“The distribution backlog is no more”

The time for a double final distribution is over from 2023. Time to rejoice?

For GVL, the answer is a clear yes. After all, it means that we managed to finally dissolve the long backlog that we had for years when it comes to the final distributions. And for our rights holders, it means they get paid more quickly in the end.

From next year onwards, there will only be one final distribution per year. Initial preparations for the final distribution of the distribution year 2019 in the coming autumn are already well underway. We inform our rights holders in the next days regarding the notification period for their contributions for the year 2019. 

In the past few years, GVL carried out two final distributions each autumn. What was the reason behind that?

Well, you need to look back a little bit more to understand why, in fact more than ten years back. A complete digital transformation process was linked to the switch from the GVL distribution system from an income-based to a usage-based system. Values that had to be determined on the basis of a stack of paper in the past can now be calculated by using millions of datasets.

It took GVL some time to complete this transition. We were only able to run a final distribution for the first time according to the new system from 2018. This was for the distribution years 2010 to 2012 at the time. Then, a continuous payout was the main issue. At the same time, we had to make up for any backlogs of previous years. As a consequence, we decided, together with our committees, that we would run a final distribution for two remuneration years together until we caught up with the backlog. That means that we ran the final distribution for the years 2013/14 at the beginning of 2020, the years 2015/16 in 2021 and the years 2017/2018 in 2022. We are thus now in the statutory regular distribution cycle.

What does this distribution cycle look like?

The Collecting Societies Act (Verwertungsgesellschaftengesetz), in short VGG, provides for a distribution cycle spanning four years. It is no later than nine months after the year that the money was received in the respective usage year, the initial distribution takes place. Rights holders can submit notifications regarding their contributions for each year for a minimum of three years. During this time, we carried out the so-called subsequent distributions. In the fourth year following the usage year, there is a final distribution where the remuneration which we had not been paid out to potential contributors yet will be paid out to all other rights holders who had submitted contribution notifications for said year.

Does this mean that the rights holders have to wait for the final distribution above all?

No. Overall, we distribute on a continuous basis across the entire distribution cycle. This means that we pay out remuneration with the initial and subsequent distributions to the rights holders, step by step. We therefore recommend that our rights holders do not wait until the end of the notification period for the final distribution. Please take some time on a regular basis, let’s say two to four times per year, and submit your notifications via our online portal my.gvl!

In the final distribution, it is only the remainder of the remuneration that is paid out. Said remainder has decreased more and more over the past few years because we already paid out more in the subsequent distributions based on the experience values arising in the previous years, and our know-how regarding the contributors is constantly rising.

Can those participating in the distribution breathe a sigh of relief now?

Yes, chasing backlogs is over for now. However, we are already taking pole position for the next items to be optimised in order to continue to improve the cooperation between GVL and its rights holders. In the  portal meine.gvl, we managed to make significant improvements for our rights holders by introducing an enhanced product search and a newly structure “notifications - submitted” area in 2022. The latter will be launched in the next few days on our portal.  Of course, we are going to continue working on our portal in 2023, with functionalities such as “My data” or “CV”. It is our goal that it becomes ever easier for the rights holders to deal with their GVL matters.

Juliane Fiedler carried out the interview.