Dear Colleagues,

this report on activities of the Supervisory Board refers to the period starting from the last General Assembly held on 28 May 2018, to the General Assembly to be held on 27 May 2019 and it is accompanied by a brief summary of Supervisory Board’s activities over the latest three-year term of office of the Supervisory Board.

INTRODUCTORY INFORMATION: The composition of our three-member Board of Trustees is stable and remains unchanged. There have been no changes in the composition of the Supervisory Board either. The Ministry of Culture has accepted our tariff in force since 1 January 2019.

AUDIT: The Board of Trustees of the association is responsible for the compilation of financial statements. The Supervisory Board is responsible for the supervision over the process of financial reporting in the association. The proper audit carried out by APOGEO Audit, s.r.o., did not find any errors in the accounts of OSA for 2018 and information quoted in the annual report of the Board of Trustees of OSA is in all respects in compliance with the financial statements.

ECONOMIC RESULTS: After exceeding the amount of one billion CZK of revenues collected, OSA did not rest on its laurels and continued its economic growth in 2018. But the last-year’s jump was considerably influenced by the fact that since 1 January 2018, OSA has been collecting revenues in the field of public performances for all collective management organizations involved in the area of music. Consequently, the total revenues collected jumped by 18.83 %. Even after netting out the revenues collected on the basis of new agreements entered into with the collective management organization Intergram, OSA increased its revenues collected by 2.99 %. In quantitative terms, it is the amount of CZK 31,170,000.

In 2018, OSA achieved again the historically best economic result. In the column of total revenues collected, the figure in brackets should be used for a rolling comparison with 2017. It shows the total revenues collected according to the original methodology, i.e. net of the royalties collected on the basis of newly concluded agreements with the collective management organization Intergram. As OSA became the sole place of collection for the collective management of public performance of music, we have achieved the lowest cost deduction since the beginning of the nineties.

MEMBERSHIP: As of 31 December 2018, OSA represented based on an agreement 9,338 domestic rights holders. The membership slightly changed year-on-year. As of 31 December 2018, the number was 578 members in total compared to 587 in 2017, including 411 composers (338 popular music, 73 classical music), 92 lyricists, 50 heirs and 25 publishers. There have been 18 new members since 1 January 2019 who were accepted by the General Assembly in 2018, and one member changed classification from publisher to author. Two members of OSA died by 18 March 2019. The current number is 594 members, including 352 popular music composers, 72 classical music composers, 93 lyricists, 50 heirs and 27 publishers. In terms of profession groups, the current numbers are the following: 466 composers, 101 lyricists and 27 publishers.

Out of the non-members who have met the requirements for acquisition of members, 15 filed an application for membership this year. They include 10 popular music composers, 2 classical music composers, 2 lyricists and 1 person applying for an exceptional admission as a member in the section of composers. This year’s General Assembly of the members of OSA will decide on the applications.

ACTIVITIES OF THE SUPERVISORY BOARD: After one year of validity of the new Distribution Rules for live performances, we analyzed the effects thereof. We compared the new distribution with a simulated distribution for the same period under the old rules. The results of comparing the average royalties paid in individual categories clearly show that the new rules have met our expectations, both in terms of the planned functionality and in terms of the royalties paid. As expected, categories 7 and 8 have benefited from the cancellation of collection coefficients. There has been a decline in categories 3, 5 and 6. Here we propose coefficient corrections. Other categories maintained their average values. We are convinced that in addition to the guarantee of fair distribution, the rules ensure long-term support for classical and non-commercial music. The legislative purity, simplicity and transparency are considerable advantages of the new system.

The legislative process which culminated in 2018/2019, interrupted our upward development by its unpleasant dissonance. Last year, our legislators started discussing a “mini-amendment” to the Copyright Act as a part of the so-called Marrakesh Treaty. It was supposed to concern only relieves for handicapped users. Senator Valenta took the opportunity to prepare an amendment which was a clear attack on private ownership resulting from artistic activities and on the very principle of copyright law. To our surprise, the Senate, which is supposed to be a safeguard of equity and legislative pureness, approved this bad imitation of law even though the draft amendment was clearly contrary to the EU law and international agreements binding on the Czech Republic. Such a change to the Copyright Act would deprive all rights holders – both authors and performers – of considerable sums of money. At a guess, we might lose up to a third of our revenues from public performances, i.e. revenues collected for audio and audiovisual devices situated in public premises and establishments. Under this threat, individual artists as well as organizations concerned started protesting. The protesters included in particular collective management organizations OSA, Intergram, Dilia, OOA-S, but also the Association of Authors and Performers, including Actors’ Association. There would be no point in enumerating the contributions of individual protesters. Everyone tried their best. We were issuing statements, initiated a joint petition, articles, interviews, we held a press conference in presence of the media but we also directly contacted political figures. We were finally united and we were heard. We would like to take this opportunity to express our thanks to all of you who supported the petition or contributed otherwise. When the voting was held in the Parliament at the start of this year, the government proposal was passed without the senate amendment. It was positive but the Pandora’s box remained open and two deputies (for SPD and ANO) have already submitted an identical, rejected proposal. Therefore, the voting will be repeated and we should be ready for the possibility that the matter will be finally resolved by court. In such a case, we would have to put up with a temporary loss of a part of revenues collected. On the basis of the existing case law of the Court of Justice of the European Union, we expect a course of events similar to our older dispute concerning devices installed in hotel rooms, which we won.

Together with the Board of Trustees, the Supervisory Board started preparations for the celebration of this year’s exceptional anniversary – 100 years of OSA. Given the long deadlines for arrangement of suitable premises and planning of performers, we had to start well in advance. It will be up to the Board of Trustees and the newly elected Supervisory Board to complete the celebrations. For now, we expect the gala evening to be held in Karlín Music Theatre on 9 October (i.e. on the date of establishment of OSA in 1919). Work is under way on an epic publication under the working title “A hundred hits of OSA”, containing one domestic piece for each year. We also plan a travelling exhibition “A hundred years of OSA” composed of the period materials stored in OSA’s rich archives.

This year, we have launched a new, improved OSA website; we were working on it for almost the entire last year. The new website contains an e-shop which makes it possible to enter into license agreements electronically, including a payment gate for copyrighted work users. Once the applicant enters parameters, the rate is calculated and the license agreement is sent automatically to the user’s e-mail address. Once the payment is made, inter alia directly via the payment gate, the user receives an invoice. New parties interested in concluding an agreement with OSA may use the website to apply for conclusion of an agreement with OSA. We hope that the website is not only of much better graphic quality but also more transparent, extensive and user-friendly.

BRIEF SUMMARY OF OSA MANAGEMENT’S ACTIVITIES OVER THE LATEST THREE-YEAR TERM OF OFFICE

In 2016, we spent most of our time on the amendment to the Copyright Act and on preparation of amendments to the fundamental documents of OSA. At the 2017 General Assembly, we had to adapt our internal rules to the requirements of the new Copyright Act. We successfully changed our Statues and the Code of Procedure of the General Assembly but we also fundamentally changed the Distribution Rules and the Statues of the Cultural and Social Fund. New rules for the holding and conduct of the General Assembly of OSA members were put in place at the 2018 General Assembly. It was mainly the option of remote electronic voting, the right to authorize other persons to attend the General Assembly on the members’ behalf, and we also introduced voting by voting machine in order to save time of General Assembly participants.

We had great satisfaction with respect to the stayed proceedings in one case and the approval of our tariff, reviewed by the Office for the Protection of Competition (OPC), in the other. The first case was about an increase in the area of live music (2016) where the OPC had received hundreds of submissions. In the other case, it was a reaction to our “notorious price increase of 50 %” (2017). We had to ask the Office for a review ourselves in order to comply with a retroactive provision of the amended law. We succeeded in both cases. Our arguments and results of comparison with the rates applicable in other EU member states clearly weighed in our favor. We coped with all changes to the tariff over the last three years. Also the Ministry of Culture of the Czech Republic – according to the wording of the new Copyright Act – considers our complete tariff issued in August 2018 to be approved.

Since 1 January 2017, OSA has been a member of the Economic Chamber of the Czech Republic. We believed it was right to joint this organization in order to declare our affiliation with the private business community. Some sub-questions which concern us really are discussed at the Economic Chamber of the Czech Republic and hence our membership was definitely not a merely formal step.

On 1 January 2018, OSA became the sole place of collection for all collective management organizations involved in the area of music. OSA collects simultaneously for Intergram, DILIA, OOA-S and OAZA. It is a significant progress which reduces the costs of all collective management organizations and increases the effectiveness of collection by OSA. At the same time, the principle of a single place of collection is convenient also for users. They can see their liabilities at once and choose the payment method.

As mentioned above, having exceeded the amount of one billion Czech crowns of revenues collected, OSA does not rest on its laurels and it relentlessly continues to grow economically year after year. This has been taking place since 2013 and over the last five years, OSA increased its total revenues collected by CZK 383 million.

CONCLUSION: The results of the last year confirm the upward trend of OSA’s economic results. We have a stable and qualified Board of Trustees. Following the amendment to the Copyright Act, we managed to adapt and clarify our fundamental documents which are not in conflict with the laws of the Czech Republic in any respects. Virtually all royalty collection and distribution processes are carried out electronically. We have an excellent magazine “Autor in” (Author in) and a great social event OSA Awards. We communicate with those represented by OSA based on an agreement, with users and the public and we are absolutely transparent. In all good conscience, we can say that we have cleared the decks. But we still have sleepless nights about some things – the attempts to damage the management of copyrights through internal legislation. This is where we least expected it. At a time when the EU is trying to correct an error of many years and introduce copyright protection in the cyberspace, the Czech legislators have been racking their brains on how to deprive rights holders of their traditional earnings at home. Contrary to the proposer of the bill, i.e. the Ministry of Culture of the Czech Republic, some deputies and senators demonstrate their inadequate insight into the area of intellectual property and use it only as a political issue. Fortunately, we are not completely powerless. We can once again pull together and rely on the laws of the European Union. And we will definitely do so.

Let me to express my particular thanks on behalf of the Supervisory Board to the Board of Trustees and the employees of OSA for their year-round efforts and I thank you all for your trust. 
The Supervisory Board wishes you success both in your creative work and personal life.

 

Luboš Andršt
Chairman of the Supervisory Board