Solidarity, decency, humility and respect

Last year I wrote that mutual solidarity among authors was – and still is today – one of the important pillars upon the establishment of OSA in 1919. We were fulfilling this dimension throughout last year as the world was gripped by the pandemic of coronavirus causing COVID-19 disease. Last year, in addition to standard royalties, we paid out solidarity financial aid of close to CZK 10 million to approximately one thousand domestic authors who were directly affected by cancellation of all music events and lost their jobs virtually overnight. We also felt solidarity with other sectors such as gastronomy and service operations which were affected similarly to performing arts. We waived royalties payable by the users who had to close their operations due to government measures for the period for which their operations were closed. We launched a special website for our authors as well as users’ clients, containing up-to-date information on state support schemes. OSA pursues social responsibility. We used our best efforts to ensure the safest possible working environment for our employees and clients. Although our employees worked from home for a large part of last year due to government measures, the transition to online mode was smooth and there was no significant impairment to the high quality of our services which we provide to our authors and publishers. I would like to express my great thanks to our employees for this.

One of the basic principles we follow in OSA is to pay out royalties to our authors and publishers as fast and accurately as possible. Last year I reported that we were testing royalty distribution on a monthly basis. One year on, monthly payments were launched by OSA on 1 February 2021. There are only two collective management organizations in the world who are able to pay royalties to their authors and publishers on a monthly basis. They are KODA (a Danish organization similar to OSA) and our OSA. Beginning this year, we offer the so-called self-billing service to VAT payers and we have been pleasantly surprised at the interest taken in this service.

In terms of collections, the year 2020 was marked by a decline in revenues from concert productions and background music in public areas. Both these segments fell by 50%, which means in practice that authors and publishers lost CZK 215 million. Given the time difference between collection and payment of royalties, authors and publishers will be significantly affected by this decline in particular this year. Last year still generated some positive effects. After many years of negotiations, a settlement for past periods was achieved with FTV Prima. The amounts for the period from 2013 to 2019 will be paid to music authors in the course of this year.

Keeping overhead costs consistently low is not an easy task in standard economic circumstances, let alone in a year of the COVID-19 epidemic. Last year, we paid out royalties to almost 200 thousand authors and publishers from all over the world. Yet we managed to reduce the last-year’s costs by CZK 13 million to the final amount of CZK 155 million. In practice, this means that in the difficult COVID year, we paid out to our authors and publishers, on average, the amount of CZK 86.50 from each CZK 100 collected.

OSA has become a sought after and attractive address for foreign partners representing big names of the music world and for foreign independent rights managers. We also have the trust of domestic authors. Last year, we entered into new rights management agreements with 444 music authors. And with additional 150 music authors only in the first three months of 2021. I believe that the trust of our authors and publishers as well as foreign partners is a sign that we are on the right track and that our services are of very high quality.

I must mention the decision of the Office for the Protection of Competition (OPC) which imposed a fine on OSA in the amount of CZK 10,676 thousand on 18 December 2019. OSA had allegedly abused its dominant position as in the period from 2008 to 2014, it had not taken account of the room occupancy of accommodation establishments. The appeal filed by OSA with the chairman of the OPC was unsuccessful and the chairman upheld the original decision on 23 November 2020. OSA has paid the fine in accordance with the OPC’s decision and, at the same time, filed an action against the decision. If the lawsuit is successful, the fine will be repaid to OSA.

Social life in the Czech Republic virtually stopped because of the COVID-19 epidemic. Performing arts looked for innovative alternative ways of reaching out to their audience by streaming concerts, festivals or theatre performances from empty clubs, theaters or even rehearsal studios directly to the living rooms of their fans. But this way lacks the basic emotion which is created by the performer directly and jointly by mutual interaction with the audience. For performers, the experience is even worse than for footballers or ice-hockey players playing without audience. It is not so great from economic point of view either, even though some managed to collect one-off higher amounts from voluntary contributions. It turns out that this concept is not viable in the long term, at least not in this form. A fundamental transformation may be brought about by an extension of the space in virtual reality. Our lives are increasingly shifting to the virtual world. It’s just a matter of time before concerts of famous music stars appear in this space on a grand scale.

The virtual space very quickly permeates our real world. The world of the Internet mirrors our real life and, therefore, same rules have to apply there. We have to be very careful in adopting new laws in order to create a regulatory environment that will protect human society, i.e. all of us. If we underestimate this aspect, computer codes and algorithms, disinformation and identity thieves will acquire control of our society. We will become mere commodities, intensively and happily traded by tech companies.

The amendment to the Copyright Act will be the first and crucial test. The Czech Republic, just like the other member states, has to implement two European Union directives concerning the copyright. In terms of ensuring balance on the Internet between authors and artists and tech giants such as Google or Facebook, the Directive on Copyright in the Digital Single Market is important. If it is well implemented by the Czech Republic and the politicians do not cave in to the pressure of tech giants and other pseudo-independent citizens’ initiatives, the negotiating position of authors and artists will improve. Creation of a fair environment on the Internet is in our interest and it will eventually benefit the entire society. There will be more business opportunities for legal and innovative services, more space for young and emerging artists and we all will enjoy a larger variety of music, films or computer games.

I believe that our society can come out of the COVID-19 pandemic wiser, more responsible and self-confident. Building blocks of our society should be decency, mutual regard and solidarity, humility, gratitude and respect, even for opposing views.

 

 

Roman Strejček
Chairman of the Management Board