SUISA's new license prices are causing trouble in the advertising industry

Despite many years of cooperation with the advertising industry, SUISA had failed to provide information about its request in good time and to find an amicable industry solution. This has angered advertising clients and the SWA, and the association has therefore joined forces with Leading Swiss Agencies (LSA), Allianz Schweizer Werbeagenturen (ASW), Interessengemeinschaft Elektronische Medien (IGEM), IAB Switzerland and Goldbach Group to oppose these new license prices.SWA and Co. reject the new license pricesThe SWA and the organizations involved last rejected these new licence prices and SUISA's impracticable process at the beginning of October. At the same time, the advertising industry suggested that SUISA should seek a solution with the platforms that technically distribute the advertising spots on the internet for compensation for the so-called making available.MK Today, SUISA invoices for synchronization rights, reproduction rights and "making available" for music in online advertising. Are advertising clients and agencies still able to see through this?ROLAND EHRLER The issue is indeed complex and various advertising clients also pay further compensation to SUISA, such as for in-store radio or music at exhibitions and events. However, these amounts are usually modest and have no relation to the media investments, and the costs for making music accessible in online campaigns now reach a completely different dimension with the required maximum 3.3 percent of the spendings. The amount can therefore be significantly higher than anything that an advertising client has already paid a composer directly for the creation and use of a musical work. In the past, advertisers assumed that purchased music could be used in all media. This is no longer the case for online music. We are fighting against this.MK What is the legal basis for these new license prices?EHRLER According to copyright law, the copyright holders of musical works - i.e. the composers - have the exclusive right to determine whether, when and how a piece of music is used. Every act of use therefore requires consent or is subject to compensation. The so-called making available of music on online platforms is such an act of use. Insofar as the respective rights holders are members of SUISA and SUISA holds the corresponding rights, SUISA can base its claims on these legal bases.MK Together with your supporters from the advertising industry, you rejected SUISA's new license fees and suggested that the platforms should be welcomed. What is the current state of affairs?EHRLER Unfortunately, SUISA broke off negotiations immediately after our position was taken. At the same time, SUISA sent numerous letters to advertising clients in an attempt to motivate them to submit their media plans to SUISA in order to enforce the new license fees of a maximum of 3.3% for making moving image campaigns accessible.MK Do the advertising clients go along with this?EHRLER Us an association, we don't like this at all, but we must now leave it up to each advertising client to decide whether or not to cooperate with SUISA. It would be easiest for advertising clients to use "SUISA-free" music as a matter of principle. This would mean that nothing would be owed to SUISA either way. However, we cannot support SUISA's current demands.MK With YouTube, Google has one of the largest platforms for moving image advertising. What is the situation with this global player?EHRLER Google does not disclose any figures, but we suspect that this is where the most revenue from video advertising is generated in Switzerland. Both SUISA and Google Switzerland confirmed to us that they had concluded a contract for music rights. However, we have no transparency about the exact content. SUISA only explained to us that it does not include the making available of commercials, which we believe is a missed opportunity to pay for the making available of commercials with music together with the content on YouTube. Unfortunately, SUISA has decided to simply stick to the advertisers, even though it is the platforms that actually place all content on their websites.MK What do the Swiss platforms have to say about this issue?EHRLER SUISA claimed that it had spoken to the Swiss platforms. Unfortunately, I have not heard anything about this after asking the largest websites. Fortunately, some platforms have signaled to us that they are interested in an industry solution in the interests of advertising customers. Although, of course, no one has been waiting to take on new license costs. In TV and radio, broadcasters add the cost of this accessibility to advertising prices. Thus, advertisers pay this compensation indirectly to the composers. SUISA could treat online in the same way.MK What solutions are there to this conflict?EHRLER The easiest thing would be for the composers and SUISA to realize that, firstly, the complex billing process is unsuitable and, secondly, the license fees of max. 3.3 percent on the online media spendings are completely exaggerated. SUISA should then seek talks with Google and other large platforms in order to find an acceptable and administratively simple industry solution. We have already offered to provide support here and we have already held several discussions with relevant market players.