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The royalties of performing rights payable to Gramex are based on §47 of the Copyright Act that states that compensation must be paid for performing phonograms to the public. In addition to the public performances of published recordings, royalties are collected from copying phonograms to be performed to the public. [1]

Radio and television companies submit reports of the music they have used detailing the name and length in seconds of each piece. Other parties that play music (stores, restaurants, etc.) do not have to submit such reports; in their case the fee is determined, among others things, according to the floor area. [2]

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Distribution rules

The royalties collected by Gramex are distributed to performing artists and phonogram producers according to Gramex's own distribution rules. The royalties for Finnish phonograms from abroad are distributed once a year in cooperation with the copyright societies in other countries. The royalties from abroad are based on the distribution and processing rules in force in the country of collection.

The distribution rules determine the right-holders, who are entitled to compensation, i.e. the performing artists (musicians, soloists, and conductors) and the phonogram producers. According to the rules, the royalties for phonograms are distributed half-and-half between performing artists and phonogram producers. With performing artists, the distributable amount depends on how vital a role the artist plays on each track of the phonogram.

Any disputes relating to the implementation and interpretation of the distribution rules are ultimately settled by the Board of Gramex [3]. 

Notes and References

[1] Copyright Act § 47

[2] Gramex

[3] Gramex