Škoro: ‘Food Chain’ Leaves Musicians with Only Crumbs to the Third, Even Fifth Decimal of 1 Kuna

Miroslav Škoro has been among the most popular Croatian singer-songwriters for decades, but alongside singing and composing, he has ventured into everything from politics to winemaking. He is a co-owner of several companies, a television and radio host, and from 2001 to 2006, he was also the director of Croatia Records. Recently, he defended his doctoral dissertation on the topic ‘Models of Management and Distribution of Revenue in the Music Industry in Conditions of Globalization’, and about all this, as well as the (non)functioning of the music industry in Croatia, read below.

At the end of last year, you defended your doctoral dissertation on the topic ‘Models of Management and Distribution of Revenue in the Music Industry in Conditions of Globalization’. As part of your dissertation work, you interviewed your colleagues and conducted two major studies; what conclusions did you reach?

This is a very extensive work because, as far as I know, it is the first of its kind on the topic of the music industry. Many write about this industry which, de jure, does not exist in Croatia, as it is dispersed in the national classification of activities. Since there are no valid statistical data or professional literature, everything boils down to sensationalism and the saddling of irrelevant things for the industry, as well as for the economy and society as a whole. I dare say that no one has touched on the essential aspects until this work.

The doctoral dissertation focuses on the state of the music industry in the context of management and revenue distribution in conditions of digitalization from the perspective of its stakeholders. It provides a brief historical overview of the emergence and development of music and musical genres, defines a musical work as intangible property, and explains the legal frameworks for music protection. A historical overview of the emergence of the music industry is also provided, and based on available documentation and legal solutions, the positioning of the music industry in Croatia has been executed. Its position in the economy has been determined, as well as in the sector of creative industries that have become interesting worldwide in light of research that has indicated the strength of these industries even in times of economic crises.

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My quantitative research was conducted on a sample of over 500 respondents, and its aim was to verify whether the perception of stakeholders in the music industry in Croatia correlates with the impact of digitalization on them and their activities. I also conducted qualitative research through so-called in-depth interviews with nine leading figures in the music industry from the sphere of copyright protection for musicians. There are many conclusions, as I tested five main and six auxiliary hypotheses. I think it is important that it has been scientifically proven that digitalization has caused a change in format in the music industry, thereby returning music from a product back to a service, or project. The need to translate part of individual rights into collective rights for fairer distribution of revenue from the use of music has been confirmed, and in my opinion, the most important thing is that creatives in the music industry, regardless of their status, do not know enough about copyright areas and neglect users as stakeholders in the music industry.

You spent some time at the helm of Croatia Records. From that insider experience, what are, let’s call them, the biggest sore spots of the music business in Croatia?

I partially listed them in response to your previous question. The music industry is shrouded in secrecy worldwide, and it is difficult to obtain real data. It is the same with us. Some people who lead the whole story in public expose everything that is at the level of sensation, superficiality, or, at best, some false glamour that helps sales. The real business, as well as its results, remain at the level of confidential documents that carry a secrecy label and are available only to a few. With the emergence of record labels and the translation of music from service to product, record labels have taken the throne of the music industry and do not let go. We primarily lack education, and then serious advocacy for greater transparency and representation of Croatian music in public. Talented children finish various vocational schools without basic knowledge of the work they are entering. Sad.

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Album sales are at extremely low levels, ZAMP, HGU, and even Porin have largely lost their former significance; what can be done to improve the situation?

I would not agree that HDS-ZAMP and HGU are losing significance. I believe that their significance will be even greater in the near future because the disappearance of music as a product is very likely. Therefore, collective rights protection societies will gain more importance. With the emergence of the internet, the number of intermediaries has increased even more. The anticipated revolution that was supposed to erase all intermediaries between music artists and their audience has not occurred. Now, in addition to record labels and music publishers, you have various telecommunications companies, digital aggregators, and services, and many others in the food chain that leave musicians with only crumbs to the second, third, and even fifth decimal of one kuna. American professor Aram Sinnreich has demonstrated in his model of revenue distribution in the so-called ‘MP3 economy’ that from the dollar a user spends to download a song, the performer receives about eight cents, and the composer about ten cents. I believe that this amount is even lower in Croatia. Some have seen the solution in cryptocurrency, and I am somewhat convinced that so-called blockchain technology could be the solution for those more entrepreneurial musicians to avoid so many intermediaries and increase their share of revenues. Regarding income from usage in the collective protection system, there is a need to work on education and reducing the cost of protection, which is currently too high. In some cases, it even approaches the legally permissible thirty percent. Only HDS-ZAMP, or the company engaged for these tasks, earned over 154 million kuna from 2010 to 2016. Thus, in a period of seven years, one and a half total annual income goes to protection. I think that is too much.

Besides music, you have really engaged in everything and anything in life, from politics to winemaking. How much of these frequent changes were caused by the fact that the Croatian music industry does not exist or, perhaps better said, does not function?

One of the auxiliary hypotheses I tested was precisely that creatives in the music industry, besides music, engage in other businesses. In most cases, the reason is insufficient income from music, so people simply try to survive. Although you imply in your question that I have dabbled in various things, with which I might partially agree, in my case, the reason is a bit different. Namely, I have that kind of spirit. I cannot sit and wait for the next performance that may or may not happen. The day has 24 hours, and I simply have no desire or need to waste all that time drinking coffee and lamenting about how I am a star that no one understands. The week has seven days, so even if I have two or three performances, I still have at least three days to work on something else. Moreover, I am aware of the transience of success, so I have always tried to invest what I earn into other activities and projects. I do not engage in winemaking because I am not doing well in music; on the contrary. Engaging in the wine business is still a cost that I finance with income from music, but I believe I can build a business model that will be profitable, while also employing people and protecting the invested capital by generating added value.

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You were also a member of parliament and even a candidate for the mayor of Osijek. However, you left politics quite quickly. What were the reasons, and how do you view that experience with the passage of time?

Basic decency requires a person to shift focus from oneself to the community at some point in life. We would not exist if it were otherwise. This means, for example, that in developed civilizations, it is normal for a local veterinarian to be active in an animal protection society. This is who I am, and I have done what I have done partly because my parents instilled this in me from birth and upbringing, but a great deal of credit also goes to the environment and conditions in which I grew up. My grandfather was accepted in Slavonia in 1942 when he arrived from the stony Imotski region. The Slavonian land fed us, I was educated there, and it had a tremendous impact on me. I would never be who I am without Višnjevac and Slavonia, and I am endlessly grateful for that. At one point, I felt that I could and should help my country. However, my understanding of caring for the public good, or politics, and the understanding of the people and interest groups around me did not align, so I quickly gave up. I am glad I tried, and that’s where it ends. We have the government we deserve, our children are leaving, and it will not be easy to get out of this; we are to blame for it ourselves.

The company Omega Software, of which you were a co-owner, worked on projects for both state and local institutions (Zagreb Holding, Government). Omega was quite criticized in the media during those days; what was your role in the whole story?

I will try to answer this multilayered question as simply as I can. Namely, I have business shares in several different companies. Omega is one of them, and I do not participate in the decision-making process there, just as I do not participate in the decision-making process at Hrvatski Telekom, in which I also have ownership shares, nor in the company Monperin from Istria. I invested in them because I assessed that it was a good business move. Of course, I am interested in their business results being good because that reflects on the return of my investment. However, to avoid seeming evasive, I will say that Omega has received all its jobs both before and after my arrival through very transparent and easily verifiable public tenders. Where it met the conditions, it passed, and where it did not meet them, it did not pass. More than 90 highly educated Croatian engineers in the field of information technology and computing work in that company, and what is most important, they perform their jobs excellently and have received praise for their excellent work everywhere so far. Omega does not import and does not ‘deal’ in questionable quality foreign products on the Croatian market, but develops and produces its own solutions through its own development. I am immensely proud of that, even though I only have a five percent ownership stake. Recently, we have also entered the LED lighting market, where we incorporate our own IT solutions that are in line with the latest global trends. God willing, there will be more such companies in our country. Omega’s work is easily verifiable on the ground and among clients, and what the media writes is due to misunderstanding, sometimes pure inability to understand me, or it is ordered by competitors who pollute the market for personal interests while protecting imported products.

You have also worked as a television and radio host, a diplomat… we can say that music is actually the only constant in your life. Is it purely about love for singing and composing, something you cannot live without, or is the situation in other areas you have tried even worse?

You have concluded that excellently. Since I first climbed onto the ‘stool’ in my mother’s summer kitchen and sang to her and aunt Anica while they were making cherry juice, that love for music and the stage has not let me go. I enjoy the fact that my musicians, my producer, and I live off those songs that mostly came out of my head. I work different jobs five days a week, and then those two with the best musicians around, I travel around, climb onto stages, and perform songs about love for everything that surrounds us. Everything we earn, we share equally, and that’s how we have functioned for many years. If the Croatian music industry functioned like our little microeconomic model, it would be much better for all musicians, believe me.

Read the conversation with Miroslav Škoro as part of the topic on the careers of famous musicians outside of show business in the printed or digital edition of Lider.