. We will use historical data to ensure the most accurate settlement possible. It is our opinion that no other scheme will be as effective as this.
Jørgen Karlstrøm Cato Strøm
Chairman CEO