Music is valuable!

The royalties that the Performing Rights Society of Iceland (STEF) pay to composers, lyricists, and other right holders of musical works shall be governed by the Icelandic Copyright Act and the following distribution rules.

The license fees that STEF collects for the performance of musical works (less operating expenses and other cost related to the operations of the society), including contributions to the STEF Music Culture Fund, shall be distributed to right holders retroactively based on the performance of their works of music during the year in which the fees accrue.

Account shall be taken of the following views when distributing royalty payments as appropriate:

1. The cost of collecting royalties in the field in question, so that allocations are relatively higher where cost is lower.
2. The proportion of protected music in the material performed, e.g. in a program broadcast by a radio station or in a concert, so that higher payments are distributed when the proportion is higher.

Contributions to the STEF Music Culture Fund may amount to up to 10% of collected license fees, less cost, as decided at the Annual General Meeting of STEF each time.

Royalty payments pursuant to Article 2 shall be distributed in as close compliance with the income collected for the performance of each musical work as possible. Distribution of royalties is made by the following categories, as further stipulated in Article 5:

1. Broadcasted music, i.e. radio and television.
2. Concerts held by the Icelandic Symphony Orchestra.
3. Symphonic concerts other than specified in Item 2, together with chamber and choir concerts.
4. Concerts featuring folk music, jazz and other popular music.
5. Dances and gatherings other than concerts.
6. Background music, such as in restaurants and shops.
7. Music during church ceremonies.
8. Music in movie theatres and in films.
9. Music in theatres and in plays.
10. Music on the Internet.
11. Premiere of musical works.

The license fees collected for public performance of musical work are processed for distribution on the basis of information that STEF receives from music users. Music users are obliged to submit to STEF detailed music reports on all broadcasting in radio and television, live performances, stage music, music in movie theatres and on-line streaming and downloads as described in more detail in Article 5.1 – 5.5. For cost reasons, however, no reporting is required for certain performances of recorded music.

The distribution of royalties for performances of music which STEF receives no information from the respective music users such as in category 5 and 6, is as a general rule based on the reporting of broadcasted music in radio. If additional information on music use within these categories can be obtained without unreasonable costs, by using samples of musical works that are performed, distribution in these categories can also be based upon such information. Samples can e.g. be obtained from bands performing at dances and other gatherings and from companies that stream music to shops and restaurants. Decisions on the use of samples shall be taken by the Board of STEF. If samples have been obtained, they count for half of the distribution and reports on broadcasted music in radio for half. Distribution in these instances should correspond to real music use as accurately as possible.

Samples shall be randomly selected and an effort should be made to ensure that right holders are not subjected to discrimination beyond that which derives from such a distribution method.

Distribution within this category is based on the license fees collected from each broadcasting company and reports on the broadcasting of music submitted by the same company according to contracts between STEF and the respective company. Distribution related to each radio and television station and, if appropriate, each radio and television channel shall be made separately. In the case of radio or television being broadcasted within a limited geographical area and the license fees collected being insignificant, the distribution shall be based on musical reports submitted by other broadcasters of a similar nature.

Distribution is based on the amount of license fee collected from each concert and the musical report submitted by the respective concert promoter, or alternatively, the respective artists or right holders. In the case that STEF has signed a contract with a venue which pays a fixed sum of license fees per year and the license fee of each event taking place there being insignificant, the distribution shall be based on musical reports, submitted by the respective venue, or alternatively, the respective artists or right holders.

In the event of concerts dedicated to a single band or performer and if the number of guests exceeds 1000, 90% of the royalty payments of the concert shall be paid to the right holder of the music performed by the band or performer. The right holders of music that is performed by other bands or performers, such as “warm-up bands”, receive 10% as their share of royalty payments from the concert.

Distribution is based on the license fees collected from each theatre or other stage music promoters and musical reports submitted by the same promoter according to contracts between STEF and the respective promoter.

Distribution in respect of cinema films being performed at movie theatres is based on information from box offices. Distribution in respect of films being performed in aeroplanes or other public venues is based on musical reports submitted by such venues.

There is a special distribution for premiere of new works. Work is premiered when a new work has been registered by a member of STEF and it can be shown that it has been performed in Iceland. Members of foreign societies can also receive distribution for premiered work as long as they are performed for the first time in the world in Iceland. Each composer is responsible for notifying such a performance to STEF.

Works are registered in STEF´s database in accordance with work notifications submitted by the respective right holders. A work is only eligible for royalties’ distribution if an appropriate work notification has been filed. Principally, only one work notification, duly signed by all right holders, shall be submitted to STEF for each work. A separate work notification must be submitted for all versions of the work.

STEF may at its discretion accept a work notification as a basis for retroactive distribution for up to four years, if the right holder can satisfactorily prove that the work was not registered due to negligence on the part of another right holder or to external circumstances.

A work notification may only be amended by a new work notification signed by all the signatories of the original work notification.

Copyright vested in a work is independent of STEF´s registration of the work.

STEF assumes no liability and provides no warranty for damage that may be suffered by any party in royalty distributions or in the protection of copyright as a result of incorrect or incomplete work notification.

Right holders may only inspect registration of their own works.

Royalty payments for the performance of a musical work as well as mechanical reproduction royalties shall be divided into up to 12 equal parts. Those who are entitled to compensation for the performance of a musical work shall each receive a specified portion of the payments for the performance as is specified below, unless another agreement has been reached:

*When the work and the text are composed at the same time, the composer and the lyricist, and as appropriate the arranger, shall notify STEF to this effect on forms provided for this purpose and specify the division.

**Division of shares between composer and arranger shall be agreed upon by them. In general, the norm is 2/12 shares for the arranger, which is deducted from the shares of the composer. In exceptional cases, when the arrangement is highly complicated, the arranger can receive 3/12 shares, with the consent of the composer.

***For more detail, see the rules of STEF for arrangements of folksongs.

Royalty payments to right holders who are members of foreign collective management societies shall be distributed, through the intermediation of the Swedish sister society, STIM, in accordance with the reciprocal agreements made by STEF and the respective societies. Such distribution shall, follow the same rules as distribution to right holders who are members of STEF, as set out in Articles 2 through 7 above. Payment of royalties to foreign right holders shall takes place at least once a year, in the same way as distribution is done to right holders that are members of STEF, at a date decided by the Board of Directors of STEF.

9.1 Distribution of Mechanical Reproduction Royalties

Nordisk Copyright Bureau (NCB), a Nordic-Baltic collective management society, collects and distributes mechanical reproduction royalties to members of STEF, according to Representation Agreement between STEF and NCB.

9.2 Distribution of Royalties Received from Other Societies.

Foreign collective management societies which represent and administer the rights of members of STEF according to reciprocal agreements with distribute to STEF royalties for Icelandic music repertoire performed in their territory. The timing of these distributions varies by societies.

9.3 Non-Identified Works

STEF does it outmost to identify reported works. This is done by matching of reports against the STEF database, both automatically and manually. If the work is still unidentified the following procedure takes place:

1. If the author is known he/she is contacted and a registration of the work takes place.
2. The work is manually matched against the Nord-Doc database and other sources on the Internet.
3. In case of no match, the unidentified works are  added to a list of unidentified works which is reviewed quarterly, i.e. before every distribution.  Every work is added and no threshold on royalties is applied.

Royalties paid for use of musical works that STEF is not able to identify and royalties that are withheld because of the minimum rule set out in Article 10, are distributed proportionally to identified works.

Payment of royalties takes place at least once a year at dates decided by the Board of Directors of STEF.

Royalties shall be paid to a bank account according to instructions from the respective right holder. Each right holder is responsible for notifying STEF of changes regarding his or her bank details.

In the event that royalty payments to right holders do not reach a minimum decided by the Board of Directors, the payment will be added to the next year’s payment for up to four years, after which it shall lapse.

Royalty income is taxed under the Icelandic Income Tax Act before payable to the respective right holder.

The Board of Directors can decide, for purposes of efficiency, to distribute payments for the performance and other use of a specific work or works to a limited group of right holders. In instances involving the heirs of a composer or lyricist, the Board may thus decide to distribute payments to the joint agent of the heirs.

Right holders may submit comments or complaints about the distribution within three months following the date they are notified of it, in order for them to receive an additional allocation of royalties in the following supplementary distribution. Otherwise, the right holder must wait the next distribution for any corrections. However, no comments or complaints may be submitted if two years have elapsed since the distribution took place. STEF shall withhold a reasonable amount of its annual income to meet claims pursuant to this Article.

The Board of Directors of STEF shall rule on all disputes concerning the interpretation of these rules. The decision of the Board may be referred to the Representative Council of STEF for a final ruling.

These rules, which replace the distribution rules previously in effect from May 7, 2011, takes effect 1 January 2012 and shall apply to the distribution of revenue collected as of that date.

So approved at a General Meeting of STEF on 13 December 2011 with amendments of a General Meeting on May 7th 2016.

Distribution of Royalties

In Respect of Private Copying

According to the Icelandic Copyright Act, which defines the right to compensation for private copying as sui generis, the Board of Directors of STEF have made the following decision with regard to the distribution of royalties, received by STEF, from IHM, The Collection Centre for Blank Tape Levy, on behalf of composers, lyricists and other categories of right holders of musical works.

1. According to the Icelandic Copyright Act, only right holders, whose works have been broadcasted on radio or television or recorded on audio or video formats for publication, are entitled to remuneration.
2. The purpose of the distribution of royalties is to reflect to the extent possible the private copying of works that takes place in Iceland each year.
3. Payments to right holders, that are members of STEF, are made through STEF, and is based upon the proportion of musical works by its members being broadcast and recorded for publication in Iceland, compared to other musical works,  as further decided by the Board of STEF.
4. Payments to right holders, that are members of other collective management societies, are made through their respective societies according to the Board´s decision each year. The distribution of royalties to each such society is based upon the proportion of musical works by its members being broadcast and recorded for publication in Iceland, compared to other musical works, according to reciprocal representation contracts between STEF and the respective society. According to the Icelandic Copyright Act, distribution is only made to right holders, having domicile in countries with similar compensation system for private copying.