GVL revenues slightly above expectations

• GVL collected approx. € 230m based on neighbouring rights for artists, producers and event organisers
• Decline of income compared to the previous year due to high payments in the private copying sector in 2017
• Overall result for broadcast remuneration increased by 5.9 per cent to about € 92.1m
• Eight additional support projects for 2019 and 2020 approved
• Updated distribution plans from 2016 onwards agreed
• Kammergericht [Higher Regional Court] endorses GVL Articles of Association

Berlin, 24 June 2019 – The Gesellschaft zur Verwertung von Leistungsschutzrechten mbH (GVL) published its annual accounts 2018 in the course of its regular ‘Associates and Delegates’ Assembly on 18 June 2019. Due to the decline in high adjustment payments of the previous year by ZPÜ, GVL’s overall revenues dropped, as was expected, to € 229.8m in 2018 (a decrease of 25.9 per cent).

“All in all, we are satisfied with our year-end results for 2018”, declare GVL Managing Directors Guido Evers and Dr. Tilo Gerlach. “The result has turned out to be significantly higher than we had originally anticipated. It is far above average collections of the previous ten years and noticeably above the 200-million-Euro threshold.”

After having benefited from back payments and adjustments in the private copying sector in the previous years (collections via ZPÜ, the joint collection centre of the collective management organisations for private copying levies), such one-off financial items were missing in 2018 to a great extent. GVL thus saw its overall income decrease by 25.9 per cent in financial year 2018. Total revenues therefore reached about € 203m in 2018.

“Apart from the good annual result, we are pleased that we managed to pay out a total of € 287m to our producers and artists in 2018”, adds Guido Evers. “At the same time, the distributions 2018 acted as a test run for the new GVL systems. After intensive development and programming works over the past few years, we carried out all distributions for the first time via the new systems environment in 2018”, says Evers. “It was particularly during the closing distribution for artists that we were able to dissolve high reserve amounts and transfer them directly to our rights holders”, explains Tilo Gerlach. “The challenge for GVL remains to conclude the digital transformation process for our rights holders. Of course, there are still items here and there which need to be improved for a smooth distribution process within a comprehensive redesign of the IT architecture such as the one that has been carried out at GVL, but we are making good progress”, Gerlach continues to elaborate.

Overview of the most important numbers

Reproduction rights resulted in an income of € 83.9m in 2018 compared to € 169.3m in the previous year. This is mainly remuneration from private copying. In this sector, GVL benefited in the previous years from one-off financial items based on comprehensive adjustment payments.

The highest revenues yielded by GVL in 2018, combined with a growth of 5.9 per cent, occurred in the broadcasting revenue sector (about €92.1m in 2018 compared to €87m in the previous year).

A noticeable increase in income by more than 41 per cent were reached by GVL in the international rights remuneration sector. They amounted to € 5.6m in 2018 compared to approx. € 4m in 2017. This is the encouraging result of the continued claiming processes with the sister societies (establishing rights entitlements). At the same time, a high number of rights holders followed GVL’s repeated invitation in 2018 to register their contributions for past years. This was a major contributing factor to the previously mentioned increase in international revenues.

The € 1.1m decrease in the public communication sector was not an operational effect but the result of accruals and deferrals and a conservative estimate regarding the receivables.

Slight reductions were also felt by GVL in the collecting sector of rental and lending. Revenues in this sector decreased by about 14 per cent to € 2.1m. Income from cable re-transmission of artistic performances remained relatively stable with € 2.1m compared to the previous year (€ 2.2m).

GVL’s own administrative expenses reduced by about 3 per cent to € 22.1m compared to the previous year (€ 22.8m in the previous year). The cost deduction rate was at 9.6 per cent due to the drop in income and therefore higher than the previous year’s levels (7.4 per cent in 2017).

Subsidisation and promotional projects

GVL paid about € 3.6m in total for the promotion of cultural projects in the course of allocations in 2018.

Apart from the grant applications that had already been agreed upon in November 2018, additional projects were positively confirmed at the ‘Associates and Delegates’ Assembly:

“During said meeting, we released the support for eight additional projects for 2019 and 2020. A particular highlight is the promotion of OPUS Klassik, the most important German classical music award. We thus support the award ceremony in the course of the politico-cultural grants in the coming two years with a high five-digit amount respectively. Smaller projects are, however, also very close to our hearts: In 2019, GVL supports the “Internationale Jugendbegegnung” [International Youth Meeting], a project of the Rheinische Musikschule Köln [Music School Rhineland, Cologne]”, says Detlev Tiemann, Chairman of the ‘Associates and Delegates’ Assembly.

Approval by the Higher Regional Court Berlin: In the proceedings of individual producers of sound recordings last Wednesday, the voting rights weighting based on economic importance has now been confirmed as legally binding.

The annual and transparency report 2018, plus additional contents, will be published at the end of August at www.gvl.de.

About GVL:

Those who render artistic performances or create the respective financial basis for the latter must receive money for the exploitation of their performances. GVL, the society for the administration of neighbouring rights, captures and manages such exploitations. GVL pays the fees it collects on a fiduciary basis e.g. from radio and TV stations and for the communication to the public (e.g. in restaurants or cafés) to its members in the form of a remuneration each year. More than 160,000 performers, producers of sound recordings and audiovisual recordings, music and music video clip producers as well as event organisers have placed their trust in GVL on a global level - and thus make GVL one of the biggest collective management organisations and music licensing companies for neighbouring rights in the world. Shareholders of GVL are the German Orchestra Association (DOV), the Federal Association of the Music Industry (BVMI), the Federal Acting Association (BFFS) and the Association of Independent Musicians and Music Companies e.V.(VUT).