Administrative costs

Administrative costs are the deductions that the societies are entitled to charge their members on the receipts from the rights they manage. These costs are born solely by the rightholders, not the users. For example, out of 100 Swiss francs of license fees paid in, the member receives 85 Swiss francs assuming a 15% cost deduction.

The actual administrative costs of the societies may be higher than the cost deduction born by the members. This is however covered to some extent by additional income from financial investments for example, so that the members do not have to be charged the entire expenditure.

The cost-coverage deduction shows the share of tariff revenues withheld from beneficiaries in order to cover administration costs: this is the distribution perspective.

Conversely, the gross cost rate is the ratio between total gross costs and total gross revenues in a purely economic perspective and without any set-offs.

The level of administrative costs depends on factors such as the number of tariffs, customers and members administered by a society and how many employees it requires to accomplish the task. The Swiss societies are obliged to incur a relatively high expenditure in order to administer a small, multilingual territory. Nevertheless, their administrative costs have been falling for many years. At the present time, they amount to: