CEO’s Review: A good year was overshadowed by the delay of the Copyright Act
The funding for the compensation for private copying being secured for four years in advance brought the desired financial predictability to the creative industry. In contrast, the delays in the reform of the Copyright Act created uncertainty.
From the perspective of Kopiosto’s core tasks, 2022 was a good year: the revenue was within the budget and the costs remained in check. We were able to collect revenue from remunerations and distributed them to copyright holders as planned.
It has been important for the creative industries that our operations have remained normal during the coronavirus years, because they suffered badly from the restrictions due to the pandemic. Copyright remuneration has been a much-needed source of income especially for those authors whose opportunities for earnings were cut down dramatically by the restrictions in performances.
The decision of the Finnish Government on the compensation for private copying was happy news for audiovisual authors and AVEK, too. The funds received from it will be distributed to performers and authors of creative work and used to promote the audiovisual field through support for productions, among other things. In the session on spending limits, the Finnish Government agreed to maintain the compensation at its established level of €11 million for the period of 2023–2026. As a result of long-term lobbying, we were able to make our message heard on the importance of predictability and continuity for the vitality of the audiovisual field.
Delays in the reform of the Copyright Act
The reform of the Copyright Act is a topic that has created a lot of work for us. The aim was for the reformed regulations to implement the Directive on Copyright and Related Rights in the Digital Single Market and the Online Broadcasting Directive in Finland.
The criticism received by the proposed amendment of the Copyright Act in the autumn of 2021 made the Minister of Science and Culture state in the spring of 2022 that the law will only be reformed as required by the directives. The national legal amendment needs were moved to future reforms.
The partial reform of the act was completed in February 2023, when the Parliament approved the act. The amended act will enter into force on 3 April 2023.
After the amendments that have now been made, no other new directives regulating copyright are expected for several years. Therefore, our goal is to include an entry on continuing the reform of the Copyright Act in the next Government programme, now purely based on domestic needs.
New focus areas for the strategy
We renewed our strategy at the end of 2022. We anticipated changes in the operating environment and specified three new main themes for our activities.
- New revenue streams: We are looking for new operating areas in which we can benefit both the authors and publishers of works as well as their users. Our goal, within the mandate given to us, is to secure the copyright remunerations important to the creative industries even in the changing circumstances.
- Sharpening our lobbying: The ways to influence social preparation and decision-making have changed, and we, too, must take a look at our own lobbying activities in a new light. We will develop our work on influencing matters together with our member organisations.
- Renewal: The rapid development of our operating environment offers us new opportunities and encourages us to renew ourselves. We want to keep up with the technology and develop the use of data in our own operations, for instance. For this reason, we will also develop our own expertise further.
We need to continue to survey our operating environment in order to understand the dynamics of change. For example, if the public economy is tightened up, this may mean that our compensations will also be cut. As for the uncertainty around the world, it affects our return on investments.
It is important to monitor the effects of the green transition on our customer base, such as consumer behaviour in companies or educational institutions. Will copying and printing on paper disappear completely due to electronic products and services? Many different kinds of changes in society will naturally also affect Kopiosto.
We must be able to respond to the changes in our operating environment and turn them into advantages for the creative industries in our own operations.
Fortunately, Kopiosto has a very efficient organisation, and the committed Board of Directors and our expert employees work hard for the creative industries. Based on our personnel surveys, the people at Kopiosto do work that they find meaningful in a good work community. We want to thank them both for their work and the whole year 2022!
The continuity of funding for the compensation for private copying was confirmed
The decision on the future of the compensation for private copying made by the Finnish Government in the spring was important for the makers of TV programmes as well as AVEK, which operates as a part of us. In the Government session on spending limits, it was agreed that the compensation would remain at its established level of €11 million for the Government term of 2023–2027. As a result of long-term lobbying, we were able to make our message heard on the importance of the compensation and its predictability for the audiovisual field.
Meetings and a goodbye at the summer party
At the summer party in June, we met the employees of our member organisations and other close interest groups again after a long time. At the same time, we celebrated the going-away party of our retired Deputy CEO Jukka-Pekka Timonen.
The Copyright Act reform took up resources
The most important matter in our lobbying in 2022 was the reform of the Copyright Act. The intensive lobbying effort was completed in February 2023, when the Parliament approved the partially amended act. The Directive on Copyright and Related Rights in the Digital Single Market and the Online Broadcasting Directive of the EU were behind the change; they were incorporated into the Finnish legislation. The amendments to the act will improve the position of authors, publishers and performing artists as required by EU directives. The amended act will enter into force on 3 April 2023.
The reform of the act did not take any other update needs into account yet. In fact, our goal is to include an entry on continuing the reform of the Copyright Act in the next Government programme with a so-called second package, now purely based on domestic needs.
54 million euros of copyright remunerations for the creative industry
In 2022, we distributed EUR 54 million in copyright remunerations to authors, publishers, performing artists and producers. We paid copyright remunerations to copyright holders both directly and through the organisations that represent them. A total of EUR 27.1 million were paid to the copyright holders of television and radio programmes and EUR 21.6 million to the authors and publishers of books, magazines, newspapers and sheet music. A total of EUR 2.5 million was paid to visual artists as public lending remunerations. AVEK distributed a total of EUR 2.7 million to the Finnish AV culture and creative industries in 2022.
Copyright remunerations were distributed from the newspaper and magazine publishers’ archive licence for the first time
Copyright remunerations collected from the archive licence available to newspaper and magazine publishers were distributed to the creative industries for the first time in the spring of 2022. The remunerations were distributed as grants via JOKES, the Foundation to Promote Journalistic Culture. A total of EUR 145,000 in grants were awarded to 65 applicants.
Opportunities for offering new copyright licences
The Copyright Act reform brings new extended collective licences and licensing opportunities for the authors and copyright holders represented by Kopiosto. In December 2022, Kopiosto’s autumn meeting decided to expand the category of rights that applies to libraries, archives and museums and approved three completely new categories of rights: the use of works included in newspaper and magazine publications as well as the use of audiovisual and graphic works in online content sharing services. The Grant of Rights to Kopiosto that applies to graphic works was updated to correspond to the new categories of rights. In 2023, the Kopiosto member organisations will approve the updated Grants of Rights and start collecting authorisations according to them.
The copying licence for educational institutions was revised
The copying licence for educational institutions by Kopiosto was clarified and the contents of the licence was expanded to meet the needs of teaching and the amendments of the Copyright Act. At the same time, legal design was applied to the licence terms, i.e. they were revised by means of legal service design. The licence, which has been acquired for nearly every educational institution and all institutions of higher education, enables the copying of supplementary material for teaching while respecting copyright.
A new strategy was built in cooperation between the Board of Directors and the personnel
At the end of 2022, we reformed our strategy led by the Board of Directors. The work began with identifying and analysing the changes in the operating environment and based on that, it continued with strategy design. All Kopiosto employees were also able to contribute their own efforts to the strategy work during its different stages. In the new strategy, we specified three new main themes for our operations: finding new revenue streams, sharpening the lobbying and renewal. The work in accordance with the new strategy will start during 2023.
Demand for open publication – harm or benefit to science?
The demand for open publication has sparked much discussion, especially in science and research. What kind of opportunities and challenges does it bring to scientific publishers or researchers, for instance? Does high-level science require open publication? These are questions into which we delved deeply in the discussion event held in March 2022 together with researchers, publishers, funders of science and other experts who have studied the topic. We organised the event together with the Trade Union of Education in Finland (OAJ), the Finnish Union of University Professors, the Finnish Publishers Association, the Suomen tiedekustantajien liitto association for Finnish scientific publishers, the Association of Finnish Nonfiction Writers, and the Finnish Union of University Researchers and Teachers (FUURT).
A development programme for the audiovisual field in Finland
Kehittämö – Talent Development Lab, the first audiovisual development programme in Finland, focuses on the professional development of new filmmakers. The programme started in 2022; it is implemented by AVEK, which operates as a part of Kopiosto, and made possible with the financial support of the Finnish Cultural Foundation, which will provide the audiovisual industry with almost one million euros in additional funding over a period of four years.
Those selected for the programme will be mentored by international experts in the field, and they also receive financial support for their project. The aim of the programme is to strengthen the personal voices of the most talented filmmakers of their generation and create new audiovisual works of the highest quality.
The coronavirus pandemic that has continued for the third year has affected Kopiosto’s activities in many ways.
In 2022, our revenue from remunerations totalled 52.2 million euros, 1.9% less than in the previous year. The most significant factor behind the reduction of revenue was the decrease in the number of users of online recording services.
Most of our revenue came from the use of audiovisual works and the photocopying and digital use of publications. In addition to these, the revenue includes the compensation for private copying and public lending remunerations, as well as the Ministry of Education and Culture’s creative culture grants to AVEK.
Our total expenditure in 2022 was 5.2 million euros, compared to 2,5 % more in the previous year. The restrictions on our normal activities caused by the COVID-19 pandemic continued to reduce expenses in many areas.
Remuneration funds are invested in accordance with the investment policy approved by Kopiosto’s Board of Directors for the period between their collection and distribution. In 2022, financial yields and revenue from investments totalled EUR 0.6 million in loss, compared to the EUR 1.3 million of profit in the previous year. The loss of revenue from investments is a result of the write-down of fixed income investments in particular, when the market value dipped lower than the acquisition value.
In 2022, the total amount of revenue transferred to copyright holders was 46.2 million euros, 6.2% less than in the previous year.