May 24, 2017 Material for the Regular Press Conference Japanese Society for Rights of Authors, Composers and Publishers Advertising dated March 13, 2017 (Nihon Keizai Newspaper) Advertising dated March 14, 2017 (Yomiuri Newspaper and Asahi Newspaper) Fiscal 2016 Business Affairs 1 Collection and Distribution of P. 2–5 Royalties 2 International Affairs P. 6–7 3 Earthquake Restoration Support P. 8 4 Other Topics P. 9 JASRAC not only asserts its rights (collecting royalties and taking legal action), but also grants licenses quickly and in a user-friendly manner, and distributes royalties with precision. It also undertakes various activities to help cultivate music culture. For more information: JASRAC International Relations Department As the first part of a 2-year campaign to publicize these activities, JASRAC placed a full-page Tel: +81-3-3481-2144 Email: [email protected] advertisement, as shown above, in major national newspapers. 1 1 Collection and Distribution of Royalties Japanese Society for Rights of Authors, Composers and Publishers (1) Royalties and Other Fees Collected in FY2016 Performances, etc. Category Collection (JPY) Against FY2015 (%) The amount of royalties collected for “Performances, etc.” Performances 58,597,002,291 100.4 exceeded last year’s result for the following reasons: the Performances, etc. 21,377,883,605 101.0 continued growth of the concert market, new contracts concluded Broadcasts, etc. 31,129,430,342 98.8 with large and popular facilities such as hotels, clubs and discos, Cable broadcasts, etc. 4,733,061,766 105.5 and the re-evaluation of music usage and renewal of existing Film exhibitions 219,870,802 106.3 contracts. Background music 730,535,012 145.1 Foreign income (performances) 406,220,764 80.3 Broadcasts, etc. Reproduction 25,098,759,322 78.0 The amount of royalties collected for “Broadcasts, etc.” (blanket Audio discs 12,248,529,429 95.6 fees) exceeded last year’s result due to an increase in NHK Videograms 12,466,850,336 72.4 subscription income, back payments resulting from the Foreign income (reproduction) 97,110,219 77.9 Other reproduction 286,269,338 14.2 ascertainment of the share of JASRAC repertoire in broadcasts Publication 999,150,035 101.6 for FY2015, etc. On the other hand, broadcasting royalties for Reproduction for particular purposes* 5,445,076,362 ---- commercials were below last year’s results due to a decrease in Reproduction for advertisement 1,259,217,858 ---- the use of administered works by major companies. As a result, Reproduction for games 4,185,858,504 ---- total collection was slightly below last year’s result. Lending 3,154,618,961 97.1 Interactive transmissions Composite use 18,511,501,107 109.9 The amount of royalties collected for “Interactive transmissions” Online Karaoke 7,069,145,193 101.0 exceeded 10 billion yen for the first time. This was due to Interactive transmissions 11,442,355,914 116.2 Remuneration for private audio/video endeavors to proactively license rapidly growing subscription 14,928,439 37.2 recording services, and the continued growth of video-posting (sharing) Total 111,821,036,517 100.1 websites, etc. As a result, the number of work usage reports * This category has been newly established and includes “Reproduction for advertisement” that had been included in “Other reproduction” and “Publication” until last year, and also significantly increased. “Reproduction for games” that had been included in “Videograms” until last year. 2 Japanese Society for Rights of Authors, Composers and Publishers (2) Royalties and Other Fees Distributed in FY2016 Category Distribution (JPY) Against FY2015 (%) Second largest amount of distributions ever Performances 59,981,422,297 101.3 Distribution of royalties collected for “Performances, etc.,” which Performances, etc. 22,459,164,905 106.7 reflects the continued growth of the concert market, and Broadcasts, etc. 31,890,337,972 98.8 distribution of royalties collected for “Interactive transmissions,” Cable broadcasts, etc. 4,472,808,847 95.7 which reflects the expanded market for subscription services and Film exhibitions 190,334,440 89.0 continued growth of online game services, increased Background music 487,712,583 99.4 substantially. The distribution total amounted to 112,470 million Foreign income (performances) 481,063,550 92.5 yen (100.8% year-on-year, an increase of 880 million yen), the Reproduction 27,082,985,381 84.7 second largest result ever*2. Audio discs 12,438,390,829 97.8 Videograms 13,915,483,626 81.3 Distribution statements are prepared by calculating royalties per Foreign income (reproduction) 84,581,632 85.6 type of use, and distributions are made quarterly (in June, Other reproduction 644,529,294 32.0 September, December and March). In FY2016, rights owners of Publication 1,021,857,891 102.1 approximately 2.11 million works received distributions. Reproduction for specific purposes*1 3,304,195,187 ---- *2 The largest amount was recorded in FY2008 (115,500 million yen), but the figure Reproduction for would have been below the distribution total for FY2016 if back payments for cable 887,694,005 ---- advertisement television broadcasting that were distributed that year were excluded. Reproduction for games 2,416,501,182 ---- Distribution totals since 2008 Lending 3,163,108,728 91.5 (100 million 1,155 1,124 yen) 1,088 1,084 1,096 1,099 1,114 1,115 Composite use 17,906,171,786 112.6 1,064 Online Karaoke 6,984,153,042 100.1 1,000 Interactive transmissions 10,922,018,744 122.4 Remuneration for private audio/video 16,345,309 39.6 recording 500 Total 112,476,086,579 100.8 *1 This category has been newly established and includes “Reproduction for advertisement” that had been included in “Other reproduction” and “Publication” until last year, and “Reproduction for games” that had been included in “Videograms” until last year. 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 FY 3 Japanese Society for Rights of Authors, Composers and Publishers (3) Topics 1) Licensing of performances by pachinko and pachislo 3) New tariff established for reproduction for the purpose machines commence of advertisement Following successful negotiations with an organization At the annual general meeting of members held in June 2015, the representing pachinko and pachislo machine (similar to pinball and copyright trust contract was amended to add a usage category where slot machines) manufacturers, JASRAC began licensing audio and the fee rates are quoted by the members. In conjunction, Section 15 video performances of JASRAC repertoire using such game “Reproduction for advertisement” and Section 16 “Reproduction for machines on January 1 of this year. games” were added to Chapter 2 of the Tariffs. For collection purposes, game-machine manufacturers obtain JASRAC also integrated licensing operations for reproduction for licenses on behalf of store managers (source licensing scheme), advertisement and games in the Advertisement, Game and Film and JASRAC calculates royalties in proportion to the number of Licensing Section in April 2016. Previously, different sections of the game machines manufactured and the number of administered Reproduction Rights Department handled parts of these operations. works reproduced. JASRAC has also decided on a transitional measure to reduce royalties for three years after the start of administration. Reference URL: http://www.jasrac.or.jp/info/create/ad.html 2) Increased coverage of music use in classes 4) Tariff for videograms amended In recent years, the diversification of audio visual products led to a JASRAC started administering performances at singing classes decline in retail prices for such products, while the enlarging data (where services are mainly to give singing lessons to students, capacity of recording media led to an increase in the number of such as karaoke classes and vocal schools) in April 2016. works used in each product. This resulted in a higher percentage of JASRAC already administers music use in ballroom dancing production costs being paid as copyright royalties. classes (since 1971), fitness clubs (2011), and classes at culture centers that teach musical instruments (2012), among other kinds The tariff for videograms was amended in October 2016 to address of classes. JASRAC is now preparing to commence administration this issue. In the new tariff, royalty rates are stipulated separately for of performances at commercial musical instrument classes. different reproduction purposes and types of content. 4 Japanese Society for Rights of Authors, Composers and Publishers 5) Broadcast royalties distributed per second of use 6) Amendments made to options regarding partial entrustment of rights Because NHK and commercial TV broadcasters have become At the annual general meeting of members held in June 2016, a capable of reporting every second of use for every work resolution was adopted to amend the copyright trust contract so broadcast, JASRAC amended its distribution rules to distribute that trustors can more freely choose the rights they wish to entrust, broadcast royalties on a per-second-of-use basis (applicable effective from April 1, 2017. With this amendment, trustors applied from 2016-12 distribution). for amendments to the extent of rights entrusted to JASRAC for Meanwhile, with all usage reports for broadcasts in FY2015 approximately 500 thousand works. submitted, the usage shares of works administered by each of the copyright management organizations were reflected in the royalty calculations in accordance with the agreement of the 7) Reduction of applied administrative expense rates “Review Committee on the Method to Determine Usage Share of Repertoire in the Field of Broadcasting” (Five-Party Talks). Operating income exceeded, and operating expenditure fell below the FY 2016 budget. Therefore, in order to return reserve funds not scheduled to be spent (*) to right holders as soon as possible, applied administrative expense rates were partially reduced only *Distribution based on census reports* for the 2017-03 distribution.