Words from the CEO, 2019
From record year to crisis year.
I have limited pleasure in writing about our record results for 2019 with the exceptionally sad spring we have had in 2020. Here in Norway, it’s only been a month since TONO’s members were forced to endure the cancellation of concerts, events and most of the activities that provide our members with an income.
The creative response was immediate among TONO’s members and others who wanted to help bring musical experiences back to the people. Covid-19 concerts quickly became a great way to communicate with an audience artists were prevented from meeting at the usual venues.
TONO quickly established a licensing model for these “corona concerts”. As of 30 April 2020, approximately 500 such concerts have been reported to TONO. It is important, however, to remember that these corona concerts do not in any way compensate for the loss of income that our members have experienced as a result of the cancellation of traditional concert activities that were planned for the spring and summer months. At the time of writing, it is also likely that autumn concert activities will be severely curtailed.
The entire country, including our industry, is in the midst of a serious crisis, and no one can say when we will be back to what can be termed “normal”. It could take a long time. In this phase, TONO is contributing by providing the Ministry and the music industry in general with input and financial calculations. Together with the Music Industry’s Business Council (MIR), we have proposed the establishment of a fund that could compensate for some of the loss that TONO’s members will suffer in the period from March to August 2020. We will be reassessing our loss calculations on a regular basis depending on how long the shutdown lasts.
The crisis in the concert market and the businesses that use music every day will hit TONO’s members with full force when annual payments are calculated in 2021.
In mid-March, TONO calculated that, in the six months from March to August 2020, we will experience a loss of revenue of NOK 107 million for the rights we manage for Norwegian and foreign rights holders. We can now see that the closure of large parts of the market that uses music in their businesses will undoubtedly last beyond August 2020.
It is highly likely that many of TONO’s clients will have to close for good, and we will see the effects of this both in 2021 and in years to come. During this period, it is important that we ensure that culture does not turn to “bargain pricing”. Our members must have their “reasonable remuneration” as stated in the Norwegian Copyright Act. There will be pressure on rights holders in all categories in the time ahead, and the competition for jobs could be greater than before.
We expect constructive collaboration with the authorities, and that solutions will be put in place to help to minimise our members’ losses.
Record year in 2019
Despite difficult times in 2020, 2019 produced TONO’s strongest results ever. Gross revenues totalled an impressive NOK 771 million, up 9 per cent from 2018. Profits for distribution were NOK 674.4 million, 9.9 per cent higher than the previous year. We are proud that TONO is now a “ten per cent society”. The cost percentage for operating TONO was 10.50 per cent.
For the first time in the company’s history, we passed the milestone of NOK 100 million in concert revenue in 2019. Again, this news is naturally bittersweet now that we know how the concert market has suffered in spring 2020. However, this means that TONO’s members can expect good concert settlements in the autumn of 2020.
It should of course be remembered that our impressive results in 2019 were in no small part due to TONO’s successful court case against RiksTV in the Supreme Court of Norway and, through subsequent negotiations, we received a compensation of NOK 100.5 million
On the downside, the relationship between TONO and Norway’s four largest orchestras – Oslo, Bergen, Trondheim and Stavanger – is yet to be clarified. They are unwilling to pay what we consider “reasonable remuneration” under the Norwegian Copyright Act. Our aim will be to convince these institutions, which receive close to NOK 600 million from the Ministry of Culture, to support Norwegian rights holders by paying reasonable fees when the orchestras perform their works. In this way, they can fulfil their purpose, which is “to increase interest in artistically valuable music through orchestral, choir and chamber concerts, as well as tours and recordings”, to cite the stated objective of Norway’s largest orchestra.
TONO will work hard to help our members through this crisis that has hit the cultural world so hard, and our goal is to prevent culture from becoming a low price commodity because we know that the audience out there is yearning for musical experiences.
Cato Strøm, CEO