SOCAN Releases 2019 Annual Report
Canadian performing rights org SOCAN has announced final 2019 financial results, including record domestic and international collections for the company's member music creators, music publishers and visual artists. The company also announced significant financial losses due to past investments in the acquisition, creation, and financing of the new business venture Dataclef Inc. Pictured, interim CEO Jennifer Brown.
By External Source
Canadian performing rights org SOCAN has announced final 2019 financial results, including record domestic and international collections for the company's member music creators, music publishers and visual artists. The company also announced significant financial losses due to past investments in the acquisition, creation, and financing of the new business venture Dataclef Inc.
Highlights of SOCAN's 2019 results:
$405.6-million in total collections – an 8.2% increase compared with 2018.
Record-setting domestic collections of $315.1-million – 10% more than 2018.
A 2.2% year-over-year increase in international royalty collections ($90.5-million).
A 37.6% increase in revenue from digital sources ($86-million).
Reproduction rights collections increased to $12-million.advertisement
Distributions to members totalled $296-million, a 6% decrease compared with the $315-million distributed in 2018. The disparity was due primarily to the steep learning curve required for the company's newly deployed technology to process international and television income. Significant progress has been made in these areas in 2020, as SOCAN continues to leverage this new technology to meet the data-intensive demands of the digital age, the PRO said in its reporting.
In 2016, SOCAN through its wholly-owned subsidiary Dataclef Inc. embarked on a plan to implement the organization's strategic vision. The 2019 financial results include losses that resulted in an impairment of $41.7-million to the advances made by SOCAN to fund its subsidiary operations since 2016.
"At the time of our investment in these operations, we were exploring new ways to support our members by creating other revenue streams and leveraging new technologies," said interim CEO Jennifer Brown. "Business plans didn't come to fruition in the way we anticipated. Through the evaluation process, it became clear that we should divest ourselves of Dataclef assets. We are, however, encouraged by significant success with our new technology system and our improved matching and processing capabilities."
Through extensive evaluation and analysis, SOCAN says it has developed a plan to manage the losses, which have not impacted distributions.
Aspects of the plan include the sale of Dataclef assets, a significant reduction in SOCAN's overhead expenses, a reorganization of the Dataclef operation, and new management leadership, all of which have already been put into action.
SOCAN's management and Board of Directors have also committed to sharpening the company's focus on core work for members: expanded domestic licensing of music; continual improvement of the depth, accuracy and speed of royalty distributions; and investing in ways that will allow our team to focus on our core purpose of helping music creators and publishers.
The accounting firm Grant Thornton LLP has reviewed SOCAN's financial plan to manage the financial impairment and has provided SOCAN with its support.
SOCAN will hold its AGM online on November 10 to discuss the org’s 2019 results and financial plan in detail.
The meeting is available online to SOCAN members who earned royalties in 2019. SOCAN's 2019 annual report and financial statements audited by KPMG will be made available in concert with the meeting.
SOCAN represents various rights of 160,000 songwriters, composers, music publishers and visual artists in Canada, and licenses more than 100,000 businesses to play music across the nation.