ZAPRAF Annual Report for 2018 1 Annual Report for 2018 (with the included Finan- cial Report for 2017)

1. GENERAL ASSEMBLY The General Assembly consisted of 20 members in 2018. The Assembly of ZAPRAF representatives has 11 members.

2. MANAGING BOARD Association for Protection, Collection The ZAPRAF Managing Board consists of 7 regular members. and Distribution of Phonogram Producers’ Rights President of the Managing Board: ZAPRAF Želimir Babogredac, Records Vice-president of the Managing Board: Branko Komljenović, Menart Ulica kneza Borne 5, 10 000 Tel: +385 1 3668 194 Fax: +385 1 3668 072 Regular members of the MB: www.zapraf.hr MENART DANCING BEAR AQUARIUS RECORDS E-mail address: [email protected] Activity code: Activities of other membership organizations, NEM (9499) SCARDONA Registered number: 00000541 Identification number: 1150006 OIB: 43794390104 3. DIRECTOR Maja Vidmar Klarić IBAN: HR9823600001101365900 President: Želimir Babogredac 4. SUPERVISORY BOARD Director: Maja Vidmar Klarić The members of the ZAPRAF Supervisory Board are Mirjana Matić, Zrinko Tutić and Šima Jovanovac. Organizational Structure of ZAPRAF Structure Organizational

2 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 3 Content:

Introductory remarks by the President of ZAPRAF ...... 6 Fee distribution for 2017...... 29 Introductory remarks by the Director of ZAPRAF...... 8 BTL Fund...... 32 ZAPRAF’s activities between two annual meetings of the General Assembly...... 10 Audit report...... 34 Extraordinary meeting of the ZAPRAF General Assembly...... 10 Inspection of ZAPRAF’s operations by the State Intellectual Property Office...... 36 Regular meeting of the ZAPRAF General Assembly...... 11 Other activities...... 37 Managing Board activities...... 13 Cooperation between ZAPRAF and the University of Zagreb...... 37 Highlights...... 13 11th Electronic Media Days again welcome a ZAPRAF representative...... 37 ZAPRAF obtains new approval for collective rights management...... 13 ZAPRAF’s participation in the MAKK conference...... 37 Linking of ZAPRAF and HRT music archives completed...... 14 Creative industry calls on EU Presidency to resolve the problem of the transfer of value on the digital market...... 38 Implementing the GDPR in ZAPRAF’s activities...... 14 HDU launches the “Incubator of Good Music” radio show...... 39 The unified ISRC base presented...... 15 Second “Month of Music” held in Zagreb...... 39 Annual transparency report published ...... 15 International Record Store Day celebrated in April...... 40 Supervisory Board report ...... 16 First Study of music-listening habits in Croatia presented ...... 40 International cooperation and bilateral agreements...... 16 Croatian Phonographic Association and Laganini FM sign Cooperation Agreement. . . . 41 Lodovico Benvenuti, director of the IFPI’s European Office, visits ZAPRAF...... 16 ZAPRAF and HDU continue with the raising of awareness among students...... 42 Representative of the International Federation of the Phonographic Industry visits ZAPRAF. 17 Activities of the HDU’s Anti-piracy Department...... 42 Albanian collective management organization visits ZAPRAF...... 17 Cooperation between HDU and RTL on the new RTL Play service...... 42 Regional conference held in Belgrade...... 17 The first celebration of the National Album Day...... 43 ZAPRAF and HDU representatives at Serbian Radio Days...... 18 Launch of the book “70 priča o albumima povodom 70 godina od prvog izdanja”. . . . . 44 ZAPRAF representatives as regular participants in PRC Meetings ...... 18 Croatian Phonographic Association launches new monthly vinyl chart...... 44 A number of bilateral meetings with collective management organizations from the region. 19 New cooperation between Deezer and HDU: “Selected for you by…”...... 45 BPI representatives visit ZAPRAF and HDU...... 19 HDU annual awards and special recognitions presented...... 45 Financial report for 2017...... 20 “Shape of You” – the song with the most airplay in 2017...... 47 Collected fees...... 21 ZAPRAF’s Staff ...... 50 Broadcasting...... 22 Rebroadcasting (cable retransmission)...... 23 Public performance...... 24 Fee for phonogram reproduction for private or other personal use (blank-tape levy). . . 25 Mechanical reproduction rights (dubbing)...... 26 Allocations for the cost of rights management...... 27

4 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 5 We have joined one of the most import- should strive to achieve. We believe that out Croatia. Introductory ant initiatives launched by numerous cre- the study conducted last year is a step In the year ahead, we would like to raise atives in Croatia and in Europe, and to- towards reaching those goals, together all of our previous successes to an even remarks by the gether with other associations, we have with national campaigns that should be higher level, and add some new ones, to begun to tackle the so-called Value Gap organized in synergy and cooperation of the satisfaction of all our rightholders. In President of problem. Up until the moment when the rightholders and government bodies and addition to the high-quality and active Copyright Directive was voted, we had ministries. protection of their rights, we shall en- ZAPRAF sent messages about the importance of Furthermore, we have also implement- deavour to establish cooperation with solving the Value Gap problem to the Eu- The year behind us was full of devel- ed a number of successful activities in new partners and to keep pace with ropean Parliament, and called on MEPs opments in the , and in it cooperation with the Croatian Radio- global music trends and thus support the to support the development of new leg- – as in any other year – Association for television (HRT). In accordance with the growth and prosperity of our righthold- islation that would adequately protect Protection, Collection and Distribution of signed Music Industry Promotion Agree- ers with a high level of transparency and the rights of all stakeholders in the music Phonogram Producers’ Rights (ZAPRAF) ment, we have provided HRT with our professionalism, as in the past. We are industry and other creative industries, so implemented a number of activities. We entire archive containing over 95,000 pleased that we have continually validat- that they can enjoy the protection of their have summarised all of them in our An- domestically produced recordings. For its ed the trust of our members and collab- rights and obtain a just remuneration for nual Report which we hereby present to part, HRT has introduced internationally orators year after year, and I believe that their work. We had primarily addressed you. We are grateful that you have opened recognized ISRC codes as unique identi- the year ahead will yield the same results. the Croatian members of the European its cover page, and proud that you can fiers of each recording into its systems, Parliament, but also other MEPs, and the now learn more about the Association’s resulting in quicker and more accurate public at large. Eventually, we achieved activities and operations, and about its data on the recordings used that are then what we had insisted upon for nearly a detailed financial report, in this seventh collected by ZAPRAF. This cooperation is year: the Directive was adopted by the edition of our bilingual Annual Report. an excellent example of a national pub- European Parliament and submitted for lic media service and the music industry Over the past period, ZAPRAF has been further procedure, that is, for the tria- working together to promote and de- promoting interests of record producers logue between the European Parliament, velop music, creators and the recording and the music industry in Croatia, while Council and Commission. at the same time protecting to the utmost industry to their mutual benefit, and to possible degree the rights of its members I would like to underline that last year the satisfaction of the public as the end and those who have granted it their pow- ZAPRAF, in cooperation with the Croa- user. It is noteworthy that, thanks to this er of attorney, both in Croatia and abroad. tian Phonographic Association, conduct- cooperation, HRT’s audiences will re- If we look back at the recent meetings ed a study on the music-listening habits ceive timely information and news from with IFPI (International Federation of the in the Republic of Croatia, with the aim the music industry and far more diverse Phonographic Industry) representatives, of obtaining a realistic picture of listen- musical content. ing habits and attitudes toward music the meeting with a representative of the In the past period, in cooperation with the among Croatian citizens. The study – the largest British phonographic organiza- Croatian Phonographic Association, we first of its kind in this region – showed tion, BPI, our participation in the IFPI PRC have once again organized the rich Mu- that our expectations had been correct meetings in Lisbon and London, and the sic Month in Zagreb, presented the HDU and that Croats like music and enjoy it meetings held with the State Intellectual annual awards for best musical works, on a daily basis. However, some prob- Property Office, the Croatian members of celebrated National Album Day in Croatia lems are still present, and this has been the European Parliament, other collec- for the first time, established new collab- confirmed by the study: in Croatia, there tive management organizations in Cro- orations with RTL, the Laganini FM Group is a lack of legal digital music services, a atia, and many other direct and indirect and the University of Zagreb, held a num- high rate of music piracy, and insufficient stakeholders in the Croatian and interna- ber of panel discussions, participated in awareness of the necessity to respect tional music industry, we can say that we various conferences, continued activities copyright and related rights. Therefore, Želimir Babogredac have endeavoured to achieve our goals to raise awareness of the importance of raising public awareness and creating to the greatest extent possible and in the intellectual property, copyright and re- conditions for the arrival of the major le- best possible way, and that we have once lated rights with special emphasis on the gal music services to the Croatian market again been successful. youth, and we have also launched our are goals that the entire music industry own radio show, Incubator of Good Mu- sic, broadcast by radio stations through-

6 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 7 regulations with effective legislative real use of recordings, which means that erations and to transparently perform solutions. It also had to reapply for ap- all recordings used and reported as aired ZAPRAF’s primary task, which is to collect proval from the State Intellectual Prop- by the users of the subject-matter of pro- and distribute rightholders’ fees. erty Office of the Republic of Croatia. We tection were included in the distribution. You can find more information about all are pleased that ZAPRAF has satisfied all Last year, ZAPRAF’s IT department col- of the above, and about our association’s requirements, and has thus obtained new lected data on the use of recordings from many other activities and accomplish- approval for the collective management a total of 176 radio and television stations, ments, in the report that you have before of phonogram producers’ rights. and processed more than 16 million re- you. In addition to improving regulations in cords on aired recordings. the field of copyright and related rights, We are particularly pleased that the lev- over the past year ZAPRAF has also been el of recognition of recordings used that intensively involved in the implementa- are registered in ZAPRAF’s database has tion of the General Data Protection Reg- reached 91.29% (the International Feder- ulation (GDPR) in order to ensure that the ation of the Phonographic Industry (IFPI) personal data of all the holders of pho- recommends that the level of recognition nogram producers’ rights are handled in be at least 80%). compliance with the highest confidential- ity and security standards. In 2017, the calculation of fees payable to rightholders contained for the first Besides these activities, in the past year time more data and information, includ- we have continued investing resourc- ing a break-down of the amount by type es in the further modernization and im- of use, and also including the ZAPRAF’s provement of our digital databases and IT operating costs, such as an itemised solutions. Since June 2018, all righthold- break-down of rights-management ers, and all users of the subject-matter Maja Vidmar Klarić costs, special payments to funds, etc. of protection, can access a single digital This novelty was introduced to further in- ISCR database from ZAPRAF’S web page. crease the level of information reported Introductory The database makes it possible to see the to rightholders about how their revenues name of the recording, performer, year of are managed, and to contribute to even remarks by the release and other important parameters. greater transparency of ZAPRAF’s oper- Based on feedback and positive reactions ations. Managing Director received from users, I can point out that this activity has achieved its goal, which Finally, I am particularly pleased to be of ZAPRAF was to ease the daily work of the users of able to point out that last year we were recordings, primarily radio and television honoured to receive some leading per- You have before you an overview of last stations. sons of the International Federation of year’s activities of Association for the the Phonographic Industry, which was a As far as ZAPRAF’s financial results are Protection, Collection and Distribution of great boost to ZAPRAF’s work and impor- concerned, in 2017 revenues generated Phonogram Producers’ Rights (ZAPRAF), tance. On that occasion, it was noted that by contracts concluded with users re- largely marked by some changes result- the high-quality systems such as those mained stable, with an increase of nearly ing from new legislative solutions affect- developed by ZAPRAF can serve as an 3%. The best financial results, that is, an ing the system of collective management outstanding model and example of good increased percentage of fees in compari- of copyright and related rights. practice for other organizations, and that son to the previous year, were generated they can be applied in other countries, The Act on Amendments to the Copyright by the right to public communication, and too, especially in countries in our region. and Related Rights Act that entered into the right to remuneration for private or force in July 2017 introduced a number other personal use. Such praise and recommendations are of novelties, and, consequently, ZAPRAF definitely an incentive for our further ef- As in previous years, the fees were dis- had to adopt a range of new provisions forts to systematically improve our op- to its by-laws with a view to aligning its tributed on the basis of the criterion of

8 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 9 of copyright or related rights, contents of time limit for the submission of data on nues, which amounted to nearly 3%, or ZAPRAF’s activities an approval application and the proce- the use of phonograms in a distribution HRK 727,810.61. With reference to distri- dure for issuing approvals to collective year and the time limit for the distribu- bution of the fees collected, the practice between two annu- management organizations by the State tion of fees in a distribution year, how was continued of payment of monthly Intellectual Property Office. the amounts for unrecognized recordings and quarterly advances to those hold- al meetings of the are set aside, as well as new provisions ers of phonogram producers’ rights who All associations engaging in the collective pertaining to the regulation of funds, lim- had been entitled to a fee exceeding HRK rights management based or established General Assembly itations of ZAPRAF’s operational costs, 100,000, or HRK 40,000, respectively, in in the Republic of Croatia – including management of revenues generated by the previous year. ZAPRAF – were obliged to align their rights, and provisions on transparency. Extraordinary meeting of the ZAPRAF by-laws, their internal organizational Director Maja Vidmar Klarić stated that General Assembly structures and their operations with the Therefore, at this extraordinary meeting, the continuous enhancement of the IT provisions of the new Act, and the new the ZAPRAF General Assembly adopted processing of data relating to the use of Ordinance, within a period not to ex- ZAPRAF’s new Statute and Regulation on phonograms had been notable, result- The extraordinary meeting of the ZAPRAF ceed four months after the date of the the collective protection of phonogram ing last year in the collection of data on General Assembly was held on Thurs- Ordinance’s entry into force. The same producers’ rights and distribution of fees, the use of recordings from 176 national, day, 25 January 2018, at the Association’s deadline had been set for submitting ap- simultaneously rendering null and void regional, and local radio and television premises in Zagreb. plications for approval to the State Intel- the previous Regulation on the require- stations in the Republic of Croatia. A to- lectual Property Office, with all the doc- ments and procedure for accession to tal of 16,410,441 phonogram airings were ZAPRAF’s regular members were present uments and other evidence proving that ZAPRAF membership and the Regula- registered, with a total of 604,550 pho- at the meeting, which was chaired by the they meet the requirements for engaging tion on the Fund for Stimulating Artistic nograms used. Furthermore, the level President of ZAPRAF Želimir Babogredac. in the activity of collective management Creativity and Cultural Diversity, whose of phonogram recognition is at enviable In her introductory address, ZAPRAF of copyright and related rights as pre- provisions had been incorporated in 91.29% of recordings recognized, which is Managing Director Maja Vidmar Klarić scribed by the Act and the Ordinance. ZAPRAF’s aforementioned newly adopt- significantly higher than the level of 80% ed by-laws. recommended by the IFPI (International pointed out that the reason for holding The ZAPRAF members present were Federation of the Phonographic Indus- the extraordinary meeting of the ZAPRAF notified of all novelties, and the pro- try). The upgrading and optimization of General Assembly was to align ZAPRAF’s posed amendments to the Statute were Regular meeting of the ZAPRAF Gener- ZAPRAF’s digital database also contin- Statute and by-laws with the amended explained, motivated by the necessary al Assembly ued. Copyright and Related Rights Act of the alignment of the Statute with the new Republic of Croatia, adopted in July 2017, Act, and the necessity for securing new The high-level of transparency of pursuant to the implementation of Direc- approval for operations from the State ZAPRAF’s operations was maintained, The regular meeting of the ZAPRAF Gen- tive 2014/26/EU of the European Parlia- Intellectual Property Office. Furthermore, and thus in the distribution year 2017 all eral Assembly was held on Friday, 8 June ment and of the Council of 26 February the newly proposed Regulation on the rightholders who granted ZAPRAF their 2018, in the Olympia Sky Hotel at Vodice. 2014 on collective management of copy- collective protection of phonogram pro- power of attorney could see data on right and related rights and multi-terri- ducers’ rights and distribution of fees was Sixteen out of twenty ZAPRAF members the recordings used in real time, broken torial licensing of rights in musical works also presented. The adoption of this new with voting rights were present at the down by radio and television stations. for online use in the internal market. Regulation rendered the preceding Reg- meeting, and the meeting was chaired by In 2017, ZAPRAF and the Croatian Ra- ulation on the protection of phonogram ZAPRAF President Želimir Babogredac. On the basis of this Act, in November 2017 diotelevision (HRT) signed a cooperation producers’ rights and distribution of fees Following the election of the working the Ordinance on professional standards agreement on the basis of which ZAPRAF for phonogram use null and void. presidency and the establishment of their and procedures for issuing approvals for delivered to HRT more than 95,000 re- mandate, ZAPRAF Director Maja Vidmar collective rights management and on Special explanations were provided cordings from its base and the corre- Klarić presented the annual report on the remuneration for the work of the expert of the meaning of the most important sponding covers of each edition, with the Association’s operations and its financial council for fees in the area of copyright provisions of the new Act pertaining to total number of releases (albums) thus results, as well and the operating plan and related rights was also adopted. The ZAPRAF’s activities, such as those stip- delivered totalling 9,830. In this way, and financial plan for the forthcoming Ordinance regulates professional stan- ulating who can be a holder of the pho- holders of the phonogram producers’ period. dards that collective management orga- nogram producers’ rights, how they can rights who granted ZAPRAF their power nizations have to meet in order to engage exercise their rights, how non-commer- Particular emphasis was placed on the of attorney could enjoy new advantag- in the activity of collective management cial use of phonograms is regulated, the continued increase in ZAPRAF’s reve- es and opportunities presented by the

10 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 11 greatly simplified delivery of top-format al Assembly, in line with Art. 168(d) of the Managing Board activities recordings, and the delivery of the corre- Copyright and Related Rights Act. Highlights sponding metadata, to all stations in the On the basis of the adopted amendments HRT network. During its previous term, between 11 July to the ZAPRAF Statute, a discussion was 2017 and 29 May 2018, the ZAPRAF Man- ZAPRAF obtains new approval for col- Revenues from HRT were again stable launched on the possibility of estab- aging Board held 15 sessions. During this lective rights management over the preceding period, while reve- lishing an Assembly of Representatives, period, representatives of record com- nues from RTL and Nova TV continued to which would have the same rsponsibili- panies/members of the Managing Board show steady growth. ties as the General Assembly, and would On 19 June 2018, the State Intellectual were: be elected for a term of four years. After Property Office of the Republic of Cro- A tripartite contract was signed with HDS the discussion, the proposal was put to atia issued a new approval to Associa- ZAMP and HUZIP, regulating the rights CROATIA RECORDS a vote and the following eleven ZAPRAF tion for the Protection, Collection and and obligations of general users, cable Želimir Babogredac members obtained the highest number Distribution of Phonogram Producers’ operators, importers of blank sound/pic- Managing Board president of votes and were thus elected to the As- Rights (ZAPRAF) for the collective ture/text carriers, jukeboxes, local radio sembly of Representatives: management of phonogram produc- and television stations and DJs, while the MENART ers’ rights in the forthcoming period. collection of fees for simulcasting, web- Branko Komljenović CROATIA RECORDS casting and on-demand services was Managing Board vice-president The need to obtain new approval was the successful. result of amendments to the Copyright SCARDONA DANCING BEAR and Related Rights Act which became ef- The Supervisory Board reported to the Silvije Varga fective in the second half of 2017. General Assembly on its work over the MENART previous year, and stated its conclusion AQUARIUS RECORDS ZAPRAF was granted approval for the that the Managing Board and Director AQUARIUS RECORDS Boris Horvat management of the right to fees for had operated in compliance with the broadcasting of phonograms, for public Statute and in the interests of the Asso- HIT RECORDS DALLAS RECORDS communication of phonograms, for pub- ciation, that they had adopted all neces- Dario Draštata lic lending of phonograms, and for repro- sary decisions in line with valid legislation SPONA duction of phonograms for private and and that the reports on the Association’s SCARDONA other personal use, as well as the right CANTUS activities and business operations were Branko Paić to reproduction of phonograms, to lend realistic and objective, which means that phonograms and to make phonograms TONIKA no illegalities nor unlawful actions had HIT RECORDS available to the public. been identified. After the members of Kristina Krajna The State Institute examined all evi- the Supervisory Board were discharged DANCING BEAR dence submitted by ZAPRAF in order to of their duties, Mirjana Matić, Zrinko Tutić establish that it met the requirements to and Šima Jovanovac were re-elected as DALLAS RECORDS In compliance with the provisions of perform collective management of pho- members of the Supervisory Board for the Statute, the ZAPRAF Managing nogram producers’ rights in the Republic the forthcoming period. UNIVERSAL MUSIC HRVATSKA Board re-elected Maja Vidmar Klarić as of Croatia, and it concluded that all the In the continuation of the preceding pre- ZAPRAF’s Managing Director for a new requirements had been met and ZAPRAF sentations and discussions, the General two-year term. was eligible for new approval. Assembly adopted the amendments to In accordance with the provisions of the Statute, with a view to harmonizing it the new ZAPRAF Statute, resulting from with the amended Copyright and Related amendments to the Copyright and Relat- Rights Act. The amendments concerned ed Rights Act, two new forms have been provisions regulating membership in adopted, which are vital to ZAPRAF’s op- ZAPRAF, transparency of ZAPRAF’s op- erations. erations and the responsibilities of ZAPRAF’s bodies. Furthermore, the An- Those are the new power-of-attorney nual Transparency Report was presented form and the ZAPRAF membership appli- and unanimously endorsed by the Gener- cation form.

12 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 13 Any natural or legal person whose domi- lished Croatian music to be stored in a The unified ISRC base presented and the regular annual inspection by the cile or registered seat is in the Europe- single place and available to HRT from the State Intellectual Property Office. Since June 2018, ZAPRAF’s web page has an Union, and who is a holder of phono- moment of its release, in a state-of-the- featured a link to the unique digital ISRC The Annual Transparency Report also in- gram producers’ rights as defined by the art format, accompanied by all necessary base, which will greatly facilitate the work cludes a description of ZAPRAF’s legal provisions of the Copyright and Related data for its processing by the mediARC of ZAPRAF and of all the phonogram users, and managing structure. The financial Rights Act, may become a member of radio archiving system, and thus also by particularly radio and television stations. data specified in Art. 168.d(3) of the Copy- ZAPRAF upon submission of a completed Croatian Radio’s NETIA broadcasting sys- In this database, users can find meta data right and Related Rights Act contained in application. Thus, in the previous peri- tem. on the recording, and the unique identi- ZAPRAF’s Transparency Report include od, ZAPRAF has admitted Agapa, Muzi- To recall, ZAPRAF and HRT signed the fying recording code (the so-called ISRC). data on revenues from rights broken ka 360, Idm Music, Sipa Music, Propeler, Cooperation Agreement on promotion of down by the category of rights and type Mirna Aria, Gazde Art and Chansonfest to The ISRC is very important for the identi- the music industry in October 2017. The of use, data on rights-management costs membership. fication of recordings in the play-list re- goals of this cooperation as stated in the and other services provided by ZAPRAF ports submitted by radio and television In line with the preceding paragraph, for- Agreement are networking, harmoniza- to rightholders, data on amounts pay- stations. The ISRC-base browser is quick eign rightholders who are not citizens of tion and cooperation in acquisition and able to rightholders, and financial data and responsive, and facilitates searches an EU member state, and who do not have ensuring availability of the Croatian-mu- on relationships with other collective by year of release, title of the recording, their domicile or establishment in an EU sic archive and recent musical works, and management organizations. Attached to name of the performer and other param- member state, cannot grant their direct promoting music, creators and the record the Report is also a report on the use of eters. It has been optimized to allow its power of attorney to ZAPRAF to man- industry in HRT’s programmes. allocations for social, cultural and edu- use on desktops, laptops, smart phones, age their phonogram producers’ rights cational services, and the complete An- Pursuant to the Agreement, ZAPRAF tablets and other devices. in Croatia, but they can do so through a nual Transparency Report is available at made its entire archive available to HRT, licence agreement or a bilateral contract The software solution for the ISRC base ZAPRAF’s web page. with over 95,000 domestically produced signed by ZAPRAF and an organization has been developed by the company records, while HRT for its part introduced for collective management of phonogram Poslovna Spajalica d.o.o., ZAPRAF’s long- the internationally recognized ISRC producers’ rights in the country of their time partner and collaborator. codes, as unique identifiers of each re- citizenship, domicile or establishment. cording, to its systems. ZAPRAF has also adopted a new pow- Annual transparency report published er-of-attorney form, which is more de- tailed and aligned with valid legislation in Implementing the GDPR in ZAPRAF’s the field of copyright and related rights, activities In keeping with the obligation of collec- as well as the provisions of the Gener- The General Data Protection Regulation tive management organizations to com- al Data Protection Regulation (GDPR) (GDPR) came into effect on 25 May 2018. pile and publish annual transparency 2016/679 of the European Parliament It regulates the protection of personal reports – another novelty introduced by and Council. The new regulations equate data, with a view to providing the indi- the latest amendments to the Copyright all rightholders in the EU’s territory with viduals with a greater control over their and Related Rights Act – prior to the stip- respect to their choice of collective man- personal data. Considering that ZAPRAF ulated deadline ZAPRAF published on its agement organization and the complete handles the personal data of its mem- official web page its Annual Transparen- or partial withdrawal of their power of bers in compliance with the highest stan- cy Report, adopted unanimously by the attorney. dards of confidentiality and security, the General Assembly at its meeting of 8 June Linking of ZAPRAF and HRT music ar- Association also implements the GDPR 2018. Among other mandatory elements, chives completed in its operations. All members, partners the Report includes the 2017 Financial and business associates received timely Report, consisting of the balance sheet The transfer of the Croatian-music ar- information about the GDPR’s entry into and profit-and-loss account, and the Re- chive and recent musical releases, made force, and about their rights as stipulated port also lists the activities in the relevant available by ZAPRAF to the Croatian Ra- by the provisions of the Regulation. financial year. These include contracts diotelevision, was successfully complet- and cooperation agreements signed with ed in March 2018. other collective management associa- ZAPRAF made it possible for all the pub- tions and organizations, the annual audit

14 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 15 ment organizations, including ZAPRAF, ganization for collective management of Albanian collective management or- Supervisory Board the amended Copyright and Related phonogram producers’ rights in the re- ganization visits ZAPRAF Rights Act introduced novelties that gion, and pointed out the importance of report extend responsibilities of supervisory its continued development and its sound boards, which now include supervision of cooperation with the IFPI. Furthermore, In mid-February, representatives of all benefits, remunerations, amounts re- he emphasised his satisfaction with the the Albanian organization for collective In accordance with the ZAPRAF Statute ceived, and possible conflicts of interest expertise of the governmental bodies he management of phonogram producers’ and the extended scope of activities and involving persons managing the collec- encountered during his visit. rights, AMP, came to Zagreb and visited responsibilities of the Supervisory Board, tive management organization. ZAPRAF. The reason for their visit was to at its session held on 13 March 2018, Su- obtain more detailed information about pervisory Board members Mirjana Matić The new responsibilities of the Supervi- Representative of the International ZAPRAF’s mode of operation as a rep- (chairperson), Zrinko Tutić and Šima Jo- sory Board are also reflected in its mon- Federation of the Phonographic In- resentative model and good example for vanovac (members) examined the draft itoring of the implementation of certain dustry visits ZAPRAF other organizations in the neighbouring ZAPRAF’s Risk Management Ordinance decisions adopted by the General Assem- region. drawn up by ZAPRAF’s staff, and adopted bly, or the Assembly of Representatives, such as those pertaining to distribution, The primary focus of the discussion was it unanimously without any remarks. Ieva Platpere, a representative of the undistributed amounts, investment of the operating modes of the two organiza- In compliance with the Statute adopted International Federation of the Phono- revenues generated by rights, and the tions, and the presentation of ZAPRAF’s on 25 January 2018 and the Ordinance graphic Industry (IFPI), who specializes in adoption of risk management rules and database and its distribution model, as on the Collective Management of Phono- the implementation and supervision col- approval of certain procedures concern- well as its contracts with users. AMP Di- gram Producers’ Rights and Distribution lective management organizations, was ing the disposal of ZAPRAF’s assets. rector Zamir Sukniqi mentioned that AMP of Fees, at the following session held on in Zagreb in late February, on a working is only beginning its development as a 30 May 2018, the members of the Super- visit to ZAPRAF. The purpose of her visit collective management organization, and visory Board considered the application was to gain insight into ZAPRAF’s oper- that exchanges of experience with more of the ZAPRAF Statute and other by-laws ations and distribution model in line with experienced organizations were very and decisions of its bodies from 25 Janu- International coop- the IFPI’s aim of gathering and imple- important for setting up a high-quality ary 2018, and inspected the material and menting the best practices of collective system of collective protection of right- financial operations in 2017. eration and bilater- management organizations, and facilitat- holders. ing an exchange of experiences among The Supervisory Board has reviewed the al agreements organizations. Furthermore, ZAPRAF’s minutes of the fourteen Managing Board operational priorities and goals for 2018 sessions held since the last regular meet- Regional conference held in Belgrade were discussed, and ZAPRAF’s IT system ing of the General Assembly of 7 June Lodovico Benvenuti, director of the IF- and database were presented, which had 2017, and ascertained that the decisions PI’s European Office, visits ZAPRAF been assessed earlier by the IFPI as one adopted by the Managing Board complied In late 2017, a regional conference was of the most advanced systems in Europe. with the Association’s Statute and the held in Belgrade, with representatives aforementioned Ordinance. Lodovico Benvenuti, the director of the On behalf of the IFPI, Ms Platpere con- of collective management organizations European Office of the International Fed- firmed that ZAPRAF’s system complied from all countries in the region participat- Having inspected all the necessary docu- eration of Phonographic Industry (IFPI), with the standards set by the IFPI. She ing. The business models of all represent- ments, the Supervisory Board has estab- paid a working visit to ZAPRAF and the pointed out that advanced systems such ed collective management organizations lished that the Managing Board and Di- Croatian Phonographic Association on as ZAPRAF’s were an excellent model were presented, while IFPI representa- rector have acted in compliance with the 27 and 28 November 2017. During his and example of good practice for oth- tives suggested possible solutions for op- ZAPRAF Statute and in the Association’s visit, he held meetings at the State Intel- er organizations, and that they could be timizing the operation of organizations, interests, that they have adopted all the lectual Property Office and the Ministry introduced as such in other countries, depending on the level of development of necessary decisions in keeping with valid of Culture, discussing topics relevant to which is an IFPI’s recommendation. each of them. legislation, that their reports are realistic the music industry, especially in view of On this occasion, ZAPRAF presented and objective, and it has not identified the current amendments to EU copyright its operational and business system, any illegalities or unlawful actions. regulations. its database, and the distribution mod- With the goal of increasing the transpar- During his visit, Mr. Benvenuti praised el together with the highly advanced IT ency of operation of collective manage- the work of ZAPRAF as the leading or- system which allows our Association to operate efficiently and transparently.

16 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 17 ZAPRAF and HDU representatives at ZAPRAF representatives as regular A number of bilateral meetings with Copyright Directive, creation and Serbian Radio Days participants in PRC Meetings collective management organizations communication of charts, and anti-piracy from the region activities. As in earlier years, ZAPRAF maintained As a part of the spring Serbian Radio ZAPRAF representatives participated and developed bilateral relations with Days, held at Zlatibor from 15 to 17 April in the IFPI PRC meetings held in Lisbon organizations for collective management 2018, a panel discussion was organized in May 2018, and in London in October of phonogram producers’ rights in on the topic of Copyright and Media 2018. The two-day meetings included the neighbouring region, which is a Regulation. Besides representatives of overviews of the most important prerequisite for the high-quality and collective management organizations features of the music market in 2017, successful management of the rights of from and the president of RAB and workshops entitled “Music licencing” those who provided ZAPRAF with their Serbia Maja Rakovic, participants in the and “Data-base systems and distribution powers of attorney in territories outside discussion included ZAPRAF’s director rules.” Croatia. Maja Vidmar Klarić, and HDU’s president IFPI representatives held a range Želimir Babogredac. During the past year, meetings were held of presentations and informed their with Serbian, Slovenian and Albanian On this occasion, Ivan Božajić, the audiences about developments in the phonogram producers’ collective mana- manager and chief programmer of music market in 2017, including the gement organizations: IPF, OFPS and the 1Played system for tracking aired progress achieved with the development AMP. recordings, held a presentation of the of the Portal and Central Database, system for owners, managers and editors whose goal is to improve the cooperation of radio stations, the members of RAB between phonogram producers, BPI representatives visit ZAPRAF and Serbia. Those present demonstrated collective management organizations HDU a great deal of interest in the 1Played and the IFPI, by providing phonogram system and its possible implementation producers and collective management in their daily operations. organizations with a possibility of quicker In November, ZAPRAF and HDU and easier entry of catalogues at the representatives met with Ian Moss, the global level. public affairs director of the BPI (British As to financial results, it was concluded Phonographic Industry). that, in comparison to 2016, in 2017 the BPI represents the UK’s phonographic total revenues of the music industry grew industry, consisting of 300 independent by 8.1%, and it was the third consecutive record companies and three majors, year in which the music industry Universal Music, Sony Music, and Warner experienced increased revenues. Music. BPI members represent 85% of In 2017, the main source of revenues were the total annual music sales in the UK, the digital sales (downloads and streaming), fourth largest music market in the world. physical sales, phonogram producers’ Among its other activities, BPI organizes collective rights and revenues from some of the world’s most prestigious dubbing. In comparison to 2016, the total annual award ceremonies in the music collected fees in Croatia rose by about industry, the BRIT Awards and Classic 3%, and Croatia was one of the countries BRIT Awards. with lower operational costs. The meeting was an opportunity to exchange experiences between the organizations, and in addition to topics relating to collective rights, other issues were also discussed, such as the Annual HDU award ceremony, Record Store Day, new forms of music consumption,

18 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 19 Financial report for Collected fees In the 2017 distribution year, a total of HRK 34,489,748.80 was collected, which resulted in a growth of 2.9% of the total revenues in comparison to the earlier 2017 distribution year. ZAPRAF’s total revenues

2016 2017 DIFFERENCE in DIFFERENCE SHARE IN 2017 REVENUES REVENUES HRK in % REVENUES .

TV BROADCASTING HRK 1,073,741.98 HRK 11,217,936.42 HRK 144,194.44 1.30% 32.53%

RADIO BROADCASTING HRK 4,595,467.52 HRK 4,645,127.42 HRK 49,659.90 1.08% 13.47%

PUBLIC PERFORMANCE HRK 10,972,810.05 HRK 11,336,408.33 HRK 363,598.28 3.31% 32.87%

CABLE RETRANSMISSION HRK 4,131,798.03 HRK 4,168,948.42 HRK 37,150.39 0.90% 12.09%

BTL HRK 2,187,354.91 HRK 2,468,979.53 HRK 281,624.62 12.88% 7.16%

DUBBING HRK 557,505.30 HRK 566,557.98 HRK 9,052.68 1.62% 1.64%

INTERNET FEES HRK 0.00 HRK 39,612.72 HRK 39,612.72 0.11%

BILATERAL AGREEMENTS HRK 0.00 HRK 21,177.98 HRK 21,177.98 0.06%

OTHER REVENUES HRK 0.00 HRK 25,000.00 HRK 25,000.00 0.07%

TOTAL HRK 33,518,677.79 HRK 34,489,748.8 HRK 971.071.01 2.90% 100%

Difference in total revenues 2016 – 2017

2017. REVENUES 2016. REVENUES HRK 15 mil.

1.30% 3.31% HRK 10 mil.

HRK 5 mil. 1.08% 0.90% 12.88% HRK 1 mil.

HRK 0.5 mil. 1.62%

TV RADIO PUBLIC CABLE BTL DUBBING INTERNET BILATERAL OTHER BROADCASTING BROADCASTING PERFORMANCE RETRANSMISSION FEES AGREEMENTS REVENUES

20 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 21 Broadcasting Rebroadcasting (cable retransmissi- The total amount collected for the bro- adcasting rights was HRK 15,863,063.84, on) which included phonogram producers’ ri- ghts for radio and television station bro- adcasting. In 2017, a total of HRK 4,168,948.42 was collected for rebroadcasting (cable re- In comparison to 2016, the collected fees transmission), which was an increase of increased by HRK 193,854.34, or 1.24%. 0.9% in comparison to 2016.

Rebroadcasting (cable retransmission) Television broadcasting

HRK 12 mil. 11,217,936.42 HRK 4.5 mil. 11,073,741.98 4,168,948.42 HRK 11 mil. 4,131,798.03 10,219,029.16 10,194,510.03 HRK 4 mil. 3,946,426.85 HRK 10 mil. 3,874,698.97

HRK 9 mil. 8,799,055.27 HRK 3.5 mil. 8,527,539 3,317,287.03 HRK 8 mil. HRK 3 mil.

2012 2013 2014 2015 2016 2017 2,656,669.04 HRK 2.5 mil.

Radio broadcasting HRK 2 mil. 2012 2013 2014 2015 2016 2017 HRK 5 mil. 4,645,127.42 4,595,467.522

HRK 4.5 mil. 4,274,930.44 4,299,869.374 4,125,870.548

HRK 4 mil. 3,889,570.239

HRK 3.5 mil.

HRK 3 mil.

2012 2013 2014 2015 2016 2017

22 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 23 Public performance Fee for phonogram In 2017, HRK 11,336,408.33 was collected for public performance, which was an in- reproduction for crease of 3.31% in comparison to 2016. private or other personal use (blank-tape levy)

Public performance HRK 2,468,979.53 was collected in 2017 from fees for the reproduction of phono- HRK 12 mil. grams for private or other personal use. In accordance with its legal obligations, ZAPRAF has allocated 30% of this amount, 11,336,408.33 or HRK 637,000.83, to stimulate suitable HRK 11.25 mil. artistic creativity and cultural diversity. In 10,972,810.054 comparison to the previous year, the col- lected fees for the use of these rights saw 10,586,705.76 an increase of 12.88%. HRK 10.5 mil. 10,096,265.74

9,854,341.73 9,791,951.1 HRK 9.75 mil. BTL

HRK 9 mil. HRK 2.65 mil.

HRK 2.5 mil. 2,468,979.53 2012 2013 2014 2015 2016 2017 2,378,861.85

HRK 2.375 mil. 2,350,858.21

HRK 2.25 mil. 2,187,354.91 2,125,462.87 HRK 2.125 mil. 2,079,615.91

HRK 2 mil. 2012 2013 2014 2015 2016 2017

24 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 25 Mechanical Allocations for reproduction rights the cost of rights (dubbing) management

This category includes fees collected for Of the total amount of fees collected in the use of phonograms by DJs, in juke- 2017 for the use of phonogram producers’ boxes and in digital archives at radio and rights, which was HRK 34,489,748.80, television stations. In 2017, a total of HRK the costs of collective management of 566,557.98 was collected for mechanical phonogram producers’ rights have been reproduction rights, which was an in- divided in two categories: costs of fee crease of 1.62% in comparison with 2016. collection, and costs of data processing and fee distribution (costs of ZAPRAF’s operation). In the 2017 distribution year, the total cost of fee collection was HRK 4,261,271.88. Dubbing

ZAMP’s costs

COSTS OF FEE COLLECTION (HDS ZAMP)

Broadcasting HRK 531,475.64 Public communication HRK 2,607,373.93 Rebroadcasting HRK 667,031.75 BTL HRK 345,643.43 Dubbing (DJ, jukeboxes, digital archives of HRK 102,434.58 TV and radio stations) Internet fees HRK 7,312.55 TOTAL: HRK 4,261,271.88

26 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 27 ZAMP’s costs Fee

HRK 4.3 mil. 4,261,271.8808 distribution for

HRK 4.15 mil. 4,090,674.7486

HRK 4 mil. 3,941,828.4645 3,866,894.8947 HRK 3.85 mil. 3,843,951.5898 3,760,844.9903 2017 HRK 3.7 mil.

2012 2013 20142 015 2016 2017

In 2017, the costs of data process- ing and distribution of fees were HRK 3,752,545.24, which corresponds to 12.68% of the fees collected. These costs encompassed all costs of data process- ing and overhead expenses (rental of the premises, staff salaries, accounting, IT service, legal service, telecommunica- tions, Internet, IFPI membership fee, PR costs, intellectual-property protection event, seminars, conferences etc.).

28 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 29 cial allocations to funds, etc. The goal is Share in the total amount for distribution Distribution of fees to provide better information to the right- holders about the management of their revenues and greater transparency of In June 2018, ZAPRAF’s staff completed the operation of collective management processing the data on the use of phono- organizations. ZAPRAF warmly welcomes grams in 2017, and payments were made these goals, which it endeavoured to at- to all rightholders on the basis of final an- tain in its operation even in earlier years. nual calculations. In the last distribution year, the fees dis- As in the previous years, fees were dis- tributed to rightholders increased by tributed on the basis of the real use of 2.74% and in comparison to the previ- recordings, with all recordings that the ous year, the amount for distribution was 37.37% users of the subject-matter of protection TV BROADCASTING higher by HRK 668,971.92. reported as played having been included in the distribution of fees. Furthermore, before the final distribution of fees for 2017, 11 (eleven) advance in- Over the past year, ZAPRAF’s IT depart- stalments were paid to those righthold- ment collected data on the use of phono- ers who had been entitled to an amount grams from a total of 176 radio and tele- exceeding HRK 100,000 in the previous vision stations, and processed more than 14.44% year, and 3 (three) advance instalments 16 million aired recordings. RADIO were paid to those rightholders who had BROADCASTING Pursuant to the new Copyright and Re- been entitled to an amount exceeding lated Rights Act and the obligations con- HRK 40,000 in the previous year. tained therein, the notifications on the calculation of fees for 2017 contained a greater amount of data relating to the break-down of the amount by the type of OTHER REVENUES 0.07% BILATERAL AGREEMENTS 0.08% use, and the break-down of the overall INTERNET FEES 0.11% cost of ZAPRAF’s operation by item, spe- DUBBING 1.57%

5.02% BTL

Distribution of fees 11.83% CABLE 29.50% HRK 30 mil. RETRANSMISSION PUBLIC 25,063,762.923 PERFORMANCE 24,394,791.007 HRK 25 mil. 22,712,372.43 21,631,518.32

19,710,388.2 HRK 20 mil. 18,949,307.42

HRK 15 mil.

HRK 10 mil.

2012 2013 2014 2015 2016 2017

30 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 31 The applications were processed by the 21.) CD “ 50 godina” BTL Fund Expert Commission appointed by the ZA- List of projects 22.) Toni Cetinski: “Kao u snu” (CD and PRAF Managing Board (Kristina Krajna, LP) Maja Vidmar, Mladen Milić), which veri- granted financing Since the last BTL tender, announced in fied whether each application satisfied 23.) 10th Zagreb International Blues 2017, legislation governing collective ma- the conditions for funding from the BTL from the Fund: Festival nagement organizations’ funds has been Fund, whether it had been submitted wi- amended. With the entry into force of the 24.) 23rd International Summer Music thin the deadline, whether it contained all 1.) Release of the album ”Kanat od mora” new Copyright and Related Rights Act on School at Pučišća/Bol – island of Brač & data necessary and met the purpose of 8 July 2017, the legal obligation to alloca- 2.) Aquarius Vinyl Edition Bol Jazz Workshops the Fund. te funds generated by private and other 3.) My first single 25.) 10th Croatian Blues Challenge personal use to the Fund for Stimulating The decision on the allocation of funding 26.) Zrinka Posavec: “‘Gradovi i sela” Suitable Artistic and Cultural Creativity of from the so-called BTL Fund was adopted 4.) Mayales Katran Live Session Predominantly Non-Commercial Nature by the Managing Board at its session of 10 5.) 2018 CMC Festival 27.) Rokambol: “Sam” April 2018. and Cultural Diversity in Suitable Artistic 28.) B’s FUNSTALLATION: “Blue Line” and Cultural Fields (the so-called BTL 6.) 66th Zagreb Festival A contract has been signed with each Fund) no longer exists, though the possi- 29.) ‘MANNTRA – recording and applicant who was granted funding, sti- 7.) USB/CD edition of the concert by bility to do so has been maintained. production of a new album pulating, inter alia, the project manager’s Tamara Obrovac and CD edition of the composer Sanda Majurec At its session held on 8 February 2018, obligation to submit to ZAPRAF the re- 30.) TRAM 11: “Vrućina gradskog asfalta” the ZAPRAF Managing Board decided to levant documentation on the completed 8.) 2018 Karlovačko Rock Off – remastering, album production, LP and continue with the practice of many years project. digitalization 9.) Cedeterija.com and set up the BTL Fund for the next year 31.) TBF: “‘Uskladimo toplomjere” – as well, and grant funding in accordan- 10.) 21st Chansonfest remastering, album production, LP and ce with the conditions prescribed in the 11.) Publishing of the vinyl and CD edition digitalization announced tender. “ acoustic u Lisinskom” 32.) Zlatni glas Hrvatske – FestNet Thus, it was decided that 30% of the 12.) Release of “Antologija” by Paraf 33.) Release of the album Vladimir & amount collected from fees for private Kalafat: “Riva Degli Schiavoni” and other personal use would be alloca- 13.) Release of three vinyl re-issues ted to the BTL Fund, which corresponded (Gibonni: “Judi, zviri i beštimje”, Jinx: “Na 34.) Release of the album Mimika to HRK 637,038.68. zapad”, and TBF: “Pistaccio Metallic”) Orchestra: “The Divinities of the Earth and the Waters” The Fund was established with the aim of 14.) Kojoti: “Dragocjeno Raskošno Blistavo” (LP and 3CD box set) stimulating artistic and cultural creativity, 35.) “Ljepote takve nij 2” that is, stimulating and co-financing pu- 15.) Chui and HRT Jazz Orchestra: “Chui 36.) Release of the audio recording of blishing, phonogram producers’ activities ovu glazbu” (double CD and LP) the concert “Vanna & u and musical events in all fields of music, 16.) Damir Halilić - HAL: “Moć gitare” Lisinskom” and the funding was granted on the basis (book of sheet music for classical guitar 37.) Release of the audio recording of the of a public tender. + 2 DVDs) concert “Hauser i gosti u Pulskoj Areni” The tender was open between 5 March 17.) Ogenj: “Domaj” 38.) New webshop and 5 April 2018, and announced on ZA- PRAF’s web pages, as well as in a new- 18.) Miceks: “Ljubav, voda i sloboda” 39.) Album “Croatian Lounge” sletter sent to all subscribers and all 19.) Release of the album “Frano: The 40.) Velika rock eksplozija #11 those who provided ZAPRAF with their light” power of attorney. 41.) “Žurnada – Kantaduri” 20.) Release of seven albums (Kiper, In 55 project applications for funding from from the Cold and Nula, Kevlar Bikini, 42.) 8th Split Blues Festival – In the BTL Fund were received. Embassy 516, Šumski, Dalstroy, memoriam Jadran Zlodre Gobbo tri Franolić, Ćulap, Jovanović)

32 ZAPRAF Financial Report for 2017 ZAPRAF Financial Report for 2017 33 Audit report

A regular annual financial audit of ZAPRAF’s business activities was performed in September and June by Pir d.o.o., an independent auditing company. According to the opinion of the certified auditor, ZAPRAF’s annual financial statements for 2017 and the general calculation of the distribution of revenues generated by phonogram producers’ rights to the use of phonograms have been produced and published in keeping with the law, ZAPRAF’s internal by-laws and decisions.

34 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 35 Branko Komljenović, vice-president of Inspection of Other activities the two associations, participated in the ZAPRAF’s opera- discussion. Cooperation between ZAPRAF and the University of Zagreb tions by the State ZAPRAF’s participation in the MAKK Intellectual Proper- conference In October 2018, ZAPRAF began its co- operation with the University of Zagreb, ty Office In November 2018, ZAPRAF’s representa- with the goal of using the resources of tives again participated in the MAKK Con- both parties to raise public awareness of ference, traditionally held in the Zagreb the need to respect intellectual proper- On 21 and 22 December 2017, the State Museum of Contemporary Art. Among ty rights in the broad sense of the term, Intellectual Property Office (SIPO) con- other prominent speakers, the vice-pres- including copyright and related rights as ducted its regular inspection of ZAPRAF’s ident of ZAPRAF and HDU Branko Koml- their integral components. The activities operations pertaining to the legality of its jenović took part in the panel discussion organized within the framework of this activity of phonogram producers’ rights entitled The EU Copyright Directive. The cooperation include public discussions management. panel focused on a very topical issue, im- to be held at the Zagreb Faculty of Law, During the inspection, facts were ascer- portant to all stakeholders in the creative organization of various panel discussions, tained and assessed for the period that music sector, the expected adoption of media campaigns and many others. Oth- had elapsed since the previous inspection the Copyright Directive, which should fi- er collective management organizations with reference to the conformity of and nally do away with certain disparities and have joined ZAPRAF in this cooperation, amendments to the Association’s inter- legal lacunae on the digital music market, including HDS ZAMP, HUZIP and DHFR. nal by-laws, its excerpt from the Register both in Croatia and in the EU as a whole. By participating in such cooperation, of Associations, number of providers of ZAPRAF endeavours to contribute to the powers-of-attorney, ZAPRAF’s business development of the music industry in the premises and staff, administrative and RoC, and, together with other stakehold- technical tasks, bilateral relations with ers in the project, to raise awareness of foreign organizations for collective man- intellectual property and the need to re- agement of phonogram producers’ rights, spect it. membership in international umbrella as- sociations, business contracts concluded with other associations, rate schedules 11th Electronic Media Days again wel- and rules on distribution of fees, as well come a ZAPRAF representative as the audit report and the Supervisory Board report. The inspection did not identify any The panel discussion on the Copyright non-compliance, and the inspectors in- and Related Rights in the Media and Mu- formed ZAPRAF that collective manage- sic Industry, Local and National – held ment organizations with a seat or estab- during the 11th Electronic Media Days in lishment in the Republic of Croatia were November 2018 at Sveti Martin na Muri – obliged to align their by-laws, organiza- focused on the importance of upholding tional structures and operations with the copyrights and related rights, and on the Act Amending the Copyright and Related continuous need to foster cooperation Rights Act within the stipulated time limit. among all sectors of the music industry to keep pace and develop in line with trends. On behalf of ZAPRAF and HDU,

36 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 37 Creative industry calls on EU Presi- Another meeting was held in September HDU launches the “Incubator of Good Second “Month of Music” held in dency to resolve the problem of the with the Minister of Culture Nina Obuljen Music” radio show Zagreb transfer of value on the digital market Korižnek, who received representatives of creative associations in the Ministry ahead of the European Parliament’s ple- With the support of ZAPRAF, the Croatian For the second year running, the Cro- The International Federation of the Pho- nary session. The meeting was attend- Phonographic Association started 2018 atian Phonographic Association (HDU), nographic Industry (IFPI), whose mem- ed by the vice-president of ZAPRAF and with a new project, the Incubator radio supported by the biggest Croatian record bers also include the Croatian Pho- HDU Branko Komljenović, and represen- show, aired each week by a number of companies and ZAPRAF, organized the nographic Association, and 23 other tatives of ZAPRAF and HDU Mladen Milić radio stations all over Croatia. The pur- Zagreb Music Month. The events which organizations representing the European and Branimir Puškarić. The main topic pose of the show is to promote Croatian took place in April 2018 began with the creative industry, sent a letter to the EU was the Copyright Directive, and the Min- music and music-industry novelties, and Meet Your Idol competition, where Cro- Presidency in January 2018, calling on ister expressed her support for the cre- it was motivated by the desire to create atian music fans had an opportunity to it to address the issue of the so-called atives: “The individual rights and liberties an additional radio-broadcasting space meet , Davor Gobac, Željko value gap. The letter was sent to the EU of all those sharing their own content will for Croatian music. Bebek and the band Pravila Igre. Fur- Presidency ahead of the meeting in which remain the same, but what matters is thermore, a workshop on copyright and The whole show is produced, besides the 28 EU member states discussed their that platforms, which are currently only related rights was held in the Zagreb’s association, by television editor and an- opinions about the new draft Copyright generating profit, make sure that equita- secondary school Ninth Gymnasium with chor Ana Radišić and the former radio and Directive. ble remuneration is paid to those whose HDU and ZAPRAF representatives, and music editor and anchor Kornelije Heći- content they aggregate.” members of the band Meritas, who spoke The new EU Copyright Directive should mović. Thanks to an enviable production about the importance of listening to mu- resolve the issue of the digital market and It is worth mentioning that after all the level, ZAPRAF and HDU have developed sic in a legal fashion for them as musi- content-licencing method. The initiative actions undertaken, at its plenary ses- successful cooperation with a number of cians. of the creative industry, which brought sion held in Strasbourg on 12 September radio stations from all over Croatia, and together, among others, creators, per- 2018, the European Parliament adopted delivered a show which brings novelties Zagreb Month of Music ended with World formers, phonogram (record) producers, the text of the Copyright Directive, to the from the Croatian music scene week af- Intellectual Property Day, when the re- publishers, the film industry, the tele- satisfaction of rightholders and all MEPs ter week. sults of a comprehensive study of the vision industry, the European Football supporting them. The draft Directive was Croatian Phonographic Association about League and photography agencies, was then subjected to a trialogue between the music-listening habits in Croatia were launched with the aim of ensuring that Parliament, Council and Commission, and presented. It was the first such compre- the digital-market issue is not resolved to it will probably be adopted in 2019, be- hensive study conducted in Croatia. the detriment of the creative industries, fore the end of term of the current Euro- and with the objective of everybody re- pean Parliament. ceiving equitable pay for their work. In August, ahead of the vote on the EP’s text of the Copyright Directive on 12 Sep- tember 2018, Croatian creatives sent an- other letter to members of the European Parliament, warning Croatian MEPs of the importance of each single vote for the Directive. ZAPRAF and HDU joined the appeal sent to MEPs and thus made their contribution to the survival of present and future creatives and companies that work with them in Croatia and in the EU. In September, representatives of ZAPRAF and HDU met with Croatian MEPs in Strasbourg, before the plenary session at which the Directive was put to a vote.

38 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 39 International Record Store Day cele- insufficient information about legal music Croatian Phonographic Association brated in April services on offer, and only 16% of the and Laganini FM sign Cooperation respondents believe it is possible that Agreement they will use a pay-service in the future. For the eleventh year running, the third More than 96% of respondents listen Saturday in April has been celebrated all to the music on the radio and Internet, In May 2018, the Croatian Phonographic over the world as International Record making those two the most often used Association and Laganini FM (the former Store Day. As they did in the previous media for listening to music. Soundset Group) signed a Cooperation years, Croatian record companies took Agreement concerning the use of the The presentation of the study was part in the event and, under the umbrella Croatian music in the programming of followed by a panel discussion focusing of the Croatian Phonographic Association, the group’s radio stations. Laganini FM First Study of music-listening habits on “Contemporary Ways of Listening to they marked the day in large Croatian has radio centres in Zagreb, Varaždin, in Croatia presented Music,” with the participation of certain cities with special music releases, , Slavonski Brod, Požega, and relevant stakeholders from the fields discounts, gatherings and concerts held . of intellectual property, copyright and in CD shops. With the support of ZAPRAF, and in related rights and the music industry. The goals of this cooperation are In accordance with international practice, cooperation with the Croatian Employers’ The panellists were Ljiljana Kuterovac, networking, harmonization and the Croatian Record Store Day was also Association (HUP), in April 2018 the the director of the State Intellectual cooperation in the acquisition of the supported by two ambassadors, Tony Croatian Phonographic Association (HDU) Property Office, Davor Marić, member Croatian music archive and recent Cetinski and Tram 11, who treated their presented a study on music-listening of the Electronic Media Council, Antun releases and ensuring their availability, fans to their new musical releases and habits in Croatia, conducted in March Tomislav Šaban, the secretary general and the promotion of Croatian music, spent time with them in CD shops. 2018 by the Hendal market research of the Croatian Composers Society, creators, and the record industry in the agency. Želimir Babogredac, the president of the broadcast programming of current and In the Zagreb music shops Nova ploča, Croatian Phonographic Association, and future members of Laganini FM. Aquarius Music Shop, Menart Multimedia It was the first study of the kind carried the famous creator and musician Tonči Bookstore and Dancing Bear Music Shop, out in Croatia, and its goal was to obtain a With a view to meeting these goals, Huljić. The discussion was moderated by short concerts were given by some young realistic picture of the habits of Croatian HDU has delivered recordings from its journalist Mislav Togonal. rising stars and some well-established citizens when it comes to their listening members’ catalogues, as many as 98,000 phonographic names, from Maja Posavec, preferences and attitudes toward music. The main findings of the study are phonograms, while all new releases will Marko Kutlić, Nela, Andrijana Baković, The study encompassed all Croatian available at the HDU’s official web page. be available through a web interface. Jessica, Kim Verson, Matija Cvek, Jura regions, with a representative sample of The members of Laganini FM have Brkljača, David Temelkov and Sebastian citizens in the 15-64 age group. committed to process and adjust the Popović, to the bands such as Solarov, The results show that music is important archives received to the broadcasting Pravila igre, Kawasaki 3P, Tram 11 and to Croats, with 95% of respondents systems of radio stations which are others. All activities and special discounts listening to music every day, and current and future members of the group, were taken on by the music shops owned expressing an equal affinity for Croatian and to play and promote Croatian music by Croatian record companies in Zagreb, and foreign music. As many as two in compliance with the Electronic Media Split, Rijeka and Osijek. People who came thirds of respondents in Croatia pirate Act and other obligations stemming from to the music shops talked about the musical content, but, considering that this Agreement. music and new releases with the Croatian some respondents believe that storing ambassadors of Record Store Day, and music downloaded from YouTube on with many other performers and music their computers is legal, that number lovers. They also had an opportunity is certainly higher. Many Croats, 75% of to find coveted releases at discounted them, also believe that music should be prices, and thus they participated in a free of charge. At the same time, 8 out globally recognized musical tradition. of 10 respondents hold the opinion that artists should be able to make a living with their work and they also claim that they are well aware of the notion of intellectual property. Croats have

40 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 41 ZAPRAF and HDU continue with the Activities of the HDU’s Anti-piracy The first celebration of the National In addition to those talks about the album, raising of awareness among students Department Album Day a panel discussion was held in October in Nova Ploča music shop, entitled The mu- Within its department for the legality National Album Day was observed on 13 sic album or a modern way of listening to of digital music, HDU has continued its October, while the autumn, which was Continuing with their awareness-rais- music? The participants in the discussion intensive activities aimed at removing entirely dedicated to the album as a mu- ing activities initiated earlier, in 2018 were Branko Komljenović, Slavko Nedić, and delisting links. Thus, by September sic format and to its 70th anniversary, ZAPRAF and HDU representatives held Zlatko Turkalj and Pavao Mašić. The event 2018, HDU reported to Google and del- saw a number of activities organized by several workshops in schools, including was complemented by live performanc- isted 56,749 links containing illegal mp3 HDU, with the support of ZAPRAF. The the workshop on intellectual property es by Mia Dimšić, Kim Verson and Bojan music, which resulted in 130 pirate web activities, which brought the album back and the necessity to respect copyright Jambrošić, and the project’s ambassa- pages being shut down or rendered inac- into the focus of the music industry and and related rights for students of the Ri- dors were Tony Cetinski, Ivan Dečak, Mia cessible. The total quantity of mp3 music fans, included a number of media ap- jeka Natural Science and Graphics School Dimšić, Vojko Vrućina, Kim Verson, Si- removed or made inaccessible is several pearances, such as a series of talks in held in May. lente, Mladen Puljiz, Tomislav Bralić and hundred thousand albums and singles of Zlatko Turkalj’s Music Pub on the Croatian Dalibor Pavičić. In addition to a presentation of ZAPRAF’s both Croatian and foreign musicians. Radio’s Channel Two, and television ap- and HDU’s activities, students and teach- pearances on HRT, RTL, CMC, DMC and Z1. With the support of ZAPRAF, HDU will ers could learn about the system of copy- continue with its intensive activities right legislation relevant to the music aimed at protecting intellectual property industry of the Republic of Croatia. In an rights, primarily on music content, and it interesting discussion, the importance of will continue to follow global trends and respecting copyright and related rights the IFPI’s instructions on combatting pi- on music works was highlighted. racy. As they addressed the questions raised by both students and their teachers, HDU’s and ZAPRAF’s representatives Cooperation between HDU and RTL on gained valuable insight into the issues the new RTL Play service confronted by both of these groups in their daily lives. In 2018, HDU and RTL launched coop- In 2018, ZAPRAF’s awareness-raising eration which resulted in many Croatian activities targeted not only students, but music videos being made available in a also teachers. Thus, following an invita- single place. Thus, RTLplay and the RTL tion by the Agency for Vocational Edu- Music channel feature a large number of cation and Training and Adult Education, the best and latest Croatian music vid- ZAPRAF director Maja Vidmar Klarić gave eos produced by five record companies: a presentation on the collective manage- Aquarius Records, Dallas Records, Danc- ment of copyright and related rights and ing Bear, Menart and Scardona. With this the importance of awareness-raising of kind of cooperation, HDU endeavours to younger generations at the Vocational bring Croatian music closer to domestic Teachers’ Days held in in March. listeners and viewers.

42 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 43 Launch of the book “70 priča o albu- Croatian Phonographic Association New cooperation between Deezer and for her song . The newcomer of mima povodom 70 godina od prvog launches new monthly vinyl chart HDU: “Selected for you by…” the year title was won by Zsa Zsa, who, izdanja” together with Damir Kedžo, also won the award for best song of the year for their As a part of the celebration of National The Croatian Phonographic Association duet Sve u meni se budi. Buđenje was As part of the observation of National Album Day, HDU published its first top- and Deezer have launched a new playlist proclaimed the best band of the year, Album Day, in November 2018 the Croatian selling vinyl chart, since this medium whereby Croatian musicians can present after they topped the charts with their Phonographic Association presented the had regained popularity among music their favourite music to Croatian listeners. song Samo ti, samo ja. book “70 priča o albumima povodom 70 listeners. Globally, despite the general Every month, a new Croatian music The highest selling Croatian album of the godina od prvog izdanja” (70 stories about decline in physical sales, revenues celebrity produces his/her compilation year was Moderna žena by , albums on the 70th anniversary of their from the sales of vinyl grew by 22.3% in of both Croatian and foreign songs. The while the award for the most sold foreign first release). Music critics Hrvoje Horvat comparison to 2016, and year-on-year compilation can be found on Deezer under release went to Ed Sheeran for his album and Zlatko Gall wrote 70 stories about revenue growth had been steady. As for the title “Selected for you by…”. Divide. albums that are important for the history Croatia, vinyl sales also saw a significant of music in our region, and printed them rise in 2017 in comparison to 2016 of Among the performers who have shared The winners were greeted by many in this special edition presented by the 26.56%. their favourite music with listeners are colleagues and other performers, authors in the Zagreb Kaptol Boutique Ivan Dečak, Mia Dimšić, Saša Lozar, who also had successful singles in the The chart is available at the top-lista. in November. In addition to the book Marko Škugor, Luce, Đani Stipaničev, Jure previous year on the HR top 40 national hr web page, where each week the HDU presentation, an exhibition was held in Brkljača, Ivana Kovač, David Temelkov, radio-broadcasting chart, and radio and publishes the only official and accurate the same venue on 26 and 27 November, Boris Štok and many others. television editors and other celebrities. chart of the music played by Croatian radio featuring the covers of the major albums stations (HR Top 40), and the weekly top- As part of the HDI annual award ceremony, released by record companies in the selling Croatian and foreign album chart. the Croatian Employers Association and region. HDU annual awards and special recog- HDU conferred a special recognition to In addition to its publication of monthly nitions presented Croatia Records for its 70 years of operation top-selling vinyl charts, HDU has and its contribution to the Croatian music introduced the symbolic recognition industry, and special recognitions to the “Vinyl of the Month,” given to the record In December 2017, the Croatian record companies Menart and Tonika for company whose vinyl release sold the Phonographic Association brought 20 years of operation. most copies. together the leading persons of the Croatian music industry in the Zagreb This recognition marks a long tradition Kaptol Boutique Cinema & Bar and of the successful record industry in the presented its second annual awards. Republic of Croatia, and of the record companies active in its territory. In cooperation with RTL and the television programme Top.hr, the Croatian Phonographic Association presented its awards for the most successful musical works in the previous year, on the basis of data obtained from the national radio- broadcasting charts “HR top 40” and official record-sales charts. The award ceremony was opened by HDU president Želimir Babogredac, and the event was hosted by RTL’s Antonija Blaće and Dorijan Klarić. The best male singer award for 2017 went to Tony Cetinski for his song Laku noć, while the award for the best female singer of the year was presented to Mija Dimšić

44 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 45 “Shape of You” – the song with the most airplay in 2017

Based on the data collected by ZAPRAF from radio and television stations, Ed Sheeran’s song “Shape of You” received the most airplay in Croatia in 2017. ZAPRAF’s staff collected and processed all airplay data submitted by users, radio and television stations, which led to the conclusion that music editors aired Ed Sheeran’s hit the most. It was followed by Damir Kedžo and Zsa Zsa and their song “Sve u meni se budi,” Mia Dimšić and her song “Bezimeni,” and then her “Život nije siv,” and “Dani i godine” by Nina Badrić.

46 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 47 TOP 10 CROATIAN RECORDINGS IN 2017 RANKED BY AIRPLAY: TOP 10 FOREIGN RECORDINGS IN 2017 RANKED BY AIRPLAY:

SVE U MENI SE BUDI DAMIR KEDŽO, ZSA ZSA HIT RECORDS SHAPE OF YOU ED SHEERAN WARNER MUSIC GROUP / DANCING BEAR BEZIMENI MIA DIMŠIĆ CROATIA RECORDS SOMETHING JUST LIKE THIS CHAINSMOKERS / COLDPLAY SONY MUSIC / MENART ŽIVOT NIJE SIV MIA DIMŠIĆ CROATIA RECORDS CHAINED TO THE RHYTHM KATY PERRY / SKIP MARLEY UNIVERSAL MUSIC CROATIA DANI I GODINE NINA BADRIĆ AQUARIUS RECORDS HUMAN RAG ‘N’ BONE MAN SONY MUSIC / MENART LAKU NOĆ TONY CETINSKI HIT RECORDS I FEEL IT COMING THE WEEKND / DAFT PUNK UNIVERSAL MUSIC CROATIA ZALJUBILA SAM SE DETOUR AQUARIUS RECORDS ROCKABYE CLEAN BANDIT / SEAN PAUL, WARNER MUSIC GROUP / RENO 4 MILE KEKIN MENART ANNIE MARIE DANCING BEAR

SREĆA OLIVER DRAGOJEVIĆ, GIBONNI AQUARIUS RECORDS CAN’T STOP THE FEELING! JUSTIN TIMBERLAKE SONY MUSIC / MENART

VRATI ME NINA BADRIĆ AQUARIUS RECORDS SKIN RAG ‘N’ BONE MAN SONY MUSIC / MENART

OPET SE SMIJEM CROATIA RECORDS THERE’S NOTHING HOLDIN’ SHAWN MENDES UNIVERSAL MUSIC CROATIA ME BACK

LOVE MY LIFE ROBBIE WILLIAMS SONY MUSIC / MENART

48 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 49 KRISTIJAN BARABAŠ Database and Digital Content Manager

ZAPRAF’S STAFF MLADEN MILIĆ Legal Adviser

ADELA JUHAS Public Relations Associate

50 ZAPRAF Annual Report for 2018 ZAPRAF Annual Report for 2018 51 ZAPRAF Udruga za zaštitu, prikupljanje i raspodjelu naknada fonogramskih prava

Ulica kneza Borne 5, 10 000 Zagreb Tel: +385 1 3668 194 Fax:+385 1 3668 072 www.zapraf.hr Prosinac 2018