Two years after the pandemic and its temporary shutdown of concerts and many stores and restaurants devastated the collective management organizations that license public performance royalties for songwriters and publishers, some of those CMOs are reporting record-setting financial results. In April, German society GEMA and the United Kingdom’s PRS both collected and distributed their highest amounts ever. And on June 21, French collective management society SACEM announced that it had collected €1.41 billion ($1.54 billion) in 2022, 34% more than in 2021, and distributed €1.06 billion ($1.15 billion) — a 19% increase over the previous year. Both numbers represent new highs — both for SACEM and at least for European societies.
“Thanks to the resumption of concerts, the explosion of digital, the new agreements signed with the many users of SACEM’s repertoire, and the strategic shift undertaken in its transformation plan, SACEM had a record year in terms of both collections and royalties distributed,” said CEO Céclile Rap-Veber in the organization’s announcement. “These results demonstrate, once again, our ability to adapt and strengthen our expertise in a highly competitive and rapidly changing sector.”
For SACEM, as for all CMOs, some of the increase in revenue and distributions comes from the return of live concerts, which are a significant source of royalty revenue. But the success also reflects the growth of streaming, as well as the ability of CMOs to negotiate better prices for the compositions they license. It’s also important to note that SACEM’s results will not just affect French composers and publishers: CMOs now compete to represent the rightsholders for online use in most countries, excluding the U.S., and SACEM licenses the work of composers around the world, as well as the repertoire of Universal Music Publishing Group.
SACEM, the oldest music collecting society, is setting the pace for its rivals. Its collections of €1.41 billion ($1.54 billion) are higher than those of GEMA, which in 2022 took in 1.18 billion euros ($1.25 billion), and PRS, which had revenue of 836.2 million pounds ($1.04 billion).
Direct comparisons are inexact, however, since all of the CMOs use different accounting procedures. (The two biggest U.S. CMOs, ASCAP and BMI, are also constrained in their negotiations by antitrust consent decrees.) SACEM, for example, counts money it collected and distributed in 2022, but since it takes some time to distribute funds, the money it pays out trails slightly. This implies that distributions will rise in the first part of next year. “In 2023, taking into account collections in the second half of 2022 and the first half of 2023, we expect to reach a new distribution record,” SACEM said in its announcement.
SACEM also lowered its expenses. Its ratio of operating expenses to collections was a low of 11.65%, down 3.15 points from 2021. As competition among CMOs heats up — especially between SACEM and the ICE hub run by GEMA, PRS and the Swedish society STIM — all of the societies are trying to cut costs.
In 2022, for the second year in a row, online was the biggest source of royalties — up 38% to €493 million ($538.27 million). The second largest category of revenue was television and radio, which accounted for €353.1 million ($385.56 million), up 19%. General royalties contributed €327 million ($357.06) — up 93% partly due to the return of the live music business.
The financial results only include SACEM’s core operations of collecting public performance and mechanical royalties for composers and music publishers, both in France and for online uses in most countries around the world. They do not include SACEM’s neighboring rights revenue from television and radio play of sound recordings, or the subsidiaries like the one it operates to license the neighboring rights of newspapers and periodicals when their works are used by online companies like Google and Facebook.
:quality(85):upscale()/2023/05/11/976/n/1922564/782262e2645d6b967847b4.74342194_.png)
