Tuning in to the needs of Iceland’s SFH

For the past nine years, Tim Silver, PPL’s Head of Business Services, has been leading the design and implementation of an offering that uses PPL’s people, processes, repertoire data and systems to help societies manage their distributions better.

He runs a lean and agile team.

“There may only be four of us, but together we provide customers with an account manager, an analyst, and a planner/coordinator – this enables us to leverage all of PPL’s capability,” Tim says.

“This allows us to offer solutions to collective management organisations (CMOs) that help solve data problems and put more money into more member’s pockets quickly. It’s a service that I believe delivers a better outcome for more members at a lower price point than everybody else can achieve. Nobody can come close to us on costs,” he adds.

CMOs supported by PPL’s Business Services include AGATA in Lithuania, Audiogest in Portugal, EFÜ in Estonia, LaIPA in Latvia and PPI in Ireland.

In March 2022, Iceland’s SFH became the latest CMO to join this growing client list, signing a five-year deal on  PPL’s support in the distribution of royalties to performers and recording rightsholders based outside of Iceland.

We asked Tim for an overview of the market in Iceland, the solution PPL provides and what developments the future holds.

Market overview

“There’s a really vibrant Icelandic music scene, ranging from artists such as Björk and Of Monsters and Men who have an international following, to home-grown talent like the indie duo Valdimar, which has one of the SFH team in their line-up,” Tim says.

According to the 2022 Annual Report, SFH increased its collections by 20%. Of that total, 36% comes from radio, 43% from public performance (the playing of music in bars, restaurants, hotels and nightclubs) and the remainder comes from private copying levies.

The business need

Historically, SFH focused on taking the money for Icelandic music artists and distributing that locally, while IFPI Iceland managed distributions to record companies.

However, as part of the European Collective Rights Management Directive (CRM Directive), all societies within the European Economic Area (including Iceland) must have sufficient capacity to process the data needed to administer multi-territorial licences, collect rights revenue and distribute amounts to rightsholders and performers.

This meant that as well as managing local distribution of Icelandic artists, SFH’s team also needed to deliver transparent, timely and accurate payments to international record companies and performers for the use of their works.

“There are some vital ingredients that you need to pay record companies and performers,” Tim explains:

• You need to know what music is being played by your broadcasters and other licensees – so they need to provide you with their playlists.
• You need to be able to match those playlists to a database of corresponding recordings so you can identify not only who owns the recording rights but also who are the performers on that airplay.
• And for that, you need a global repertoire to match the airplays to your database.

“All of this requires having lots of data feeds coming in, and also ensuring you’re capturing that data to a level of quality and accuracy that you can work with. PPL will work to de-duplicate and enrich it, as well as manage performers making claims on those recordings, and manage rightsholders changing as companies buy and sell catalogues,” he adds.

“For most CMOs, that’s a massive undertaking. Only a handful of organisations can scale up and do this,” Tim acknowledges.

PPL is one of them.

“We have a database of over 25 million tracks. We have the global rights picture, the performer line-ups, and the integration with systems like RDx which provides a global repertoire feed, IPD and VRDB which are global systems for managing performer data and line-ups,” he says.

Shaping a solution for SFH

“To start supporting SFH with the distribution of royalties to performers and recording rightsholders based outside of Iceland, we needed three key pieces of input data,” Tim says.

The first was how much money it had to distribute against each revenue stream. The second was what airplay data it wanted to use for each of them. The third was its distribution rules to ensure revenues are distributed to performers and rightsholders accurately.

“We started our partnership by managing the distributions to international performers,” he explains. “SFH gave us the airplay data and from that we identified 13,000 unique, qualifying international recordings on its radio stations. This excludes US recordings that are not protected in Iceland and tracks from Icelandic artists that are managed locally.

“We matched pretty much all (99%) of the airplays to corresponding recordings registered in our database,” Tim says. “Few, if any, societies in the world are capable of hitting that rate.”

A service that’s exceeding expectations

The service was up and running in four months. SFH were so pleased that it asked PPL to extend the distributions to performers and producers for 2022 royalties.

And that’s not the only change. “PPL started its service with the goal of calculating royalty distributions on a half-yearly basis,” Tim says, “but since June this year, we moved that to annually. That’s because the payments we made were so complete on the first distribution, that the value of doing a six-month top-up is not there. We’re more or less matching all the airplays and allocating nearly all the money to record companies or performers,” he says.

For Gunnar Guðmundsson, Managing Director at SFH, the partnership has proved to be a win-win. “Our aim at SFH is to collect and distribute as much money as possible for the performers and recording rightsholders locally and internationally,” he says.

“Using PPL means we can do this for international performers and recording rightsholders as timely and accurately as we do distributions for local artists. What’s more, we can do it without eating too heavily into our revenues.

“We sought cooperation with PPL because of how effective it is and how much experience it has in this field. This first year has certainly confirmed our good expectations in this teamwork,” he adds.