Monopoly over music authors

"Fuck Sokoja, report yours music to the catalog and earn some dinar", writes the group SARS on their Facebook account in 2012. Four years earlier, despite the fact that their song Moldy bread was the most played pop track on YouTube within the Serbian-Croatian speaking area, Sokoj paid them only 2008 dinars in the name of copyright for 16,5.

By the way, Sokoj is the only organization in Serbia that collects royalties from music users (broadcasters, restaurants, cinemas, public performances) and pays them once a year to authors and other copyright holders (songwriters, arrangers). This collective organization has enjoyed a monopoly position since 1950, and it receives a license to perform its activities from the Intellectual Property Office.

Outraged by this calculation for their hit, SARS held a concert in the Student Cultural Center in 2009, for which the ticket symbolically amounted to 16,5 dinars. Part of the members left this organization shortly after that, although this means that they will not even receive royalties from the broadcast, since there is no alternative to Sokoj.

Soko's Service for International Legal Affairs states that this example is "out of place and outdated" and that it is being used "because of its bombast". However, SARS frontman Žarko Kovačević, in an interview for this text, confirmed that the situation has not changed much. "That s Moldy bread was a scandal. The following year, each of the authors in the band rose to a few hundred euros, which shows that it seems to bear fruit only when you make a big enough noise, but it is still far from what it should be", believes the musician and describes Sokoj as Pandora's box.

This group, however, is one of the few that has been publicly protesting against Sokoj for years. Many do not dare to do this because Sokoj, apparently, took care of it. The leadership adopted a rulebook according to which any public criticism could even lead to expulsion from the membership. In addition, Sokoj also tried to hide many parts of his business. So even their main task - distributing money from music broadcasting to authors - is one of the business secrets. This means that the authors do not know who received how much money, so they can only hope that they were awarded what they deserved.

Finally, while authors complain about low fees, Sokoj employees have no such problems. Their earnings increased by 50% in previous years, so now they earn more than 260.000 dinars, or 440.000 in the case of director Dejan Manojlović, according to financial reports for 2023.

However, what our interlocutors point out as the pinnacle of bad management of this organization is the fact that Sokoj has been operating under an invalid Statute for four years, since the Agency for Business Registers (APR) refused to register it. This means that all the decisions made by the association in accordance with this Statute are illegal, confirms lawyer Mirko Mrkić, professor of media law at the Faculty of Media and Communications. "If Sokoj can prove that the statute is valid, then they should explain why it was not published in the APR so that everyone could see it through the official state administration. If they can't explain that, then I really don't know what methods they used to fulfill the condition for obtaining the approval of the Intellectual Property Office to be a collective organization," says Mrkić.

DISSATISFIED, AWARD-WINNING AUTHORS

In October 2020, Sokoj and the Association of Musicians awarded the third Godum award in a row. Although it is not one of the most famous music awards in the country, this award means a lot to authors because it is a confirmation that their music has been listened to. Namely, it is awarded, among other things, for the most broadcast tracks.

Then the song Doll group SARS for the second year in a row won the Falcon Award for the most broadcasted rock track, which is not surprising because there is hardly a person who has not heard it, especially as a song for the first dance at weddings.

Nevertheless, this award seemed to many as a consolation or an attempt by Sokoj to smooth things over, bearing in mind the aforementioned incident with the song Moldy bread and a fee of 16,5 dinars. At the award ceremony, however, it was clear that the dissatisfaction with the fees had not disappeared. When receiving the award, the frontman of this group, Žarko Kovačević, said: "I want to thank Sokoj for this recognition and, here, one proposal to harmonize a little with the documentation and distribution sector, so that the fees are in line with this award," he said.

photo: jadranka ilić / tanjug

At the same event, the members of the pop/rock band Butch Cassidy, the only younger group that managed to sell out Tasmajdan in recent years, took the opportunity to express their dissatisfaction:

"Thank you to Sokoj who gave us this award, who tries so hard to answer all the emails about the thousands and thousands of millions of seconds that disappear. We will hear from you when you ask us to do something because you gave us this award", they said when receiving the Award for New Hopes.

Earlier that year, before the release of the new album, the band decided to entrust ZAMP, the Croatian counterpart of Sokoj, with the authority to exercise property rights, on the territory of the whole world except Serbia. Therefore, everywhere except in Serbia, the band's rights are now exercised by ZAMP instead of Sokoj.

In an interview for this text, the band's manager, Nikola Jovanović, confirms that they took advantage of the opportunity to exercise rights in several associations at the same time, since Butch Cassidy regularly performs and earns royalties from abroad.

"Butch Cassidy is no longer just a Serbian band, but also started to be broadcast on stations in the region, so we looked for more adequate protection than the one offered by Sokoj. We heard that Croatia does it a little better than Serbia - maybe not perfectly, but better. In addition to the fact that ZAMP proved to be a better option for collecting digital royalties, there was no point in waiting for Sokoj to collect royalties from abroad. Apart from the fact that it is quite late, it also means that Sokoj and that foreign association take a certain percentage from us. We felt that there was no need for double work and waiting for royalties, which they can earn faster in Croatia", explains the band's manager.

SPACE FOR THE GRAY ZONE

The big problem that the authors suffer is related to the lack of transparency in the distribution of collected funds, says Vuk Stevanović from the electro-blues band Ljubičice, laureate of the "Milan Mladenović" Award.

Stevanović says that they have been facing this problem since their first single I have a new band.. Namely, it was a hit for more than four weeks on the then Discomer Radio Studio B. However, in Sokoje's report for that year, the broadcasts on this radio were not recorded at all - and this is not the only time this situation happened to them.

"Something similar happened with the song I can't wait for the man vs. machine war, which was the hit of the year on Radio 021, and was also shortlisted for the hit of the year on Radio 202. Sokoj's reports showed a significantly lower number of seconds of airplay than we had assumed by our calculations. And many times during the later years I had the feeling that the reports did not match the real situation", notes Stevanović, a trained musician and lecturer at the "Jovan Bandur" Music School in Pancevo.

As he explains, a huge problem is also the impossibility for the authors to verify the veracity of that "feeling" that the calculation from the annual calculation is incorrect.

"Regardless of all the stories and reasons we can hear, it is incredible and unacceptable to me that in 2025, in a completely digital era, a serious association that has a monopoly in this area is not able to have a transparent system for viewing broadcasts in real time that would allow everyone to see the accuracy or inaccuracy of their suspicions", emphasizes our interlocutor and adds that the lack of transparency usually hides a space for manipulating accurate data.

An almost identical situation was told to us by the frontman of the group SARS. Doll it was broadcast for about 12,5 million seconds, while the data of the organization for the exercise of authors' rights - Sokoj records only 2,5 million seconds due to the practice of sampling the broadcaster's shirts.

"We filed a complaint and never received an official response. At the same time, we noticed that the same percentages are repeated year after year for our lesser-known songs, although we are convinced that this has nothing to do with the actual number of broadcasts. It is especially easy to see this difference for calculations related to digital platforms, where we have direct access to the analytics of the number of broadcasts of our catalog. After so many years of experience in the relationship with the Sokoj organization, one loses the will to clean up things that, under ideal circumstances, Sokoj himself would should have done for us as authors", says Kovačević, who, together with other members of the group, lost valuable time analyzing the annual allocations.

"Since we started doing music, Sokoj has not justified his monopoly position and the commissions he collects for sloppy work", he notes.

While the authors remain dissatisfied with the fees that Soka distributes to them annually, the employees of this organization do not have to worry about their earnings.

As already mentioned, Sokoj, which is run as a non-profit organization, increased its employees' salaries by more than 2021 percent between 2023 and 50, judging by financial reports. The average net salary in Sokoj in 2023 was about 262.000 dinars, which is 2,5 times more than the average Serbian salary in that year. The independent auditor's report also shows that the net salary of director Dejan Manojlović that year was 444.000 dinars.

"The prerequisite for amining such amounts is that all authors who are fruitful are better off than those who provide them with services. Michael Jackson's manager never had more money than Michael Jackson. If the artist complains, the management should also complain. If the artist is doing extremely well, then the management should only be doing well", believes lawyer Mrkić, who, by the way, is a representative of several members of Sokoj.

CRITICIZE WITHIN YOUR FOUR WALLS

These are not the only cases of dissatisfied authors. Almost everyone we talked to criticized the way in which Sokoj treats them, and most often they point out exactly what is the main job of this organization - the payment of fees that follow authors. However, not everyone wanted to speak about this under their first and last names.

The reason for this could firstly lie in the fact that the leadership of the organization adopted the Code of Professional Ethics in 2021. In that document, adopted "in order to preserve the dignity of the profession and improve moral values", it is stated that all members of the organization, which number about 14.000, "are obliged to take care of the interest and reputation of Sokoj". This practically means that members of the association run the risk of being removed from membership by publicly commenting on the organization's operations. Thus, according to lawyer Mrkić, constructive criticism is placed in the same category as defamation.

"Slandering or slandering is one thing, when you talk negatively about an organization. But, when you critically point out the failures of someone who has a monopoly on exercising public authority, it is a completely different category. Constructive criticism is part of the social consensus, something that is completely acceptable," reminds the lawyer.

And that's not all that Sokoj wants to preserve "within its four walls". The Rulebook on Business Secrets covers a wide range of information that, since Sokoj is a citizens' association representing thousands of domestic authors, should be of public interest. Thus, for example, business transactions, data on employees, as well as individual royalty calculations are considered business secrets, which prevents insight into the most important financial decisions of Sokoj.

And the document "Information System Strategy" for the period 2020-2025 shows that Sokoj is very confident thanks to its monopoly position. in which they state:

"The current legal provisions define Sokoj as the only organization that deals with the collective protection of copyrights of music authors. In any case, this increases the responsibility of Sokoj, but also facilitates the work of Sokoj since there is no competition, nor the risk of losing members because of it," it says on the tenth page.

Although in most countries there is only one organization that performs this activity at a given moment, the possibility of competition, that is, other organizations that would apply for a license from a state authority, is not excluded. In the case of Serbia, it is the Intellectual Property Office, which should have a proactive role in monitoring collective organizations, reminds lawyer Mrkić.

"If collective organizations do not function, the Institute should revoke their license. The question arises as to how logical it is for a collective organization to have a monopoly because if you determine that one is not working properly, who will be the alternative", the lawyer points out and adds that healthy competition promotes collective organizations in proving that they will work better in the interests of their members.

FALCON ABOVE THE COURT

For an organization that has been in existence for 75 years, it is somewhat incredible that the last four years have been governed by a Statute that was never adopted. Namely, in all official documents, business decisions and on the website, Sokoj refers to the Statute from 2021. However, the Agency for Economic Registers rejected this Statute, after which the organization did not submit new requests. At APR, we were told that the 2010 Statute of the association is valid, which means that numerous business decisions of the association in recent years are illegal.

And those decisions are precisely related to what the members have been protesting against for years. Namely, the actions of Sokoj's leadership, which some of the members pointed out as a violation of the Statute, and even sued Sokoj for it, this organization simply resolved - they made a change in the new, invalid Statute that justifies their decision.

So, for example, one member sued Sokoj for holding electronic sessions without certified identification of the participants and without discussion, i.e. voting via e-mail. When the court accepted this lawsuit, Sokoj only added to the new Statute the possibility of holding electronic sessions without discussion.

The representative in this case was lawyer Mrkić, who confirms that the lawsuit annulled all decisions made during electronic sessions that did not have the characteristics of a parliamentary debate. However, the Sokoja Assembly approved them at the first following session.

"So, they retroactively valorized the court's decision through the decision of the Assembly, which the court found to have made an illegal decision. In this way, Sokoj placed himself above the court, because he thought it was okay to subsequently verify the decisions that the court had previously annulled," our interlocutor points out.

Another example of problematic moves relates to the Sokoje Fund for Cultural and Social Benefits - established to invest part of the money in the promotion of musical creativity and assistance to vulnerable members.

The Management Board decides on the distribution of this money. A criminal complaint was filed against the former president of the Supervisory Board, Srđan Hoffman, for abuse of office, since he allocated the money from this Fund to his family members. And after this case, the Statute was changed again - this situation is no longer considered a conflict of interest if money from the Fund is allocated for a non-commercial event or publication that promotes Serbian musical creativity.

LARGE ASSETS (NE)PROFIT ASSOCIATION

The very democracy in the decision-making of this organization is called into question by the fact that 25 members of the Assembly, or 0,2 percent, are enough to decide on behalf of 14.000 authors.

It is no coincidence that in order to convene an extraordinary session, it is necessary to gather the consent of a third of the members of the Assembly, which makes it much more difficult for the extraordinary session to take place at all.

The last time the extraordinary session of Sokoj attracted public attention was in 2019, when the Supervisory Board filed a criminal complaint against the current director of Sokoj, Dejan Manojlović, with the claim that he bought bonds of the Republic of Serbia worth four million euros without a decision of the Assembly, thereby violating the Statute.

In the then Statute, it was stated that all realized funds can be used exclusively for financing the activities of Sokoj. The management simply deleted that article in the new Statute. Instead of the expected dismissal of the director, the Management Board dismissed whistleblowers Zoran Radetić and Vlada Georgijev from the Supervisory Board, who publicly pointed out numerous irregularities in the work of Sokoj. The criminal charges were eventually dismissed.

The mentioned RS euro bonds are mentioned in the financial report from 2023, when their yield amounted to almost 25 million dinars. Their increase was just used by the management as an argument for this investment.

According to lawyer Mrkić, any spending of money by non-profit associations - especially those that have public authority for collective exercise of rights - must be exclusively in the interest of the members, which in this case are the authors.

"If for some reason they cannot explain the excess money, then the use of that money must not be in the hands of arbitrary decision-making, but the consensus of the Assembly must be achieved, which has an established quorum and a valid vote. This leads us to the further conclusion that such an assembly must have certain conditions of verifiability, and electronic assemblies do not," he notes.

Sokoj's substantial assets do not end there.

This organization has a share in the ownership of the company Rimex, that is, the Belgrade City Hotel on Savski trg. They got this because they were owed money by the company Rimex or a person connected to them, so instead of money they got part of the ownership.

In addition to the building at Mišarska 12, where they opened the Sokoj club and the Sokoj restaurant, they also manage the Legacy of Josip Slavenski at Trg Nikola Pašića 1. Although the acquisition of property can be the result of good business decisions, lawyer Mrkić reminds that this property should be intended for the best possible exercise of the rights of association members.

"The moment when the money that the association earns does not go into the pocket and/or the immediate interest of the entire collective as such, at that moment we are not talking about a non-profit association", believes the lawyer and suggests that the authors who make up the current convocation of the Assembly should be thoroughly informed about the essential issues about the work of Sokoj, as well as not to agree to individual agreements and contacts that satisfy individuals, and not the collective as a whole.

"The author is bound by law to Sokoj, and the realization of his rights depends only on his patience, waiting in the corridor and individual discussions with the administration. At that moment, the author says - Okay, I'm alone in this because I was the only one waiting in that hallway. However, he should recognize that his interest coincides with the interest of other authors and that they should form a common front, perhaps in the form of a union", concludes our interlocutor.

Although Sokoj was provided with a list of questions regarding business, internal decisions and interpretation of the statute, no answers were received by the time this text was written.