Current status and future development of the business
TONO SA (TONO) is a cooperative society that manages performing and recording rights relating to music. In addition to individual administration contracts with 41,289 rights holders, TONO has reciprocal representation agreements with 78 international sister societies, and thereby also manages their rights in Norwegian territory. TONO has delegated management of its rights holders’ recording rights to the Nordic Copyright Bureau (NCB) in Copenhagen, which is jointly owned by the Nordic collection companies Koda (Denmark), Stim (Sweden), STEF (Iceland), Teosto (Finland) and TONO.
TONO is operated from Oslo. Its office address is Møllergata 4, NO-0179 Oslo, Norway.
In 2023, eight board meetings and one board committee meeting were held.
TONO has purchased directors and officers (D&O) liability insurance pursuant to Section 3-3a of the Norwegian Accounting Act. Coverage amounts to NOK 5 million.
Administration contracts
As at 31 December 2023, TONO had administration contracts with 41,289 rights holders. By comparison, TONO had 39,060 rights holders as at 31 December 2022. In 2023, 2,258 new rights holders were added, 14 of whom were music publishers.
Women made up 21.6 per cent and men 77.8 per cent of the society’s individual members. Music publishers made up 0.6 per cent of the membership.
Voting members
As at 31 December 2023, TONO had 4,710 voting members, compared with 1,965 voting members as at 31 December 2022. Women make up 20 per cent and men 80 per cent of the voting membership. Music publishers make up 1 per cent of the voting membership.
Financial performance
TONO generated gross revenues of NOK 997,896,781 in 2023. This is an increase of 15.41 per cent compared with 2022. After a 2 per cent deduction payable to the Norwegian Composers’ Fund, as well as losses and administrative costs, TONO had NOK 847,982,395 available for distribution to rights holders, an increase of NOK 130,633,916 compared with 2022. Expenses totalled 12.89 per cent of revenues in 2023, compared with 12.77 per cent the year before.
The financial statements have been prepared in accordance with the Norwegian Accounting Act of 1998, and comply with prevailing laws, regulations and generally accepted accounting practice. The Accounting Act of 1998 caused material changes in the way pension costs were recognised in 1999. As a result, TONO’s recognised equity is negative. The original effect of this was a liability in the amount of NOK 11,026,446. As at 31 December 2023, the total effect of liabilities recognised in equity came to NOK 9,651,645. The year before, the liability totalled NOK 8,176,241.
TONO’s distributable profit normally constitutes 85–90 per cent of its revenues. The distributable amount is whatever is left after all expenses have been deducted. The Board considers that TONO’s financial results for 2023 are good.
TONO has at all times a large and liquid cash management portfolio. The objective is to achieve the highest possible return on investment at the lowest possible risk. TONO’s conservative investment strategy secures stable returns. Each individual investment shall be made among those with the lowest risk in their asset class. Risk is further reduced through a broadly composed portfolio, and TONO employs multiple financial services providers to reduce the management risk.
Market developments
2023 was an eventful year for TONO. Its financial performance was extremely good, with record-high revenues. Positive developments were made in all market areas. The receipt of settlement for several historic claims in the media area contributed to the good result. TONO has set ambitious goals with respect to the development of technology, work processes and its organisation. Our transformation programme “Mjølnir”, which is intended to promote technological solutions and infrastructure to support more efficient processes, gained momentum in 2023. Along with project support from the Bearing Point consultancy company, particular progress was made with respect to new distribution solutions supplied by the Irish tech company Spanish Point. TONO works closely with its sister societies to develop solutions. Its collaboration with Koda and Teosto is particularly close. Another important project is the new repertoire solution ICE Cube, which is being developed in partnership with PRS, Stim and Gema.
In addition to technology development, TONO’s culture and organisation are also being enhanced. Particular attention has been paid to addressing the gaps revealed in the employee surveys in 2022 and 2023. In December 2023, TONO was certified as a “Great Place to Work”.
The music industry continues to change in line with new technology and new business models. In 2023, artificial intelligence (AI) was a particular focus of attention. TONO is monitoring developments in this area closely, and is particularly concerned to protect music creators’ rights when new technology is developed and statutory regulations proposed. A key element in the new business strategy that is currently under development will be a stronger focus on how TONO can exploit new technology to automate and improve its work processes, as well as to exploit data for analysis and insight.
At the Annual General Meeting in 2023, it was decided to amend the articles of association to enable TONO to invest some of its surplus liquidity in real property. In consequence of this, TONO acquired the building Kongens gate 12, in Oslo city centre, in December 2023. The purchase is primarily an investment, but the building could also become the workplace for TONO and affiliated associations, as well as open up opportunities to develop member-related amenities in the form of conference and studio facilities.
TONO does not expect any particular changes in its rights portfolio in the current year.
NCB
NCB is an independent legal entity, which is led by a board elected by Koda, Teosto, Stim, STEF and TONO. NCB’s operations are performed by Koda.
In 2023, NCB collected a total of DKK 91 million, compared with DKK 95 million in 2022. The sale of phonograms (recorded music) in 2023 generated DKK 27 million, compared with DKK 43 million in 2022. The decrease is attributable primarily to a lack of CLA payments from Germany. NCB’s operations in 2023 made a profit of DKK 5.090 million, compared with DKK 13.047 million in 2022. This has been transferred to equity, which totalled DKK 73.361 million as at 31 December 2023.
TONO’s workforce
At the start of 2023, TONO had 62 permanent employees, of whom three worked part-time at their own request (a total of 60.53 full-time equivalents). At the close of 2023, TONO had 59 permanent employees, of whom three worked part-time at their own request. In addition, TONO had five temporary employees: three trainees and two replacement staff paid by TONO. At the close of 2023, TONO also had two replacement staff paid by an external staffing agency.
It is TONO’s ambition that there shall be full equality between men and women. This means that there shall be no difference in the way men and women are treated with respect to salary, promotion and recruitment, for example.
TONO’s workforce comprises 38 women and 28 men. Two men and one woman are employed on a part-time basis at their own request. The average age for all employees at TONO is 46.45 years (46.3 years for women and 46.6 years for men).
At the close of 2023, the average gross monthly salary for all female employees, including managers, came to NOK 64,430. The average gross monthly salary for male employees, including managers, came to NOK 74,940. The higher average salary for men is attributable to the higher proportion of men in senior positions.
Internal control, HSE (health, safety and the environment)
The organisation’s HSE activities are systematised through the Works Committee (AMU). The Works Committee holds regular meetings. Efforts relating to sickness absence shall be discussed at at least two meetings per year.
In 2023, the sickness absence rate totalled 5.43 per cent, compared with 3.9 per cent the year before. Sickness absence is followed up in accordance with the provisions of the Norwegian Working Environment Act. TONO does not engage in business activities that could pollute the external environment.
The employer’s duty to promote equality and prevent discrimination
TONO’s Code of Business Conduct, which all its employees have signed, contains the following provisions:
“TONO shall be a workplace with an inclusive working environment. Employees shall treat each other and those with whom they come into contact through their work with respect and integrity. TONO shall facilitate a working environment free from discrimination on the grounds of religion, skin colour, gender, sexual orientation, age, nationality or ethnic origin, or disability. TONO’s employees shall also contribute to a working environment free from bullying, abuse, harassment, etc. TONO will not tolerate any behaviour that may be perceived as degrading or threatening.”
Over time, it has been TONO’s goal to achieve a near equal distribution in the number of men and women in its workforce. As at 31 December 2023, women made up 56 per cent of its employees, while men made up 44 per cent. Men and women in comparable jobs receive the same salary. Three employees work part-time at their own request. On average women take 80 weeks of parental leave, while men take nine weeks.
TONO abides by the provisions of the Norwegian Cooperative Societies Act with respect to board representation. These require that both genders shall have at least 40 per cent representation on TONO’s board of directors. TONO employs people with a background from all the Scandinavian countries, the rest of Europe, Asia, Africa and the USA.
We are therefore of the opinion that TONO promotes equality in accordance with the purpose of the Act.
Fundamental human rights and decent working conditions
An account of TONO’s due diligence assessments pursuant to the Norwegian Transparency Act will be published on TONO’s website in June this year.
