“Free” Music in Slovenia: the Struggle for Royalties from Radio

Musicians in Slovenia are losing royalties as radio stations exploit legal loopholes to avoid paying them their due. In a radio broadcast, the organization responsible for protecting artists was called a “terrorist organization”, and journalists who’ve dared to touch the topic have been sued. Edgar Tijhuis reports on a troubling trend seen across the region.


What links Prince, Beyonce, Led Zeppelin and the Beatles? All of them (or their legal successors) boycott Spotify, or decided to do so at some point. Many other artists have also complained about not receiving fair payment for their music streamed on Spotify. A substantial number of artists have decided not to work with Spotify at all. The issue of songwriters receiving shockingly little income is often seen as a new phenomenon that has accompanied the increasing importance of the internet to listen to music. In the past, whenever music was played on the radio or through other means, decent royalties were supposed to be paid. Today, musicians should be able to make their own decisions about whether or not to join platforms like Spotify, Apple Music, Tidal or Google Play Music.

On the Sunny Side of the Alps

This is not the case in Slovenia, the small country “on the sunny side of the alps,” according to the testimony of numerous songwriters belonging to the Slovenian Union of Musicians and the Slovenian NGO SAZAS—a body licensed by the government to collect royalties for music, including music broadcast on the radio. Their complaint? A number of radio stations do not pay at all for the music they play, or pay just a tiny fraction of what is legally due. According to the copyright law of Slovenia, as in other countries in Europe, the use of music played over the radio is considered a “public performance” for which the user should pay. The user in this case is the radio station, which offers music as content to encourage its audience to listen to its commercials. That’s how radio stations work and make money: Pay for music as content, draw in listeners, receive money from advertisers who want to access those listeners. But it’s a far sweeter deal for the radio station if it can receive the same money from advertisers, while avoiding paying for musical content. However, it’s also illegal. But that hasn’t stopped it from happening.

In an article in one of the largest daily newspapers of Slovenia, Slovenske Novice (Slovenian News), the union of musicians stated the following:

“Leo Oblak who, through his ownership of companies, controls the largest commercial radio network, is a systemic violator of copyright and royalties default.”[1]

Leo Oblak is the CEO of Infonet, a company that owns around 31 radio stations, forming the biggest network in Slovenia. The network has dominated the radio landscape for a long time. In a 2004 study by the Ljubljana-based Peace Institute on media ownership and its impact on media independence and pluralism, Infonet was described as the only significant network in the country.[2] While analyzing Infonet, researchers Sandra Hrvatin and Lenart Kučić wrote:

“When entering the network in the media registry in 2002, the Ministry of Culture did not check if Infonet fulfilled the requirements set down by law. The statement of the broadcaster that the network fulfilled these requirements was taken as sufficient.”[3]

Given the seriousness of these allegations, and similar complaints from rights-holders that something was amiss, I scrutinized the situation regarding royalties for the broadcast of music on Slovenian radio. I contacted both SAZAS and Infonet, as well as a number of songwriters. Media reports, a review of Slovenian legislation, and other documents were also used in an effort to provide a comprehensive understanding of the situation.

SAZAS, Infonet and Slovenian Artists

The author contacted SAZAS in Slovenia and spoke with Tomaz Grubar, the vice-president of SAZAS. Grubar is a producer of a substantial repertoire spanning over twenty years, and well-known within the field of copyright. He’s produced TV series like Odklop (“Turned-Off”), Zmenkarije (“Rendezvous”), the sport series Adrenalina, the comedy series TV Dober Dan (“TV Good Day”), and the still-running Nova dvajseta (“The New Twenties”), as well as the most popular currently running Slovenian daily format, Ena žlahtna štorija (“A Sad Story”). Over the course of 20 years, he’s produced over 800 episodes of television, among them some of the most popular shows in Slovenia. When asked about the situation with Oblak’s Infonet radio stations, he replied:

“It’s a long story. First of all, the radio stations failed to complete contracts with SAZAS. According to the Slovenian Copyright Act, radio stations need to complete such contracts to be allowed the use of the repertoire of music that is represented by the CMO [licensed by the Slovene government to take care of authors’ rights in the field of music], which received its license from the Slovenian Intellectual Property Agency (SIPO).[4] Furthermore, the stations failed to pay the correct amount of royalties on the basis on the fee set by SAZAS in 2008. That is not to say that nothing was paid at all. Random and low amounts were paid to SAZAS, so the stations could show something to the government inspector. According to Slovenian law, even when no contract is completed, stations may use the repertoire, if they deposit the amount according to the valid tariff.[5] In this case, however, they paid just a small part of what they were due.”

The summary of events from Grubar makes clear why rights-holders may receive far less than they should, and why they have been complaining. But how could this have gone on for so long? Did SAZAS not take any action to claim the royalties for the musicians it represents? When confronted with these questions, Grubar continues:

“We did go to court more than once to claim all royalties that were due. The problem is that the revenues of the stations, that are the basis for calculating what is due, seem to be obscured, on purpose. The revenues are spread across different companies, especially Infonet Media, which is not a radio station, so that in the end, the actual revenue shown is much lower, and thus the amount that they claim is due [is much lower]. We even had to go to court to gain insight into the books of the companies, and we got a financial expert examining the books on the basis of a court order. In the end, it is the musicians who are losing and not being paid their fair share for their creativity. One radio station (Radio S, which no longer exists) even asked SAZAS repeatedly to exempt it from paying any royalties. And it asked about 100 musicians to instead pay 10 euros a month to have their music played on the station… This all is very sad.”

When I contacted Leo Oblak and asked for Infonet Media’s response to the various allegations, I received no substantive reply. This does not mean that his radio station empire has been entirely silent on the matter. Complaints have been filed against the journalist responsible for the media report in Slovenske Novice and Radio 1 (Infonet’s flagship network) engaged in a brief but ferocious smear campaign against SAZAS (More on that in a moment).

Several singer-songwriters confirmed, off the record, the trouble with the collection of royalties. Radio remains the most important medium for getting artists’ music to the public, and criticizing the largest chain of radio stations is not seen as being in their best interest.

Art “Terrorists”

In addition to court cases between the CMO and the different radio stations, Infonet seems to have broadened its battle. Radio 1, one of its biggest stations, accused the CMO of being a terrorist organization. In a radio show the DJ told listeners:[6]

“You’re listening to Radio One and you have probably heard of the biggest terrorist organization that we call SAZAS (…) We have heard that Europe has received many Muslims, among which there are a lot of lovely women and a bit less lovely terrorists. I’m interested, do you think Slovenia is threatened by this terrorist organization SAZAS?”

After this introduction, the DJ keeps asking people about SAZAS, each time explicitly describing the CMO as a terrorist organization. Most of the audience seems to have no clue as to what the DJ is talking about. One man finally responds that SAZAS is in fact an organization that deals with authors’ rights. “You should know this if you are from the radio,” the man says. However, the DJ simply continues to repeat his claim about terrorism: “Does the terrorist organization SAZAS threaten Slovenia, in your opinion?” Another man explains that SAZAS is an organization that takes care of musicians. The DJ continues asking other members of the audience about the organization, until one woman starts laughing and says, “SAZAS aren’t terrorists! Are you really from the radio?!” The DJ responds, saying “yes, yes yes.” Suddenly the report ends, and the radio commercials begin.

Chasing Journalists

Whereas the Radio 1 station portrayed SAZAS, a CMO licensed by the Slovene government to take care of authors’ rights in the field of music, as a terrorist organization, the Infonet Media Group itself is very sensitive to any attacks on its company or owner. An analysis of the archives of the Slovenian Court for Journalists shows a long list of complaints by Leo Oblak against journalists from all kinds of media.[7] The majority of complaints were dismissed by the court.

The aforementioned Slovenske Novice article was what inspired Oblak to take the daily newspaper to the Slovenian Court for Journalists. His complaint alleged a violation of articles 1 and 5 of the code for journalists, because the article’s author had not verified statements included in the piece, and did not indicate in the publication that the statements had not been verified. Slovenske Novice did not defend itself in court, but it was obvious to the judges that there was no violation of either article. A breach was established, however, of article 3 of the code as the journalist, according to Oblak, had not asked him for his response, while it concerned serious allegations.

A similar complaint was filed by Oblak against the website www.vecer.com that also quoted from the statements from the Slovenian Union of Musicians. The court ruled in the same manner, and dismissed the alleged violations of articles 1 and 5, while it confirmed a violation of article 3.

Given the complaint in these cases—that Oblak was not asked for his response—it may seem remarkable that he did not respond when he was, in fact, asked explicitly by this author to respond to a number of allegations. Furthermore, from the text of the verdicts, it seems that at least part of the complaints lodged by SAZAS, as described by Tomaz Grubar, have been admitted to by Oblak himself. While denying allegations that he has evaded paying royalties, he argued that he did pay SAZAS, and referred explicitly to article 158, paragraph 2 of the Copyright Law. This seems to confirm that the radio stations did not fulfill full individual contracts with SAZAS, but rather that Infonet simply paid selective deposits directly to SAZAS.

A closer look at article 158, paragraph 2 reveals that the law, as used by Infonet radio stations, seems to provide a legal loophole that can easily be used to evade paying the right amount of royalties. Slovenian legislators may have failed to foresee how this loophole might have been exploited to deny artists their full share of revenues.

When the long list of cases against journalists is combined with the smear campaign against SAZAS by Radio 1, one can wonder how the cases should be interpreted. As a legitimate instrument to defend oneself against unjust allegations from journalists or others, or as a way to discredit anyone arguing against the evasion of royalty payments?

Not Only Radio, and Not Only Slovenia

The recent trouble around royalties for music does not appear to be an isolated phenomenon in Slovenia. The issue of royalties for audiovisual material has been a huge problem since at least 2009, when Variety Magazine reported on a “royalty battle” in central and eastern Europe.[8] A recent issue of Film International described an international fight for remuneration that has been dragging on for years, but which has gone completely unnoticed outside of Slovenia.[9] The matter includes rights-holders losing up to millions of euros in revenue and the failure the Slovenian Intellectual Property Agency to provide proper oversight. The agency favored one CMO called AIPA over all others applying for the same license. The rightful international organization, Agicoa, was kept entirely out of the procedure. A Slovenian court later judged this to be a violation of Slovenian law. Furthermore, an internal battle within the current responsible CMO, AIPA, was revealed for the first time. Utilizing a range of legal procedures, the founders of AIPA attempted to rid the organization of its current management. So far, the current management has managed to remain in power.

Similar or even bigger problems are found in other countries in the region. For the purposes of this article, I contacted CMO’s from across Eastern Europe. One case in particular exemplifies how serious the situation is, though it has never received any attention in the international media. I spoke with a CMO called Albautor from Albania. A representative described the current situation there:

“Most national TV stations, and all digital platforms, haven’t paid any royalties. Only 11 radio stations (out of 71 in total), and 139 cable TV stations (out of 180), have signed an agreement with the CMO. Except for RTSH (the state Radio and TV station), no national broadcasters have paid any royalties, as they have strong political connections and support.”

Conclusion

This article started out describing some of the well-known struggles of the 21st century music scene, wherein artists receive scant compensation for their creative work, which is streamed by millions of people across the globe. I have focused on but one example that is surely the tip of the iceberg. This problem is not confined to the relatively new field of music streamed via the internet, but also extends into the supposedly well-organized and long-running environment of radio broadcasts. To make matters worse, rights-holders in smaller countries like Slovenia lack the choice of their colleagues in larger markets, who can deal with Spotify, Apple or Tidal. Artists from Slovenia are simply unable to choose whether to have their music aired on the radio or not. Radio stations use their creative product without any contract that entitles them to the repertoire, and without paying the full amount of royalties due. While this has been the story of a single state in the EU, one wonders what kinds of comparable situations exist involving the abuse of legal loopholes, as well as outright illegal and certainly immoral behavior might be taking place in other EU countries and around the world. The brief review of Balkan countries outside of Slovenia, with Albania as an example, seems to indicate the region is rife with similar problems, and is a very bad omen.

[1]http://www.slovenskenovice.si/novice/slovenija/preiskava-na-sazasu-maslo-radijskega-mogotca-lea-oblaka

[2] http://mediawatch.mirovni-institut.si/eng/media_ownership.pdf

[3] http://www2.mirovni-institut.si/media_ownership/pdf/slovenia.pdf

[4] Grubar refers to article 158 – 1 of the Slovenian Copyright Act that states: (1) The user of works from the repertoire of a collecting society may request, at any time, the conclusion of a contract for the non-exclusive assignment of rights for the use of authors’ works in accordance with the valid tariff. Collecting societies may refuse such a request insofar as they have an objective reason to do so, such as a history of non-payment on the side of the user.

[5] This refers to article 158 – 2 of the Slovenian Copryright Act that states: Should parties fail to conclude a contract for the non-exclusive assignment of rights for the use of protected works, the right shall be deemed to have been assigned if the user deposits in the account of the collecting society, or with a court or notary, the amount demanded by the collecting society according to the valid tariff.

[6] https://www.youtube.com/channel/UCrahIsyGTlOryIryN1P5KEw

[7] http://razsodisce.org/razsodba_15032016-3.html (March 15th 2016), http://razsodisce.org/razsodba_23022016-2.html (February 23rd 2016), http://razsodisce.org/razsodba_080615c.html & http://razsodisce.org/razsodba_080615c.html (both June 8th 2015), http://razsodisce.org/arhiva588.html%3fnid=348 (March 13th 2013), http://razsodisce.org/arhiv0adc.html%3fnid=346 (February 5th 2013), http://razsodisce.org/arhivc271.html%3fnid=322 (July 1st 2012)

[8] http://variety.com/2009/scene/markets-festivals/royalty-battle-brews-in-europe-1118008852/

[9] http://filmint.nu/?p=17611

[10] http://filmint.nu/?p=17611

 

Edgar Tijhuis was trained as a lawyer and is the head of Katschberg Consulting in Amsterdam. He earned his PhD in criminology from Leiden University in the Netherlands and has published widely on art-related crimes and other subjects. He is a regular contributor to several magazines, including Film International and the European Review of Books and Culture.

 

Cover photo credit: David Haberthür/flickr/some rights reserved

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