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Changes in distribution patterns

In 2016 Koda made its largest-ever distributions to rightsholders. A combination of changes in music consumption, more accurate reporting and modernised distribution policies mean that members may see changes to the amounts they receive.

Koda’s 2016 turnover reached 116 million EUR, thereby nearly matching the record-breaking turnovers of 2015, and this means that members have once again received very substantial distributions. The turnover of 2016 has generated distributions of 105.5 million EUR to music creators and publishers in Denmark and abroad. This is the best distribution result ever seen in the history of Koda.  

Individual members or publishers may find that their distributions from Koda have gone up or decreased compared to previous years. Today, the group of high-income members share a larger amount that before. The group of low-income members also receive a larger amount as a group, but an increase in the number of recipients means that the average distributions have decreased in size. The general tendency for the group of members in the middle range is that on average, they receive smaller amounts than before.

Publishers have seen a prominent increase in their income in recent years. For example, the total Koda distribution to publishers has gone up by 70 per cent over a five-year period; a development that is partly due to an influx of new publisher members. The total distributions to authors and publishers went up by 12 per cent during the same period. 

 

Distributions to Koda members

Revenue category trends



Growing revenues from TV and online  

The reasons for this shift in the revenues generated by Koda members are primarily linked to overall changes in market consumption and use of music.  

“Koda’s distributions to members are partly dictated by market developments and business cycles”, says Koda’s head of distribution, Jens Juel Andersen,  explaining the changes seen in distributions in recent years.

The main increases concerned revenues generated by TV and online content, whereas the increase in e.g. revenues from radio performances is moderate.

“The market has changed. Revenues from TV and especially online content have gone up, and this affects the rightsholders’ distributions, as they quite naturally depend on where their works are played and performed,” explains Jens Juel Andersen.

The main reason why TV and online revenues in particular have gone up is the extensive work done in recent years on preparing and entering into agreements with several music providers within these fields. TV and online content is also very popular with consumers, and the supply and consumption of TV channels, video streaming services and music streaming services have grown steadily for years now.

The TV category is greatly dominated by works composed for films and series, something that especially benefits the most popular film composers in terms of their income. Consumption of jingles and background music for various TV shows and news broadcasts is also on the rise, benefiting the composers and publishers who specialise in these fields. As regards online consumption we see that even though Danish audiences have access to all the music in the world, the majority listen to the same tracks. Overall, this means that revenues are increasingly funnelled towards the main publishers and towards music creators in Denmark and abroad.

Accurate reporting

The reports provided on music use also affects the distributions made to Koda members. The steady transition to digital data has enabled Koda to obtain increasingly accurate information on the actual use of works, thereby making the distributions correspondingly more accurate. This is very much true of areas such as ‘restaurants’, ‘hotels’, and ‘background music’ where Koda is receiving increasingly accurate information about the actual music consumption.

The use of music in e.g. shops, restaurants and hotels is dominated by Danish and international top 20 artists. Combined with more accurate reporting, this fact means that distributions within these fields increasingly go to those music creators and publishers who have the most popular repertoires. The digital reports are expected to become even more finely meshed in the years to come. 

Modernised distribution policies

The more accurate reporting means that there is now less need for distribution policy decisions. As Koda receives increasingly accurate information on the actual music consumption, the need for judgment calls on distribution principles decreases. What is more, three years ago the Koda Board of Directors launched a process aimed at adjusting Koda’s distribution principles. The objective was to simplify the set-up so that the revenues generated within a given revenue category are also distributed within that same category, and that the costs associated with the distribution are defrayed within the relevant category.

Koda’s members are beginning to feel the impact of these adjustments, and the overall developments also serve to hone Koda’s competitiveness amidst growing international competition and new EU stipulations on transparency.

 

We must retain the large repertoires, the largest publishers and the most popular authors 
- Niels Mosumgaard, Chairman of the Board

 

”Koda’s survival depends on our ability to attract and retain the leading publishers and those authors who generate the greatest revenues,” says Niels Mosumgaard, chairman of the board at Koda. He continues:

“Today, publishers and authors are free to decide which rights management society they want to manage and sell their rights, so it is important for Koda to remain highly competitive. Another part of the story is that we must retain the large repertoires, the largest publishers and the most popular authors: when combined with the full Koda repertoire they pave the way for the best agreements possibly, thereby pulling the emerging talents with them up. For this reason it is crucial to continue our work to increase efficiency and to ensure very accurate distributions so that the rightsholders receive exact remuneration for the actual use of their music. We must also ensure transparency in our accounts, reports and distributions so that old and new members can all clearly see that they get the best service and the most accurate distributions from Koda.”

 

 

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Revenues from TV and especially online content have gone up, and this affects the rightsholders’ distributions

Jens Juel Andersen, Head of distribution

2012 - 2016

70 per cent increase in distributions to publishers

I million EUR

REPORTING RATES 2016

89 per cent full reporting