Statement of the General Management on 2021
2021 was a successful year for GVL. However, in times like these we find it difficult to focus solely on economic results. Back in February 2022, while in the midst of preparing this annual report, the outbreak of a war caught Europe by surprise. And after over two years, all eyes suddenly shifted from the pandemic to the dramatic events, which were unfolding in the Ukraine. The daily stream of news and images of a war taking place just 1,000 km away was and is quite unsettling. For our rights holders, the most recent developments are accompanied by additional tangible burdens: The price hikes of the past months not only impose unexpected financial burdens but also create an additional uncertainty in a year where everyone had such high hopes for a return to normality.
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In uncertain times, we are especially aware of the particular importance of income to our creative partners and also GVL’s significant contribution in this respect: In 2021, we distributed a total of EUR 337m to more than 140,000 rights holders and once more exceeded the peak value of 2020. At the same time, GVL reduced its reserves and accounts payable for another year running by more than EUR 100m.
GVL also registered a distinct increase in revenues in 2021: At EUR 248m, our revenues considerably exceeded the prior-year figure by well over EUR 30m. The revenue sector most severely affected by the pandemic was the public performance sector. Despite a brief recovery in 2021, it still has not reached its 2019 level. We, however, managed to increase our income significantly in the private radio sector due to a new radio tariff as well as in the private copying sector.
A key event in the past year was the Assembly of Rights Holders, which due to the COVID-19 pandemic was streamed in an online format only. The key focus of the Assembly, which is held every four years, was the election of the GVL delegates. The 2021 elections were conducted on June 4 via an online portal specifically designed for the event.
Only three weeks later, we welcomed the 16 re-elected and the six newly elected delegates to the Assembly of Shareholders and Delegates, the GVL’s principal committee. Among the newly elected delegates are public critics of GVL who are now able to work constructively alongside our committees to further develop our collective management organisation/music licensing company.
We responded to the public criticism from the previous years by communicating in a more active and purposeful manner, and above all, by increasing our performance significantly. In 2021, we adhered to our ambitious distribution schedules and furthermore continued to invest into GVL’s technical development and progress. As a data processing company, we are constantly adapting and revising our technologies and interfaces in order to remain compatible with national and international systems and also to set new standards. Our biggest challenge is to ensure the alignment of the continuous optimisation of our portals and features with the ongoing operations of our existing systems in terms of functionality.
On 1 August 2021, shortly before the end of the legislation period, the reformed Copyright Act entered into force as scheduled. It provides for new remuneration rights for platform exploitations, which we as GVL will proficiently exercise in the interest of our rights holders.
With the change of government after the Bundestag elections, the expectations of the creative sector are now directed at Claudia Roth as the new Minister of State for Culture and Media. In our view, an important signal was sent on the onset of Culture should be anchored into the German Constitution as a fixed national objective. We welcome this initiative, particularly with regard to the precarious situation of many performers and cultural institutions due to the COVID-19 pandemic. It will, however, be an important step to breathe life into this growth in significance and importance. In order to maintain strong and long-lasting cultural diversity, social security systems and sustainable support structures for all categories are called for. We are actively working to achieve this.
To this day, many performers are still struggling with loss of earnings. The promotion and support are not only essential in times of COVID-19, it is also our absolute priority to make a tangible contribution. For the past 15 years, we have been involved as principal shareholders of Initiative Musik, which in 2021, awarded more than EUR 100m via various funding programmes. In addition, GVL carried out a EUR 30m scholarship programme, financed by the Federal Ministry of Culture (BKM) as part of its Neustart Kultur programme: Some 5,500 performers benefited from the grant scheme with regard to their creative undertakings.
In its second COVID-19 year, we managed to remain a reliable and strong partner for our rights holders. The thoroughly positive reactions from the cultural sector encourages and motivates us to continue to do our best for our performers and labels who entrusted us with their rights.
Yours
Guido Evers and Dr. Tilo Gerlach
Managing Directors of GVL