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Direct taitto 231110 - Cupore

Ta rja Koskinen - Olsson • Olsson & Koskinen ConsultingDIRECT COPYRIGHT REVENUE STREAMSIN CREATIVE INDUSTRIES IN FINL ANDEVALUATION MODEL©FINNISH COPYRIGHT SOCIETYPublications No 30 ( 2010 )Finnish Copyright Institute1


ight revenue. It could as well be 100%, but most stakeholders had difficultiesusing that as a basis.Using the same classification asthe World Intellectual PropertyOrganisation (WIPO) does in surveyingthe economic contribution of thecopyright-based industries was a consciouschoice. This classification doesnot, however, cover all industries thatdeal with copyright.In the industries that are included,there are certainly many more areaswhere direct copyright revenuestreams could be identified. Therefore,the figures can be regarded as aconservative estimate.The model as it stands is a beginning.All comments and considerationsare welcome to finalize themodel. Equally, all hints of additionalinformation sources are most welcome.June 30, 2010,Tarja Koskinen-Olsson5


In this evaluation, collective managementorganizations (CMOs) are listedunder the sector, which they serve,such as music. They are also presentedtogether in section 9 to give acomprehensive picture of their activities.All CMO figures show gross revenueand thus include the share ofadministrative costs.Each industry can include severalsubsections. They are analyzed separatelyand grouped together underthe main industry.3 . G e n e r a l I n f o r m a t i o n o n C r e a t i v e I n d u s t r i e s a n d S u b s e c t i o n sUnder the heading “Stakeholdersand the Market” general informationon each creative industry/subsectionincludes the following:• Number of stakeholders andreferences to their associations;• For international comparison,these figures could be calculatedas an index, per thousandinhabitants, as proposed in theIntellectual Property Audit Toolof WIPO;• Key findings illustrating end-useand user habits;• Market figures of the creativeindustry/subsection.There are many measurements illustratingthe size of most creativeindustries. In those cases, differentfigures are presented citing the informationsource and year. The readerhopefully gets a general picture of themarket and can make his/her ownjudgement.4 . I d e n t i f i c a t i o n o f D i r e c t C o p y r i g h t R e v e n u eS t r e a m s i n t h e Va l u e C h a i nCreation and performance of worksor other protected subject matter customarilyinvolves direct copyrightrevenue, for instance royalties to writers,fees to freelance photographersand salaries to employed authors.Whereas royalties are 100 % directcopyright revenue, the share of salariesneeds to be estimated. In thelatter case, representatives of variousassociations have used fairly divergingestimates. To a large extent thefigures provided by the stakeholdersare used in the evaluation, indicatingthe source of the information.Permissions and licenses to usematerial protected by copyright involvedirect copyright revenue. Allrights based exploitations involvedirect copyright revenue, for exampleremuneration paid by television companiesfor broadcasting rights.7


Whereas the sale of physical goods,such as books, does not constitute directcopyright revenue, licensing anddigital delivery are based on rightsand involve direct copyright revenueaccording to the chosen methodology.Copyright plays a decisive role alsoin the sale of physical goods, as withoutan effective copyright systemthis trade would be subject to unauthorizedduplication. Therefore, noconclusions can be drawn of theimportance of copyright as such inany given sector.Under the heading “CopyrightRevenue in the Value Chain”, theanalysis proceeds in the order ofthe value chain – creators, producers,exhibitors, distributors and end users– as the case may be. The tables indicatethe direction: who pays to whom.This approach could be used as afoundation for a value chain analysis.5 . E v a l u a t i o n o f C o p y r i g h t S h a r eSome revenue streams can be classifiedin total as copyright revenue,such as revenue collected by CMOs.In some cases the share of copyrightrevenue is low and/or difficult tojudge, such as the salary of employedjournalists in newspaper publishing.All estimates are indicative, not absolutefigures.The estimates concerning the shareof direct copyright revenue can beinterpreted in the following way:• Low (1-19%)• Medium (20-49 %)• High (50-100%)Estimates could also be called “copyrightfactor”, “copyright intensity” or“weighting”; terms that the WIPOmethodology uses describing thelevel of dependence on copyrightmaterial.6 . E v a l u a t i o n o f D i r e c t C o p y r i g h t R e v e n u eIn each industry/subsection, theinformation includes:• Revenue type by using genericterms;• Calculation basis of copyrightrevenue in M€ or %;• Copyright share in %;• Copyright revenue in M€.The following generic revenue typesare used (examples mentioned inbrackets):• Royalty (writer’s royalty froma publisher)• Salary (journalist’s salarypaid by a newspaper publisher)• Fee (photographer’s fee for the8


Direct copyright revenue streamsin creative industries in FinlandPRESS AND LITE R ATUREBook PublishingNewspaper/Magazine/Periodical/Journal PublishingCMOs in the Literary FieldBook PublishingS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• The Union of Finnish Writers:600 fiction writers• Society of Swedish Writersin Finland: 197 writers• The Finnish Union of Authorswriting for children, youngstersand young adults• 125 writers of all genres• The Finnish Association ofNon-Fiction Writers:2.500 non-fiction writers• The Finnish Association ofTranslators and Interpreters• 300 translators of fictionand non-fiction; in total 1.800translators and interpreters• The Finnish Comic Professionals:some 100 membersProduction (P)• Finnish Book PublishersAssociation• More than 100 publishers(80 % of commercial publications)• Finnish Technical PublishersAssociation: 9 membercompanies• Finnish Small PublishersAssociation: some 60 publishersDistribution (D)• The Organisation of theBooksellers’ Association in Finland• Libraries: 936 public librariesand 202 bookmobilesEnd-Use & Usage habits (U)Book buying habits according to the2008 Study “Finland Reads” by theOrganisation of Booksellers’ Associationin Finland and Finnish BookPublishers Association• 22 million books per yearbought privately (excludingteaching materials)• Average 4,2 books per inhabitant10


• 77 % of the adult populationbuysat least one book a year• 80% of Finns use public libraries:12 visits and 20 loans perinhabitantMarket• Fennica-Unesco-Statistics (2008)• Total number of newpublications: 10 899• Finnish Book PublishersAssociation (2008)• Number of new titles:print 4.648, digital 535 (80 %of commercial publications)• Net sales excluding VAT292 M€ (print, audio, digital)(90 % of total)• Net sales excluding VAT324 M€ (total)• 559 M€ value of book sales(Facts and Figures, 2007)• 566 M€ turnover(Mass media market volume,Statistics Finland, 2008)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C PWriters customarily conclude a publishingcontract with publishers andtheir copyright revenue is based on aroyalty scheme, varying in differentbusiness sectors. Royalties are 100 %direct copyright revenue. Figures (netsales without VAT) are based on thestatistics of the Finnish Book PublishersAssociation and represent 90 %of the turnover of commercial publications.The share of technical materialis an estimate of the FinnishTechnical Publishers’ Association. Amajority of non-fiction publications ispublished by others than members ofthe Finnish Book Publishers Association,for example by public authorities,companies, associations, sportclubs, families, self publications, etc.No figures of the turnover are availablefor that share.Average royalty rates are based onthe following estimates:• Fiction, including children andyoungsters : royalty range19 – 26 %, average 22 %• Non-fiction: average royalty 20 %• Teaching material: average of 20 %,sometimes lower in this category• Technical materials: royaltyrange 16.5 – 22 %,average royalty 19 %.Translators receive a fee for literarytranslations. This revenue is regardedas 100 % direct copyright revenue bythe representatives of the association.An average fee is based on a 175page publication, totalling 3 500 €.The number of titles comes from thestatics of the Finnish Book PublishersAssociation. Moreover, translators receiveroyalties ranging from 2.5 to 4 %from audio and digital rights, leadingto minor revenue at this stage.11


Relation CP in book publishing:SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueBOOKS (print, audio and digital)FictionOriginal 60 %Translated 40 %Children, youngstersOriginal 25 %Translated 75 %Comic BooksNon-fictionOriginal 87 %Translated 13 %432.817.2338.324.81610894.014.0RoyaltyFeeRoyalty (audio...)Royalty 22 %FeeFee (estimate)RoyaltyFee22 %1.1 M €2.5-4 %22 %2.8 M €1.020 %4.0 M €1001001001001001001001005.71.10.11.82.81.018.84.0Teaching Material90Royalty20 %10018.0Technical Material6Royalty19 %1001.1TOTAL29654.4Relation C D: LibrariesThe revenue from public lending comespartly as a culture based allocationfrom the State Fund, and thisis not regarded as direct copyrightrevenue. The copyright based publiclending remuneration is included inthe CMO figures, as the revenue ispaid by three CMOs.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueLIBRARIESLibrariesBudget allocationLending right2.9 M €3.0 M €01000(3.0)TOTAL0Relation P U: Digital salesDigital sales are based on the conceptof licensing. This licensing incomeis estimated to be 50 % direct copyrightrevenue. The turnover (netsales) statistics from the Finnish BookPublishers Association include bothprint and digital publications, and theshare of the latter is calculated as thedifference between total and print.The share of technical material is anestimate of the association.12


SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueBOOKS (digital)Digital salesDigital sales (technical)290LicenseLicense11.1 M €2.0 M €50505.61.0TOTAL6.6Newspaper / Maga zine / Periodical / Journal PublishingS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• Union of Journalists in Finland• 15.379 members (includingradio and television)• 5 915 employed pressjournalists• 1.650 press freelancers• Finnish Association of ScienceEditors and Journalists: 880professionals involved inscience communicationsProduction (P)• Finnish Newspaper PublishersAssociation• 128 publishers and 36 othercompanies• 197 newspapers - printand online• Finnish Periodicals Publishers’Association• 271 publishers• 557 magazines andperiodicals in all genres:consumer magazines,business and associationmagazines and customermagazines (print and online)• Association for ScientificPublishing in Finland:87 member organizationsEnd-Use & Usage habits (U)Newspaper consumption• Circulation 3.1 million papernewspapers daily(0.6 newspapers per person)• 57 % of persons read onlinenewspapers (15 years and over)Magazines/periodicals• Circulation 11.6 million copies/year (2.2 copies per person)Market• Newspaper publishing end-userturnover (print and digital)1.300 M€• Magazines/periodical publishingend-user turnover(print and digital) 760 M €• Total 2.060 M €13


C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C PThe majority of journalists are employedby newspaper publishers.They conclude a labor agreementwith the employer, based on a collectivelabor agreement negotiatedbetween the relevant organizationsrepresenting journalist and employers.Figures are based on the surveyof the Union of Journalists (April2008). The average (middle figure)salary was 3.281 €/month, i.e. 39.372€/year. The share of direct copyrightrevenue is estimated to be 7 % of thejournalists’ salary. This is an estimatemade by the Union of Journalists.Freelancers customarily receive afee for their contribution. The averageinvoicing in 2008 was 25.000 €/year(survey of 2009). Whereas there aredifferent ways to classify this fee, itis regarded by the Union of Journalistsin the same way as the salary ofemployed journalists: 7 % as directcopyright revenue.There is no information regardingthe fees that are paid to scientificauthors. The figure is estimated to beminor, and consequently not includedin the figures.Relation CP in newspaper, magazine, periodical and journal publishingSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueNEWSPAPERS/MAGAZINES/PERIODICALS/JOURNALS (print and digital)Newspapers, etc.Journalists, employedFreelancersJournalsScientific authorsSalaryFeeFee232.9 M €41.1 M €7716.32.9TOTAL19.2Relation P U (digital sales)The turnover figures include bothprint and digital sales. The numberof internet newspapers is high, 164 of197 (2008). For magazines, the correspondingfigure is 248 of the total of557. The share of digital sales is estimatedto be 2 % of the total turnoverand the share of direct copyright revenue50 % thereof.14


Relation PC in digital sales for newspapers, magazines, periodicals and journalsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueNEWSPAPERS/MAGAZINES/PERIODICALS/JOURNALS (digital)Digital2.060License41.2 M € 50 20.6TOTAL20.6CMOs in the Literar y FieldRemuneration collected by CMOs is100 % direct copyright revenue.The relevant CMOs in the literaryfield and their respective licensingareas are:• KOPIOSTO (Joint FinnishCopyright Organization)• Reprography and certaindigital uses• SANASTO (CopyrightOrganization for LiteraryWorks)• Public lending remuneration,literary works• Licensing of literary works• Writers’ Unions• Broadcasting right, to bemanaged by SANASTO in 2010SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueLITERARY WORKS (print and digital)KOPIOSTOSANASTOWriters’ Unions23.63.00.1ReprographyLending rightOther licensingBroadcasting12.9 M €2.2 M €0.01 M €0.1 M €10010010012.92.20.010.1TOTAL26.715.2TOTAL FOR PRESS AND LITERATURE: 116 M €• Book publishing: 61 M €• Newspaper/magazine/periodical/journal publishing: 39.8 M €• CMOS in the literary field: 15.2 M €15


MUSIC , THEATRICAL PRODUCTIONS & OPE R AMUSICLive MusicRecorded MusicSheet MusicCMOs in the Field of MusicTHEATRICAL PRODUCTIONS & OPE R AMUSICS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• TEOSTO: 20.000 composers,lyricists and music publishers• GRAMEX: 40.000 performingartists and record producers• Finnish Musicians Union:3.300 performersProduction (P)• The Finnish Music Publishers’Association: 40 music publisherswith 70 % market share• The Finnish National Groupof IFPI: 23 phonogram producerswith 86 % market shareEnd Use & Usage habits (U)• 69 % of Finns listen to musicdaily, only 2 % do not listen at allMarket• 700 M € (includes 240 M €education)(Music Business 2009)• 532 M € for music, theatricalproduction, opera in 2008(Economic Contribution ofCopyright Industries in Finland2005 – 2008)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C E: Live MusicTEOSTO grants a non-exclusivelicense for the use of musical works,including for live performances, onbehalf of composers, lyric writers andmusic publishers.Performers in orchestras, includingopera, receive their salary on thebasis of the terms of collective laboragreements. The share of recording remunerationof the salary is estimated tobe 6 % by the Finnish Musicians Union.16


Live performances are occasionallybroadcast and freelancer performersreceive remuneration forsuch broadcasting. The share of onepercent is an estimate.The turnover of live performancesis 200 M € according to Music BusinessReport of 2009.RelationE: live musicSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueLIVE MUSICConcerts & festivalsCreatorsPerformers/OrchestrasPerformers/Freelancers200Performing rightFeeFee5.8 M €35 M €50 M €10061(5.8)2.00.5TOTAL2002.5Relation C P: Recorded MusicTEOSTO/NCB grants a license forrecording of musical works on behalfof composers, lyric writers and musicpublishers.Musicians receive salary for therecording of their performances to beused in sound recordings, based oncollective labor agreements. The shareof copyright revenue in the salary isestimated to be between 30 and 50%, with an average of 40 % (FinnishMusicians Union).Soloists receive royalties for recordingof their performances, andthese royalties are direct copyrightrevenue (the Finnish National Groupof IFPI).The turnover of recorded music is90 M € according to Music BusinessReport 2009, national turnover being30 M €.Relation CP: recorded musicSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueRECORDED MUSICRecord salesCreatorsMusiciansSoloists90/30Mechanical rightSalaryRoyalty9.6 M €0.5 M €3.1 M €10040100(9.6)0.23.1TOTAL90/303.317


Relation P P:Recorded MusicIn phonogram production, the sale ofmaster files plays an increasing role.The master file is produced by anartist or a producer who then sellsthe rights to another producer forrelease to the market. Phonogramproducers also license third parties touse recorded music in other phonogramsand in compilations and musicgames. The sale of master files andrights are estimated to make 10 to 15% of the turnover for recorded music.According to the Finnish Group ofIFPI, the turnover excluding VAT was41.8 M € in 2008.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueRECORDED MUSICMaster files, licensing,compilations, games41.8 M €Right, license12.5 % 100 5.2TOTAL5.2Relation P D:Recorded Music/Digital SalesDigital sales are based on licensing.Based on the discussions with therepresentatives of the Finnish Groupof IFPI, this evaluation uses 50 % asthe share of direct copyright revenue.The turnover of digital sales is10 M € according to Music BusinessReport 2009.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueRECORDED MUSICDigital SalesDownloadsMobileSubscriptions10RoyaltyRoyaltyRoyalty2.6 M €1.9 M €0.65 M €0.02 M €5050501.00,30,01TOTAL101.3Relation P D: Sheet MusicMusic publishers grant permissionsfor the use of sheet music. Musicusage outside the mandate given toTEOSTO is licensed directly by musicpublishers, including some foreignrights. The share of reprography isincluded in the figures of KOPIOSTO.18


SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueMUSIC PUBLISHINGMusic PublishingSheet musicGrand rightsSynchronisationForeign rightsReprography10/73.6LicenseRightLicenseRightRight0.22 M €0,11 M €0.14 M €0.39 M €0.26 M €1001001001001000.20.10.10.4(0.3)TOTAL100.8CMOs in the Field of MusicTEOSTO licenses the use of musicon behalf of composers, lyric writersand music publishers in Finland, andreceives income from foreign equivalentsfor the use of Finnish musicabroad. Moreover, TEOSTO pays theshare of music from public lendingrevenue to its members.NCB represents mechanical rightsfor Nordic and Baltic rightsholders onbehalf of national relevant organizations,such as TEOSTO.GRAMEX collects remunerationfor public performance of recordedmusic on behalf of performers andphonogram producers. Moreover,GRAMEX administers certain reproductionrights. Some Finnish performerscollect foreign income directly,outside the scope of GRAMEX and itsreciprocal agreements.The compensation for privatecopying for music is given as ajoint amount, which is distributed byTEOSTO and GRAMEX respectively.CMOs in the filed of musicSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueMUSICAL WORKS AND SOUND RECORDINGSTEOSTOTEOSTO/NCBGRAMEXDirect collectionsPrivate copying39.03.03.09.616.20.613.0Performing rightForeign incomePublic lendingMechanical rightRemunerationForeign incomeMusic share39.0 M €3.0 M €0.3 M €9.6 M €16.2 M €0.6 M €3.8 M €10010010010010010010039.03.00.39.616.20.63.8TOTAL72.519


THEATRICAL PRODUCTIONS & OPE R AS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• The Finnish Dramatists’ Union:more than 470 writers (theatre,film, multimedia)• The Union of Finnish TheatreDirectors: some 330 members• The Union of Finnish scene andcostume designers: 250• The Union of Finnish Actors:1.750 actors (in different media)• The Union of Finnish DanceArtistsEnd-Use & Usage habits (U)• 46 % of Finns have attendeda theatrical performance(theatre, ballet, opera) duringthe last year (2007)• 3.9 million visitors; 0.7 visitsinhabitant (Theater Statistics,2008)Market• Ticket sales 50 M €, includingopera (Theatre Statistics, 2008)Exhibition (E)• Association of Finnish Theatres:44 member theatresC o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C EWriters and dramatists customarilyreceive royalties for the use of theirplays in theatres, the typical royaltyrate being 12 % of ticket sales (excludingVAT). The majority of Finnishdrama writers are represented bythe Finnish Dramatists’ Union (FDU),with gross revenue of 1.3 M €. NordicDrama Corner (NDC) represents foreignand Finnish writers, with grossrevenue of 3.0 M € (includes 1.8 M €for musicals).Music publishers license performancesof music in theaters (grandrights); the revenue is included in theshare of music.Performers receive salary and certainroyalties which are included inlive performances for music.Artistic staff in theatres receivessalary based on collective labor agreements.Occasionally they receive copyrightrevenue for recordings androyalties, but the amount is minorand no estimate exists. The share ofthe salaries of artistic staff in theatresis 39 M €, 49 % of the total 80 M €.20


SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueTHEATRICAL PRODUCTIONS & OPERAWritersMusic publishersPerformers/orchestrasArtistic staffRoyalty (FDU)Royalty (NDC)Grand rightsSalary/royaltySalary1.3 M €3.0 M €0.1 M €39 M €100100100-1.33.0(0.1)-TOTAL4.3TOTAL FOR MUSIC, THEATRICAL PRODUCTIONS & OPERA: 89.9 M €• Subtotal music: 85.6 M €• Subtotal theatrical productions & opera: 4.3 M €21


MOTION PICTURE AND VIDEOFeature FilmsOther Audiovisual ProductionsCMOs in the Audiovisual FieldMOTION PICTURE AND VIDEO“Motion picture and video” includes feature films and other AV-productions,such as short films, documentaries and video productions, as well as independentproductions produced for television companies. Games could also be classifiedunder “motion picture and video”. In this evaluation they are howeverpresented under software (section 6).S t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• Animation Clinic – FinnishAnimation Association• The Association of Finnish FilmDirectors: ca. 100 film directors• Association of SwedishSpeaking Actors in Finland• The Finnish Dramatis’ Union:470 writers (theatre, film,multimedia)• Finnish Society ofCinematographers• Finnish Union of Dance Artists• Union of Finnish Actors:1.750 actors in different media• Union of Finnish Film andVideo Employees• Union of Finnish Scenographersand Costume DesignersProduction (P)• The Central Organization ofFinnish Film Producers:47 companies• Association of IndependentProducers in Finland (SATU):106 companies• Finnish Animation Producer’sAssociation (Finnanimation):34 companiesDistribution (D)• The Finnish Film Distributors’Association/the FinnishChamber of Films• 169 motion picture releases(19 domestic first releases)• Films in distribution 391(market share of domesticfilms 23 %)Exhibition (E)• The Finnish Cinema Exhibitors’Association/the Finnish22


Chamber of Films• Cinemas (196 cinemas,operating in 148 different towns)• Gross box office 54.5 M € (2008)(Facts and Figures• Creative Industries Finland)End Use & Usage Habits (U)• 6,9 million cinema admissions:1.3 admission per capita (Factsand Figures 2008, the FinnishFilm Foundation)• 62 % of the population watchesa feature film at least oncea year in cinema• 27 % of the population watchesa film at least once a month onDVDMarket• 377 M € (2006) (Facts andFigures –Creative IndustriesFinland)• 510 M € (2008) (EconomicContribution of CopyrightIndustries in Finland2005 –2008)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nFeature FilmsRelation C PThe total budget for feature films inFinland is estimated to be 25 M € in2008. It is calculated on the basis ofan average budget (1.53 M €) and thenumber of new releases (16).Writers negotiate an individualagreement with a film producer.They receive customarily a fee forthe screenplay, and certain royaltiesbased on additional uses. Both areconsidered to be 100 % copyrightrevenue. According to the CentralOrganization of Finnish Film Producers(SEK) writers receive from 20.000to 50.000 € for a manuscript (average35.000 €).Directors conclude an employmentcontract based on a collectivelabor agreement, which however doesnot have a generally binding effect.They receive salary, combined withcertain royalties. According to SEK,directors’ salary varies between30.000 and 50.000 € (average 40.000€). Based on a survey made by theTheater and Media Employees in Finland(TeMe), the share of royaltiesvaries between 10 and 25 %. Accordingto SEK’s estimate, royalties varybetween 20 and 50 %. Based on theseestimates, a 25 % royalty rate is usedin the calculation.The principle of salary and royaltyapplies also to cinematographers,scene and costume designers, with aroyalty between 0 and 15 % (average7%).23


Actors conclude an employmentcontract, based on a collective laboragreement. The maximum amount ofcopyright revenue is according to theagreement 28 %, which is used inthis evaluation. The average numberof shooting days for a feature film is35. No statistics are available on paidsalaries to actors; 2.5 M € is thus anestimate.Relation CP: feature filmsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueFeature Films (Domestic)ProductionWritersDirectorsOther artistic personsPerformers25 M €Fee, royaltySalary, royaltySalary, royaltySalary, royalty0.6 M €0.7 M €1.0 M €2.5 M €100257280.60.20.10.7TOTAL1.6Relation C E:Music in Feature FilmsTEOSTO licenses public performanceof music in cinematographicworks through an agreement withtheaters. Composers receive 1.1 % ofticket sales. This amount is includedin TEOSTO’s turnover, presented inthe table CMOs in the musical field. Incase of commissioned music, the filmproducer pays remuneration directlyto the composer, and mechanical royaltiesthrough TEOSTO.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueEXHIBITION (Theatrical releases)Ticket sales54Music rights54 M € 1,1 (0,6)TOTALRelation P & D E:Theatrical ReleasesFeature films are marketed by filmdistributors. The share of five big distributorsis more than 92 %. Totalticket sales collected by cinema theatresare 54 M € (including VAT). Forforeign films (77 % of turnover), distributorsreceive some 45 % for “filmrental” (the Finnish Chamber of Films).24


According to SEK, the total forFinnish Feature films (23 % of turnover)consists of the following shares:VAT (8 %), theatres (52 %), distributors(6 %) and producers (34 %).Relation P & DE: theatrical releasesSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueDISTRIBUTION (Feature Films)Ticket sales, foreignTicket sales, domestic38.511.5Distributor shareDistributor shareProducer share17.3 M €0.7 M €3.9 M €10010010017.30.73.9TOTAL50.021.9Relation P D:Rental and Sales (DVD and Blue-Ray)The turnover for rental and sales ofDVDs is 92 M € according to the FinnishChamber of Films. Sales represent89 % and rental 11 % of the trade.Rental is based licensing and thus 100% copyright revenue.The market share of domesticreleases of rental and sales is roughly14 %. For DVD sales, Finnish producersreceive a royalty which is estimatedto be 30 %.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueRENTAL AND SALES (DVD, Blue-Ray)Rental and salesSalesRental92.081.610.4Royalty/producerRental right11.4 M €10.4 M €1001003.410.4TOTAL92.013.825


Other Audiovisual ProductionsC o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C P:Other AV-ProductionsAn average budget for short filmsis 140.000 € and for documentaries160.000 €. These productions mayinclude direct copyright revenue forwriters, directors and other artisticpersons. The share is however minorand no direct copyright revenue iscalculated in this evaluation.For television productions producedby independent producers,authors and performers customarilyconclude an employment contract,without royalties. There are also contractswith royalties, but as this israrer, no direct copyright revenue tocreators is included in the evaluation.Relation P - E: IndependentProductions for TelevisionIndependent producers produce amajor part of television programs,in particular for commercial channels.According to the estimate of theAssociation of Independent Producersin Finland (SATU), the producersreceive from 60 to 70 M € (average65 M €) from television channels fortheir exhibition rights. This revenue isby its nature copyright income. Moreover,the producers receive minor extrasfor copyright (estimate for royalties1 M €).SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueEXHIBITION (Independent Television Productions)Television66 Exhibition rightsTOTAL66 100 66.066.0CMOs in the Audiovisual FieldThe relevant CMOs in the audiovisualfield and their management areas arethe following:TUOTOS (Copyright Association forAudiovisual Producers in Finland)represents some 500 producers. Moreover,TUOTOS represents some 7000foreign producers in the area of retransmissionof broadcasts, based onits cooperation agreement withAGICOA (Association for the Inter-26


national Collective Management ofAudiovisual Works).It manages the following rights andremuneration:• Private copying compensation(producers’ share)• Retransmission of broadcasts(collected by KOPIOSTO)• Educational copyingof radio and televisionprograms• Other licensingKOPIOSTO (Joint Copyright Organizationin Finland) has 44 memberorganizations and through themsome 40 000 individual mandates.It manages the following rights/remuneration:• Private copying compensation(audiovisual authors andperformers’ share)• Recording of radio andtelevision programs• Retransmission of broadcastsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueAUDIOVISUAL WORKSTUOTOSKOPIOSTO1.023.6Private copyingRetransmissionOther licensingPrivate copyingRecordingsRetransmission0.4 M €0.3 M €0.2 M €5.8 M €1.9 M €3.1 M €1001001001001001000.4(0.3)0.25.81.93.1TOTAL11.4TOTAL FOR MOTION PICTURE AND VIDEO: 114.7 M €• Subtotal feature films: 37.3 m €• Subtotal other av-productions: 66.0 m €• Subtotal cmos in the field of av: 11.4 m €27


R ADIO AND TE LEVI SIONNationwide Radio and TelevisionLocal RadioCable and SatelliteR ADIO AND TE LEVI SIONSection “Radio and Television” overlaps among others with music and motionpicture/ video, its two major contents. Cross references are used to indicatethese overlaps. Broadcasters are both producers for in-house programs andexhibitors for outside productions.Nationwide Radio and TelevisionS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• Union of Journalists in Finland• 5.039 employed TV-journalists• 400 freelancersProduction & Exhibition (P & E)• YLE, a public-service broadcaster• MTV3, a commercial Broadcaster• NELONEN, a commercialbroadcasterEnd Use & Usage Habits (U)• 92 % of Finns had a television,and 98 % of them readiness fordigital television (2008)• The majority of watching takesplace real time, and only 10 %consists of recorded programs(Finnpanel)• Television reaches 72 % of thepopulation daily• Radio reaches 78 % of thepopulation on an average day(from nine years up)• Daily time spent on televisionwas 2 hours 57 minutes(from four years up)• Daily time spent on radio was3 hours 15 minutesMarket• Total turnover for radio andtelevision 1.076 M € in 2008(Economic Contribution of theCore Copyright Industries inFinland 2005 - 2008)• Television broadcasting 948 M €in 2008 (Statistics Finland/Media Statistics)• Radio broadcasting 53 M € in2008 (SF/Media Statistics)• YLE turnover 381 M €(YLE, Annual Report 2008)28


C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C PIn-house productions are producedby employed staff and freelancers.There are 5.039 employed journalistsworking in radio and television. In2008, the medium salary for RTVjournalistsworking for YLE was 2.942€ and for MTV3 and NELONEN 3.724€ (some 10 % work for the latter two),resulting in 3.015 €/month or 36.182€/year. An estimated share of 7 % isdedicated to direct copyright revenue(Union of Journalists).Freelancers customarily receive afee for their contribution. The averageinvoicing in 2008 was 25.000 €. Thereare some 400 freelancers working forradio and television, resulting in 10M € in freelance fees. An estimatedshare of 7 % is dedicated as directcopyright revenue (Union of Journalists).Relation CP: nationwide broadcastsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueBroadcasting programs (In-House)ProductionTV-journalistsFreelancersSalary, royaltyFee, royalty182,3 M €10.0 M €7712.80.7TOTAL13.5Relation P E:Independent productionsIndependent producers produce amajor part of television programs, inparticular for commercial channels.According to an estimate of the Associationof Independent Producers inFinland (SATU) producers receive 66M € for exhibition rights and minorroyalties from broadcasters. This revenueis direct copyright revenue, includedin the figures of motion pictureand video (repeated here forcross reference).Broadcasters finance the productionof Finnish feature films, and tominor extent documentaries. A typicalpre-sale amount for televisionrights entails 200.000 €, which summakes part of the film’s budget (anestimate by SEK). While this is partof financing from the film producers’perspective, the investment is madeto in order to get exhibition rights tothe releases. It can thus be regardedas direct copyright expenditure fromthe broadcasters’ perspective. Theestimate give is 3.2 M € for feature29


films and 0.8 M € for documentaries,totaling 4.0 M €.Broadcasters buy rights for foreignprograms. It is estimated that acquiringbroadcasting rights for foreignproductions makes approximately 15 %of the costs of the broadcasting companies.MTV Media buys rights forforeign productions with some 44 M €.Relation PE: independent productionsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueBroadcasting rightsProductionTV-journalistsFreelancersBroadcast rightBroadcast rightBroadcast right66 M €4.0 M €142.2 M €100100100(66.0)4.0142.2TOTAL146.2Relation C P & E:Music Rights/RemunerationBroadcasters pay for the use of musicin their programming to TEOSTOand GRAMEX: performing andmechanical rights of musical works toTEOSTO and remuneration rights toGRAMEX. These sums are includedin the figures of CMOs in the field ofmusic, but mentioned here by crossreference.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueMUSIC IN BROADCASTINGTEOSTOGRAMEX48.616.2RightsRemuneration21.8 M €10.5 M €100100(21.8)(10.5)TOTAL(32.3)Relation P D: Sale of RadioandTelevision ProgramsBroadcasters sell their programs asaudio and video recordings to institutionsand individuals. YLE and KOPI-OSTO have agreed on the followingcopyright remuneration for 2008: 23 €/C-cassette, 47 €/VHS-Cassette and56 €/DVD. A similar agreement isalso concluded between MTV3 andKOPIOSTO. The collected copyrightrevenue is included in the figures of30


KOPIOSTO in CMOs in the AudiovisualField.YLE Archive Sales, a departmentwithin YLE, supplies content for useoutside the organization, in Finlandand abroad. Customers include bothinstitutions and private individuals.The customer receives a license touse the material in a clearly definedmanner and context and the ownershipremains with the broadcaster.The income is direct copyrightincome. Ready in the archive, thereare 3 697 hours of audio recordingsand 8298 hours of video recordingscovering 100 years. Details stipulations,including remuneration, covertheir area of activity.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueSALES (Audio and Video Recordings)Program sales/YleArchive sales/Yle1.8RightLicense1.80.51001001.80.5TOTAL2.3Local RadioS t a k e h o l d e r s a n d t h e M a r k e tCreation (C)• There were 91 radio-journalistsemployed by local radio stationsin 2008.Production & Exhibition (P & E)• Commercial radio broadcastingin Finland begun in 1985• RadioMedia (the Association ofFinnish Radio Stations) has 49commercial radio stations as itsmembersEnd Use and User Habits (U)• 3.6 million Finns listen to localradio programs weeklyMarket• Radio turnover was 53 M €(Cultural Statistics 2008)• Radio advertisement incomewas 50.5 M € in 2008, and theshare of local radio stations 30 %(15 M €)31


C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C P & EInformation on RTV-journalists includesjournalists who work in localradio stations; 91 employed journalists.Salary and fee income is includedin the figures of nationwidebroadcasting.Remuneration for music paid bylocal radio stations is included in thefigures of nationwide broadcasters.Cable and SatelliteS t a k e h o l d e r s a n d t h e M a r k e tDistributors/Exhibitors (D & E)• The Finnish Federation of Communicationsand Teleinformatics(FiCom) is the cooperationorganization for the FinnishICT industry• Cable-TV companies are membersof FiComEnd-Users and User Habits (U)• 1.37 M households were connectedto cable of the 2.2 M total(62 %) (FiCom Review, September2009)• 315.000 households have paidtelevision services (22 % of cablehouseholds)• 406 000 channels packages weresold in 2009 (1.3 package perhousehold)• Number of IPTV customers was20.000Market• The subscription fees and otherincome for television (antennas,cable and satellite) was 293 M €in 2008 (Cultural Statistics)• The share of subscription feeswas 208 M € and the basic feesof cable-TV 85 M €• The amount paid by the householdis dependant on the numberand combination of channelsC o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation P EThere are very few, if any, nationalcable originated programs. Differentpackages of channels consist of foreignprograms. These programs areeither foreign broadcasts retransmittedsimultaneously and unchangedor foreign program packages. For thefirst, copyright remuneration for allrightsholders is collected by KOPI-OSTO and included in the figure forCMOs in the audiovisual field. For32


the latter, subscription fees for otherchannels totaled 208 M € in 2008. Theshare of exhibition rights is estimatedto be 30 % of the total revenue, i.e.62.4 M €.Relation PE: cable and satelliteSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueCABLE AND SATELLITESubscriptionsBroadcasts208(85)Exhibition rightsRetransmission62.4 M €3.1 M €10010062.4(3.1)TOTAL29362.4TOTAL FOR RADIO AND TELEVISION: 224.4 M €• Subtotal nationwide radio and television: 162.0 m €• Subtotal local radio (included in nationwide)• Subtotal cable and satellite: 62.4 m €33


PHOTOGR APHYPhotographyCMOs in the Field of PhotographyPhotographyS t a k e h o l d e r s a n d t h e M a r k e tCreators (C)• Central Association ofPhotographic Organizations(FINNFOTO)and its membersassociations• In total, 5.800 members• Professional Nature Photographersin Finland• Press Photographers in Finland(Finlands Pressfotografer)• The Union of CameraAssociations• Nature Photographers inFinland• Advertisement Photographersin Finland• Professional Photographers inFinland• Photography StudentsThe Union of Journalists in Finland• Professional press & mediaphotographers as membersArtists Photographers in Finland is amember of Artists’ Association of Finland• The Artists’ Association hassome 2 800 membersProducers & Distributors (P & D)• Photo agencies: more than 50photo agencies in Finland representingphotographersExhibitors (E)• Photo archives and museums:The Finnish Museum ofPhotography/photo archiveMarket• Turnover 113 M € (2008)Economic Contribution ofCopyright Industries in Finland2005 – 2008C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C P & DPhotographers market their worksthemselves or use photo agencies astheir representatives. They customarilygrant a license (non-exclusive orexclusive) for the use of the photo-34


graph. License terms are often basedon the recommendation of the association.In case of commissioned works,an exclusive license is customary,at least for a period of time. Thelicense defines the media included inthe price. Additional remunerationis paid for additional media andtime exceeding one year. The licensefees are considered as 100 % directcopyright revenue. The estimatedinvoicing is 25.000 €/year for 1.500photographers.Photo agencies license photographsfor different uses, such asadvertising and media companies.Their turnover is estimated to be 40M €. After deduction of an agencyfee, estimated at 40 %, the revenueto photographers is 100 % copyrightrevenue.Relation C EPhoto archives/museums grant permissionsto use photographs in theircollections. The turnover is includedin the estimate for photo agencies.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenuePHOTOGRAPHYPhotographersPhoto agencies37.540.0LicenseLicense37.5 M €60 %100 %100 %37.524.0TOTAL61.5CMOs in the Field of Photography• FINNFOTO and the Union of Journalists are members of KOPIOSTO(Joint Copyright Organization)• Artists Association of Finland/Union of Artist Photographers is a memberof KUVASTO (Visual Artists Copyright Association)• KOPIOSTO, reprography 12, 9 M €, of which the share of illustrationincluding photography is some 15 % (1.9 M €), included in revenue forliterary works• Artist Photographers are members of KUVASTO, included revenue forvisual and graphic artsTOTAL FOR PHOTOGRAPHY: 61.5 M €35


SOFT WARE AND DATABASESSoftwareDatabasesGamesSof t wareIn this evaluation, software includes software development and sales of softwareproducts by licensing or as services.S t a k e h o l d e r s a n d t h e M a r k e tCreators and Producers (C & P)• IT- sector employees 44 000 intotal; 33 000 employees withsoftware as the main business• IT-sector companies 8 000 intotal• 18 000 professionals and 600companies as members of theFinnish Information ProcessingAssociation (FIPA) atwww.ttlry.fi• 1 050 software developmentcompanies (2007) (source: TheFederation of Finnish TechnologyIndustries (FFTI) atwww.teknologiateollisuus.fi )Market• 2 320 M € turnover of Finnishsoftware industry (source: FFTI,2009)• 7 558 M € for software anddatabases (2008) (EconomicContribution of CopyrightIndustries in Finland2005 – 2008)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C PSoftware developers are customarilyemployed by software-producingcompanies and their copyright rightsare transferred to the employer onthe basis of the law, unless otherwiseagreed between parties. This evaluationtakes as a point of departurethat rights reside with the employers,i.e. software development companies,and no direct copyright revenue isestimated in the relation C P.Relation P UThe Finnish software firms can bedivided into eight categories:36


• Software product firms offeringtheir own software productsusing the traditional licensingmodel (classified as copyrightrevenue);• ASP and SaaS firms offeringtheir software over the internetusing either an ApplicationService Provision (ASP) orSoftware-as-a-Service (SaaS)arrangement (classified ascopyright revenue);• Development service firms providingsoftware development services(development rental) or customdevelopment projects (classifiedas copyright revenue);• Deployment projects offeringinstallation, customizationmainly for ready softwareproducts (not classified ascopyright revenue);• Software consulting firms offeringconsulting and testing(no copyright revenue);• Hardware firms offering hardwarewith embedded software(no copyright revenue);• Content and ads firms offeringsoftware-related services(no copyright revenue);• Non-software firms offeringgeneral consulting and ITsupport services(no copyright revenue).The estimated turnover of firms thatdeal with copyright revenue rangesfrom 1.100 M € to 1.500 M €. Thisrepresents some 55 % of the totalturnover. As business in this categoryis in the main based on licensing,rather than sale (transfer of ownership),90 % of the turnover is regardedas direct copyright revenue. Somesectors of consumer trade, such assale of packaged software off theshelves and sale of software in conjunctionwith hardware, are borderlinecases. The prevailing businessmodel is based on selling a licenseand thus corresponding turnover isincluded in this evaluation, but onlyup to 90 % of the trade.Relation PU: softwareSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueSOFTWARE (Products and Services)SoftwareProducts and services2 3401 300License1 170 M € 100 1 170TOTAL1 17037


DatabasesD a t a b a s e p r o c e s s i n g a n d p u b l i s h i n gThis section includes a great variety of different services. There is no singleindustry with a given turnover figure. The Economic Contribution of CopyrightIndustries in Finland 2005 – 2008 indicates 7 558 M € for software and databasesin the year 2008. On the basis of this, an estimated turnover for databaseprocessing would lead to some 5 200 M €.S t a k e h o l d e r s a n d t h e M a r k e tCentral players in database processingand publishing are the following:• Creators and publishers whocreate the documents;• Database producers, whoprocess documents intodatabases and producebibliographic data describingthe documents;• Database vendors, onlinevendors, who acquire one orseveral databases for onlineavailability;• Data communication serviceswho provide for the connectionto the databases;• Intermediaries or informationprofessionals who help endusers in finding documents;• End-users, either using theservices or intermediaries orusing the databases themselves.C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C P: DatabasesCreators and publishers of the underlyingmaterial create the content onthe basis of the same rules andlogistics that apply to the particularcategory of works. This relation isdealt with in the proper context, forinstance literature, music or photographs.It is assumed that the copyrightrights of database developers aretransferred to the employers, andconsequently no direct copyright revenueis identified in relation C P.Relation P E: Online vendorsRemuneration collected for the useof copyright protected material inonline databases cannot easily begrouped under one heading, asthe business model is dependanton the transmitted content. Legalonline music services, for instance,are reported under music. Databases38


including technical standards, forinstance, are reported under literature(technical materials).At this stage, no estimate is givenfor direct copyright revenue in databaseprocessing and publishing.GamesGames and other interactive software are in this evaluation grouped under softwareand databases. As indicated earlier, they could also be grouped under“Motion Picture and Video”.The game sector can be divided into four segments, depending on their platform:console, PC, online and mobile.S t a k e h o l d e r s a n d t h e M a r k e tCreators and Producers (C & P)• The Finnish Game Developers’Association, c/o NEOGAMES• NEOGAMES, Finnish NationalCenter of Game BusinessResearch and Education inconjunction with TechnologyCenter HERMIA• 45 - 60 game developers andgame service providers• Turnover of game developmentis 87 M €, including 75 M €export revenueProducers and Distributors (P & D)• Finnish Games and MultimediaAssociation (FIGMA): 11 membercompanies, in charge ofdistribution and sales• Turnover of FIGMA members87 M € at resale price value withVAT (2008)• Non-FIGMA members 20 M €,totaling 107 M €Market• Turnover 171.2 M € in total,including hardware andaccessories (FIGMA PressRelease2009)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C PIn game development, direct copyrightrevenue is paid to the developers.Rights are transferred to theemployer directly based on the law,unless otherwise agreed by the parties.This evaluation takes as a pointof departure that no copyright revenueis paid to the individualsworking in development companies,neither to outside individuals.39


Relation P & D UThe total turnover excluding hardwareand accessories is 107 M €. This tradeis based on the nation of licensing ofusage rights and included as directcopyright share in this evaluation.Relation P & DUSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueGAMESGamesDevelopmentDistribution194.487.0107.0Royalty/licenseLicensing87.0 M €107.0 M €10010087.0107.0TOTAL194.4TOTAL FOR SOFTWARE AND DATABASES: 1 364.4 M €• Subtotal software: 1 170 m €• Subtotal databases: no estimate• Subtotal games: 194.4 m €40


VI SUAL AND GR APHIC ARTSVisual artsGraphic artsCMOs in the field of visual artsVisual Ar tsS t a k e h o l d e r s a n d t h e M a r k e tCreators (C)• Artists’ Association in Finlandhas in the following memberorganizations: 2.300 members• Finnish Interdisciplinary ArtistsAssociation (MUU)• Association of Finnish Sculptors• Union of Finnish Visual ArtsAssociations• Finnish Artistic GraphicDesigners• Finnish Painters’ Union• Finnish Artists Photographers• Employed labor force in visualarts (sculptors, painters andrelated artists) 4.160 in 2005(Facts and Figures)Distribution and Exhibition (D & E)• In retail sale of art and artgallery activities: 208 enterpriseswith 205 employees in 2006(Facts and Figures, CreativeIndustries in Finland)• The Finnish Art GalleriesAssociation: 33 members• Art rental: 22 members inthe association(www.taidelainaamot.fi):a monthly rental fee dependingon the price of the art work• Auction Houses: 2.132 workssold at Finnish art auctions withthe sales of 7 M € and averageprice of 3.292 € in 2007 (Factsand Figures)• Art museums: 63 museums in2006, representing 20 % of allmuseums (Facts and Figures)End Use and Usage Habits (U)• The most popular Art Museum,the Museum of ContemporaryArt Kiasma, had some 232 000visitors in 2006 (Facts andFigures)Market• Turnover 22 M € in 2006(Facts and Figures)• Turnover 22 M € for visual andgraphic arts in 2008 (EconomicContribution of CopyrightIndustries in Finland 2005 –2008)41


C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C D & E & UWorks of visual arts are sold to usersdirectly by the artists themselves andby art galleries. Works may also becommissioned by the acquirer.Artists get sales income for directsales. Works sold through gallerieson commission also generate salesincome. This income is not regardedas direct copyright income. The sameapplies to remuneration for commissionedworks.Sales through art galleries is estimatedto be 16 M €, and a typicalcommission 30 %. As works in galleriesare owned by artists, galleries donot pay copyright revenue for exhibitionof works on site or through internet.Art rental is a relatively new phenomenonwhich in the majority ofcase leads to sale; works are rentedfor a period of time and sold thereafterto the same person. Only in case ofinstitutional users, such as film producers,works of art are rented for theproject. Based on that, the estimatefor rental is very small.Sales through auction houses ofworks of art are estimated to be 7M € according the Statistics Finland(2007). Resale right remuneration is inthe CMO figures.Relation CD & E & USourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueVISUAL ARTSGalleriesArt rentalAuction sales16.01.07.0Commission saleSale/rental rightResale right11.20.10.2 M €-100 %100 %-0.1(0.2)TOTAL0.142


Graphic Ar tsS t a k e h o l d e r s a n d t h e M a r k e tCreators (C)• GRAFIA, Association ofProfessional Graphic Designersin Finland: 900 professionals asmembers• Illustrators in Finland: 230membersMarket (M)• Joint turnover 23 M € for visualand graphic arts (2007)C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nC PGraphic designers work in the followingareas: corporation graphics, publicationgraphics, advertisement, andillustrations. Graphic designers canbe employed, work through their owncompanies or as freelancers. They geta salary or a fee for their work. Accordingto the Statistics Finland, salariespaid for graphic design were 7.2M € in 2008. Part of the salary canbe dedicated as direct copyright revenue.License fee can be regarded as100 % copyright revenue. It is estimatedthat 100 freelancers invoice 15.000 €yearly.Illustrators conclude a license agreementwit the user. A RecommendationAgreement drafted by Illustrators inFinland consists of general terms andterms of commission. Fees paid toillustrators are considered as directcopyright revenue. Illustrators in Finlandestimate that some 250 – 400illustrators work professionally andget part of their income from illustrations(invoicing 15.000 €/year).As illustrators and graphic designersare partly overlapping, the estimate isbased on 250 persons.43


Relation CE: graphic designers, illustratorsSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueGRAPHIC ARTSGraphic designersIllustratorsSalaryFeesFees7.2 M €1.5 M €3.7 M €7 %100 %100 %0.51.53.7TOTAL5.7CMOs in the f ield of Visual and Graphic Ar tThe relevant CMOs in the field ofvisual and graphic art are the following:• KUVASTO (Visual Artists’Copyright Association)• KOPIOSTO (Joint CopyrightOrganisation): public lendingremuneration for visual art andphotography• KOPIOSTO: reprographyremuneration includes alsorevenue for visual and graphicartists (included in the figuresof CMOs is the literary field)SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueCMOsKUVASTOKOPIOSTO0,423.6ExhibitionsReproductionsResale rightPublic lending0.1 M €0.1 M €0.2 M €0.3 M €100 %100 %100 %100 %0.10.10.20.3TOTAL0.7TOTAL FOR VISUAL AND GRAPHIC ARTS: 6.5 M €• Subtotal visual arts: 0.1 m €• Subtotal graphic arts: 5.7 m €• Subtotal cmos in the field of visual and graphic arts: 0.7 m €44


ADVERTI SING“Advertising” includes information on agencies and buying services. The WIPOMethodology of 2003 specifies that the price of advertising should not be included.The broader concept “Marketing Communication” includes the followingsubsections (with the percentage of turnover in 2008):• Media advertising (42.1 %)• Direct marketing (24.0 %)• Sales promotion (33.9 %)S t a k e h o l d e r s a n d t h e M a r k e tCreators (C)• Creative professionals employedby advertising agencies• 5 852 persons working in2 465 advertising agencies withtotal salary of 236 M € in 2008(Statistics Finland)Producers of Audio-Visual (P/AV)• Association of IndependentProducers in Finland (SATU)• 32 companies• 7 companies in sound advertisingProducers - Distributors (P & D)• 102 enterprises with 1 500employees in MTL FinnishAssociation of MarketingCommunication AgenciesExhibitors (E) (Advertisers)• Some 400 member companies inthe Association of FinnishAdvertisersMarket• Turnover 1 662 M € and 8 128employees(Economic contribution of thecopyrights-based industriesinFinland, 2008)• Turnover 1 500 M € and 6 823employees in 2 827 enterprises(2006) (Facts and Figures/Creative Industries in Finland2009)• Print and electronic mediaadvertising 1 334 M € (2008)and 1 263.4 M € (2009)(Statistics Finland)• The share of print mediaadvertising was 61.7 %,electronic media 35,4 % andthat outside/vehicle advertising2,9 % (2009) (Press releaseJanuary 21st, 2010, FinnishAdvertising Council MNK)45


C o p y r i g h t R e v e n u e i n t h e Va l u e C h a i nRelation C P & DSome 2 000 persons work in MTLmember companies with a salaryof 3 515 €/month (42 180 €/year).The copyright rights are customarilytransferred to the employer and nodirect copyright share is estimated inthis evaluation.Relation P/AV P & DAd films include productions for television,video, cinema, internet or mobile.According to the general conditionsfor adverting films by SATU,The commissioner gets the right totransmit the ad in television (or theagreed forum). A separate agreementis due for wider usage rights, such asother media, extra copies, sowing outsideFinland. Remuneration for extrarights is agreed between parties. Thefilm producer is responsible for anythird party content used in the film,such as music. In case the commissioneris an advertising agency, thecompany has the right to transfer theusage rights to the advertiser. Thetrade is based on the concept of exclusivelicenses, and the ownership tothe material (film) stays with the adproducer. The turnover of ad filmsis estimated to be 45 M € and it isregarded as 100 % direct copyrightrevenue.The fees paid for third party content,such as music, is included in thesection for music; TEOSTO in the caseof musical works.Relation P/AVP & D: film producers & advertising agenciesSourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueAD FILMSAV producer45.0License45.0 M € 100 % 45.0TOTAL45.0Relation P & D EAccording to the general conditionsagreed between the advertising agenciesand advertisers, the advertisergets ownership rights to the materialit has commissioned. The advertisingagency is responsible for any thirdparty content used in the advertisement.No direct copyright revenue isincluded in this relation.Fees paid for third party content,such as photographs, are included inthe relevant section.TOTAL FOR ADVERTISING: 45.0 M €46


COLLECTIVE MANAGEMENT ORGANISATIONSThis section includes summary information on the revenue collected by CMOs.It is included for reference purposes only, as the figures are presented in thesector which the CMOs serve. All figures concerning the revenue collected byCMOs are gross figures, including the share of administrative costs.SourceTurnoverRevenue typeRevenue(% or €)CopyrightShare (%)CopyrightRevenueCMOsTEOSTOTEOSTO/ncbGRAMEXKOPIOSTOTUOTOSSANASTO44.29.618.123.61.02.3RightRightRightRightRightRight44.2 M €9.6 M €18.1 M €23.6 M €1.0 M €2.3 M €100 %100 %100 %100 %100 %100 %(44.2)(9.6)(18.1)(23.6)(1.0)(2.3)TOTAL102.1(98.8)47


SUMMARYThis section includes a summary of direct copyright revenue streams identifiedin each of the eight industries included in the evaluation. As said at the outset,this is a first assessment and a model, rather than any absolute figure.The total of identified direct copyright revenue streams for 2008 is 2 022.4 M €.PRESS AND LITERATURE: 116 M €• Book publishing: 61 M €• Newspaper/magazine/periodical/journal publishing: 39.8 M €• CMOs in the literary field: 15.2 M €MUSIC, THEATRICAL PRODUCTIONS & OPERA: 89.9 M €• Music: 85.6 M €• Theatrical productions & opera: 4.3 M €MOTION PICTURE AND VIDEO: 114.7 M €• Feature films: 37.3 M €• Other av-productions: 66.0 M €• CMOs in the field of av: 11.4 M €RADIO AND TELEVISION: 224.4 M €• Nationwide radio and television: 162.0 M €• Local radio (included in nationwide)• Cable and satellite: 62.4 M €PHOTOGRAPHY: 61.5 M €SOFTWARE AND DATABASES: 1 364.4 M €• Software: 1 170 M €• Databases: no estimate• Games: 194.4 M €VISUAL AND GRAPHIC ARTS: 6.5 M €• Visual arts: 0.1 M €• Graphic arts: 5.7 M €• CMOs in the field of visual and graphic arts: 0.7 M €ADVERTISING: 45.0 M €GRAND TOTAL: 2 022.4 M €48


With the available turnover estimates, the share of direct copyright revenuestreams is as follows:IndustryPress and literatureMusic, theatre and operaMotion picture and videoRadio and televisionPhotographySoftware and databasesVisual and graphic artsAdvertisingTurnover estimates2 600 – 5003*532* - 700377 - 510*1 076* - 1 294113*2 513 - 7 558*22*1 662*Direct copyright revenue11689.9114.7224.461.51 364.46.545.0The figurers marked with * are based on the findings of the Economic Contribution ofCopyright-based Industries in Finland 2005 – 2008.As said at the outset, no conclusions can be drawn of the relative importanceof copyright as such in any given sector. Licensing-based business models areexpected to grow in the future, and as business models evolve, the figures willchange. This evaluation shows a snapshot of the year 2008. The results show aconservative estimate.49


50NOTES


DIRECT COPYRIGHT REVENUE STREAM SIN CREATIVE INDUSTRIES IN FINL ANDE VALUATION MODELThe study was commissioned by the Finnish CopyrightSociety, and was carried out by Ms Tarja Koskinen-Olsson,Olsson & Koskinen Consulting. This study is a contributionby the Finnish Copyright Society to the largernational project to establish a met hodolog y to assessthe functioning and performance of the copyright andrelated rights system.Publication Series of the Finnish Copyright InstituteThe Finnish Copyright Institute, established within theFinnish Copy-right Society, publishes in its PublicationSeries studies, articles, research reports etc. Furthermore,the Institute publishes materials on legislation,preparatory legislative documents and case law.FINNISH COPYRIGHT SOCIETY©Finnish Copyright InstituteAddress of the Institute:Lauttasaarentie 1 • FIN-00200 HELSINKIPhone +358-9-6810 1279 • Telefax +358-9-673 374E-mail: maire.wikholm@copyrightsociety.fi52

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