The Managing Director's Report

Last year Koda turned ninety. It was a day for celebration, and we are certainly looking at an unusually spry ninety-year-old here. Koda is in better shape than ever!

Once again, Koda has broken all its own records in terms of the amounts distributable to our rightsholders. No less than 105.5 million EUR finds their way from Koda to composers and music publishers in Denmark and abroad. That is the highest amount ever seen throughout Koda’s ninety years in existence. Yet the amount might have been even larger: right now, a considerable sum been frozen under the auspices of Copydan due to disagreements on how they should be distributed.

A substantial part of Koda’s income is generated by TV and cable operators. Agreements within this field are negotiated with Copydan – a setup that we are very pleased with, because it makes it easier for clients to licence audio-visual content, which of course encompasses a range of different rights. However, our co-operation with other rightsholders also means that we and they must agree on how the income generated should be distributed. Unfortunately, differences of opinion between us and the other rightsholders currently mean that substantial sums have not yet been distributed, and this has a significant impact on our net results for 2016.

On the plus side, we have seen the income generated by the area general public performance (hotels, restaurants, concerts, etc.) increase even further this year, exceeding the 25 million EUR mark, which is a highly positive result. Revenues from abroad are also on the rise: in 2016 we collected more than 9 million EUR from abroad. That is an increase of almost 50% compared to five years ago. Both results can be directly attributed to the resolute efforts made by Koda’s staff.

When we receive revenues from our clients it often takes quite a while before we also receive the reports that enable us to make distributions to the relevant rightsholders. This means that at any given time we have a substantial amount of money in our care; money that we must look after until it can be distributed. The returns generated by such funds can vary greatly, but last year we achieved returns of more than 2.5 million EUR, which will of course benefit our members. Even so, we firmly believe that funds should not remain suspended at Koda for long – they should be funnelled on to the rightsholders as soon as possible. To ensure this we have embarked on efforts that will help us distribute funds even more quickly in the future.

Initiatives aimed at optimising Koda’s efficiency continue within all areas: Today Koda employs 10% less manpower than we did six years ago – and at the same time we process greater workloads within all areas of our field. This is a direct result of our efforts to ensure that we are as efficient as we can possibly be. Keeping up with the rapid developments within the field of IT requires investments, and this also means that our IT costs have increased compared to previous years. That trend will continue in the years to come. Fortunately, our collaboration with TONO and Teosto in Polaris means that we have someone to share these costs with, enabling us to keep up with the times without having to defray all the costs alone.

Another significant feature of the year was the implementation of new legislation on collective management of copyright. The legislation entered into force on 1 April 2016, and implementing all its regulations in Koda has required tremendous effort. We have changed a wide range of procedures and processes to accommodate the new rules, and this has imposed huge demands on both staff and management in our various departments, requiring them to work closely together in order to complete the process within the deadline stipulated.

NCB celebrated its centenary in 2015. Unfortunately the decline in mechanical licensing continues, and for this reason the owners of NCB (the Nordic collective rights management societies) decided that major changes must be carried out within NCB. Koda has contributed greatly to this work, which is scheduled to be completed in 2017.

The EU is currently working to bring out new legislation within the field of copyright. Koda has been deeply involved in this work at all levels, engaging in intense lobbying work at the Danish Parliament and in Brussels. The reason is that a range of services, such as YouTube, SoundCloud and others, use a loophole in the current legislation to avoid paying rightsholders for their content. Of course this situation is entirely unacceptable, and we are working both alone and within international forums to change this state of affairs. The struggle is hard, but it is a battle we must fight in order to ensure that Koda can celebrate many anniversaries in the years to come!

Anders Lassen, Managing Director of Koda

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