PROs
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Despite a challenging economy and the lingering effect of the pandemic on the concert business, the German collecting society GEMA took in 1.178 billion euros ($1.25 billion) in revenue in 2022, a 13% increase over 2021. This year, for the first time, the organization’s distributions will exceed a billion euros.
“This is a record result,” said GEMA CEO Harald Heker in a statement. “The resurgence of events and music performances means a relief for our members after three hard years.”
Some of this increase reflects the continued growth of streaming, but some of it is due to the recovery from the pandemic.
GEMA collections from public music performances, its biggest category of revenue, grew to 357.5 million euros ($381.6 million), up 43.7% over 2021 (but still below the 407.4 million euro high of 2019). Online, the organization’s third biggest category, grew to 301.3 million euros ($321.6 million), up 26.5% over 2021. (Radio and television collections, the second biggest category of revenue, dropped 3.9% to 325.1 million euros [$347 million].) The amounts of money GEMA collects from levies on computers and items with blank memory, as well as from physical goods, both declined – by 27.7% and 9.2%, respectively.
GEMA is one of the first international collecting societies to announce its 2022 results, but its counterparts are expected to report good years as well, for some of the same reasons. Last month, ASCAP reported a 14% increase in collections over 2021, to $1.52 billion. (Collecting societies report their results differently, so exact comparisons can be difficult.) While organizations struggled to maintain revenue during the pandemic, the comeback of the concert business – and public life in general – should now boost all of them.
GEMA’s good news comes at an interesting time for the organization. As the 2014 EU directive on collecting societies continues to push them into competition with one another online, GEMA has emerged as one of the bigger and more successful organizations. In addition to its own operations, GEMA operates the online licensing and collecting hub ICE with STIM (Sweden) and PRS for Music (UK). Heker has led GEMA since 2007 and is expected to retire by the end of the year, and there is talk that GEMA will name its next CEO by summer.
Like many collecting societies and organizations of publishers and songwriters, GEMA believes that music-streaming is unfair to their side of the business, and rewards labels and artists disproportionately.
“The trend towards streaming must not lead to authors’ rights being undermined,” Heker said in the same statement. “GEMA’s most important task is and remains to stand up for fair remuneration in all areas and thus at the same time to secure conditions for a lively and diverse musical and cultural landscape.”
The American Society of Composers, Authors and Publishers on Wednesday (March 8) posted a 14% increase in collections to $1.522 billion while also reporting its fund available for distributions to songwriters and publishers grew 10.7% to $1.388 billion in 2022. In the prior year — 2021, when the economy was still impacted by the COVID pandemic — the performance rights organization disclosed revenues of $1.335 billion and distribution funds at $1.254 billion.
Moreover, the double-digit percentage increase for collection and distribution funds represents a significant bump from the pandemic-scarred 2021 when ASCAP posted a less than 1% increase in collections from 2020’s $1.327 billion and a 3.4% increase in distribution funds from $1.213 billion.
The PRO attributed its rebound and continued growth to its 2015-launched strategic growth plan, which focused on revenue growth, technological innovation and operational efficiency.
“It is our technical innovation coupled with an unparalleled work ethic that grew our domestic revenue 16.5% in 2022 and yielded a 6% compound annual growth rate since the inception of our strategic plan eight years ago,” ASCAP CEO Elizabeth Matthews said in a statement. Beyond that, ASCAP also noted the organization had achieved a 7% compound annual growth rate for total distributions to members over the same time period.
In an apparent reference toward ASCAP’s competitors — BMI, SESAC and GMR — Matthews continued her statement by noting it is “the only US PRO that operates on a not-for-profit basis which is a key differentiator among PROs. ASCAP creator and publisher members are the sole beneficiaries of this growth because we invested years ago in cloud computing, enabling us to address the challenges of digital streaming efficiently, and because we only pay songwriters and publishers, not private investors.”
Breaking out collections, ASCAP said its domestic receipts grew 16.5% to $1.178 billion from 2021’s $1.011 billion; while foreign receipts grew 6.3% to $344 million from the prior year’s total of $323.5 million. It attributed the discrepancy in growth rates to “challenges due to foreign currency exchange volatility.”
Moving over to funds available for distribution, ASCAP said domestic distribution funds totaled $1.048 billion — a 14.9% increase over the prior year’s total of $912.6 million, and further noted that it was the first time those funds had surpassed the $1 billion mark.
“We are elated to share these historic financial revenue and distribution results for 2022 with our songwriter, composer and publisher members, who are the foundation of the music we all love,” ASCAP chairman and president Paul Williams said in a statement. “In the US, we have competition, meaning that creators have a choice, and that choice should be ASCAP. It is in ASCAP’s DNA to ensure that we operate in the best interest of all our members. Our financial success for over 100 years, and a singular commitment to nurture their careers and maximize the value of their music, prove that our not-for-profit model of collective licensing works.”
Meanwhile, foreign revenue funds available for distribution totaled $340 million, or $1 million less than 2021’s total of $341 million. The latter total was larger than the $323 million reported for 2021 foreign receipts, and ASCAP attributed the unusual occurrence to “technological and distribution process efficiencies and timing.”
Finally, the organization said it delivered 90 cents on the dollar back to its members and affiliates, thus implying its expense structure costs 10% of revenue — and that’s down from 12.3% of collections in 2015 — the last time ASCAP publicly revealed detailed financials including a breakdown in its expense structure.
In its latest results, ASCAP said that it grew every major category of performance licensing, reporting general licensing revenue increased by 40%, radio by 32%, audio streaming by 16% and audio-visual by 7%, without breaking out the actual revenue numbers those income streams achieved in 2022 or 2021.