Finland's parallell systems of library compensations

Introduction and background

"As I remember", a Korean writer said to me, "Sweden and Finland have a unique and special program and support between writer and library. Can you tell me something about it?" Below, please find my tentative answer. Being a Finn myself I will, however, limit the scope of this article to the Finnish case. The interesting, more generously funded, and probably better system they have in Sweden would deserve an own article.

The question of the library loan compensations is a conflictual issue and a complicated subject. In order to grasp what it is all about, one would have to take into account the different economic interests and the diverging opinions of authors, translators, publishers and investors, educators, librarians, politicians, tax-payers and other members of the reading public. Let it therefore be said that I, as a reading citizen, try my best to be on the side of the public libraries and their users. The public libraries of the Nordic countries (Sweden, Denmark, Norway, Finland and Iceland) are traditionally seen as part of the liberal education for the entire nation; some of us also believe that the libraries have a starring role to play in the information society. 1 Undoubtedly, publishers, too, will continue to have an important role in the digitalised environment, and the writers themselves will probably always be the most beautiful stars. Yet the continuation of the virtual reality which we call 'literature' is unthinkable without the library.

The issue of the library loan compensations arouse with the growth of mass markets for printed books and the development of public lending libraries in the USA and in Europe. However, the related idea of the public lending right (PLR) - that authors, or rights holders, are entitled to an economic remuneration for the book loans – took hold only in Europe.2

In the Nordic countries the story of the PLR begun at a meeting of Nordic authors in 1919 when Danish author Thit Jensen famously called for a compensation of 5 öre (0,05 crowns) for every book loan.3 From here onwards the various players in the field have tried, and have on the whole succeeded, in keeping the balance between cultural imperatives and economic interests. Thus in Sweden, the Authors' Fund was set up by the state in 1954 to manage both state scholarships for writers and library compensations per book loan. A major reform at the European level was initiated by the European Commission in 1992 with its unique and controversial directive "on rental right and lending right and on certain rights related to copyright in the field of intellectual property". The special feature of the PLR-directive of the EU is its total disregard of the cultural aspects of the relation between authors, readers and libraries. The text of the directive indeed omits the very words "reading" and "library", preferring to speak instead of "establishments which are accessible to the public".4 However, the implementation of the directive in the various countries has not only met resistance from librarians, citizens groups and consumers (the readers!), but also from politicians and national governments. Thus the directive's proponents have often been forced to retreat from their militant economism and to enter into cultural and political compromises with its adversaries.

This is also why Finland now has not only one, but two different systems of library compensations to authors and translators.

The Library Grants for Authors and Translators

The older arrangement is a cultural policy which was laid down in the Act on Grants and Subsidies for Authors and Translators (1961).

In accordance with the said Act, the Finnish state budget for art contains each year a post for library grants and subsidies. The sum of money in question should correspond to 10 per cent of the book acquisitions by the public libraries in the previous year. Despite this linking of the funding to the library, it is, however, stated that all writers who live, or have lived, in Finland, and who write in Finnish, Swedish or Sami5, are entitled to these grants and subsidies regardless of whether their books have or have not been borrowed from libraries. Thus the kirjastokorvausapuraha (literally, "library scholarship"), as this type of grant is called in Finnish, is a culturally motivated form of public support for literature. Obviously, the money which the libraries have to spend on new books (ca 25 million euros in 2009), are another very significant way of financing literature, reading and publishing by public means. As IFLA noted in its 2006 position paper on public lending right:

"By increasing literacy rates and encouraging reading habits, libraries are fostering the long- term development of a market for information products, especially for the local content industries. In the short term, libraries are using their purchasing power to support and encourage these industries."6

The Finnish library grants and subsidies (the "subsidies" are for "senior writers" ) are intended for "creative work" which, in this context, excludes scientific research and the writing of schoolbooks. During the first two decades, the grants and subsidies were in fact only allowed to writers of fiction and poetry. Since 1984, however, writers of non-fiction have also been able to apply for and to receive this kind of support for their creative work.

The kirjastokorvausapuraha-system is managed and distributed by a Board of authors and writers under the supervision of the Ministry of Education. In the year 2010 the Board distributed ca 2,9 million euros to 932 writers, senior writers and translators, who had submitted applications. The individual "scholarships" varied between 500 and 14.500 euros per person.

In addition to the literary merits, the project plans and the provenience of the applicants, the Board also probably in some cases considers their economic, social, etc. circumstances, if these happen to be known. Questioned by the present writer, a senior former member of the Board confirms that the complexity of the criteria of allowance sometimes borders on sheer arbitrariness. However much discussion and more or less smothered protest the system may generate, the writers of fiction and poetry, who get the bulk of the grants, clearly benefit from it, and so, although to a lesser extent, do the translators and the writers of non-fiction. The translators' quota has been set to 16 per cent, while writers of non-fiction usually receive ca 10 per cent of the total sum.

The loan compensations

Now, let's take a look at the more recent parallell Finnish system of "support between writer and library". This more recent system, which is presently being implemented in parallell with the older arrangement, is essentially a market regulation based on the above-mentioned PLR-directive of the EU (1992). If and when this new system will be really functioning, it will be based directly and only on the quantitative library loan data. In other words, the writer will be remunerated in proportion to the number of times that his or her books are borrowed from the libraries. And, the benificiaries of these so called library compensations lainauskorvaukset , in Finnish - will be not only writers (of both fiction and non-fiction) and translators living in Finland, but also their colleagues in the European Economic Area countries,7 whose books are read by Finnish library users.

Guess if the implementation of this is system, too, will be a complex task, which might also, like the older parallell system, lead to some more or less outspoken protests? "Whoever has will be given more", exclaimed, for instance, the editor of Parnasso, a literary journal. "This will finally put an end to the injustice, that the most popular and best-selling authors do not always get most of the money! Soon they will."

How, more precisely, will the library compensations be calculated? Some basic facts are needed to frame the question.

Firstly, the system only comprises loans from public libraries – that is, city libraries and municipal libraries, of which there are all in all ca 880 in Finland (2009). Loan data from university and high-school libraries are not considered. In 2009, the total number loans from public libraries in Finland was ca 100 million. Of these loans, however, only ca 72 million were book-loans, the rest being musical CDs, videos, etc. (remunerations are also to be paid for the lending of these materials, via mechanisms which I will not go into here). This total will ultimately serve as the basis for the compensations 2010.

However, a quarter of these library books are by writers from outside the European Economic Area, and will therefore not be taken into account. Only the translator of, say, a Korean book into the Finnish language, should be compensated. Translators and authors are remunerated on a fifty-fifty basis, which means that the translator of the Korean book gets 50 percent of the library compensation, while nothing is paid to the Korean author. Perhaps the Korean writers can comfort themselves with the knowledge that they belong to a much wider language area with larger book market than their Finnish colleagues, and consequently will have higher incomes, at least if they happen to write bestsellers ? From what has been said so far, it follows, anyway, that the number of book-loans to be considered in the Finnish calculation amounts to ca 72 000 000 – (72.000.000/8) = 63 million.

Secondly, we need to know how much money there is for the purpose, and, yes, we also have to ask: from where does that money come? Certainly, it does not come the military-industrial complex. Nor is it a gift from the peaceful nuclear or non-nuclear industry. In theory, it could of course be provided directly by the library users, if the users paid 5 cents each time they borrow a book in the library. In theory, such payments would generate 5 cents * 72 million = 3,6 million euros. This, I guess, was also the original idea of the EU Commission when it created the European right of the copyright-holder to be compensated for loan or rental of his work, and the related law, i .e. The PLR-directive. The Finns, however, are great lovers of their public libraries, which have hitherto lived exclusively on money from the tax-payers (via the state budget), and some contributions from the National Loteries. In other words, to make the library users pay for each loan was out of the question, except, perhaps, for the supporters of the most capitalistic political parties. And so what had originally been intended to be taken care of by the invisible hand of the market had to be implemented by way of politically decided funds via the state budget. Yet this time no new Act was passed by the parliament; the only legislative measure needed was the amendment of the existing Finnish Copyright Act with the new public lending right from the EU.

What will happen the day when, because of a financial crisis of some sort, the government will refuse to grant money for the PLR compensations, nobody knows. Or knows only too well: it will lead to the privatisation and commercialisation of the public library system.

In the year 2007, for the first time, 2 million euros were allocated for the PLR-compensation. From 2008 to 2010 the yearly sum has been 3 million per annum.

Do we now have the necessary facts and figures to calculate what each writer and translator should receive? Well, not exactly. Two major problems need to be solved before the system will work as smoothly as a slot machine.

The first problem is the quality and quantity of the library loan data. Not all libraries use the same integrated library systems (ILS); more precisely, they use four major systems, which all generate somewhat different data. All the experts seem to agree that the problem can only be solved by more, not less, computerization and integration of the library systems. (But here, a different type of problem arises, namely, the problem of commercial monopoly – in case the libraries do not pool their resources to build an "in house" ILS.8 )

The second problem stems from the fact that books give only scarce information about their writers.

At least, the information is incomplete, if you would like to support them by paying them their library compensations. What this means is that each and every writer has to take up his pen, or sit down at his laptop, in order to register himself in the PLR-system. You know, fill in a lot of forms with personal information, including the complete list of all his or her books and publications, which might be easier said than done. Not every writer likes to do do such things, it seems, because hitherto, only a fraction of the writers have registered themselves since the start of the system in 2007. Sanasto 9, the new body which was set up to manage the library compensations, actually has to reach out to all those writers, in the first place, and to tell them what I am trying to tell in this article – what the system is, how the compensations are calculated, how to register, and so on.

All these major or minor initial problems have led to the situation where we are today. Of the 8 million euros reserved since 2007, Sanasto has so far (December 2010) only been able to distribute 0,22 million to rightsholders. Because of the diversity of the loan data generated by the libraries, the first "pilot payments" had to be based on a sample of only 10 % of the total library loans. In this first round, which took place in March 2009, about 900 authors received library compensations varying between 20 euros (the minimum) and 10.000 euros.

The future: a literary slot machine?

To conclude this brief presentation, I would like to speculate freely for a little while about how "the support between library and writer" will develop in the future. In so doing, I cannot avoid the thought that the traditional concern about the balance between the interests of authors, publishers, libraries and readers is already being superseded by the digital revolution. Is not the digital revolution so called precisely because it turns everything on its head? What is publishing now, how to define a book in these days, and where is the library? Is it in my Samsung Galaxy, or in a building near the house that used to be the Post Office? Two things seem to remain unchanged, namely, the writing and the reading, but do we know for sure what these words mean? Well, at least we may trust that literacy is here to stay. The question is: do we want a literacy where every act of writing and reading has a price tag, or has to be paid for by the minute? Do we want to transform the only virtual reality we have into one gigantic slot machine? The answer is no.

Mikael Böök

book (at)


1 See Haavisto, Tuula: "ad astra - Will the Libraries have a Starring Role in the Information Society?" , in Mäkinen, Ilkka (ed.): Finnish Public Libraries in the 20th Century. Tampere University Press 2001, p 155.

2 "There is no PLR in the United States, Russia and the former Soviet Union states, countries in the Caribbean, Latin America, Asia and Africa." Quoted from "The position paper on public lending right" (2005) by IFLA, see note 6 below.

3 See Nordic Public Lending Right. 2nd International Conference on Author's Lending Right. Copenhagen 1997 (Ed. by C.H.Henriksen.)

4 The Commission's Directive (92/100/EEC) has since been replaced by Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006.

5 Finland, with a population of ca 5 million inhabitants, is a bilingual country. Finnish is spoken by the great majority; a minority of some 300.000 people speak Swedish, the second official language. Sami is spoken in the Northern parts of Norway, Sweden and Finland (Lapland); of these, a couple thousand people live in Finland.

6 The position paper on public lending right (2005) by the International Federation of Library Associations (IFLA) is found at

7 The European Economic Area comprises the EU member states plus Iceland, Liechtenstein and Norway, which participate in the EU's single market although they are not EU members.

8 An "in-house" solution of this kind is the free and open source software Evergreen, which runs the the integrated library system of he state-wide public information network PINES in Georgia, USA. See, for instance, my article "An Open ILS for Free LIS", .

9 See .