Distribution Policy 2021 Music Repertoire - SIAE

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Distribution Policy 2021 Music Repertoire - SIAE
Distribution Policy 2021
   Music Repertoire

                           1
Distribution Policy 2021 Music Repertoire - SIAE
Summary
1 INTRODUCTION ................................................................................................................................................................................................................... 6
     1.1             Scope of application..................................................................................................................................................................................... 6
     1.2             Main principles ................................................................................................................................................................................................ 6
           1.2.1                Distribution of the amounts attributed to individual musical works ....................................................................... 7
           1.2.2                Management policy of amounts non-attributable through ordinary distribution ............................................ 8
     1.3             Application period ......................................................................................................................................................................................... 9
2          DANCING WITH LIVE MUSIC .............................................................................................................................................................................. 10
     2.1             Distribution criteria..................................................................................................................................................................................... 10
     2.2             Distribution cycles and frequency ........................................................................................................................................................ 11
     2.3             Management of collections non-distributable through the ordinary distribution process ..................................... 11
           2.3.1          Missing setlists .......................................................................................................................................................................................... 11
           2.3.2                Unidentified music ............................................................................................................................................................................ 11
3          NIGHTCLUBS .............................................................................................................................................................................................................. 12
     3.1             Distribution criteria...................................................................................................................................................................................... 12
     3.2             Distribution cycles and frequency .......................................................................................................................................................13
     3.3             Management of collections non-distributable through the ordinary distribution process .................................... 14
           3.3.1          Missing electronic format setlists ................................................................................................................................................... 14
           3.3.2          Paper format setlists ............................................................................................................................................................................ 14
           3.3.3          Unidentified music ................................................................................................................................................................................. 15
4          RESTAURANTS, COFFEE SHOPS AND PUBS WITH PUBLIC MUSICAL PERFORMANCES ................................................... 16
     4.1             Distribution criteria..................................................................................................................................................................................... 16
     4.2             Distribution cycles and frequency ....................................................................................................................................................... 17
     4.3             Management of collections non-distributable through the ordinary distribution process ....................................18
           4.3.1          Missing electronic format setlists ...................................................................................................................................................18
           4.3.2          Paper format setlists ............................................................................................................................................................................18
           4.3.3          Unidentified music ................................................................................................................................................................................ 19
5          PRIVATE EVENTS................................................................................................................................................................................................... 20
     5.1             Distribution criteria.................................................................................................................................................................................... 20
     5.2             Distribution cycles and frequency ....................................................................................................................................................... 21
     5.3             Management of collections non-distributable through the ordinary distribution process .................................. 22
           5.3.1          Missing setlists (the following only applies to setlists submitted in electronic format).................................... 22
           5.3.2          Unidentified music (the following only applies to electronic format setlists) ....................................................... 22
6          CONCERTS AND OTHER MUSIC EVENTS ................................................................................................................................................... 23
     6.1             Distribution criteria.................................................................................................................................................................................... 23

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Distribution Policy 2021 Music Repertoire - SIAE
6.2              Distribution cycles and frequency ..................................................................................................................................................... 25
     6.3              Management of collections non-distributable through the ordinary distribution process .................................. 26
           6.3.1                 Missing setlists .................................................................................................................................................................................. 26
           6.3.2                 Unidentified music ......................................................................................................................................................................... 26
7          BACKGROUND MUSIC .......................................................................................................................................................................................... 27
     7.1              Distribution criteria.................................................................................................................................................................................... 27
           7.1.1                 Public performances carried out through TV, Radio and wire broadcasting ................................................... 27
           7.1.2                 Public performances carried out by virtue of other subscription-based mechanical reproduction
           media                 27
           7.1.3                 Radio in Store.................................................................................................................................................................................... 28
     7.2              Distribution cycles and frequency ..................................................................................................................................................... 28
     7.3              Management of collections non-distributable through the ordinary distribution process .................................. 30
           7.3.1                 Missing reports (Radio in Store only) .................................................................................................................................... 30
           7.3.2                 Unidentified music (Radio in Store only) ............................................................................................................................ 30
8          CINEMA .........................................................................................................................................................................................................................31
     8.1              Distribution criteria......................................................................................................................................................................................31
     8.2              Distribution cycles and frequency .......................................................................................................................................................31
     8.3              Management of collections non-distributable through the ordinary distribution process .................................. 32
           8.3.1                 Missing cue sheets ......................................................................................................................................................................... 32
           8.3.2           Unidentified music ............................................................................................................................................................................... 32
9          TELEVISION............................................................................................................................................................................................................... 33
     9.1              Distribution criteria.................................................................................................................................................................................... 33
           9.1.1                 Analytical distribution method ................................................................................................................................................. 34
           9.1.2                 Sampling-based distribution method .................................................................................................................................. 37
     9.2              Distribution cycles and frequency ..................................................................................................................................................... 37
     9.3              Management of collections non-distributable through the ordinary distribution process .................................. 38
           9.3.1                 Missing reports ................................................................................................................................................................................. 38
           9.3.2                 Incomplete reports ........................................................................................................................................................................ 39
           9.3.3                 Reports carrying programming irregularities................................................................................................................... 39
           9.3.4                 Missing cue sheets ......................................................................................................................................................................... 40
           9.3.5                 Unidentified music ......................................................................................................................................................................... 40
10         RADIO ............................................................................................................................................................................................................................. 41
     10.1             Distribution criteria...................................................................................................................................................................................... 41
           10.1.1                Analytical distribution method ..................................................................................................................................................42
           10.1.2                Sampling-based distribution method ................................................................................................................................... 44
     10.2             Distribution cycles and frequency ...................................................................................................................................................... 44

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Distribution Policy 2021 Music Repertoire - SIAE
10.3            Management of collections non-distributable through the ordinary distribution process .................................. 46
            10.3.1             Missing reports ................................................................................................................................................................................. 46
            10.3.2             Incomplete reports ........................................................................................................................................................................ 46
            10.3.3             Reports carrying programming irregularities....................................................................................................................47
            10.3.4             Unidentified music ..........................................................................................................................................................................47
11          RECORDINGS FOR TV AND RADIO BROADCASTING ............................................................................................................................. 48
     11.1            Distribution criteria.................................................................................................................................................................................... 48
     11.2            Distribution cycles and frequency ..................................................................................................................................................... 49
     11.3            Management of collections non-distributable through the ordinary distribution process .................................. 50
            11.3.1             Missing reports ................................................................................................................................................................................. 50
            11.3.2             Incomplete reports ........................................................................................................................................................................ 50
            11.3.3             Reports carrying programming irregularities................................................................................................................... 50
            11.3.4             Missing cue sheets ........................................................................................................................................................................... 51
            11.3.5             Unidentified music ........................................................................................................................................................................... 51
12          WIRE BROADCASTING ......................................................................................................................................................................................... 52
     12.1            Distribution criteria.................................................................................................................................................................................... 52
     12.2            Distribution cycles and frequency ..................................................................................................................................................... 52
13          MUSIC REPRODUCTION ON AUDIO AND VIDEO MEDIA....................................................................................................................... 53
     13.1            Distribution criteria.................................................................................................................................................................................... 53
     13.2            Distribution cycles and frequency ..................................................................................................................................................... 53
     13.3            Lump-sum payments ...............................................................................................................................................................................54
14          REPRODUCTIONS OF DJs’ WORK COPIES OF COPYRIGHTED MUSIC .......................................................................................... 55
     14.1            Distribution principles .............................................................................................................................................................................. 55
     14.2            Distribution cycles and frequency ..................................................................................................................................................... 55
15          ONLINE MUSIC REVENUE .................................................................................................................................................................................. 56
     15.1            Collections’ allocation process ............................................................................................................................................................. 56
     15.2            Distribution criteria.................................................................................................................................................................................... 56
     15.3            Lump-sum payments .............................................................................................................................................................................. 57
     15.4            Collections for multi-territorial licences......................................................................................................................................... 57
     15.5            Residuary collections................................................................................................................................................................................ 57
     15.6            Audio-visual services ............................................................................................................................................................................... 58
     15.7            Missing cue sheets ..................................................................................................................................................................................... 58
     15.8            Management of collections non-distributable through the ordinary distribution process .................................. 58
            15.8.1             Non-processable or missing reports .................................................................................................................................... 58
            15.8.2             Unidentified music ......................................................................................................................................................................... 58
     15.9            Distribution cycles and frequency ..................................................................................................................................................... 59
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Distribution Policy 2021 Music Repertoire - SIAE
16      PRIVATE COPYING ................................................................................................................................................................................................ 60
     16.1         Distribution criteria.................................................................................................................................................................................... 60
     16.2         Distribution cycles and frequency ...................................................................................................................................................... 61
17      INTERNATIONAL REVENUE .............................................................................................................................................................................. 62
     17.1         Distribution criteria.................................................................................................................................................................................... 62
     17.2         Distribution cycles and frequency ..................................................................................................................................................... 62
     17.3         Management of collections non-distributable through the ordinary distribution process .................................. 62
        17.3.1 Unidentified Music ..................................................................................................................................................................................... 62
        17.3.2 Missing reports ........................................................................................................................................................................................... 63
18      FUND FOR ASSISTANCE PURPOSES AND TO ENCOURAGE NATIONAL ARTS ........................................................................ 64
19      EXCEPTION HANDLING ....................................................................................................................................................................................... 64

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Distribution Policy 2021 Music Repertoire - SIAE
1 INTRODUCTION

1.1       Scope of application

      SIAE’s Music Division is in charge of managing public performance rights relating to musical works1,
      including film screenings, communication to the public by radio and television broadcasting and mechanical
      reproduction rights with regard to such musical works.

      Distribution of copyright collections is carried out net of the shares due to SIAE (hereinafter also referred
      to as the "Society") and net of any amounts allocated to welfare purposes and encouragement of the
      national arts referred to in section 18.

      Processes, criteria, and timelines relating to the distribution of revenues collected by the Society, following
      the use of works that belong to the Society’s managed music repertoire, are laid down by the following
      principles.

1.2       Main principles

      Revenues distribution criteria are established by SIAE's
      Management Board, having heard the Music
      Committee's opinion, in accordance with the Society
      Articles of Organization: Article 18 (7) and Article 22 (1).

      The distribution process is aimed at determining, and
      consequently attributing, the amounts due to the
      rightsholders in compliance with the principles of
      effectiveness, efficiency, cost-effectiveness, and transparency, in other words as accurately as possible and
      within reasonable cost and time limits.

      In order to proceed correctly with the collection distribution, the Society needs specific information relating
      to the exploitation of the protected works to which the collections themselves refer.

      1
        SIAE’s Music Division is in charge of managing rights relating to musical works, with or without accompanying words, of both
      classical and pop genres. Operas, ballets, oratorios, operettas, revues, etc. are instead entrusted to the protection of the Opera and
      DOR Sections: in such cases, SIAE’s Music Division only manages the "detached musical pieces", that is, used independently with
      respect to the full version dramatic-musical works
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Distribution Policy 2021 Music Repertoire - SIAE
The Society distributes the net revenue primarily by using the analytical method, based on detailed
information included in the setlists submitted by users, in the reports submitted by TV/Radio broadcasters
or in different kinds of documentation (e.g., online music consumption reports). In the event that the user
is unable to provide complete information or supply data in a format manageable by SIAE, the Society may
resort to alternative methods in order to acquire the information needed to carry out the collection
distribution, including electronic format fingerprinting techniques.

In order to pursue the cost-effectiveness of its work, the Society may also use alternative methods for
acquiring information, such as sampling the setlists received and sample surveys carried out by qualified
experts.

The Management Board, after consulting the Music Committee and while considering the collections
volume, management cost-effectiveness criteria, as well as the availability of the information necessary for
the distribution purposes, may derogate from the allocation criteria set out in this document, approving
specific rules by resolution, still ensuring a just, equitable and efficient distribution of the amounts due to
the rightsholders.

1.2.1   Distribution of the amounts attributed to individual musical works
The amounts which, following the operations laid
down by these criteria, are attributed to the
different musical compositions, are distributed,
and paid to the rightsholders on the basis of the
allotment shares stated in the statement reports
deposited and acquired in the Society's works
database, in compliance with art. 33 of the
Society’s General Regulations. The above-
mentioned reports state the allotment shares due to the individual holders, owners of the works.

The amounts credited to each musical composition by foreign copyright collecting societies (affiliated
societies), are listed, on the reports issued to SIAE’s members, separately for each foreign Society, and to
such an extent that, taking into account any shares withheld by said Societies, the distribution share is

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equivalent to the percentages set out by the declaration of copyright ownership and/or authorship form,
without prejudice to the effects of the special regulatory arrangements with regard to the assignment of
works abroad.

1.2.2      Management policy of amounts non-attributable through ordinary distribution

Before and during the ordinary distribution
process, the arising of a variety of reasons, not
dependent on the Society, could make it
impossible to proceed with the distribution of
the amounts in favour of the rightsholders, for
example:
  amounts that cannot be included in the ordinary distribution process due to extraordinary reasons
        (e.g., unsent programming reports from television and radio broadcasters).
  amounts placed in ordinary distribution that cannot be attributed to members because it was
        impossible to identify the relative work and/or the rightsholder (e.g., unidentified music).

The amounts not attributable through the ordinary distribution process and criteria are therefore
distributed in a proportional way, according to the amount stated in the rightsholders’ analytical reference
reports, as specified in the following sections and with different timelines depending on the cause that
prevented the ordinary distribution from taking place.

Any complaints received after the extraordinary proportional distributions referred to above, yet submitted
within the statutory limitation period, shall be accepted, provided that the ownership of the works by the
complainant is ascertained and the Society has received all the information required for the purposes of
quantifying the amount to be paid in reason of the exploitation of the above-mentioned works.

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1.3      Application period

      The following criteria apply to distribution processes relating to year 2021. Distribution cycles and frequency
      along with their relative timelines are outlined in the following sections.

      Table 1: Royalty sources and reporting classes of payments to rightsholders

          SECTION       ROYALTY SOURCE                                                 PAYMENT CLASS

              2         DANCING WITH LIVE MUSIC                                        CLASS I
              3         CLUBS                                                          CLASS I
              4         RESTAURANTS, BARS, PUBS WITH PUBLIC MUSICAL PERFORMANCES       CLASS I

              5         PRIVATE EVENTS                                                 CLASS I
              6         CONCERTS AND OTHER MUSICAL EVENTS                              CLASS IV

              7         BACKGROUND MUSIC                                               CLASS IV
              8         CINEMA                                                         CLASS II
              9         TELEVISION                                                     CLASS II and III
             10         RADIO                                                          CLASS III
              11        RECORDINGS FOR TV AND RADIO BROADCASTING                       CLASS V

             12         WIRE BROADCASTING                                              CLASS III
             13         REPRODUCTIONS ON AUDIO AND VIDEO MEDIA                         CLASS V
             14         REPRODUCTIONS OF DJs’ WORK COPIES                              CLASS V
             15         ONLINE MUSIC REVENUE                                           CLASS VI
             16         PRIVATE COPYING                                                PRIVATE COPYING
             17         INTERNATIONAL REVENUE                                          REMITTANCES BY CMO

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2    DANCING WITH LIVE MUSIC

2.1       Distribution criteria

      Dancing events accompanied by live music are distributed 100% analytically based on the information
      stated in the submitted setlists. Notably, collections relating to each dancing event and entertainment event
      accompanied by dancing with live musical performances are allocated by share among the musical
      compositions listed in the corresponding setlist submitted to the Society by the license holder of the
      relevant entertainment event. The music pieces listed more than once in a setlist that relates to the same
      entertainment event, will be calculated as if they had been performed only once.

      EXCLUSIONS

      Music pieces performed for less than thirty seconds are excluded from the analytical distribution.

      The following are also excluded from the analytical distribution:

          A. setlists relating to private events

          B. setlists relating to performances that have taken place on ships and other means of transport
             (with the exception of those entertainments for which it is possible, also in terms of cost-effectiveness
             of management, to carry out checks)

          C. setlists with programming irregularities as per implementation of article 38 of SIAE’s General
             Regulations

          D. setlists with filling out irregularities (for example, failure to subscribe, missing, incorrect or untrue
             indication of the data of the performer or subscriber and/or setlists that, following investigations, turn
             out to be signed by a person other than the actual director of performances).

      Collections relating to setlists for private events (point A) are distributed according to the rules outlined in
      section 5 below.

      Collections relating to the setlists listed above (points B, C and D) are distributed within the semester
      following that of the ordinary distribution, in favour of the parties entitled to participate in the distribution

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of the rights relating to "Dancing events accompanied by live music", in proportion to the amount of the
      analytical reports relating to the reference period.

2.2      Distribution cycles and frequency

      Distribution of rights collections relating to dancing events and entertainments events with dancing
      accompanied by live music, reported with electronic format setlists, is carried out no less than once
      every six months:
        revenues collected up to 30 April each year are distributed by July of the same year provided that
              the relative electronic format setlists are returned by 30 April the same year
        revenues collected up to 31 October each year are distributed by January of the following year
              provided that the relative electronic format setlists are returned by 31 October the same year
        revenues collected in November and December each year, are distributed by July of the following
              year.

2.3      Management of collections non-distributable through the ordinary distribution process

      2.3.1      Missing setlists

      Collections relating to setlists which, despite all diligence by the Society, have not been delivered in time to
      proceed with the distribution process relating to the relevant semester, are distributed in the semester
      following that of the ordinary distribution, in favour of the parties entitled to participate in the distribution
      of the rights relating to “Dancing events accompanied by live music”, in proportion to the amount of the
      analytical reports relating to the reference period.

      2.3.2      Unidentified music

      Collections relating to unidentified music used in "Dancing events accompanied by live music" are
      distributed in the semester following that of the ordinary distribution, in favour of the parties entitled to
      participate in the distribution of the rights relating to "Dancing events accompanied by live music",
      proportionally to the analytical reports amount with regard to the reference period.

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3    NIGHTCLUBS

3.1       Distribution criteria

      Nightclubs’ copyright collections are distributed 100% analytically based on the information
      contained in the relative electronic format setlists. In particular, collections relating to each musical
      performance using a mechanical instrument for both dancing and entertainment events accompanied by
      dancing, for which electronic format setlists are filled out and returned (through the "mioBorderò" –
      “mySetlist” online service), are allocated by share among the musical pieces listed in setlist. Music pieces
      listed more than once in a setlist that relates to the same entertainment event, will be calculated as if they
      had been performed only once.

      EXCLUSIONS

      Music pieces performed for less than thirty seconds are excluded from the analytical distribution
      process.

      The following are also excluded from the analytical distribution process:

          A. setlists relating to private events

          B. setlists relating to performances that have taken place on ships and other means of transport
              (with the exception of those entertainments for which it is possible, also in terms of cost-
              effectiveness of management, to carry out checks)

          C. declared setlists with programming irregularities as per implementation of Article 38 of SIAE’s
             General Regulations.

      Collections relating to setlists for private events (point A) are distributed according to the rules described in
      section 5 below.

      Collections relating to the setlists listed above in points B and C are included in the distribution carried out
      by sampling and surveys described in paragraph 3.3.2 below.

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3.2      Distribution cycles and frequency

      Distribution of rights collections relating to musical performances with a mechanical instrument for
      dancing and entertainment events accompanied by dancing, reported with an electronic format setlist,
      is carried out not less than every six months:
        revenues collected up to 30 April each year are distributed by July of the same year provided that
          the relative electronic format setlists are returned by 30 April the same year
        revenues collected up to 31 October each year are distributed by January of the following year
          provided that the relative electronic format setlists are returned by 31 October the same year
        revenues collected in November and December each year, are distributed by July of the following
          year.

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3.3   Management of collections non-distributable through the ordinary distribution process

  3.3.1    Missing electronic format setlists

  Collections relating to electronic format setlists which, despite all diligence by the Society, have not been
  delivered in time to proceed with the distribution process relating to the relevant semester, are included in
  the distribution carried out by sampling and surveys described in paragraph 3.3.2 below.

  3.3.2    Paper format setlists

  Collections relating to musical performances using a mechanical instrument for dancing and
  entertainment events accompanied by dancing, reported with paper format setlists, are allocated and
  distributed according to the following criteria and methods:

      1. for a 70% share, on the basis of a sample consisting of direct, even partial, surveys carried out
          under confidentiality in the semester to which the distribution refers, of musical
          performances in dancing and entertainment events with dancing performed accompanied by
          a mechanical instrument; the methods of sampling surveys are governed by specific technical
          provisions. The total amount of the aforementioned share of revenues is therefore allocated by
          share among the music pieces identified in the sample.

      2. for a 30% share on the basis of a sample consisting of 1/5 of the setlists delivered by event
          organizers and identified with statistical selection criteria as per specific technical provisions. The
          overall amount of the aforementioned share of collections is allocated among the music pieces listed
          in the sampled setlists, by giving each music piece listed in the same setlist, an equal number of points
          obtained by the ratio between the collections relating to the setlist in question and the total number
          of music pieces reported therein. The value consisting of one point is equal to the quotient between
          the aforementioned overall amount and the total number of points attributed to all the music pieces,
          reported in all the setlists included in the sample. Musical pieces listed more than once in a declared
          setlist relating to the same entertainment event, will be calculated as if they had been performed
          only once.

  EXCLUSIONS

  From the samples referred to in points 1 and 2 above, the following music performances are excluded:

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A. performed during private events

   B. performed for less than thirty seconds

   C. performed during entertainment events that have taken place on ships and other means of
        transport (with the exception of entertainment events for which it is possible - also in terms of cost-
        effectiveness of management - to carry out checks)

   D. listed in setlists that, as a result of checks, reveal filling out irregularities such as failure to sign or
        irregular or false indication of the requested data

   E. setlists with programming irregularities as per implementation of article 38 of SIAE General
        Regulations.

Collections relating to setlists for private events (point A) are distributed according to the rules described in
section 5 below.

DISTRIBUTION CYCLES AND FREQUENCY

Distribution of rights collections relating to musical performances with a mechanical instrument for
dancing and entertainment events accompanied by dancing, reported with a paper format setlist, is
carried out no less than once every six months:
  revenues collected during the first semester of the year are distributed by January of the
     following year
  revenues collected during the second semester of the year are distributed by the month of July
     of the following year.

3.3.3    Unidentified music

Collections relating to unidentified music used in "Dancing events with mechanical reproduction on media"
are distributed in the semester following that of the ordinary distribution, in favour of the parties entitled
to participate in the distribution of the rights relating to "Dancing events with mechanical reproduction on
media", in proportion to the analytical reports amount with regard to the reference period.

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4    RESTAURANTS, COFFEE SHOPS AND PUBS WITH PUBLIC MUSICAL
           PERFORMANCES

4.1       Distribution criteria

      Revenues collected from restaurants, coffee shops, pubs and similar venues are distributed 100%
      analytically based on the data reported in the relevant electronic format setlists. In particular,
      collections relating to any event with live musical performances or with non-subscription based mechanical
      reproductions in restaurants, coffee shops, pubs, and similar venues (public places not undertaking
      entertainment activities), for which electronic format setlists are filled out and returned (through the
      "mioBorderò" – “mySetlist” online service), are allocated by share among the music pieces listed in each
      setlist. Music pieces listed more than once in a setlist that relates to the same entertainment event, will be
      calculated as if they had been performed only once.

      EXCLUSIONS

      Music pieces performed for less than thirty seconds are excluded from the analytical distribution
      process.

      The following are also excluded from the analytical distribution process:

          A. setlists relating to private events

          B. setlists relating to performances that have taken place on ships and other means of transport
              (with the exception of those entertainments for which it is possible, also in terms of cost-
              effectiveness of management, to carry out checks)

          C. setlists with programming irregularities as per implementation of Article 38 of SIAE’s General
              Regulations.

      Collections relating to setlists for private events (point A) are distributed according to the rules described in
      section 5 below.

      Collections relating to the setlists listed above in points B and C are included in the distribution carried out
      by sampling and surveys described in paragraph 4.3.2 below.
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4.2      Distribution cycles and frequency

      The distribution of rights collections relating to musical events covered by this section reported to the
      Society with electronic format setlists, is carried out no less than once every six months:
        revenues collected up to 30 April each year are distributed by July of the same year provided that
          the relative electronic format setlists are returned by 30 April the same year
        revenues collected up to 31 October each year are distributed by January of the following year
          provided that the relative electronic format setlists are returned by 31 October the same year
        revenues collected in November and December each year, are distributed by July of the following
          year.

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4.3      Management of collections non-distributable through the ordinary distribution process

      4.3.1   Missing electronic format setlists
      Collections relating to electronic format setlists which, despite all diligence by the Society, have not been
      delivered in time to proceed with the distribution process relating to the relevant semester, are included in
      the distribution carried out by sampling and surveys described in paragraph 4.3.2 below.

      4.3.2   Paper format setlists

      Revenues relating to live musical performances or by mechanical reproduction on a medium,
      reported with a paper format setlist, not provided with a subscription, carried out in restaurants, coffee
      shops, pubs, and similar venues (public places not undertaking entertainment activities), with the
      exception of private events (as per Section 5), are distributed according to the following criteria and
      methods:

          1. for a 75% share, on the basis of a sample made up of direct, even partial, surveys carried out
              under confidentiality in the semester to which the distribution refers; the methods of sampling
              surveys are governed by specific technical provisions. The total amount of the aforementioned
              share of collections is therefore allocated by share among the music pieces identified in the sample.

          2. for a 30% share on the basis of a sample consisting of 1/5 of the setlists delivered by event
              organizers and identified with statistical selection criteria as per specific technical provisions. The
              overall amount of the aforementioned share of collections is distributed among the music pieces
              listed in the sampled setlists, giving each music piece reported in the same setlist an equal number
              of points obtained by the ratio between the collections relating to the setlist and the total number
              of music pieces reported therein. The value of one point is equal to the quotient between the
              aforementioned overall amount and the total number of points attributed to all the music pieces
              listed in all the setlists included in the sample. Musical pieces listed more than once in any declared
              setlist and relating to the same entertainment event, will be calculated as if they had been
              performed only once.

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EXCLUSIONS

The following are excluded from the samples referred to in points 1 and 2 above:

    A. music performances carried out during private events

    B. music performances carried out for less than thirty seconds

    C. music performances carried out during entertainment events that have taken place on ships
        and other means of transport (with the exception of entertainment events for which it is possible
        - also in terms of cost-effectiveness of management - to carry out checks)

    D. music performances listed in setlists that, as a result of checks, reveal filling out irregularities
        such as failure to sign or irregular or false indication of the requested data

    E. music performances reported on the relevant setlists with programming irregularities as per
        implementation of Article 38 of SIAE’s General Regulations.

Collections relating to setlists for private events (point A) are distributed according to the rules described in
section 5 below.

DISTRIBUTION CYCLES AND FREQUENCY

Distribution of royalties relating to live musical performances or by mechanical reproduction on a medium,
provided with a paper format setlist and carried out without a subscription in restaurants, coffee shops,
pubs and similar venues is carried out no less than once every six months:
  revenues collected during the first semester of the year are distributed by January of the following
     year
  revenues collected during the second semester of the year are distributed by July of the following
     year.

4.3.3   Unidentified music

Collections relating to unidentified music of musical performances covered by this section are distributed
in the semester following that of the ordinary distribution, in favour of the parties entitled to participate in
the distribution of the rights relating to musical performances in restaurants, pubs, and coffee shops, in
proportion to the amount reported on the analytical reports relating to the reference period.

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5    PRIVATE EVENTS

5.1       Distribution criteria

      Revenues from private events are distributed 100% analytically based on the information reported in the
      relative electronic format setlists when organized by organizations that signed a specific agreement with
      SIAE. The proportional distribution method is used for other types of private events.

      In particular, collections relating to each private event organized in circles by organizations that signed a
      specific agreement with SIAE, relating to checks to be carried out confidentially, and for which electronic
      format setlists are filled out and returned (through the “mioBorderò” “mySetlist” online service) are
      allocated by share among the musical compositions listed in each setlist. Music pieces listed more than once
      in a setlist that relates to the same entertainment event, will be calculated as if they had been performed
      only once.

      Collections relating to dancing and other private events2 with music performed live or by mechanical
      reproduction on a medium, are distributed according to the criteria and methods outlined below:

          1. collections relating to private dance entertainment events with live music are distributed in
             proportion to the amount reported in the analytical reports relating to the reference period of the
             corresponding public entertainment events referred to in Section 2

          2. collections relating to private dance entertainments events with music performances by
             mechanical reproduction on a medium, are distributed in proportion to the amount reported in
             the analytical reports relating to the reference period of the corresponding public entertainments
             events referred to in Section 3

          3. collections relating to private entertainments events with music performances (carried out
             without a subscription) in restaurants, coffee shops, pubs and similar venues are distributed in
             proportion to the amount stated in the analytical reports relating to the reference period of the
             corresponding public entertainments referred to in Section 4.

      2
       Regardless of the venue: in public places, private homes, or open spaces, offered by private individuals to guests on the occasion
      of weddings, ceremonies, or anniversaries in general, congresses, gatherings, corporate meetings, etc.; from private clubs with
      access allowed only to members and possibly to family members; from managers of public premises to guests on the occasion
      of club openings, opening of a new season, etc.
                                                                                                                                     20
EXCLUSIONS

      The following are excluded from the analytical distribution process:

         A. music pieces performed for less than thirty seconds

         B. setlists with programming irregularities as per implementation of Article 38 of SIAE’s General
            Regulations.

      Collections relating to the setlists listed above (point B) are included, according to the type of event, in the
      three proportional distribution processes concerning private events.

5.2      Distribution cycles and frequency

      Distribution of rights collections relating to musical performances in dancing and other private
      entertainment events is carried out no less than once every six months and is moved up for events provided
      with electronic format setlists organized by organizations that signed a specific agreement with SIAE:
        collections for events organized by organizations that signed a specific agreement with SIAE,
           and carried out until 31 October each year, are distributed by January of the following year
           provided that the relevant electronic format setlists are returned by 31 October the same year
        collections for events organized by organizations that signed a specific agreement with SIAE,
           and carried out up to 30 April each year, are distributed within July of the same year, provided that
           the relevant electronic format setlists are returned by 30 April the same year
        revenues collected during the first semester of the year are distributed by January of the
           following year
        revenues collected during the second semester of the year are distributed by July the following
           year.

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5.3   Management of collections non-distributable through the ordinary distribution process

  5.3.1    Missing setlists (the following only applies to setlists submitted in electronic format)
  Collections relating to electronic format music setlists which, despite all diligence by the Society, have not
  been delivered in time to proceed with the distribution process relating to the relevant semester, are
  included, depending on the reported type of event, in the three proportional distributions concerning private
  entertainment events described in paragraph 5.1 above.

  5.3.2    Unidentified music (the following only applies to electronic format setlists)

  Collections relating to unidentified music of musical performances are included, according to the declared
  type of event, in the three proportional distributions concerning private events described in paragraph 5.1
  above.

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6 CONCERTS AND OTHER MUSIC EVENTS

6.1      Distribution criteria

      Rights collections from concerts and other music events are distributed 100% analytically based on
      the information reported in the relevant setlists.

      In particular, collections for public performance rights relating to each of the following typologies of events:

         a) symphonic, chamber and opera concerts

         b) dance concerts

         c) jazz concerts and entertainment events accompanied by jazz music

         d) music performed to comment or accompany theatrical, dramatic, and similar works (so-called "stage
            music")

         e) thematic music performed by mechanical reproduction on a medium with sound commentary
            functions in amusement park attractions, museum itineraries, shows or exhibitions, toy libraries and
            childcare spaces

      are distributed among the musical works reported in the setlist relating to the specific event, in proportion
      to the time length of the respective performances. Music pieces listed more than once in the submitted
      setlist relating to the same entertainment event, will be calculated as if they have been performed only
      once with the exception of the previous point “d”.

      Collections for public performance rights relating to each of the following typologies of events:

         f) pop music concerts

         g) marching bands

         h) parties held in public squares, stand-up comedy and variety shows

         i) other musical events in places open to the public (not included in the previous sections and
            paragraphs)

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are distributed by share among the music works reported in the submitted setlist relating to the specific
event. Musical pieces listed more than once in any submitted setlist and relating to the same entertainment
event, will be calculated as if they had been performed only once.

EXCLUSIONS

Music pieces performed for less than thirty seconds are excluded from the analytical distribution
process.

The following are also excluded from the analytical distribution process:

    A. setlists relating to performances that have taken place on ships and other means of transport
        (with the exception of those entertainments for which it is possible, also in terms of cost-
        effectiveness of management, to carry out checks)

    B. setlists reporting filling out irregularities (for example, failure to subscribe, missing, incorrect or
        untrue indication of the data of the performer or subscriber and/or setlists that, following
        investigations, turn out to be signed by a person other than the actual director of performances).

    C. setlists reporting programming irregularities as per implementation of Article 38 of SIAE’s
        General Regulations.

The amounts relating to the setlists listed above are distributed within the semester following that of the
ordinary distribution, in favour of the parties entitled to participate in the distribution of the rights relating
to "Concerts and other musical events", in proportion to the amount of the analytical distribution reports
relating to the reference period.

                                                                                                               24
6.2    Distribution cycles and frequency

  Distribution of rights collections relating to musical performances carried out during concerts and other
  musical events, reported with electronic format setlists, is carried out no less than once every six months:
       revenues collected up to 30 April each year are distributed by July of the same year, provided that
         the relative electronic format set lists are returned by 30 April the same year
       revenues collected up to 31 October each year are distributed by January of the following year,
         provided that the relative electronic format set lists are returned by 31 October the same year
       revenues collected in November and December each year, are distributed by July of the following
         year.

  Distribution of rights collections relating to musical performances carried out during concerts and other
  musical events, reported with paper format setlists, is carried out no less than once every six months:
       revenues collected during the first semester of the year are distributed by January of the following
         year
       revenues collected during the second semester of the year are distributed by July of the following
         year.

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6.3   Management of collections non-distributable through the ordinary distribution process

  6.3.1   Missing setlists

  The amounts relating to setlists which, despite all diligence by the Society, have not been delivered in time
  to proceed with the distribution process relating to the relevant semester, are distributed during the
  semester following that of the ordinary distribution, in favour of the parties entitled to participate in the
  distribution of the rights relating to “Concerts and other musical events”, in proportion to the total amount
  of the analytical distribution reports with regard to the reference period.

  6.3.2 Unidentified music
  The amounts relating to unidentified music are distributed in the semester following that of the ordinary
  distribution, in favour of the parties entitled to participate in the distribution of the rights relating to
  "Concerts and other musical events", in proportion to the amount of the analytical reports relating to the
  reference period.

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