KopinorNews 2001-1

Kopinor News
No. 1 Volume 5
Summer 2001
ISSN 1500-0729

ANNUAL GENERAL MEETING:

Exceptional results

Kopinor's Annual Meeting in April approved the annual report and accounts for 2000, which showed income of NOK 242 m (Euro 29.4 m.), up 34 % from NOK 181 m in 1999.

The increased income was due to special circumstances. Income for copying which actually took place in 2000 amounted to NOK 180 m, practically speaking the same amount as the year before. The main reason for the increased income was new conditions of payment of photocopying fees from primary and secondary schools agreed in November. Previously, schools paid fees the year after the copying had taken place, on the basis of meter readings at the end of the year. Biannual reports on meter readings have now been dropped. Payment will now be on the basis of statistical surveys and number of pupils. With this change there is no need for delayed invoicing.

While we could invoice fees for both 1999 and 2000 from the school sector, actual collections have been taking place in 2001. (For more details on the new licensing situation see article on "Licensing dispute resolved" in no. 2, volume 4, of this newsletter.)

Foreign share and management costs
The foreign share of Kopinor's income remained, as earlier, at about 20 %. Management costs were 7.2 % of the total income, down from 8.9 % in 1999.

Delayed distribution
Payment to Norwegian rightsholders amounted to NOK 105 m in 2000, down from NOK 130 m the year before. The reduction was caused by the delayed collection of fees from schools. Total payment to foreign rightsholders amounted to NOK 56 m, up from NOK 21 m in 1999. The increase was mainly due to the signing of an agreement with the Swedish RRO Bonus Presskopia, and the payment of NOK 26.6 m for copying of Swedish works in Norway in the years 1985-98.

Rønning re-elected
The 2001 AGM re-elected professor Helge Rønning for a new one-year term as Chair of Kopinor’s Board of Directors. Publisher Ola Haugen was re-elected as Vice-Chair.

NEW SURVEY:

Norwegian CEOs make extensive use of newspaper material in digital form

Most Norwegian newspapers supplement their paper version with a Web version on the Internet. Kopinor has registered a decline in the photocopying of newspaper clippings, and wished to find out if patterns of use were changing.

During one week in June 2001, Markeds- og Mediainstituttet a.s. conducted computer assisted telephone interviews with 606 Chief Executives of private corporations with ten or more employees in regard of their use of newspaper clippings.

71 % state that they receive photocopies of newspaper articles, and 76 % that photocopies of such articles are made at their initiative. (Mostly licensed by Kopinor). 56 % state that they receive newspaper articles in digital form, and 44 % that they send such articles by e-mail to others. (This has not been authorised by Kopinor). Photocopies clearly still play an important role, but digital uses are now more and more common. If we look at corporations with 100 or more employees, we find that 75 % of the CEOs receive press clippings of newspaper material in digital form, 44 % download clippings from the Web for storage on their PCs, while 63 % state that they pass on clippings by e-mail to others.

Systematic digital dissemination
The most interesting information may be that 10 % of all the CEOs, and 24 % of CEOs in corporations with a staff of 100 or more, state that dissemination of digital clippings is a specifically organised service within in their company.

VALUE ADDED TAX AND CMOs:

No VAT on Kopinor’s services to rightsholders

Changes in VAT legislation came into force on 1 July 2001. The Collective Management Organisations in Norway have for the last six months been seeking clarification as to how the new VAT on services may affect their operations.

Kopinor has never collected VAT on users’ fees. The reason for this is obvious: books, newspapers etc. are exempted from VAT in Norway.

VAT on Services
With recent changes in legislation the question arose: Should Kopinor as of 1 July 2001 collect VAT on services rendered to rightsholders? This would in practice have increased Kopinor’s operating costs by several million Norwegian Crowns each year. In a letter dated 18 July the authorities gave their reply. Referring to Kopinor’s status as a not-for-profit association, it concluded that Kopinor would not have to compute VAT on services rendered to rightsholders.

However, one must expect that the EU’s attempts at harmonising VAT in Europe will bring the VAT issue up again in the future. Kopinor is therefore following closely IFRRO’s lobbying activities in this field.

NEW LEGISLATION EXPECTED:

Remuneration for private copying to be introduced in Norway

In February the Ministry of Cultural Affairs proposed new legislation with regard to remuneration for private copying. Stakeholders were given less than five weeks to comment on the proposal. Recent developments indicate that we will have to wait another year for a final proposal.

Over the years Norway has had an audio and video cassette levy outside the scope of copyright. This has recently been abolished, and the Ministry aimed at introducing a copyright-based levy scheme in favour of rightsholders to sound and audiovisual works only and parallel to schemes in other Nordic countries. In its February letter the Ministry pointed to a recent survey, which shows extensive copying of music on CD-Rs for use in Norwegian households. The April deadline coincided with the EU's adoption of the directive on copyright in the information society, and it became apparent that the proposed legislation did not fully take into account the implications of the new directive.

What is private copying?
In accordance with Sec. 12 of the Norwegian Copyright Act it is permissible to make copies of copyright works for "private use" without any payment. "Private use" is mainly understood as use within the circle of family, friends and acquaintances, but in some instances also for personal, professional (institutional) use.

While Kopinor did not object to the proposed legislation as such, we pointed out that the new directive does not limit fair compensation for private copying to sound and audiovisual works alone, and that the whole issue would have to be revisited in connection with the implementation of the directive. (Although Norway is not a member of the EU, new directives are generally implemented in Norwegian law as a consequence of the agreement on the European Economic Area. Norway is an EEA country.)

Remuneration for what?
Kopinor pointed out that approx. NOK 26 m are forfeited annually in photocopying remuneration from institutional copying due to Sec. 12 of the Copyright Act. In addition comes unremunerated copying under Sec. 12 in private homes, copyshops and libraries.

Interesting new surveys
We also pointed to a new survey from Finland, which shows that text, scores, photos and illustrations etc. make up 18 % of works stored on CD-Rs. The Finnish survey also shows that the hard disks in PCs are used to a much larger extent for storage of "external material" (52.8 %) compared to CD-Rs (30.8 %). Finally, we pointed to a recent Austrian survey of hard discs in private households, which shows that text, photos, illustrations etc. copied to the hard disk from periodicals, books, the Internet etc. make up 28 % of "outside material" compared to 12 % of music (sound) and audiovisual works.

Kopinor requested that a much more extensive remuneration scheme for private copying be proposed when the new directive is to be implemented, also to the benefit of rightsholders to works in the form of text, musical scores, photos and illustrations, and irrespective of means of storage.

In the end the Ministry decided to postpone the matter, promising to review the issue in conjunction with implementation of the new EU directive.

One outcome of this process may be that Sec. 12 will be changed so that a line is drawn excluding institutional copying from copying for private use. All institutional copying would in that case have to be licensed.

FLASH FLASH FLASH

New German survey

GfK, Germany's leading market research provider, has recently published a survey conducted at VG WORT and VG Bild-Kunst's initiative, which shows that four out of five Germans with private PCs store copyright protected material on them.

See more at www.vgwort.de

Edited by J.W. Rudolph
July 2001