CEO’s review: A year marked by success
2019 was marked by a solution to the remuneration dispute over online recording services, promise to renew the compensation system, and passage of the new copyright directive.
2019 was a good year for Kopiosto. We achieved our financial targets, and our administrative expenses stayed within the budget. Overall, the picture for the year was bright.
The only blemish in the year was the Market Court’s ruling: transmitting programmes broadcast on domestic TV channels in cable networks is not retransmission as defined in the Copyright Act. We have made an application for leave to appeal and then an appeal with the Supreme Court; we will learn the outcome in 2020.
Domestic audiovisual remunerations distributed
The dispute over the division of remunerations from domestic audiovisual productions in online recording services had been going on for years between Kopiosto and APFI, representing audiovisual producers. Arbitration brought a solution to this.
According to the arbitrator, authors and performers get 60% of the renumerations gathered from online recording services, which operators provide for consumers, and producers get 40%. We distributed these remunerations for the first time in the autumn.
Compensation for private copying in the Government Programme
We have been successful in our influencing work. We managed to get an entry in the new Government Programme about the renewal of the compensation system for private copying, and we are very happy about this.
This entry is important for the remunerations to Kopiosto’s beneficiaries and the promotion of the audiovisual sector through AVEK. In addition to personal remunerations to audiovisual authors, it is essential to safeguard the promotion of the industry and to know how much financing AVEK will get from which sources.
We managed to keep the compensation at its former level at 11 million euros per year, even though there was pressure to reduce it in the government’s annual budget negotiations.
Directive now includes extended collective licensing
Our other objectives – making it easier to use artistic works and securing exclusive rights – will largely be achieved through the Digital Single Market directive (DSM) on copyright and related rights passed in the European Union.
The directive was carried in April, and it needs to be implemented in the Finnish legislation by the summer of 2021.
For the first time, the directive confirms that the extended collective licence used here since the 1980s is a sound and practical way of managing copyrights, so the new directive will strengthen the Finnish system.
From Kopiosto’s perspective, the new directive should be implemented in the Finnish legislation mainly as it is. This is why we focus on being able to communicate this goal as well as the benefits of our extended collective licensing clearly to political decision-makers in 2020.
What makes this work particularly important is the fact that the Parliament and its Education and Culture Committee have many new MPs, and the majority of them have no experience in copyright issues.
We are not alone in this work but collaborate with our member organisations and other copyright organisations. The more uniform our copyright message to decision-makers is, the better are our chances of success. Keeping the level of compensation for private copying unchanged in 2018–2019 is a good example of this.
Supporting creative work
The spirit of cooperation characterises Kopiosto’s employees. The pulse surveys we conduct during the year show that we have a good atmosphere.
For this, we can thank our motivated people who want to improve the position of authors and copyright holders. Copyrights are important to us, and here at Kopiosto we can work in line with our values.
Directive unified legislation
The new EU directive on copyrights and related rights in the Digital Single Market (DSM) was passed on the 15th of April 2019. Among other things, it unifies copyrights, improves the position of copyright holders online, and guarantees a level playing field within the EU. Member states have two years to implement the directive in their national legislation.
Matti Pikkujämsä named Illustrator of the Year
Our copyright remunerations are used to fund several cultural prizes; the newest of these is the Illustrator of the Year presented by the Finnish Illustration Association. Matti Pikkujämsä was the first to receive the award of 10 000 euros.
Remunerations through arbitration
Arbitration brought a solution to the division of remunerations gathered from online recording services between Finnish audiovisual authors and producers. In November, we distributed a total of 6.8 million euros to the authors and performers of domestic programmes broadcast in 2015–2018.
Great year for media art
Media artworks realised with AVEK’s support were highlighted during the year. March saw the premiere of Juhana Moisander’s work Ethology of a Man, which was made with the support of AVEK and EMMA, Espoo Museum of Modern Art. In the Venice Biennale, the Finnish pavilion exhibition was realised by the Miracle Workers collective, whose work The Killing of Čáhcerávga was premiered there.
Licences to early childhood education
The agreement made with the Finnish National Agency for Education on licences to use copyrighted materials in teaching was extended in 2019 to cover early childhood education for the first time. The licences enable e.g. the printing of materials and showing TV programmes.
During the Media Literacy Week, we arranged a cartoon competition for children and the young on copyrights, providing an opportunity to teach and learn copyright topics in a fun way. The competitors got tips from the Kopiraittila and a video with cartoonists Jarkko Vehniäinen and Marja Lappalainen, creators of Kamala Luonto (Bad Nature) cartoon.
Kopiosto elected to SAA’s Board of Directors
In March, Kopiosto was elected to the Board of Directors of the Society of Audiovisual Authors (SAA). SAA is the umbrella organisation for European audiovisual copyright organisations, promoting objectives that are important to audiovisual authors in the EU. Our representative on the Board is Director Arto Tamminen.
Licences and remunerations based on research
Five researches were carried out on how works are used in teaching. Copying studies were conducted in adult education centres, universities, primary arts education, and primary and secondary education. The results are utilised in e.g. the pricing of our licences and setting the remunerations paid to authors and publishers.
Creative knowhow and knowing creativity
At SuomiAreena, we had a debate on the future of creative industries, content business, and training. The event was arranged together with other copyright organisations in July.
Kopiosto’s operating environment stayed stable in 2019, and there are no upheavals in sight in the near future. In the long term, digitalisation and artificial intelligence are likely to change the copyright licence market.
In 2019, there were no major changes in Kopiosto’s operating environment.
The licences for secondary use of works cover comprehensively the digital use of materials, and no clear drop in photocopying has been seen in the latest research carried out in universities, universities of applied sciences, and public administration.
Streaming of TV series and films is growing, but this does not affect the secondary licence market we are operating on directly, at least yet. However, we follow closely the effect on e.g. online recording services.
In the years to come, the new DSM directive and the changes it brings to copyright law may have an effect on the secondary market operations, too.
In 2018–2019, we have paid special attention to the future of digital learning materials in educational institutions and possibilities of employing artificial intelligence in our own operations and the creative industry as a whole.
Learning materials market is changing
Digitalisation will lower the threshold for publishing learning materials, so there will be more producers of learning materials – some of them private individuals. This expansion can affect both licensing and allocation of remunerations to authors.
Direct licensing of learning materials and the presence of international companies on the Finnish market may change the position of domestic learning materials and their publishers.
Teaching will be fragmented, to be arranged by different parties. This may generate new possibilities for cooperation between publishers and other parties and create a need for developing a joint digital licence.
Due to changes in the field of education, our goal is to assess the possibilities of developing licences in cooperation with publishing companies. The most natural role for us is to make clearer the interfaces between direct licensing and licensing the secondary use of works. Moreover, we can, when necessary, complement direct licenses granted by publishers by making secondary use licences available to users more flexibly.
Artificial intelligence enhances routines
Artificial intelligence (AI) learns from experience, recognises repeated patterns, and draws logical conclusions. Even the most advanced AI applications are not creative as such, but they will change the environment for both creative authors and those managing copyrights.
In an organisation like Kopiosto, AI could possibly be used to enhance business processes, increase productivity of work, and reduce costs by automating routines. Implementing and using AI would require, among other things, a change in operating culture, solving privacy-related issues, and developing process management.
The implementation of automation will be considered by Kopiosto in the near future according to the guidelines and principles defined in the data strategy to be drawn up.
Using Kopiosto’s products, creative works can be used legitimately in different organisations.
With its licence products, Kopiosto serves educational institutions, the state, municipalities, religious communities as well as businesses and other organisations. With the licences we grant, our clients can use audiovisual works in different ways and copy publications protected with copyrights.
The comprehensive licence agreements we have with e.g. online recording services, educational institutions, or municipalities are also important to the society.
For example, the agreement made with the Finnish National Agency for Education covers all Finnish schools from early childhood education to secondary and vocational education. Hence, it is possible to use graphic and audiovisual materials in the same way all over the country. This guarantees the pupils’ fair and equal possibilities to receive a high-quality education.
Researchers gain access to digitised media
A good example of an economically minor but socially major agreement is the deal made in the Tutkain project.
The agreement makes it possible to use digitised Finnish newspapers and magazines in the National Library’s collection for research purposes in 15 higher education institutions involved. The materials are from 1930–2018.
Newspaper materials are used extensively in different types of research. The new service increases further the impact these materials have on research and gives researchers around Finland and the world access to them.
Legislation needs to be renewed
Our licence products meet fairly well our clients’ needs, but there are challenges in certain areas.
For an extended collective licence organisation like Kopiosto, it would be important to have the copyright act updated to meet current demands.
For example, we can now grant businesses licences to photocopy and scan articles for internal informational purposes, but only in a very limited fashion to copy materials from the Internet. The legislation would require updating so that at least the law could enable our licences to cover the use of online materials more widely.
This and the gaps in the licences of audiovisual materials – e.g. in the public screening of works – should no doubt be covered in the national implementation of the new DSM directive.
When the legislation has been renewed, Kopiosto has the ability to advance quickly in developing current licences and creating new products.
Even with the current product portfolio, the prospects for 2020 are good. According to research, the use of works under licences has grown especially in universities and universities of applied sciences.
We have dedicated recent years to renewing our services to rightsholders. An e-service for authorisation management is the next one to be taken into use.
Kopiosto represents a large group of creative professionals and makes sure they get appropriate remuneration for the use of their works.
In Rightsholder Services, we manage the authorisations from authors and pay copyright remunerations. In addition, we provide advice to copyright owners, coordinate negotiations over remuneration distributions, and develop services for both copyright holders and our member organisations.
Remunerations from online recordings paid
One of the year’s highlight was the first payment of remunerations from domestic audiovisual productions gathered from online recording services for 2015–2018.
Since 2015, negotiations have been going on with APFI, representing audiovisual producers. The negotiations have put a strain on both audiovisual author organisations and Kopiosto, without producing any result. A solution to the prolonged dispute over division of remunerations was finally solved in arbitration.
According to the arbitrator’s decision, authors and performers get 60% and producers 40% of the remunerations accruing from online recording services. In all, 6.8 million euros were paid in remunerations in the autumn.
Authorisation information from one place
Another theme for the year was the construction of an online service for authorisation management. In the service, to be deployed in 2020, copyright owners can simply and conveniently give their authorisations to Kopiosto. They can also easily check the authorisations given earlier and update their own information.
The online service can also be used by Kopiosto’s member organisation to keep track of the authorisations given by their members.
The new service will make authorisation giving, monitoring, and maintenance more transparent and convenient. Comprehensive authorisations are the basis for Kopiosto’s operation and the whole collective licensing system. Through them, Kopiosto can agree on copying licenses and grant them on behalf of authors and publishers.
New services a part of everyday work
In a short time, we have carried out the changes required by the Act on Collective Management of Copyright, which came into force at the beginning of 2017. The reforms have affected authorisations, cooperation agreements between Kopiosto and its member organisations, general division principles, and remuneration instructions to member organisations.
Over the past years, we have modernised our Rightsholder Services operations. We have, for example, built many new systems and services, such as a new distribution system, an extranet for audiovisual authors, and a public lending right scheme service for visual artists. Kopiosto’s new reporting system to production companies was completed at the beginning of 2020.
There are no major reforms on the horizon now; we focus on making the latest reforms a part of everyday life. Moreover, we develop our communication to member organisations and copyright holders to become even more approachable.
In 2019, we distributed a total of almost 46 million euros in copyright remunerations to authors, performing artists, and publishers.
Copyright remunerations are gathered with the copying and using licences of works granted to educational institutions, public administration, and businesses. Kopiosto also distributes compensation for private copying from the state’s budget to audiovisual authors and public lending remunerations to visual artists.
The remunerations for photocopying and digital use are paid to our member organisations representing domestic authors and publishers and through reciprocal agreements to our foreign sister organisations.
The organisations distribute the remunerations they receive from us as grants or direct remunerations, or they arrange services that otherwise benefit creative authors and publishers. Member organisations finance many creative industry prizes with the copying compensation, too.
We pay remuneration for audiovisual works as personal remunerations as well as to domestic and foreign organisations representing copyright owners.
AVEK’s support to domestic audiovisual culture
The Promotion Centre for Audiovisual Culture AVEK, operating as a part of us, distributed 3.7 million euros to domestic audiovisual culture in 2019. AVEK’s funds come primarily from the compensation for private copying. AVEK also promotes the development of creative businesses by distributing CreaDemo, CreMa, and DigiDemo grants from the Ministry of Education and Culture’s special allocation; in 2019, the grants amounted to 1.4 million euros.
In 2019, AVEK focused on the promotion of sustainability and media art. New people joining the organisation provided an opportunity to reassess its operation.
In the spring, Ulla Simonen became the new director of the Promotion Centre for Audiovisual Culture (AVEK) after Juha Samola, the long-standing Secretary General, retired. Thus, the time was ripe to review our operations and communications and to build the basis for reforms to be done in 2020.
Our basic operation has been steady throughout the year and the reforms will have minimal effect on applicants – we only want to make our operations more transparent and our guidelines clearer.
The current government’s programme is favourable to culture, and we managed to get an entry in it about reforming the compensation for private copying, which is important to our operation.
Towards sustainable productions
The most noticeable development in 2019 was our statement that we will take sustainability into consideration in our support decisions. This principle was included in our written guidelines at the beginning of 2020.
How ecological productions are is one decision criterion from now on, so we hope productions will consider sustainability more than before. In trainings, we prioritise courses taking place in Finland as well as e-training.
To promote sustainability and help authors, we also supported Ekosetti guide by Kaisa Astikainen and Anne Puolanne. As first of its kind, it provides the audiovisual industry concrete advice on how to take sustainability principles into consideration in audiovisual productions, behind the camera and in the contents.
Active on international forums
In 2019, AVEK has been more active in international operations, as per its action plan. We have, for example, supported co-productions and authors becoming more international, participated in the improvement of working conditions for artists working in Finland, and been involved in arranging workshops. At the Nordisk Panorama Festival, we sponsored the New Nordic Voice Prize, and we gave our support to the Baltic Short Film Forum.
Creating and maintaining direct contacts is ever more important to support authors in the changes taking place in the international distribution of audiovisual works.
Last year for Mediarata?
There was a lot happening in media art during the year. AVEK’s role as its supporter was particularly strong, and the same will continue in the future.
A good example of our support to media art is Juhana Moisander’s Ethology of a Man work, implemented in cooperation with EMMA, Espoo Museum of Modern Art.
2019 was the third and last year of the experimental Mediarata project, financed with a special grant from the Ministry of Education and Culture. The project has aimed at improving the operating conditions for media art producers, bolstering the structures of the field, and promoting international co-productions.
In 2019, eight production companies received a total of 192,000 euros in Mediarata support. Its impact on the development and internationalisation of media art production companies have even at this stage proved significant. This is why we are striving to secure further funding for it.
In 2019, Kopiosto’s remunerations amounted to 52.5 million euros, 3.9% more than the previous year.
The remunerations came primarily from the use of audiovisual works and from photocopying and digital use of publications. In addition to these, the remunerations include the compensation for private copying and public lending right scheme as well as creative grants to AVEK from the Ministry of Education and Culture.
The expenses of our operations were 6.3 million euros in total. The previous year, expenses were 5.6 million euros. The unusual growth in expenses was caused by the Market Court’s processing of the dispute over retransmission of domestic television channels.
Remuneration funds are invested according to the investment policy approved by Kopiosto’s Board of Directors for the period between collecting licensing revenue and paying our remunerations.In 2019, the returns of investments and financing were in all 1.0 million euros, when the previous year the corresponding figure was 0.2 million euros.
Transfer to funds distributable to copyright holders was 47.0 million euros in total, 4.8% more than the previous year. In 2019, remunerations and grants paid amounted to a total of 43.7 million euros.