Canadian performing rights society SOCAN generated revenues of CAD $405.6 million (approximately $310.5m) in 2019, up 8.2% compared with 2018, according the its final 2019 financial results published yesterday (November 4).
Distributions to members totalled CAD $296m ($226.6), a 6% decline compared with the CAD $315m ($241m) distributed in 2018.
According to SOCAN, this disparity was due primarily to what it describes as a “steep learning curve required for the company’s newly deployed technology to process international and television income”.
SOCAN adds that “significant progress has been made in these areas in 2020”.
Amongst the highlights of SOCAN’s 2019 results were a 10% year-over-year increase in domestic collections of CAD $315.1m ($241m), and a 2.2% year-over-year increase in international royalty collections of CAD $90.5m ($69.2m).
SOCAN also generated CAD $86m ($66m) in revenue from digital sources (+37.6%), while reproduction rights collections increased to CAD $12m ($9m).
Elsewhere, the organization also announced “significant financial losses” due to past investments in the acquisition, creation, and financing of its Dataclef business venture, which launched in 2018.
The 2019 financial results include losses that resulted in an impairment of CAD $41.7m ($32m) 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.”
Jennifer Brown, SOCAN
SOCAN insists that these losses haven’t impacted distributions and that a plan has been developed to manage them following extensive evaluation and analysis.
Aspects of the plan include the sale of “Dataclef assets, a significant reduction in SOCAN’s overhead expenses, a re-organization of the Dataclef operation, and new management leadership, all of which have already been put into action.
The accounting firm Grant Thornton LLP has reviewed SOCAN’s financial plan to manage the financial impairment and has provided SOCAN with its support.
“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.”
Former SOCAN CEO Eric Baptiste resigned from the company in April.
In April, SOCAN allocated up to a total of CAD $2 million (approximately $1.4m) for emergency royalty advances to help “struggling members” as a result of the COVID-19 crisis.Music Business Worldwide
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