The Managing Director's Report

Nice, round figures have a special magic of their own. That is why it was such a big day for Koda when we realised that in 2017, our turnover would exceed one billion Danish kroner (138 million EUR).

This momentous event was, however, partly fuelled by some very specific circumstances: for the past two years, we had been unable to reach an agreement with the other organisations within the Copydan alliance on how to distribute a range of new income categories. In 2017 we finally reached a resolution, which meant that in one glimpse, money from several years’ worth of TV distribution came flooding in all at once – creating a ‘ketchup effect’.   

Yet even without this backlog of payments, Koda would still have experienced good progress. Our revenues are growing nicely. A few years ago, we decided to devote extra resources to collecting revenues from abroad and to boosting our revenues from general public performance, meaning hotels, restaurants, bars etc. Both endeavours have been successful, and as a result, we can now enjoy record-high turnovers within both areas. This result has been achieved through hard and dedicated work from our employees and management team.

However, we are very much aware that not everyone experience the benefits of these increases. For example, a great many Koda members receive very little revenue from streaming. On the other hand, the idea that no-one makes any money from streaming is a myth. In 2017, almost 500 Danish Koda members received more than 10,000 DKK (1,342 EUR), and around 30 members received distributions of 250,000 DKK (33,557 EUR) on average. Even so, we certainly face a challenge within this field; a challenge that must be resolved through political means. I will return to this point at the end of this report.

Last year, we launched an initiative aimed at ensuring that our members will receive their money at a faster speed. Bearing the working title ‘Performed Sunday, paid Monday’, the objective of this initiative is to reduce the time elapsing from performance to payment as much as possible. We have embarked on this initiative as it is an important point to our large rightsholders. Moreover, the low to non-existent interest rates paid out today also means that we receive very little interest on the money we keep in trust before they are distributed to our members. Hence, everything points in one direction: the money does more good in our members’ pockets than in Koda’s.

Reaching such an ambitious goal requires that all of our IT systems need to be revised. Fortunately, our excellent co-operation with our partners in TONO and Teosto means that we can share the costs and draw on specialists working across each other’s societies.  

2017 was also the year in which the future of NCB was decided upon. After long and careful deliberation, the NCB Board of Directors decided to ask Koda to take over operation of NCB. As a result, the staff of NCB now sit in the Koda office, while the NCB Board of Directors and legal framework remain unchanged. The objective of this solution is to reduce the operating costs while still maintaining suitable levels of service as turnovers within the mechanical field continue to drop.

In terms of political work, we continued the struggle against the fundamental injustices brought about by the transition to online music distribution. At its heart, the problem is that these abrupt developments have taken away the creators’ control of the content they create. First, file sharing and piracy services became widespread and generally accepted by the public. Now, services such as YouTube and Facebook have been able to use the ‘Safe Harbour’ legislation to avoid paying a fair price for rights.

So what is a ‘fair price’? Well, it’s a price that both parties agree to. The buyer and seller of any commodity must always be able to refuse a deal – otherwise it isn’t fair. But in this case, piracy and the misapplication of ‘Safe Harbour’ legislation have removed  our ability to say no. These factors have resulted in completely unreasonable pricing trends within the digital field, and this drives prices down – also for the subscription-based services such as Spotify and Apple Music.

In 2017, Koda continued its efforts to change this state of affairs – both in the EU and in Denmark. It is of utmost importance that we create a digital market where those who create the content which drives a substantial part of all online traffic, also receive a fair share of the value generated by their content. 

Anders Lassen, Managing Director of Koda

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