Concerning the Remunerationpayable for the Exploitation of Phonograms

Pursuant to Article 167 of the Law on Copyright and Related Rights (Official Gazette of the Republic of Serbia, Nos. 104/09, 99/11 and 119/12) and Article 17 of the Statute of the Organisation of Phonogram Producers of Serbia –OFPS, the Assembly of the Organisation, at its sessionsof 18March 2010,26 March 2011, 31 January 2013, 21 June 2014, 20 June 2015, 13 December 2015, and 27 March 2016, adopted the following

DISTRIBUTION PLAN

Concerning the RemunerationPayable for the Exploitation of Phonograms

(CONSOLIDATED TEXT)

Article 1

ThisDistribution Plancontains the calculation criteriabased on which the OFPS distributes to the right holders the revenuecollected as remuneration for the broadcast and re-broadcast of phonograms, public communication of phonograms, public communication of phonograms being broadcast, and as special remuneration, in accordance with the adopted Schedule of Fees (Tariff); these criteria are based on the principles of proportionality, suitability and fairness.

Article 2

The right to take part in the distribution is accorded to the phonogram producers resident in the territory of the Republic of Serbia who have authorised the OFPS to collect, in its own name and for their account, the remuneration for the exploitation of phonograms.

In accordance with Article 180 of the Law on Copyright and Related Rights, the phonogram producers resident in the territory of the Republic of Serbia who have not authorised the OFPS to collect, in its own name and for their account, the remuneration for the exploitation of phonograms also have the right to take part in the distribution.

The right to take part in the distribution is also accorded to the phonogram producers resident outside the territory of the Republic of Serbia, who have authorised a domestic legal or natural person to collect for their account the remuneration for the exploitation of phonograms, and to the phonogram producers who are members of foreign organisations of phonogram producers with which the OFPS has entered into agreements, as stipulated in those agreements.Phonogram producers from the successor states of the former Socialist Federative Republic of Yugoslavia (hereinafter: the former SFRY), with the exception of the Republic of Serbia, shall exercise their right to taking part in the distribution through their respective organisations for the collective management of phonogram producer rights with which the OFPS has entered into bilateral agreements, except in the case where there is no such collective organisation established in the territory of the state concerned, in which case they may authorise a domestic legal or natural person to collect for their account the remuneration for the exploitation of phonograms. This provision shall not apply to the phonogram producers from the territory of the Republic of Serbia who have acquired their rights on the basis of agreements entered into with the holders of phonogram producer rights from the territory of the former SFRYconcerning the phonograms issued in the territory of the Republic of Serbia.

The rules governing the distribution asset out in this Distribution Plan shall apply equally to all the right holders the management of whose rights has beenentrusted to theOFPS.

Article 3

Repealed.

Article 4

A right holder shall registerthe subject-matter of protection withthe Organisation using the Excel table that forms an integral part of the Distribution Plan and contains the data entered in the corresponding columns, as specified below:

1. Exact name of the performer under which the phonogram was issued;
2. Exact title under which the phonogram was issued:
3. Duration of the phonogram in seconds;
4. Year of production;
5. Publisher (record label);
6. Ownership of the phonogram;
7. Beginning of ownership;
8. End of ownership;
9. ISRC (if in the possession of the right holder);
10. Country of origin;
11. Year of the first recording;
12. Phonogram producer;

The completed Excel table is submitted to the Organisation by postal mail, recorded on a CD and accompanied by a printed list of the phonograms being registered; each page of the list must be signed, and,in the case of legal entities, stamped by the right holder (authorised person of the legal entity).

Along with the Excel table (recorded on the CD and accompanied by the printed list of phonograms being registered), the right holder is obliged to submit the following forms, which constitute integral parts of the Distribution Plan:

-Form F1D– for the registration of domestic phonogram by legal persons

-Form F1S– for the registration of foreign phonograms by legal persons

-Form F2D– for the registration of domestic phonograms by natural persons

-Form F2S – for the registration of foreign phonograms by natural persons

The forms referred to in the previous paragraph must contain the following data:

1. full business name of the phonogram producer, the name of the legal representative and of the person who filled in the form and/or the person authorised for that purpose;
2. registered headquarters of the legal person, or domicile of the natural person;
3. ordinal number of the application;
4. company registration number of the legal person, or personal identification number (JMBG) of the natural person;
5. tax identification number (PIB) of the legal person, or identification card number of the natural person;
6. excerpt from the Business Registers Agency(APR) for the legal person containing the data valid at the time of submitting the application; for each subsequent application the excerpt should be submitted only if the data has been changed;
7. OP form for the legal person valid on the day of submitting the first application; for each subsequent application the form should be submitted only if the authorised representative has been changed, or if any other changes have occurred;
8. contact data (telephone number, fax number, e-mail address).

The right holder warrants, under full criminal and material responsibility, that the data contained in the application is valid and accurate, and confirms the validity and accuracy thereof by his/hersignature and stamp.

In order to take part in the distribution for any given year, the right holder is obliged to register phonograms with the Organisation no later than on 15 March of the following year.

FUNDS

Article 5

The total amount available for distribution shall be determined by subtractingfrom the total gross amount of the collected remuneration the operating costs incurred by the Organisation (total business expenses)and the amount allotted under contract to the organisation for the collective management of the rights of performers. The amount remaining after subtracting the total operating costs incurred by the Organisation (total business expenses) and the allocation of the part of the collected singleremuneration to the organisation for the collective management of the rights of performers, shall comprise the distribution fund of the Organisation.

Out of the distribution fund thus determined, 10% of the amount shall be allotted as the cultural purposes fund. Resources from the cultural purposes fund shall be distributed exclusively for the exploitation of domestic phonograms, as an incentive to the domestic artistic creation; 50% of the amount shall be distributed based on the data the right holders submit with regard to their share of the domestic phonograms in the market of copies of phonograms on sound carriers and based on digital distribution thereof, whilethe other 50% of the amount shall be distributed based on the number of new domestic phonograms issued on sound carriers in the relevant distribution year and registered with the Organisation. The resources from the cultural purposes fund shall be distributed upon the preparation of final calculations. The Director and professional services are obliged to furnish the right holders with the calculation of resources intended for cultural purposes, along with the reasoned calculation and the final calculation.

“Domestic phonograms” are the phonograms produced in the territory of the Republic of Serbia.

The distribution fund is determined by the Director and the Accounting and Bookkeeping Department.

The financial resourcescollectedon the basis of bilateral agreements entered into with foreign organisations are distributed in accordance with the reports on broadcast phonograms submitted by the foreign organisations. If such reports on broadcast phonograms have not been submitted, these resources shall be included in the fund for the next distribution and distributed in accordance with the criteria set out in this Distribution Plan.

The overall distribution fund is further divided into four funds according to the amounts collected from individual categories of users/payees:

-Fund I, corresponding to the amount collected from the users broadcasting the repertoire, in relation to the total remuneration collected for the relevant distribution year;

-Fund II, corresponding to the amount collected from the users classified as re-broadcasters, in relation to the total remuneration collected for the relevant distribution year;

-Fund III, corresponding to the amount collected from the users classified as those who communicate content to the public, in relation to the total remuneration collected for the relevant distribution year;

-Fund IV, corresponding to the amount collected from payees of the special remuneration and web radio and web television, in relation to the total remuneration collected for the relevant distribution year.

Article 6

The decision on the costs incurred by the Organisation shall be made by the Management Board at the beginning of each fiscal year. This decision may be modified in line with the development policy and increased investment into certain aspects of the business.

The total costs of protection of the rights related to foreign phonogram shall be established by the agreements the Organisation concludes with foreign organisations and shall not be subject to any limitations set out in this Article.

INDIVIDUAL DISTRIBUTION

Article 7

The distribution of the remuneration collected for the exploitation of phonograms shall be performed on the basis of data collected by the users in the form of lists of broadcast phonograms (hereinafter: cue sheets), and on the basis of data submitted by the right holders with regard to their share in the market of copies of phonograms on sound carriers and the revenues generated in the territory of the Republic of Serbia from the sales and use of phonograms on internet platforms (download, streaming) (hereinafter: digital distribution).

The financial resources in Fund I shall be distributed on the basis of valid cue sheets submitted by the media services providers.

The financial resources in Fund II shall be distributed on the basis of valid cue sheets submitted by the media services providerswhose services are re-broadcast via cable, IPTV and satellite incoming signals (DHT – direct to home).

The financial resources in Fund III shall be distributed on the basis of data submitted by the right holders with regard to their share in the market of copies of phonograms on sound carriers and the digital distribution, as well as on the basis of valid cue sheets submitted by the radio media service providers who, according to the Broadcast Tariff Agreement, fall into the categories of music and entertainment radios, and by the providers of television media services broadcast via terrestrial or cable (IPTV or DTH) incoming signals and who, according to the Broadcast Tariff Agreement, fall into the category of televisions in which the repertoire takes up more than 75% of the programme (music televisions). 50% of these resources are distributed on the basis of share in the market of copies of phonograms on sound carriers and the digital distribution, and the other 50% on the bases of valid cue sheets submitted by the radio media service providers who, according to the Broadcast Tariff Agreement, fall into the category of music and entertainment radios, and by the providers of television media services broadcast via terrestrial or cable (IPTV or DTH) incoming signals and who, according to the Broadcast Tariff Agreement, fall into the category of televisions in which the repertoire takes up more than 75% of the programme (music televisions).

The financial resources in Fund IV shall be distributed on the basis of data submitted by the right holders with regard to their share in the market of copies of phonograms on sound carriers and the digital distribution.

When performing the distribution, the Organisation shall treat equally the right holders who authorised it under a contract to collectively manage the related rights of phonogram producers and those right holders who have not entered into such a contract with the Organisation.

Article 7a

The calculationand distribution of the remuneration collected are performed on the basis of valid cue sheets submitted by the media service providers, in accordance with the Tariff Agreement concluded with the representative association of users concerning terrestrial/cable broadcast, the Law on Electronic Media and the Law on the Ratification of the European Convention on Transfrontier Television.

A valid cue sheet shall contain the following elements:

• name of the performer;
• title of the phonogram;
• date of broadcast;
• duration of the phonogram being broadcast;
• note indicating whether the phonogram is broadcast in films, series, advertisements, trailers, opening/closing credits, jingles, background or incidental music, etc.).

Cue sheets shall be submitted in electronic form only, using the OFPS Internet Portal for cue sheets as per the written instructions provided by the OFPS to the media services providers in accordance with the general act of the Organisation regulating the submission of cue sheets.

Before using the Portal, the media service provider is obliged to register via the user registration form containing the following data:

full name of the media service provider, as registered with the Business Registers Agency;

the name of the channel for which the application is submitted, specifying whether the broadcast is terrestrial or via cable;

the name of the authorised representative;

contact details of the media service provider (address, telephone, e-mail, fax);

company registration number, tax identification number;

persons at the media service provider who are responsible and authorised for filling in and submitting cue sheets, and their contact details, (e-mail, telephone);

signature of the authorised person, verified by the stamp of the media service provider.

Cue sheets are submitted on a daily basis, but no later than on the 15th day of the current month for the previous month.

The distribution for the previous year is based on all valid cue sheets submitted by 31 January of the current year.

Any cue sheet lacking the elements referred to in paragraph 2 of this Article shall be considered invalid. The validity and completeness of cue sheets shall be determined by the cue sheet processing service on the basis of the data referred to in paragraph 2 of this Article and the cue sheets submitted by the media service providers.

In case a media service provider submits an invalid cue sheet, the cue sheet processing service shall notify in writing the media service provider about the invalidity of the cue sheet, specifying the shortcomings thereof, and advising the service provider to remedy the identified shortcomings and furnish the Organisation with a corrected cue sheet within 10 days of receipt of the notice.

Should the media service provider fail to act in accordance with the notice of the cue sheet processing service, it shall be deemed that the media service provider has failed to fulfil the obligation referred to in Article 187, paragraph 5, of the Law on Copyright and Related Rights.

Article 7b

The calculation of remuneration in Fund I is performed by allotting the resources from the overall distribution fund according to the fees collected from TV and radio media services providers, as follows:

-for TV media service providers, the percentage of the overall distribution fund corresponds to the percentage of fees collected from TV media service providers in relation to the total fees collected from the media services providers (TV Fund);

-for radio media service providers, the percentage of the overall distribution fund corresponds to the percentage of fees collected from radio media service providers in relation to the total fees collected from the media services providers (Radio Fund).

In the case where the a legal person is both a TV and a radio media services provider, the resources shall be divided according to the financial statements of the media services provider concerned, to reflect the revenue of the media services provider (legal person) generated from the television and the revenue of the media services provider (legal person) generated from the radio.

The ratio between the fees collected from TV media service providers and radio media service providers shall be determined by the Director in cooperation with the professional services, based on the report of the Public Communication Department on the fees collected from TV media service providers and radio media service providers. The decision establishing the ratio between the fees collected from TV media service providers and radio media service providers shall be submitted to the Management Board within 15 days of its adoption.