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FINANCIAL

Two thousand and sixteen was another impressive year for SOCAN’s performance, again breaking records for revenue and distributions to our members. SOCAN’s total revenue was $330-million, an increase of seven per cent over the previous year. Gross Expenses were $44.5-million, an increase of $0.6-million. Royalty Distributions to Members were $289-million, an increase of $12.8-million from the previous year.

This achievement maintains SOCAN’s position as one of the top music rights organizations in the world. It demonstrates our strength at licensing the performing right, as well as our continued focus on efficient expense management to ensure that more royalties are provided to tens of thousands of Canadian songwriters, composers and music publishers and the millions of rightsholders we represent in Canada via agreements with 105 societies in 213 countries.

Financial Greatest Hits:

  • A new record for total revenue of $330-million, an increase of 7.2% over the record $307.8-million in 2015.

  • $67-million in foreign royalties identified, collected and distributed for members whose music is played internationally on radio, television, online, onstage and other public performance uses – a 31% increase over 2013.
  • Internet revenue increased by an impressive 118% over the previous year.
  • Total royalty distributions to members of $289-million – a 4.6% year-over-year increase.

 

SOCAN Financial Report 2016

Please note that Adobe Acrobat Reader is required to view PDF files. You can download a free copy of the latest version here.

Onix Belleus
Chief Financial Officer
Financial Greatest Hits
 

MEMBERSHIP

In 2016, the Membership team built on the previous year’s momentum, introducing new technology and applications for our members to maximize their royalty payments. We played an even more integral role in our members’ careers, and renewed our commitment to recruit, retain, and deliver gold-level services to our members.

Led by our A&R team, we retained important globally successful members (that helped drive SOCAN’s record foreign revenue), and brought several back into the SOCAN fold. We’re also creating new connections between members, as well as career and business opportunities for them that would in all likelihood not happen without our efforts.

In 2016, we introduced a newly designed online writer application. Music creators are now able to join SOCAN in a few easy steps, thus saving them valuable time and effort, and allowing SOCAN to commit more money and resources elsewhere. The new process has saved us the cost of postage and much longer administrative time, ultimately allowing us to put that money back into our members’ pockets.

A key part of our A&R strategy is to nurture the creator and publisher ecosystem through creative development opportunities. Song camps played a major role in our 2016 success, and over the last two years we’ve produced three SOCAN Kenekt camps (two English in Nova Scotia and one French in Québec), “SOCAN on the Farm” in British Columbia and SOCAN Song Houses at the East Coast Music Awards and Breakout West (led by famed songwriter Ralph Murphy).

Additionally, SOCAN partnered to secure SOCAN member participation in three of the prestigious Black Rock Camps in Santorini, the High Coast Songwriting Camp in Sweden, and three Merge Camps in Toronto. Through these efforts, we’ve seen upwards of 100 songwriters benefit, creating more than 200 songs. Roughly 35 per cent of the participants are signed to domestic publishers.

Songwriting camps have generated multiple pitches, several “holds,” cuts, and singles, and SOCAN’s publisher members played a valuable role to help garner interest in these new songs. But on a different level, these camps offer unique experiences that bond the writers, not only to each other, but to SOCAN—which is a very powerful tool for retention. It’s become a common story by now for a songwriter to tell us how a camp actually changed their life, and their perspective on the craft. Five days of working, eating, and bonding with like-minded creative people provide a unique experience that’s hard to match in a different setting. Writers often feel like they’ve finally found their tribe, the place where they fit in—and SOCAN is a part of that place.

We continue to work for all our publisher members. In 2016, SOCAN launched our API suite, an application program interface (API) portal designed specifically for music publishers and software application developers who want to harness the power of SOCAN’s database technology. SOCAN’s initial APIs connect music publishers’ copyright management systems directly to SOCAN’s system, avoiding the duplication of efforts, and enabling faster and more efficient royalty payments to their clients. With millions of works streaming through SOCAN’s databases, publishers can now more efficiently get their clients paid for live performances, and register new musical works. While this is the first release in the API series, future APIs will allow developers to create software applications to upload music, register memberships, and identify songs and compositions.

As COO Jeff King mentions in his report, we introduced a leading-edge proprietary software, Royalty Guru, giving our members greater transparency, and access to high-quality, flexible analytics tools to assess and monitor their royalties. Now, SOCAN members can determine where and how their music is being performed globally, and make more intelligent and informed decisions about their business and music career.

SOCAN’s almost 150,000 members are counting on us to evolve ever more rapidly to continue our excellent track record of meeting, and exceeding, their needs and expectations. We continue to ensure that SOCAN remains globally competitive through our member recruitment and retention efforts.

In 2016, Membership continued its “Get Set. Get Paid!” campaign, launched in 2015, to simplify and increase set list submissions from members, so they get paid more. As a result, from 2014 to 2016, the number of Notice of Live Music Performance (NLMP) forms submitted to SOCAN online rose 11 per cent, to 24,567 submissions.

Membership Greatest Hits:

  • Forty per cent increase in new member applications in 2016 over 2015.
  • Our royalty tracking efforts resulted in an additional $1-million put into our members’ pockets.
  • In 2016, SOCAN passed the 140,000-member milestone.
  • Eleven per cent increase in Notice of Live Music Performance submitted online, to 24,567 submissions.

Michael McCarty
Chief Membership & Business Development Officer
Membership Greatest Hits
 

LICENSING

It was another year of record domestic revenue for SOCAN. Our Licensing team collected more than $263-million, an increase of almost $20-million and almost eight per cent over 2015. 

These impressive increases are the result of many more Canadians paying for online content, as subscribers to online music services tripled over the course of the year in 2016. Powered by SOCAN, this is a promising sign for the music industry.

Our general licensing and concert revenue remained stable throughout the year.

In addition to our licensing fee collection efforts, and our efforts to sign new businesses, the Licensing team delivered its phase of the BEST information technology system project, a new, fully integrated, end-to-end Enterprise Resource Planning system. The new Licensing system allows us to create new licenses, or revise terms, easily, and is fit to operate in any territory, or currency.

Our new system also allows for easier tracking of outstanding accounts, and provides enhanced capability for analytics. We’re excited about new features that allow us to more accurately track, and improve upon, our licensing activities.

We’re also excited about SOCAN’s acquisition of Audiam. With Audiam bringing digital reproduction rights for their clients to Canada, we’re now able to provide bundled rights to online music services.

SOCAN and Licensing are actively looking to work with our partners in the industry to make it easier for businesses to obtain a license to use music fairly and ethically. We’ve started working with the neighbouring rights collective, Re:Sound, and we plan to launch new services with them in 2017. We’ve also enjoyed working with various cities to have them be Licensed To Play with SOCAN, and we’ll work with industry partners to provide them with even easier methods of reporting.

Licensing Greatest Hits:

  • Cable revenue, which continued to grow at an increased rate over the last few years, came out six per cent higher than the previous year.
  • Online music (Tariff 22A) revenue, which experienced runaway growth, increased more than 400 %.
  • Online audio-visual music (Tariff 22D) revenue increased by 60 %.

Jennifer Brown
Vice President – Licensing
Licensing Greatest Hits
 

DISTRIBUTION

SOCAN’s Distribution team enjoyed its most successful year ever, with $289-million in royalties issued in 2016, of which $67-million were foreign royalties—both new record highs.

These results were achieved by continually improving the accuracy and currency of the records of more than 25-million songs in SOCAN’s repertoire, by the more than four-million songwriters, composers and music publishers from Canada and around the world that we represent in Canada.

In addition to allocating royalties to members and affiliate performing rights organizations, the Distribution team implemented a number of key strategies in 2016:

  • Initiated processes to clean up and distribute for older concerts.
  • Streamlined our processes and adapted to changes in the music rights landscape.
  • Enhanced our technology in order to manage:
    • Online volumes in the billions, which have doubled since 2015.
    • Changes in digital services, data and processes.
    • An explosion of data and the accompanying increased demand for granular detail.

Distribution Greatest Hits:

  • $289-million total royalties paid in 2016.
  • $67-million foreign royalties paid to SOCAN members.
  • More than 25-million songs in SOCAN’s repertoire.
  • Four-million songwriters, composers, publishers worldwide.
  • Distributed in 2016
    • 4.6-million traditional audiovisual performances.
    • 43.8-million radio and satellite radio performances.
    • 19.3-billion online music services performances.
    • 4.2-billion audiovisual online services performances.
    • 55,109 live concerts.

Kit Wheeler
Vice President – Distribution
Distributions Greatest Hits
 

INTERNATIONAL RELATIONS

For the third straight year, the International Relations department delivered record revenue in 2016, achieving $67-million. In addition, the International Relations team continued to improve service levels, having reduced response times to queries on our members’ behalf by 50 per cent, as a result of improving the foreign-claims tracking process. Further, by improving the foreign claims follow-up and tracking process in 2016, International Relations was able to resolve a record-breaking 553 queries on our members’ behalf—an impressive increase of almost 70 per cent over 2015.

The International Relations team continues to ensure that we remain top-of-mind with our sister societies around the world by calling on them in person. In 2016, we met face-to-face with ASCAP (U.S.), BMI (U.S.), SACEM (France), GEMA (Germany), BUMA/STEMRA (Netherlands), KODA (Denmark), TONO (Norway) and TEOSTO (Finland), and a few of these several times.

These face-to-face encounters generate business intelligence, and help to ensure that our members’ revenues flow back to SOCAN even faster and more efficiently.

In addition, we attended, as observers, CISAC’s Latin American and Asia/Pacific committees, and participated in the leadership of CISAC’s Business and Technical committee. 

International Relations Greatest Hits:

  • $67-million in revenue.
  • $1.5-million collected from queries and unidentified performances.
  • Reduced wait time on queries from 90 days to 30–45 days for Tier 1 Societies (75% of all foreign queries), and from 90 days to 60 days for Tier 2 societies (17% of all foreign queries).
  • Resolved 553 foreign queries on behalf of our members.
  • Mining foreign distribution files, not only for missing royalties, but also to gather business intelligence regarding how societies distribute.
  • Continually improving service, while maintaining staffing levels.

Catharine Saxberg
Vice President – International Relations
International Greatest Hits
 

CANADIAN SONGWRITERS HALL OF FAME

The Canadian Songwriters Hall of Fame is a national, bilingual, non-profit organization with a mandate to honour and celebrate Canadian songwriters. Since the Canadian Songwriters Hall of Fame was brought under the SOCAN umbrella in late 2011, we’ve been rebuilding it through a number of initiatives:

  • Overhauling its content-rich website; inducting songs through a partnership with the CBC, under the “Covered Classics” banner.
  • Creating and maintaining a physical Hall of Fame at the National Music Centre in Calgary.
  • Founding an online education program.

These programs, and the overall support offered to the Canadian Songwriters Hall of Fame by SOCAN and other organizations, have enhanced SOCAN’s reputation in the Canadian music ecosystem as an industry leader, and enabled this important institution to survive, and thrive, well into the future.

In 2016, the Hall of Fame focused on building upon its core initiatives to reinvigorate and raise public awareness of the organization and its members:

  • Seven iconic Anglophone and Francophone songs were inducted through the Hall of Fame’s “Covered Classics” series. A collaboration between the Canadian Songwriters Hall of Fame and CBC/Radio-Canada, the program invites some of our nation’s brightest musical talents to each perform their version of a classic song, highlighting its induction. This year’s performers included; Ingrid Saint-Pierre, VACAY, Zaki Ibrahim, Élage Diouf, Alex Pangman, Jane Bunnett and Ron Korb, and 2016 SOCAN Songwriting Prize winners Fast Romantics. Click here to see the covers and the full list of inducted songs.
  • The Canadian Songwriters Hall of Fame now has a permanent physical home at the National Music Centre in Calgary, within Studio Bell. The$190-million, state-of-the-art museum showcases our inductees’ contributions to music, and preserves their enduring legacy. Canadian Songwriters Hall of Fame exhibitions are located on the fifth floor, along with the collections of the Canadian Music Hall of Fame, and the Canadian Country Music Hall of Fame. Exhibitions include displays of the physical awards, inductee memorabilia, and interactive databases that allow visitors to read more about inductees, and view related multimedia content. The National Music Centre opened to the public on Canada Day 2016.
  • The Canadian Songwriters Hall of Fame is moving ahead with its first induction ceremony under SOCAN leadership. The production team is in place, and we’ve confirmed this year’s inductees for the show on September 23, 2017, at Massey Hall in Toronto. The bilingual ceremony will be a celebration of Canadian music; honouring some of our nation’s most prolific and influential songwriters, and will feature intimate tribute performances through a culturally diverse bill of Canadian and international recording artists.

In December, Vanessa Thomas joined the Canadian Songwriters Hall of Fame team as Manager. The Canadian Songwriters Hall of Fame will continue to build upon its 2016 successes to ensure that legendary Canadian songwriters receive the public recognition they deserve.

Canadian Songwriter Hall of Fame Greatest Hits:

  • Seven iconic songs inducted into the Hall of Fame through Covered Classics.
  • Canadian Songwriters Hall of Fame gets a new, permanent physical home within the National Music Centre’s Studio Bell in Calgary.
  • Return of the Canadian Songwriters Hall of Fame Induction Ceremony at Massey Hall in 2017.

Vanessa Thomas
Manager – Canadian Songwriters Hall of Fame
Canadian Songwriters Hall of Fame Greatest Hits
 

SOCAN FOUNDATION

The SOCAN Foundation was established in 1992, as a distinct legal entity separate from SOCAN, to support events and projects benefitting songwriters, composers and music publishers. Details on the SOCAN Foundation’s programs and activities are available on its website.

In 2016, the SOCAN Foundation provided core funding to 10 national associations, each of which ran programs that benefitted Canadian music creators and publishers. These organizations foster musical creativity, and promote better understanding of the role that music creators play in today’s society.

The SOCAN Foundation’s Board of Directors approved grants in several categories, such as music festivals, international showcasing and educational initiatives, which benefited 651 recipients.

The Foundation’s revenue is derived, in part, through funding from SOCAN, which amounted to approximately$1.75-million for the year 2016. The Foundation also earned approximately $200,000 in investment revenue from its own endowment fund and other sources. After expenses, the Foundation distributed$1.6-million to music-supporting organizations and music creators through various grants and competitions.

The SOCAN Foundation management and Board of Directors created a new five-year strategic plan, which will enable the Foundation to focus on four directions:

  • Programs: Challenge and assess the Foundation’s existing programs to ensure their alignment with, and relevance to, our mission and vision.
  • Connections between SOCAN and the SOCAN Foundation: Capitalize on the relationship between the two by greater alignment, coherence, and harmonization.
  • The image of SOCAN Foundation in the world: Increase the visibility of the SOCAN Foundation, and enhance its credibility.
  • Assuring the Future of SOCAN Foundation: Strengthen the SOCAN Foundation’s relevance, now and for the future.

As a result of the strategic plan, the SOCAN Foundation will undergo a transformation in 2017, as it celebrates its 25th anniversary.

Foundation Greatest Hits:

  • In 2016, The SOCAN Foundation received 757 grant applications and approved 651 of them – almost 86 per cent of all applicants received grants.
  • More than$1.6-million in grant payments went directly to Canadian songwriters and composers through two programs: Popular Music International Showcasing and Composer Outreach Residencies.
  • New strategic plan that will guide the Foundation to have greater alignment with SOCAN’s corporate strategy, and to design new programs to better support music creators and music publishers.

Victor Davies
Vice President – SOCAN Foundation
Foundation Greatest Hits
 

OPERATIONS

Two thousand and sixteen was a year of remarkable transformation for SOCAN. As SOCAN’s Chief Operating Officer, I’m responsible for our domestic and international revenue, distributions, technology, strategy and planning.

Elsewhere in our report, you’ll read about some of our specific achievements in these areas.

In addition to these operational areas of responsibility, I’m also accountable for SOCAN’s Mergers & Acquisitions activities. Throughout 2016, we saw a number of transformative acquisitions.

In May, we concluded our acquisition of MediaNet, based in Seattle, Washington. MediaNet provides music content to a variety of digital services providers all over the world. As a result of this business activity, MediaNet has a continually growing database of 65-million sound recordings.

This treasure trove of data is not only fingerprinted, but also contains metadata about the songs (data about the data). In the digital world, this information is invaluable, not just in terms of facilitating identification, but for efficient licensing. That means better matching of data, which in turn means more money going to the SOCAN members and others who have rightfully earned it.

Also in May, we launched our Royalty Guru product, which we acquired in late 2015. Royalty Guru allows our SOCAN members to analyze their earnings and thereby manage their business more effectively. In 2017, we plan to launch powerful enhancements to Royalty Guru that will add tremendous new dimensions to help our members handle their careers even more effectively.

In August, we concluded our acquisition of Audiam, a company that provides services for the monetization of YouTube, and in fact is among the world leaders in that business space. In addition, Audiam provides reproduction rights agency work in Canada and the U.S. Its expertise in the rapidly growing digital landscape is of tremendous value for SOCAN’s members.

These acquisitions have dramatically strengthened SOCAN, not just for now, but extending well into the future. The SOCAN group of companies and products now boasts a collection of data and work processes that are unparallelled in the global music ecosystem.

SOCAN is working diligently and continuously to leverage the value of these new relationships as we fulfill our vision to lead the global transformation of music rights.

Jeff King
Chief Operating Officer
 

QUÉBEC AFFAIRS

Two thousand and sixteen was a very successful year for SOCAN’s Québec Affairs initiatives. As both the provincial and federal governments were reviewing their cultural policy, SOCAN submitted a brief to the Québec government that re-stated our belief in the economic importance of culture, and the need for government to embrace this reality as the underlying premise of its actions. SOCAN also invited the Québec government to keep being a player in cultural diversity forums, even more so in this era of digital dissemination. In a global market, SOCAN feels that government needs to help global players’ promotion to mainstream culture.

In 2016, SOCAN put together our first Kenekt Québec song camp. The idea of song camps hasn’t been explored much on the Francophone side, and SOCAN is now filling that gap. The camp brought together 15 SOCAN members in the remote Rabaska Lodge resort four hours north of Montréal, where for five days songwriters created new works. Each morning, four writing teams were created by the camp organizer, SOCAN A&R Executive Guillaume Moffet. For 12 hours each day the teams were tasked with creating one song each that followed certain criteria, including potential for radio play. A total of 20 songs were written and produced, one of which, “Comme les autres,” was released in April 2017 by “campers” Laurence Nerbonne and Jason Bajada.

In 2016, SOCAN presented our No. 1 Song Awards in a more public and timely fashion, with a total of 12 No. 1 awards going to our members in Québec, three presented on TV shows (Belle et BumLa Voix and Sucré Salé), three presented to songwriter members at one of their shows, and two presented at radio shows (on CHOM and on Ici Musique). We handed out one award to Bobby Bazini only seven days after his song reached No. 1, as a surprise, live on-air presentation during CHOM-FM’s morning show. In addition to our members, we now also have even stronger connections with agents, managers and publicists, who we work with to make the presentations extra-special.

In 2016, SOCAN’s presence was stronger than ever at Québec music events. At Les Francouvertes, we created a new series, presenting quick “J’aime mes ex” sets at each of the 2016 evenings by artists who had already participated in earlier Francouvertes, and curated jointly by Francouvertes and SOCAN. At M for Montréal, we sponsored our first “M/SOCAN Official Selection Artist” at the export-ready showcasing event, in addition to presenting, once again, networking dinners for all gold-badge delegates. SOCAN Montréal office representatives also attended the Gala de l’ADISQ, Bourse Rideau, FrancoFête, Contact Ontarois, Festival en chanson de Petite-Vallée, FEQ, Ma première Place-des-arts, Dégelis, FME, Pop Montréal, the Polaris Prize Gala, FrancoFolies de Montréal, Osheaga, Canadian Music Week, South By Southwest, the JUNO Awards and many more events.

For international music events, our Québec Affairs efforts are focused on those tailored to the best “export” markets for Francophone music. In 2016, we attended Bis de Nantes (France), Chantiers des Francos (LaRochelle), Printemps de Bourges (France), Pully-Lavaux à l’heure du Québec (Switzerland), MaMA (Paris), Trans-musicales (Rennes) and Aurores Montréal (Paris). When attending, the SOCAN team works to build relationships, and create projects that help promote our members in export markets. For example, with Aurores Montréal, we announced a new program that will put together a SOCAN writer member with a writer based in France, for co-writing sessions while staying at the SOCAN House in Paris. The hope is that at least one song can be created there, and played at the December 2017 Aurores Montréal concert offered by the SOCAN member.

Québec Affairs Greatest Hits:

  • Input on Quebec’s and Ottawa’s cultural policy revision processes.
  • First Kenekt Québec Song Camp.
  • More visible and timely No. 1 Awards presentations.
  • Ongoing Québec presence at trade events, both locally and internationally.

Geneviève Côté
Chief Québec Affairs Officer
Quebec Affairs Greatest Hits