Foreign Earnings For SOCAN Members Help Drive Double Digit Revenue Growth

By External Source

A rising tide of Canadian music success around the world has helped to create a buoyant year for Canada's songwriters, composers and publishers, adding to more history-making numbers for SOCAN in 2018, as the company announced preliminary year-end results.

The Canadian music rights org again has set a new record with royalty collections that saw combined domestic and international collections rising above 2017 figures by at least 11% percent.

"The consistently increasing number of Canadian music creators aspiring to make a living from their creative work is similar to the halo effect we see in other industries," said SOCAN CEO Eric Baptiste.

"SOCAN member songwriters and composers like Alessia Cara, Alexandra Stréliski, Drake, Elisapie, Frank Dukes, Hubert Lenoir, Keith Power, Loud, Murda Beatz, Shawn Mendes, Tebey, The Weeknd, and WondaGurl are excelling globally, and they inevitably inspire others to pursue their passion for creating music as a livelihood. A first step toward a serious career in music creation is to join SOCAN so that you can get paid for what you've created."

SOCAN members again enjoyed sizable growth in their "export music" – music played internationally.

Total 2018 international royalties are estimated to be least $87-million, an increase of 15% over 2017. In addition to the widespread global success of Canadian music creators, SOCAN credited pioneering technology, search capabilities, improved data-matching securing markedly better returns for members.

According to preliminary financial results,[1] the PRO's total royalties collected for its nearly 160,000 member songwriters, composers and music publishers continued to accelerate at an 11% clip, due to, among other factors, long-term investments in leading-edge technologies, strategic acquisitions and mutually beneficial partnerships.

Estimated 2018 highlights:

• At least $374-million in total revenues2 – a new record, and an 11% increase over the nearly $338-million collected in 2017.

• $315-million distributed to SOCAN members, an increase from $295-million in 2017.

• Domestic revenue of $282-million, an increase of 8% from last year's record, and a 25% increase since 2013.

• Royalties from non-Canadian sources are the #1 revenue stream for SOCAN members, reflecting the strength of Canadian talent and SOCAN's repertoire, a 70% five-year increase.

Of the world's top 10 performing rights collectives, SOCAN is the only one that returns 100% of the international royalties it receives from its international partners to its members with no additional management charge applied.

• While royalties collected increased by 11%, SOCAN's operating expenses remained constant year-over-year, the company delivering an even higher level of service to members and licensed businesses, while maintaining costs.

In addition to high-profile Canadian music creators, SOCAN's Membership A&R strategy is helping to propel the careers and business of writer and publisher members.

The organization held 22 song camps and regular in-house collaborative writing workshops in 2018, helping to build careers and businesses. "Thanks for your continued support of everything we do," said Jason Murray, Co-Founder and President of Black Box Music, an independent music publishing company based in Toronto and Los Angeles.

"It's amazing to see all the phenomenal artists showing up at your events to support. It's a true testament to the hard work you have put into building a creator-friendly culture around SOCAN."

The commitment to the payment of royalties by Canada's music-using businesses is also gaining strength. Concert promoters are submitting more setlists, and the resiliency of traditional media such as radio and television, a strengthening live music scene and rapidly growing digital media have pushed domestic growth ahead.

Despite the continued increase of digital royalties from the rising popularity of online businesses that use music, SOCAN again called for a more equitable share for music creators and publishers.

SOCAN revenue from Internet-based licensed music in 2018 will total approximately $62-million, an increase of 27% from approximately $49-million collected in 2017.

"While overall revenues from digitally-delivered performances of music continue to climb, music creators and publishers on average are yet to see earnings commensurate with the value that their work brings to these online corporations," Baptiste added.

"To put it in perspective, the average SOCAN member who earned royalties in 2018 realized only $54 from domestic digital sources in the entire year. This has to improve, and SOCAN is working tirelessly to ensure our members receive what they have fairly and deservedly earned from their extraordinary work."

With the acquisition of Canadian-based mechanical rights organization, SODRAC, in July 2018, SOCAN expanded its capabilities and offerings for music creators and publisher clients. SOCAN also welcomed nearly 1,000 visual arts and crafts creators to the organization, as well as dozens of new reciprocal agreements in the Reproduction Rights and Visual Arts domains, in addition to the more than 100 existing ones for Performing Rights.

The made-in-Canada solution is the result of years of discussions coming to fruition and provides all rightsholders with a more compelling and fulsome offering. Also, in 2018, SOCAN launched Dataclef, the back-office services arm of the company. Dataclef is an offshoot from SOCAN's multi-year investment in technology and data assets that places SOCAN at the forefront of the world's rights management companies.

About SOCAN

SOCAN is a rights management organization that connects more than four-million music creators worldwide and more than a quarter-million businesses and individuals in Canada. Nearly 160,000 songwriters, composers, music publishers, and visual artists are its direct members, and more than 100,000 organizations are Licensed To Play music across Canada. With a concerted use of progressive technology and unique data as well as a commitment to lead the global transformation of rights management, with wholly-owned companies Audiam, Dataclef and MediaNet, SOCAN is dedicated to upholding the fundamental truths that music and visual arts have value and creators and publishers deserve fair compensation for their work. For more information: www.socan.com

-- 1. Estimates; final figures will be determined following the March 2019 meeting of SOCAN's Board of Directors and released in concert with SOCAN's annual general meeting in June.

-- 2. Includes approximately $5-million in reproduction rights royalties as part of SODRAC acquisition.