ASCAP payout to industry falls by $16m, despite revenue growth

US licensing body ASCAP collected more than $1bn for the second year in a row in 2015 – but paid out some $16.1m less to songwriters and publishers.

As a result, the collection society’s overall collection-to-distribution ratio moved in the wrong direction for rights-holders – despite its expenses actually dropping in the year.

Total receipts at ASCAP last year hit $1.015bn, up 1.3% on the $1.002bn collected in 2014.

However, 2015 saw distributions of $867.4m to ASCAP’s 560,000 members in the US and around the world.

This was 1.8% down on the $883.5m ASCAP paid out to songwriters and publishers (and foreign collection societies) in 2014.

Update: According to MBW’s calculations, 14.53% of ASCAP’s total collections were spent or retained by the not-for-profit society in 2015 – meaning 85.47% was ultimately paid out to members.

In 2014, this collection-to-distribution ratio stood at 11.87% – with 88.13% of total money taken paid out to publishers and songwriters.

More money coming in, less money going out: so where did the difference go?

Not on expenses, which were actually down over $3m on ASCAP’s $127.49m bill in 2014.

(ASCAP’s total expenses reached $124.39m last year, with ‘general administrative and other’ costs growing by over $1m to $41.2m – the biggest drain on the society’s resources.)

So how can a collection society spend less on expenses but then pay out less to members?

Because by the end of 2015, ASCAP decided to keep hold of $23.093m of its collections – money which shows as a net asset on its balance sheet below.

This rainy day cash, the key factor in 2015’s cost-to-income wobble, will presumably be used for pensions, benefits and future investment in ASCAP’s infrastructure.

Update: An ASCAP spokesperson has told MBW that the reduction in distributions was “mainly the result of timing, i.e. payments from U.S. licensees, which came in toward the end of the 4th quarter of 2015, after the last distribution was made’. These receipts will go out in the next year’s distribution.”

ASCAP’s total net assets at the end of the year reached $232.74m.

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It’s important to point out that ASCAP’s drop in total payouts last year didn’t affect its US membership.

Domestic US revenue collection hit an all-time high of $716.8 million in 2015, up $61 million over the year before.

That drove record high domestic distributions of $573.5 million, up 6.2% over 2014.

However, distributions to members abroad tanked by 14.5% to $293.9m, as total collections from foreign societies dropped 14.05% to $298.06m – something ASCAP predominantly blamed on the strength of the dollar.

In fact, ASCAP says 2015 saw it deliver “the best value proposition in performing rights licensing”.

The number of performances the society tracked, matched and processed for payment in 2015 increased by 14% to 570 billion.

And at least some of its expenses in the year were invested in its now-publicly available online database containing the 10 million-plus musical compositions in the ASCAP repertory.

ASCAP President Paul Williams said: “ASCAP is a tireless advocate for the rights of music creators who depend on ASCAP to earn a living, whether it’s on Capitol Hill or at the negotiating table, and we are truly invested in their success.

“ASCAP’s superlative results mean we are doing the best job possible for our songwriter and composer members even as we advocate for changes to the outdated music licensing laws that disadvantage songwriters in the today’s digital world. These results are a testament to why the world’s most talented songwriters choose to call ASCAP home.”

“ASCAP’s superlative results mean we are doing the best job possible for our songwriter and composer members.”

Paul Williams, ASCAP

ASCAP CEO Elizabeth Matthews commented: “2015 was a winning year for ASCAP members, who are the heart and soul of our organization. While the music industry is in the midst of tremendous change, ASCAP has stayed ahead of the curve with a strategic focus on revenue growth, operational efficiencies, technology and service innovations demonstrating that the collective licensing model delivers the best value proposition in the performing rights world.

“We are happy that we could deliver a 6.2 percent increase in domestic royalties to our members in 2015, and we remain committed to transforming into the most progressive operation ensuring that songwriters, composers, lyricists and music publishers can enjoy a sustainable living in today’s music marketplace.”

Domestic revenues of $716.8 million grew across all major categories, including Audio/Visual, New Media, General Licensing and Radio.

In the Audio/Visual category, which covers broadcast and cable TV as well as top streaming services like Amazon and Netflix, ASCAP closed 68 agreements representing 245 programming services and their related websites. General Licensing, which covers bars, restaurants, music venues, and similar businesses, saw record growth of $11.0 million, or 9.1%.

ASCAP created a new Global Services Team in 2015 to provide ‘best in class’ services tm members as well as to its foreign PRO partners, which annually handle over 70,000 inquiries.Music Business Worldwide

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