GETHER

MUS IC

SACEM ANNUAL REPORT AND ACCOUNTS 2019 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

STRATEGIC REVIEW 02 A feeling of community 08 Innovation 01 Sacem in 2019–2020 KEY FIGURES 10 President’s statement 12 Q&A with Jean-Noël Tronc SACEM 14 Our five-year strategy 16 2019 Highlights IN 2019–2020 6,720 MANAGEMENT REPORT new authors, composers and 22 Operations and governance publishers joined Sacem, which 24 Supervision, members counts 176,150 members from 25 International, clients 168 different nationalities 26 Licences, private Copying 28 Regional network and clients Music accompanies us throughout our lives and 29 A global repertoire 30 Repertoire, mandates, distribution Sacem has been supporting those who create it for 31 Cultural aid 169 years. 176,150 authors, composers and publishers 33 Social responsibility 2M 34 Information systems trust Sacem to manage their authors’ rights. works generated royalties 35 Human resources, legal framework 04 Solidarity 16 2019 Highlights 36 Focus on Sacem’s business model 38 Collections As a voice for creators and a trusted Solidarity and a sense of community, 39 Distribution partner for music broadcasters, Sacem which form the basis of the collective 40 Financial performance strives to promote all genres of music. management model, have proven, in (combined figures) these difficult times, to form a solid and Sacem is a non-profit organisation effective foundation upon which to build 311,000 TRANSPARENCY REPORT that contributes to the vibrancy and a response to the troubles our authors, creators from around the world influence of creative work across the composers and publishers are going benefited from royalties distributed 44 Transparency report 1 world, with day-to-day support for through. These values give us strength by Sacem 46 Transparency auditor’s report cultural and artistic projects. as we shape a new future. FINANCIAL STATEMENTS In 2019, Sacem saw strong growth Together, let’s make music happen! 47 Income and expenses statement in the collection and distribution of 48 Balance sheet royalties, but 2020 has been marked by 50 Notes to the statutory the health crisis and its severe economic 68.671 financial statements consequences for our society. trillion streams were processed 54 Auditor’s report on the financial statements 56 Glossary 06 Social responsibility 22 Management report 57 Credits KEY DRIVERS

To collect and distribute royalties for authors, composers and publishers of music; 1. dubbers and subtitlers; poets; comedians and author-directors.

To protect and defend our members, their rights, 2. their interests and our repertoire.

To offer our members individual support for everything related to social protection and 3. professional training.

1 Sacem collects the authors’ rights for French To dedicate ourselves to sustainable creation and international works played in France and 4. through cultural activity in France and across its overseas territories. It then distributes the globe. royalties to its members and to authors, composers and publishers from other authors’ societies the world over.

SACEM ANNUAL REPORT AND ACCOUNTS 2019 01 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Oxmo Puccino Songwriter, performer

SOLIDARITY: A FEELING OF ONE OF SACEM’S CORE VALUES

COMMUNITY It means counting on one INSPIRED THE FOUNDING OF another to get through the SACEM AND HAS EXPRESSED difficult period ahead. ITSELF THROUGHOUT OUR ORGANISATION’S HISTORY

The collective IN 2019: Since 1851, and going Breakdown of annual revenue allocated strong today management model by Sacem to its member authors, 3,000 By bringing together 176,150 authors, composers and publishers. Together, the founders built a requests for aid and exceptional composers and publishers, along with model based on equality. royalty advance were made by their works, Sacem has created an 89% 7% 4% authors, composers and publishers interface that allows 500,000 music In the 1950s, the creation of the who are members of Sacem between broadcasters to go to just one place for Comité du Coeur strengthened March and June 2020. According to permission to use music in return for the social and solidarity side of our a member survey, 8 out of 10 are paying authors’ rights (royalties). mission by offering aid and support interested in financial aid for the Royalties to songwriters and composers year 2021. As a non-profit society, Sacem is not Social allocations in distress. allowed to put savings aside or turn a Cultural funds (25% from private profit. All of our resources are dedicated copy levies) In March 2020, at the start of to distributing royalties, helping finance the health crisis and its related IN 2019 cultural projects, and contributing We distribute royalties equitably, with economic turbulence, we created financially toward a secure future 79% allocated according to the actual a plan with emergency measures for creators. dissemination of works, 10% according to come to the aid of authors, to survey, and 11% by taking normal composers and publishers €33.4M consumption patterns into account. 85% in difficulty. dedicated to social work of the funds collected are distributed; the remaining 15% goes toward funding our operations.

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Polo & Pan Songwriters, performers SOLIDARITY FOR A BETTER TOMORROW

It’s about uniting all cultural actors WORKING behind a sustainable model where collective management will continue TIRELESSLY to protect us. TO FIND NEW SOURCES FOR AUTHORS’ RIGHTS AND TO FURTHER DEVELOP And creating partnerships that bring OUR DIGITALISATION together authors, composers and publishers and those who distribute their creations.

Livestreams Royalty distribution Distributions from livestreams were The year 2019 marked a new milestone designed to respond to new methods in the distribution of digital rights, with of broadcasting in the context of the the first ever Facebook distribution. health crisis. Sacem was the first authors’ society in the world to set up such a And for the past four years, we have been Our partners Scène française W I T H remuneration system, which is based paying out royalties as soon as broadcast on contracts already signed with the programmes are processed, and royalties Understanding our partners and In support of our members and YouTube, Facebook, Instagram and collected. The acceleration of these their difficulties meant keeping an French performing artists, we Twitch platforms. distributions and their increased ongoing dialogue open with our launched the #ScèneFrançaise 500,000 clients and suspending initiative, a movement for solidarity 65 traceability requires the permanent local branches throughout France, royalty collection when their and responsibility with respect to development of new information we know our partners and their premises were closed. Building on culture that is “made in France.” technology tools. activities (background music, that, we were helping our clients in Audiovisual media, Internet concerts, shows, cinemas, their efforts to recover from the crisis platforms, broadcasters and other festivals, clubs). by extending credit equivalent to music-industry players were invited the duration of the lockdown to promote and disseminate French and by softening deadlines works to the general public across all for royalty payments. channels so French artists could benefit from the rights linked to Aid granted by Sacem was also such broadcasts. maintained for the vast majority 740,400 of cancelled events. contracts with 500,000 highly diverse clients

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Aya Nakamura Songwriter, performer SOCIAL RESPONSIBILITY FOR A SOCIETY THAT IS BOTH LOCAL AND INTERNATIONAL… ...TOGETHER We have a social responsibility LET’S toward our partners and a duty MAKE MUSIC to protect our members. HAPPEN

At the national level, we have been fighting, together with professional organisations, to defend the status Our new identity conveys our of authors and their pensions. We participated with them in values more than ever. the construction of the National Music Centre. Music has never been more present Sacem accompanies those who in our lives create music: We will continue these efforts in 2020, But for songwriters, composers and first and foremost by reaching out to music publishers, the competition By helping these creators decision-makers and public opinion to has never been so fierce, and sources to emerge, live and reinvent ensure that our members’ professions of revenue are increasingly uncertain. themselves, throughout their are taken into account in national careers, thanks to the collection recovery plans. Yet we need them more than ever. and redistribution of royalties. The music they create lifts us up, carries The European Union remains an us away and soothes us. It brings us By developing mutual aid and social invaluable protective framework in together and binds us, on many levels protection programmes dedicated an increasingly uncertain world. Two It defines eras and can sometimes to them. fundamental directives were adopted profoundly transform society. on April 17th 2019: the modernisation of By fostering cultural vitality across copyright in the digital single market and France and around the world. the rules governing copyright and related rights applicable to online retransmission and direct injection. Both represented a decisive step in defending the rights of creators and publishers.

A unifying flag, to reaffirm our long-standing values and our commitment to rally, support and protect authors, composers and publishers.

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L’Impératrice Songwriters, performers

OUR ...THROUGH BUSINESS IS INNOVATION DIGITAL Our efficiency generates new contracts and AND IS CONSTANTLY added value for our members. CHANGING...

We have embarked on profound Mandates from The Sacem app transformations that are bearing international It makes life easier for authors and composers by digitalising fruit today. publishers and the registration of setlists and concert or show dates. a new contract It guarantees the rapid Strengthening our international processing of data for the leadership in digital, we signed distribution of royalties and new mandates in 2019 with Strictly enhanced traceability. Confidential and Because. These mandates entrusted to us by international publishers come on top of similar deals IN 2019 Digitalisation with the likes of Impel, Wixen, Pen music, THE VIRTUOUS CIRCLE Nadada, Socan, Warner Chappell, Music as a solution to OF ONLINE COLLECTIONS Sales et Universal Music Publishing performance and International. 260 contracts signed with recovery Sacem represents, through its own online music services in 2019, repertoire and those of its partners, one Our investments in digital technology New applications are including 38 with international of the largest catalogues in the world. have risen 84% since 2013. These primarily developed in platforms investments have demonstrated their We signed our first agreement with the cloud, like our data H ers ig Amazon Prime Video. critical importance during lockdown. analysis platform tn he ar r p ca Thanks to the efficiency of our IT tools, (Data Lake). p w a e c NUMBER OF STREAMS OR 95% of Sacem’s employees were able N it y to work remotely. We ensured business DOWNLOADS PROCESSED continuity, in particular the distribution BY SACEM IT (TRILLIONS) 12,200

of royalties. authors, composers and publishers

P 2019 68.671 have downloaded the app

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t e i This is the number of bytes s d t f e u a v 2017 2.106 p stored in our information c o t r i p m systems. We’ve surpassed o o n m c I f 3,800 the one quadrillion byte o show dates declared each month (or 1,000 terabyte) Enh s through the app storage mark. anced service f or our partners

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France, this is not just an economic significant resources and are not — ever problem, it’s a real national emergency — forgotten during the recovery period. — it calls into question the future of our The commitments the government “Guaranteeing authors, composers model and our attractiveness. made must be fulfilled very quickly, in an ambitious and transparent way. and publishers the possibility to be paid Sacem, a partner of creators since its for this work means giving them the founding, mobilised and stepped up You can obviously count on the total immediately to protect them. From the commitment of Sacem’s Board of freedom to create, and the grace to move very beginning of the lockdown, we got Directors in our country’s effort to organised to guarantee the continuity of succeed in this historic rendezvous us with works of great diversity. It also our operations in support of members with the future of its music industry. caught up in the economic storm: this is We will continue to be the voice of means making the creative industries what enabled us, notably, to ensure the authors, composers and publishers, a beneficial sector for everyone — an essential royalty distributions of April tirelessly explaining the intricacies of and July. Then, as the crisis set in, we their professions and raising the alarm economy that reaches beyond our launched a €43 million emergency over the “blind spots” in public policies response plan, one of the first and that do not sufficiently protect them. borders and creates jobs and most robust in Europe. We had two In a recent survey of 5,500 members generates activity.” main objectives: to provide rapid on their situation before and after Covid assistance to those in the most urgent and their expectations, 64% of our need, and to secure our members’ members stressed that one of their Bruno Lion, income for the long term. In concrete greatest difficulties – even in normal President of the Board of Directors 2019–2020 terms, we launched 3 complementary times, outside of the current crisis – actions: a relief fund for people who remains “ignorance and a lack of can no longer meet their basic needs, understanding” of their professions. exceptional royalty advances, and an So we still have a long way to go! Our The months of However, the year 2019 demonstrated distributed to 311,000 rights holders initial realignment of our support to future rights will depend on how well the extent to which keeping authors’ worldwide. Fifteen years ago, we prepare for the recovery. At the same we explain our industry now. confinement and the rights alive remains a struggle. We processed five million pieces of time, we continued to adapt, setting achieved historic victories, with the information a year to pay music creators. up a remuneration plan specifically for In the thick of this battle, the collective crisis we are going adoption of the European Directive on In 2019, we processed 68 trillion. These livestreaming to support artists who management model has proved its Copyright in the Digital Single Market, staggering figures illustrate the profound 64% were coming up with novel ways of worth. As we deal with the fallout of through have proven of our members stressed that but also those on direct injection transformations our authors’ society is meeting and exchanging with their the crisis, authors’ right will be as critical one of their greatest difficulties broadcasting and audio-visual media undergoing and the exponential audiences. We also initiated and carried a prerequisite as it ever was. At the heart once again that culture remains “ignorance and a lack of services. They were the result of a long volumes of data it has to deal with in out the #SceneFrançaise operation to of this project that we present to all understanding” of their professions1 and the arts play a vital battle that Sacem, our sister societies order to remunerate our members, ever encourage broadcasters to programme our partners: Together, let’s make and all the representatives of authors, more precisely and fairly, each time their works made in France and to raise music happen! role in our individual composers and publishers across works are exploited. Among the major awareness among the general public development, our Europe, were forced to fight against French private organisations — of which that their consumption of cultural Bruno Lion, one of the largest lobbying forces ever Sacem is a member, even though it content could be powerful in a context President of the Board of Directors collective well-being deployed: that of the new giants who do pursues a mission of public interest where live music was at a standstill. 2019–2020 not seek to act in the service of society — how many can boast of having Media organisations and citizens alike: and our social cohesion (no matter what they say), but rather to committed themselves so deeply to the everyone can pitch in, thanks to authors’ strengthen their own economic and shift to digital, by digitising their skills right, the powerful tool that turns “Without music, life would be a mistake, commercial interests. We have fought and activities? Probably not many. listening into remuneration. Each of a fatigue, an exile,” Friedrich Nietzsche this battle with determination, alongside us has our own role to play. warned at the very end of the our partners, because we are convinced Our efforts to redouble our activity 19th century. that collective management is the only and strengthen our performance in the As I write this, activity in the music model that allows creators to organise service of creators have obviously been business is starting up again, albeit too Music makes us thrill; it nourishes our effectively and make a sustainable living challenged by the planetary storm that slowly — and not for everyone. For many creativity and imagination at the same from their work. In France, we brought is Covid-19. The health crisis has hit creators, the strongest financial impact time as it opens us up to others and to the voices of authors, composers and culture with unprecedented violence, will be felt in the royalty distributions for the world. And yet, it is not just the fruit publishers to our institutions and more so than any other sector. Music the year 2021. While it is now a given of the talent and imagination of political decision-makers, in particular was the first sector to be locked down, that culture will be included in the passionate creators, but also — and with the creation of the Centre National with the ban on public gatherings at the national reconstruction plan, we will above all — the result of their work! de la Musique, pension reform, the end of February, and it will be one of the remain extremely vigilant and mobilised Guaranteeing authors, composers and publication of the Racine report, the last to be revived. So many songwriters, so that music and our members obtain publishers the possibility to be paid debates on the audio-visual law, and composers and music publishers have for this work means giving them the the transposition of the EU directives. been hit with an immediate, massive freedom to create, and the grace to and lasting loss of income. The risk move us with works of great diversity. For Sacem, 2019 was a constructive year they face boils down to this simple and It also means making the creative during which our society continued its frightening reality: within a few months, industries a beneficial sector for transformation while remaining faithful they may simply be unable to create everyone — an economy that reaches to its primary mission: attaining record anymore. In the end, all our cultural beyond our borders and creates jobs levels of royalty collection and diversity could collapse like a house of and generates activity. distribution. €854.8 million was cards. For a culture-oriented country like 1 According to the survey conducted among 5,500 members between April and June 2020.

10 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 11 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS AN INTERVIEW WITH JEAN-NOËL TRONC, CEO OF SACEM 2020 HAS BEEN AN EARTHQUAKE members’ income over the long term SO 2020 WILL BE A YEAR FULL FOR THE CULTURAL SECTOR, WITH through exceptional advances, the OF NEW CHALLENGES TO FACE ACTIVITY GRINDING TO A SUDDEN repayment of which will only start in AND BATTLES TO BE WAGED AND LASTING HALT. WHAT HAS 2022 and can be spread over 5 years. TO PROTECT OUR AUTHORS, We also increased the creative support BEEN THE IMPACT FOR SACEM COMPOSERS AND PUBLISHERS… “We will continue our fight programme for music publishers by MEMBERS? €1 million. As the leading private financer of to defend creators and the Right from the start of the lockdown, music in France, Sacem has a unique collective management model. together with the Board of Directors, we At the same time, we embarked on responsibility. We will continue our fight began assessing what the crisis meant a plan to reduce Sacem’s operating to defend creators and the collective We are convinced that it is the for authors, composers and publishers: costs: faced with the difficulties of our management model. We are convinced a tremendous double blow in terms of members, it is our responsibility to that it is the most effective bulwark most effective bulwark against loss of revenue. Like many others, our identify costs that can be cut and against the risk of the collapse of the the risk of the collapse of the members suffered a loss of revenue follow through with them. We set music industry. during the lockdown, with the cessation up an employee furlough plan, and music industry.” of commissions and artistic projects. But the Executive Committee and I have At the national level, we will work the drop in royalties will be felt mainly in decided to reduce our salaries by an with the Centre National de la Musique Jean-Noël Tronc, 2021. The cancellation of concerts, the equivalent percentage out of solidarity. to coordinate efforts on behalf of the CEO of Sacem closure of public places that play music authors, composers and publishers who for several months, the fall in advertising Finally, throughout the crisis, we are at the heart of the music ecosystem. revenue for the media, sales of CDs or have carried out intensive awareness devices subject to private copying levies, campaigns for political decision-makers From the exploitation of musical works, as well as the effects of the global health to ensure that authors, composers and to the development of young talent or crisis on rights income from abroad publishers are taken into account in any underexposed genres — all of these facets — all this will lead to a considerable loss national reconstruction and recovery take on a particular resonance because of income from authors’ rights, 12 to 18 plans. With the #Scènefrançaise of the crisis. We will continue to work on HOW DO YOU LOOK BACK AT 2019? WASN’T 2019 ALSO A YEAR HOW HAS SACEM’S OPERATIONAL months from now. We estimate that the campaign, we also called on the every front when it comes to protecting In 2019, our development picked up OF STRUGGLE? PERFORMANCE PROGRESSED IN overall drop in royalty income will be media to commit to broadcasting more the status of authors. The European speed on every level. We continued to 2019 was marked by a historic victory RECENT YEARS? €250 million for 2020, 23% under our French-produced music, and made the Union also remains an essential transform our society and make strategic in Europe. In the spring, the adoption The Sacem of today is nothing like collection forecasts. By comparison, this French people aware of the role they can protective framework in an increasingly investments to best meet our members’ of the directive on the modernisation it was just a few years ago. Five years would take us back to 2012 levels. play in the service of artists by listening uncertain world. It is up to us to weigh in expectations. We processed more than of copyright in the digital single market of successful transformation have to these works. to ensure that streaming platforms are 68 trillion data points for the distribution and the directive on the regulation of strengthened our performance HOW DID YOU RESPOND TO THE better regulated, and that authors’ rights of rights for music on the Internet alone, retransmission and direct injection and transparency. ENORMITY OF THIS CRISIS? WILL THE LOSSES HAVE A HEAVY and the collective management model which is six times more than in 2018. are upheld and strengthened. represented fundamental advances Faced with this dramatic situation, we FINANCIAL IMPACT? Our authors’ society demonstrated its for authors’ rights. These victories would In the seven years between 2012 and very quickly set up a crisis management attractiveness on the international stage, The drop in collections will have a At Sacem, the coming years will bring never have been possible without the 2019, our collections increased by 28.9%, system with a dedicated action plan and securing prestigious new mandates with severe impact on Sacem’s operating much more than a return to equilibrium collective mobilisation and the intense and we have been able to maintain a business continuity committee. We the music publishers Strictly Confidential income for 2020 and over several years. after the storm. We will renew our battle we fought alongside our sister control of our costs, which have increased focussed on securing the distributions of and Because, adding to a long list of Fees on royalties, which finance 70% resolve to constantly improve, in the societies and the professional mainly due to IT investments — the key to April 6 and July 6, 2020, and remaining labels that put their trust in Sacem: of our budget, are falling by the same service of our members and those who organisations that represent authors, Sacem’s modernisation. Starting in 2012, available to all our members, our Wixen, Pen Music Group, Nadada, amount as our collections. Sacem is bring creation to life by presenting their composers and publishers throughout we reversed the downward spiral of music-using customers and the Socan, Warner Chappell, Music Sales and a not-for-profit company, which can work to the public. Europe. At the national level, we worked previous years, when expenses were cultural project leaders we support. Universal Music Publishing International. neither put money aside nor make a to advocate for the rights of authors, rising as collections fell. Since 2015, We suspended billing for hundreds of At the national level, our regional network profit. In other words, there is no “war Jean-Noël Tronc, composers and publishers with the excluding IT, our expenses have been thousands of clients who had to close: also demonstrated its strength and its chest” Sacem could draw from to deal CEO of Sacem public authorities, notably in the context stable, and have even decreased cafés, shops, discotheques and other ability to forge partnerships with cultural with the crisis. We are doing everything of the creation of the Centre National de if you take inflation into account. venues, which usually bring music to life and economic players in all territories. In we can to limit the impact of the crisis la Musique, pension reform, the Racine Sacem currently distributes 85% on a daily basis across France. Then, particular, we signed an agreement with on authors, composers and publishers report and the audio-visual law. In the of the rights it collects. on March 26, we launched a raft of the French mayors’ association and by implementing a broader savings plan, face of increasingly fierce competition emergency measures for our members, launched a call for proposals around which will result in a restructuring project and growing uncertainty about revenue Our operating cash flow has gone from one of the very first and most ambitious musical events in small villages. By to be launched in the coming months. sources, we relied on our collective 10 months’ worth in 2012 to 7.7 months’ plans of its kind in Europe. We put reorganising our teams and creating We’re going to try and save more than strength to protect, defend and worth in 2019 thanks to measures we €43 million on the table, taken from our a department specifically dedicated to €12 million in management costs, which promote the careers of creators have put in place. Undistributable funds cash flow and cultural action resources, member relations, we put our members will reduce the operating budget deficit and publishers and make people have decreased by 35% in four years. to respond to particularly dire situations at the heart of everything we do, from €40.8 million to €28.8 million. aware of their circumstances. It’s a Despite a decline in staff numbers, our through direct aid and to secure our improved the quality and efficiency of battle that has to be fought every teams have risen to the challenge of our services and our response, stepped minute of every day. handling ever more data, clients, new up the pace of our distributions and forms of music exploitation, new deployed new online services like the members and new works. ability to declare set lists through our mobile application.

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MAXIMISE AUTHORS’ RIGHTS (ROYALTIES) WHAT SETS SACEM APART: 1 2 3 4 5 Approachable Digital 360º perspective International Flagship

and proactive Innovating and evolving for Reinforcing our position, at the heart Increasingly competitive Protecting the French model for our members. of collective management in France. and attractive. authors’ rights and collective Committed, transparent and available management. for everybody.

For authors, composers and affirmation of our collective force. music publishers and for Sacem, This is the strategic direction the competition has never been so board of directors has chosen. Its fierce, with sources of income so plan aims to strengthen Sacem’s uncertain. Today we have to role as an industry flagship, confront economic models that reinforcing digital development represent alternatives to collective along with its proactive, global, management — and to authors’ 360-degree approach — in the right. Our best response to these service of all our authors, challenges lies in the constant composers and publishers. adaptation of our model and the

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Traveling to music Lyrics under the cobblestones… A first. RATP (the Paris transport authority) and the Sacem Museum formed a partnership to offer a travelling exhibition of song lyrics… The bright 2019 yellow posters were displayed on the platforms and in the trains of the Paris Métro for three months. Sacem’s HIGHLIGHTS Memory and Heritage Commission, made up of authors, composers and publishers, proposed some sixty works on the theme of travel, and RATP made Electronic music: the final selection. Sacem joins AFEM Sacem became the first collective management Coachella: French creation organisation to join forces with AFEM (Association for Electronic Music), confirming its commitment to electronic La bicyclette in the spotlight music. The move came after the creation of the Electronic Quand on partait de bon matin Music Factory, a site for resources and documentation, and For its 20th edition, the American festival Coachella put twelve French Quand on partait sur les chemins artists and groups on the programme. It was an excellent illustration À bicyclette the launch of DJ Monitor, a suite of automatic identification tools for tracks played in festivals and clubs. Sacem was Retrouvez des archives inédites sur of international prestige for French creators, thanks to authors, Restezvivants.com musee.sacem.fr

Auteur : Pierre Barouh. Compositeur : Francis Lai also behind the French Electronic Lab, and supported composers and music publishers. Éditions Saravah/Éditions 23, 1968 / Interprété par Yves Montand the exhibition dedicated to Electronic music at the Philharmonie de Paris and the creation of an all-female “So Fraîche” float at the Technoparade.

MARCH APRIL MAY JUNE

Copyright Directive: a landmark My project on stage! Committed to supporting cultural development vitality throughout France, Sacem The spring of 2019 marked the end of an unprecedented created a new programme designed battle waged by authors, composers and publishers. to encourage creative and musical The Copyright Directive was adopted on March 26 after an initiatives in the smallest towns and unprecedented mobilisation of authors, their professional villages. “Musical Towns – My Project organisations and all the artists who united under the Creators Takes the Stage” is a programme set For Europe banner in the campaign against the giant Internet up for villages and towns of up to platforms. The text guarantees better remuneration for 5,000 people, for associations, cafés, authors. Around the same time, on March 28, the European restaurants, cultural youth groups… Parliament also adopted the “Cable and Satellite” Directive, A call for submissions was launched in which makes broadcasters and programme distributors the fall for projects planned for 2020. responsible for clarifying the method of authors’ remuneration. Composers on the Scheduled for 2020, the transposition of these two directives into French law is an essential step, as is the transposition of Croisette the Audiovisual Media Services Directive, which lays the Like every year in May, Sacem was foundations for new regulation that will promote better in Cannes to accompany composers exposure of European creation on digital platforms. of music for selected films and to The online museum organise professional meetings with them. Through its aid programmes, blows out its first Sacem supported and accompanied candle eleven films in the selection this year. The Sacem Museum opened its Because the composer is the third author virtual doors in June 2018. One year of a film, alongside the scriptwriter and later, 318,500 visitors had discovered the director, Sacem is committed to the exhibitions, articles, tributes, promoting music on screen at the podcasts and 10,000 original archives, heart of this beautiful international all of which can be accessed free of cinematographic event. In 2019, Sacem charge. For its birthday, the museum paid tribute to Bertrand Tavernier for his served up an exhibition on French work in promoting composers and Metal, from the heart of Hellfest 318,150 organised a masterclass with Marc in Clisson, France. Marder. Sacem was also a partner of PEOPLE VISITED Talents Cannes Adami. SACEM MUSEUM

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2019 HIGHLIGHTS Pierre Chépélov

Hollywood: A refreshed Dahae Boo Colcoa festival For the first time, the Colcoa festival, the French film festival held annually Benjamin in Hollywood, took place in September. Garzia The reformatted festival now offers three competitions devoted to cinema, television and short films. Created and organised by the Franco-American Prix Symphoniques Sacem A diversity prize Cultural Fund, of which Sacem is Strongly committed for many years to the contemporary music Sacem’s sense of social responsibility was a co-founder, Colcoa is the largest Thomas sector, Sacem contributes to composers’ career development and the rewarded at the fourth annual “Top 10 des international event devoted to Lacôte promotion of their repertoires. For the first time, Sacem awarded its recruteurs de la Diversité” awards. The prize French cinema. Prix Symphoniques at La Scala in Paris, for the opening of the festival recognized Sacem’s commitment to the fight “Aux Armes, Contemporains!”. against discrimination, notably through its recruitment of candidates from the least George Enescu Prize: Dahae Boo privileged territories. Sacem will continue to Francis and Mica Salabert Prize: Pierre Chépélov implement HR policies that are proactively Hervé Dugardin Prize: Yves Chauris, Thomas Lacôte and Benjamin Garzia (joint winners) Yves inclusive and grounded in equality. Chauris

SEPTEMBER OCTOBER NOVEMBER

Cultural and creative industries: a diverse The Music Factories economic mosaic go back to school €91.4 billion. That is the value that culture contributes to France’s The Fabriques à Musique (Music Factories) economy, twice as much as the car returned once again to primary schools, industry. The figure was unveiled in the middle schools and high schools in France 3rd survey of the cultural and creative and the Overseas Territories for the 2019– industries in France, published by the 2020 school year. From contemporary EY consultancy firm for France Créative. and electronic music to film scores, Crowdfunding music Four years after its previous publication, Chanson Française and jazz, students Banque Populaire’s foundation this survey reveals the transformations met with songwriters and composers to joined Mise en oeuvre(s), a crowdfunding Paul Cohen Scali of a mosaic economy that brings discover the process of artistic creation. programme in support of contemporary together more than six hundred In 2019, 230 classes participated in the named Chief music. In partnership with Proarti, the professions in three hundred thousand programme. Among them were five leading platform for crowdfunding for public and private enterprises. The middle school classes that participated Information artistic creation and cultural discovery, music industry alone employs 256,957 in the Fabrique Electro programme. Sacem and the Banque Populaire Technology Officer people in France, a 21.2% gain in job They joined a European cooperative foundation offer much more than Paul Cohen Scali joined creation from 2013 to 2018. project called “Future Songwriting.” just financial support. The winners Sacem in October 2019 as This programme, led by Finland, includes receive support from Proarti to help Chief Information Technology. several other European countries such as them build their strategy and offer France, Germany, Spain, Hungary and the them personalised coaching. United Kingdom and aims to compare the different methods of music learning and to deploy the INTO1 method.

1 This method, developed by the INTO School team, composed of award-winning Finnish educators and composers, aims to strengthen students’ artistic and cultural development by giving them an active role as creators of music. As part of the program, teachers will be trained in the INTO method and will use iPads equipped with the Garage Band application in the creative process with their students.

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2019 HIGHLIGHTS Keychange: Supporting underrepresented artists and innovators Among the 650 applicants, 37 emerging artists (songwriters- composers-performers) with distinctive and original talents, TOGETHER along with 37 innovative professionals in music R&D, were A National Music Centre selected to participate in the pioneering international LET’S MAKE Keychange 2020 program, which seeks to empower talented comes to life underrepresented genders with training, mentoring, and After years of reflection and months of preparation, the network support. France, represented by Sacem, the Bureau MUSIC HAPPEN! Centre National de la Musique was born on January 1st, Export and the MaMa Festival, revealed its three artists and 2020. Chaired by Jean-Philippe Thiellay, the CNM brings three innovators who will benefit from a solid programme On December 2nd, during its Grand Prix ceremony, Sacem together several key players in the music industry, including of support, mentoring and professional development. unveiled its new visual identity. Its logo carries a purple flag historic structures like the Bureau Export, the Centre that reaffirms Sacem’s collective purpose: to rally, support d’Information et de Ressources pour les Musiques Actuelles Robi The Blind suns and protect authors, composers and publishers in all their (IRMA) and the Fonds pour la Création Musicale (FCM), partly diversity. This new identity reflects the values that Sacem co-financed by Sacem. Authors, composers and music embodies and its unfailing commitment to the service of publishers expect it to fully embrace creation in all its creators and creativity. Sacem’s approach includes all of its diversity, and the economy around it. Alongside the other partners — those who use its repertoire, disseminate it and professional organisations that represent musical creators, The Rodeo contribute to its influence, so that all of us, with one voice, Sacem made several proposals, including the establishment can proclaim: “Together, let’s make music happen!” of a tax credit for music publishing, the creation of a support Clothilde Chalot fund for creators and increased resources for export.

Céline Garcia Cléo T.

DECEMBER JANUARY 2020 FEBRUARY 2020

2019 Sacem Grands Prix Contemporary music under one roof On December 2nd, Sacem awarded its Grand Prizes at an Reinforce the resources allocated to contemporary music by creating a exceptional ceremony at the Salle Pleyel in Paris, hosted strong, representative and unified structure: this was the objective of the by comedian Bérengère Krief. The authors, composers and Sacem and the Ministry of Culture, so they decided to bring together three publishers who took home prizes reflect the vitality and diversity structures that they co-finance: Centre de Documentation de la Musique of our music scene. A choral group from Bondy, a suburb Contemporaine (CDMC), Musique Nouvelle en Liberté (MNL) and Musique northeast of Paris, opened the evening, highlighting the worthy Française d’Aujourd’hui (MFA). The new centre that will bring them educational goal of making musical instruction available to all. together is a real flagship that represents all the components of contemporary music.

Making music in Avignon: creative Bringing in younger the workplace residencies audiences Sacem and Réseau Entreprendre joined Firmly committed to promoting The Biennales Internationales forces to develop projects to encourage its repertoire for young listeners, du Spectacle de Nantes (BIS) and the creation and practice of music in the Sacem and the Festival OFF d’Avignon Sacem renewed their Scène Sacem workplace: company choirs, songwriting, formed a partnership to set up BIS project with, for the first time, creative workshops. creative residencies. a programme entirely dedicated to young audiences.

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Since 2017, Sacem has put in place the Our operations BOARD OF DIRECTORS FOR 2019–2020 Governance following arrangements: Established in 1851, Sacem is a private, Founded and managed by its members OUR MEMBERS non-profit, non-trading entity managed – authors, composers and publishers 1 Authors, composers and publishers ENSURE THAT by its members – mainly creators and of music, dubbing and subtitle writers, have a greater involvement in the SACEM IS RUN TO music publishers. poets, stand-up comedians and writer- decision-making process with a directors – Sacem operates as reinforcement of the powers of HIGH STANDARDS Our role is to negotiate with users, and to a cooperative. the General Assembly OF GOVERNANCE collect and accurately distribute authors’ AND TRANSPARENCY rights to our members when their work is Elected by the Sacem General Assembly, 2 The Supervisory Board, made up available publicly. For example, through the Board of Directors is made up of six of Sacem members, oversees the audio-visual media, concerts, festivals, the Chair Vice-chair Vice-chair Vice-chair songwriters, six composers and six music Bruno Lion, Richard Seff, David Séchan, Arnold Turboust, activities of the Board of Directors Internet, cinemas, nightclubs and shops, or publisher author publisher composer publishers (one-third renewable each and the CEO reproduced through, for example, digital year in June), as well as a writer-director 160 files, CDs, DVDs or video games. We also as a permanent member and a writer- 3 The Ethics Committee, chaired by members representing 176,150 manage the collection and distribution director as a substitute. The Board of an independent third party, aims creators and publishers across our of royalties to members of other similar Directors makes all decisions essential to prevent and manage conflicts various boards and committees French and international organisations to the efficient operation of Sacem. of interest that have given Sacem a mandate to It appoints the CEO, who manages represent them. the society and is responsible for 4 Sacem is reinforcing measures implementing the policies defined intended to provide more Support, protect by the board. transparency and better Treasurer Deputy treasurer Secretary general Deputy secretary information for its members. Thierry Communal, Thierry Perrier, Patrick Sigwalt, Elisabeth Anaïs, and defend publisher publisher composer author Our business operations involve supporting creative people, protecting their repertoires and defending their interests both nationally and internationally. Sacem How Sacem is run is a member of various international organisations working for the rights of creative people and the protection of copyright, including the International Director Director Director Director Confederation of Societies of Authors and Frédérique Alie, Vanessa Bertran, Frédéric Doll, Brice Homs, Composers (Cisac), the International Office author author author author of Mechanical Publishing (Biem), and the European Consortium of Societies of The General Assembly Authors and Composers (Gesac). In France, we work alongside other industry groups Elects lobbying for similar rights, and strive to deliver the best quality of services and support for our members. Ethics Committee Appoints Supervises We also play a crucial role in the Director Director Director Director Identifies, manages Supervises sustainability of musical and cultural Gilles Amado, Anne Dorr, Wally Badarou, Dominique Dalcan, and controls conflict creativity. For over fifty years we have writer-director writer-director composer composer of interest situations. been implementing a range of The CEO The Board Supervisory cultural development programmes, of Sacem of Directors Board encompassing all the richness and Appoints diversity of cultural creativity. Our activities include supporting creative careers, encouraging the renewal of repertoires, facilitating the distribution of creative output and helping young professionals get a start in the business. Cultural aid Director Director Director Director activity has taken on a new elan since Dominique Pankratoff, Laurent Petitgirard, Nicolas Galibert, Caroline Molko, 1985, when the private copy levy system composer composer publisher publisher Executive Regulatory Technical Programmes was implemented. This, in addition to the Committee Committees Committees Committee aid programmes in place since the 1960s, allowed Sacem to support 2,665 projects representing every genre in 2019.

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MANAGEMENT REPORT Blick Bassy Songwriter, performer

Members 176,150 Supervision Sacem members Few private companies undergo such regular, Sacem currently has 176,150 members in France detailed review. Multiple and throughout the world – up from 169,385 in 2018. examinations of Sacem Membership comprises 169,630 creators and 6,520 publishers. management operations 6,720 guarantee efficiency and New members joined Sacem in 2019. Among them were transparency. 773 foreign members, with 89 nationalities represented. Its members include songwriters, composers and publishers; YEARLY EXTERNAL CONTROLS: writer-directors; poets; dubbing and subtitle authors; and comedians and comedy writers, among others. An indication • Auditor of our appeal is that 6,720 new members joined in 2019. • Permanent Auditing Committee Collections for Collective Management INTERNATIONAL Societies Collections from outside France • Ministry of Culture With 21,350 foreign members from 168 different countries, reached record levels in 2019, thanks • Detailed report on sums from Sacem is the world’s most internationally diverse authors’ society. to the performance of our catalogue the private copy levy used for and our international development Cultural Action efforts (e.g. the tracking of our works’ usage abroad). INTERNAL CONTROLS: MEMBERS’ ONLINE SERVICES • Consulting account statements. Sacem collects royalties for its Board of Directors members worldwide through 168 • Consulting broadcast data on 96,100 Sacem members have their • agreements signed with 117 foreign • Supervisory Board works with the context in which own space on the sacem.fr website societies. Moreover, in some territories, Ethics Committee they are exploited: 9,000 connections • and use the various online services. such as Luxembourg, Lebanon, French per month. • Transparency Report Polynesia and Monaco, Sacem signs • Auditing and Internal Control • ‘History of my distributions,’ with • Tool for claiming works that have contracts either directly or via its local Department graphic visualisation of royalty been unidentified during the process structure with music broadcasters, from payments over several years. of distribution. • Committees whom rights are collected and then • ‘Summary of my distributions’: • Registering works online: over 11,000 distributed to members. In countries with dynamic overall presentation of each month (+10% in 1 year). which Sacem has agreements, it is that royalty payments. country’s authors’ society that agrees on Registering events and setlists/ • contracts and collects royalties on • ‘My detailed distributions’: playlists (works performed in Sacem’s behalf, before subsequently presentation of royalty payments concert): 90% are now transferring the relevant royalties work-by-work with an unprecedented registered online. level of detail: more than 17,600 to Sacem for the repertoire that Catalogue: in this service, connections per • it represents. members have access to all the works month. they registered. Sacem, in turn, distributes to its members. • Access to Sacem PLUS: a service This type of agreement is often reciprocal, of exclusive offers and advantages with each society taking responsibility for to all members. 50 offers and the other’s rights within their respective advantages are proposed in the jurisdictions. This is still the dominant and fields of music and creation. prevailing model, except in the specific case of multi-territory Digital Service Providers for which each CMO (Collective Management Organisation) collects only the rights linked to the exploitation of its 150MILLION own repertoire. WORKS REPRESENTED BY SACEM THROUGHOUT OUR CLIENTS THE WORLD Our clients have free and legal access to 150 million works across all genres in Sacem’s worldwide repertoire. By paying authors’ rights, clients keep musical creation alive and contribute to the industry’s sustainability.

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MANAGEMENT REPORT

LICENCES OUR REGIONAL NETWORK Youn Sun Nah PNL Audiovisual – TV, radio, cable, satellite, Our extensive regional network is Songwriter, performer Songwriters, performers broadband, and SVoD – is the second one of our most valuable assets in source of revenue. This year reflected terms of delivering the very best for streaming’s dominance in France, as our members. We have teams on the well as in a large and growing part of the ground throughout France and overseas world. Sacem collects royalties directly – comprising six regional offices and from streaming services, resulting in 30% more than 60 local offices. This allows us growth of its online income. Numerous to maintain close relationships with our agreements with the media and regional customers and members and video-on-demand (VoD) platforms, as ensures accurate and efficient collection. well as legislation for private copying, have made it possible to reach high By being in close touch with the people collection levels. In the online sector, who are playing music and thus driving Sacem has attracted prestigious new sustainable creativity, we are able to feel contracts such as Strictly Confidential and the pulse of the music business, sense Because, which have joined Impel, Music the direction the economy is heading, Sales, Universal Music Publishing, Wixen, and anticipate the issues that music PEN Music, Socan and Warner Chappell. creators and publishers will be faced Through its own repertoire and those of with. This prepares us to best serve the its partners, Sacem represents one of interests of our members by adapting the largest catalogues in the world, an quickly to changing markets and essential position for promoting the best circumstances. interests of its members. Many contracts were renewed in 2018 with digital music SACEM PRO: A CUSTOMER and audio-visual platforms. In 2019, SERVICE OFFERING Sacem signed an agreement with In April 2016, Sacem successfully Amazon Prime Video. launched Sacem Pro, an offering for Sacem customers that includes: PRIVATE COPYING Since it was adopted in France in 1985, • Advice: Three guidebooks available the private copying levy has made it in digital form or hard copy to assist possible to compensate for the loss of customers in using the repertoire. revenue suffered by creators as a result Focusing on music, their purpose is of the legal exception that allows private to help non-professional customers copies to be made of their works. The organise concerts and other musical Private Copying Commission, of which events or set up a sound systems on Sacem is a member, voted for an professional premises. impressive number of new tariffs, applied from October 1st 2018, for • Discounts: 86 partners offer phones, tablets, external hard drives, customers help in areas such as TV/multimedia boxes and cloud-based setting up background music on Thanks to its own repertoire NPVRs. The private copying levy is of their professional premises, renting or crucial importance – it helps guarantee buying equipment, soundproofing an and those of its partners, Sacem cultural diversity and our country’s establishment, finding musicians or artistic vitality. technicians, promoting their events represents one of the largest and setting up a ticket office. The cultural aid payments are broken 95 catalogues in the world — this puts down among four legal categories: aid COUNTRIES FROM WHICH SACEM HAS us in a position to best serve the for creation and production, aid for the realisation of live performances, aid A PRESENCE THROUGH interests of our members. for the training of artists (authors, 168 AGREEMENTS SIGNED composers and performers) and aid for artistic and cultural education. WITH 117 FOREIGN SOCIETIES

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MANAGEMENT REPORT

MAXIMISATION GLOBAL OF RIGHTS REPERTOIRE Non-French Sacem members SACEM’S NETWORK IS MADE UP OF Regional office Local office 8 % Regional Bureau of collections come from our 60+ overseas repertoire Keren Ann local offices in mainland France Songwriter, performer and overseas

Martinique Guadeloupe 620+ co-workers

Reunion Luxembourg Sama A MORE DIGITAL RELATIONSHIP Publisher, composer, performer 160,500 Monaco Lebanon client accounts on sacem.fr EUROPE MIDDLE EAST Tahiti NORTH AMERICA 36% 67,000 % contracts signed online 7% 6 OUR CLIENTS 130,000 AFRICA choose online billing 40% SOUTH AMERICA ASIA PACIFIC 9% 2% Music venues Festivals Radio Television Online €12.4M stations stations platforms funds collected online

Sandra Nankoma Songwriter, performer

WE HAVE LICENSED Clubs Hair salons Shops Fitness clubs Pubs Cœur de pirate 500,000 Songwriter, performer HIGHLY DIVERSE CLIENTS Anitta Songwriter, performer Restaurants Doctors/ Airports Railway Hotels Anggun dentists stations Songwriter, performer

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MANAGEMENT REPORT

Repertoire Mandates Cultural aid Benjamin Garzia We represent, manage and protect 150 We also collect royalties for: Distribution In addition to its rights collection and Composer million works throughout the world and distribution activities, Sacem provides 79% of authors’ rights are across the range of creative genres. This Performers and producers of music, strong cultural support for musical • distributed work-by-work in order repertoire is expanding every day – in audio-visual works, visual arts and creation, live performances, and the to reflect, as much as possible, 2019, 2.4 million new works were added, writing via Copie France training and professionalisation of the detail of music broadcasting 255,800 by Sacem members. Through (Private Copying). creators, both in France and programmes. This accuracy is the mandates entrusted to us by internationally. • Performers (members of the the result of the considerable international publishers, Sacem also Adami and Spedidam collective technological innovation and processed the registration of 566,000 Through its expertise, networking and management organisations) and expertise needed to process large additional works. financial support, Sacem assists authors, record producers (SCPP and SPPF) for volumes of data, while at the same composers, and publishers, as well as the broadcasting of their works in time providing reliable public places such as shops, hotels the venues, festivals or producers who AUDIOVISUAL documentation. and restaurants. programme these artists, and therefore Music for the moving image ensure the dissemination of their works. • Authors of the performing arts, (films, television, series, animated • audio-visual works (members of films, advertising…) Sacem’s financial aid covers all the stages SACD), multimedia works (members ACCURACY AND EFFICIENCY of a career or a project, from assistance Musical illustrations of programmes of Scam) and graphic and plastic • to self-production. Budgets have been arts (members of ADAGP) for part • Musical documentaries 10% significantly increased this year to move of media broadcasting of the works Musical videos toward paperless operations, and to • concerned (especially audiovisual). 11% support to residences, festivals, venues, • International music publishers ensembles and musical groups, CONTENT (Universal Music Publishing, among so many other efforts. Publishing • Lyrics Warner Chappell Music, Wixen development aid offers a whole range of Music Publishing, Inc. Sharandall 79% • Poems financing to support the publishers in Music, The Music Goes Round their efforts to develop artists and to • Humour Publishing, PEN Music Group, Impel, enhance heritage. • Dubbing Strictly Confidential et Because) for • Subtitles part of the digital use of their Urban music, electro, contemporary international repertoires. classical music, creative jazz, young • Sketches • Canadian creators in Europe – since audience, pop, rock, world music, poetry, 2016, Sacem has represented the comedy, etc. This cultural action covers MUSIC repertoire of SOCAN exploited by all the repertoires managed by Sacem, DSPs in Europe. with particular attention paid to genres Chanson Work-by-work • suffering from underexposure in the Electronic music Phono-mechanical rights on By taking into account • • media or evolving in a structurally physical products (CDs, DVDs, BRs) consumer habits Rap, RnB deficient economic model, such as • distributed by European Universal By surveys contemporary classical music, creative • Contemporary classical music Music subsidiaries. • Jazz jazz or works for young audiences. • Young audience The rules of distribution are This action is managed both nationally Traditional music available on sacem.fr • and also through a decentralised budget, As a major actor in the audiovisual Sacem’s role, through the funding • World music closer to the territories and actors sector, Sacem also plays a decisive role of residencies, master classes, and in the field, handled by Sacem’s • Metal in the field of music for motion pictures, professional meetings organised with a regional network. through aid for the creation of original network of leading audio-visual festivals. music, in all formats, from short films to features. Encouraging new writing, In the field of humour, Sacem carries Sacem supports innovative and out specific support activities, aiming transmedia projects while paying in particular at musical humour and particular attention to initiatives to support for the projects of comedians in enhance heritage through its support the early stages of their careers, especially for musical documentaries and new through close work with festivals, where channels of dissemination. Finally, the the mission of identification and training and professionalisation of professionalisation is decisive at the 2,665 composers is an important part of beginning of their careers. CULTURAL AND ARTISTIC PROJECTS SUPPORTED IN 2019

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MANAGEMENT REPORT

It is the members themselves who Caravan Palace Social responsibility actively contribute to supporting and Songwriters, performers Choosing music or writing as a career sustaining creators and their work, means opting for passion. But making a through the statutory deductions for living through words and notes can be a social and cultural services (€35.2 million challenge – and while the precariousness in 2019), and through their contributions and volatility of any career has grown in to social organisations and their recent years, the profession of author or donations to the Comité du Cœur. composer has by its very nature always had its share of uncertainty. Sacem is constantly working to develop and strengthen its social and €32.4M That’s why Sacem’s members have professional activities. Accordingly, in throughout its history instilled within to supporting 2,665 cultural 2017, it embarked on a major reform of the society a strong sense of social Solidarity and and artistic projects directly its old-age security programme (RAES), responsibility and have worked hard to (€30.2 million private copying with a view to extending its benefits to concern for the create and strengthen a model that takes and €2.2 million equity). as many of its members as possible. It care of creators throughout their lives. has also defined and launched a new protection of programme to support professional Unwavering commitment and dedication development. This programme aims its members are to the protection of its members are at to enable creators who do not have at the heart of the heart of Sacem’s identity. We have access to the legal right to funding to always been committed to working to take training courses selected for their Sacem’s identity. develop greater professionalism and quality and professional interest. recognition for creators, to promote and defend their status and to guarantee the Sacem also launched a health coverage highest quality and most complete support programme in 2018 for its social protection. American resident members.

Sacem works for its members in all areas Sacem’s objective is to better support of social activity: its members by meeting their specific needs at each stage of their professional • Through its own internal initiatives: development. –– Provident Fund (with the Mutual Lastly, artistic and cultural education is an This investment comes from both CULTURAL AID  aid allowance scheme – RAES) essential part of Sacem’s cultural action, private copying (€30.2 million) and –– Solidarity Fund (mutual assistance, with the aim of placing creators at the equity (€2.2 million). 3% 6% emergency aid, death benefits) centre of activities, in all times and 7% –– Comité du Cœur, an association places of daily life. To strengthen its cultural activities, Florentine Mulsant Sacem works closely with other cultural created and supported by the 7% Author, composer In 2019, Sacem committed €32.4 million funders, including local authorities members of Sacem, which helps to supporting 2,665 cultural and artistic and business foundations, as well as authors and composers in distress projects directly. This amount also alternative financing stakeholders, to 37% • By ensuring a close relationship with includes a number of initiatives to continue to support the financial risks external social organisations, even promote and defend authors’ rights taken by the sector’s artists and actors. participating in their governance: and the professionalisation of creators. These investments cover ambitious –– Agessa (Authors’ Social Security 40% projects for creation, programming, Management Association) development, innovation or artistic –– IRCEC Pension Fund (with the two writing, and thereby solidify the supplementary pension plans, ecosystem of creation. RAAP and RACL) Promotion of live performance –– Afdas, which manages authors’ Creation and production training funds Optimisation activities and other voluntary aid Operating costs The initiatives and activities it has set Artist training up and developed demonstrate Sacem’s Cultural and artistic education strong commitment to supporting its members. They are a very concrete reflection of the spirit of solidarity of songwriters, composers and music publishers.

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MANAGEMENT REPORT

Major IT projects reinforce Sacem’s Information systems strategic axes, and revolve around the Human resources Legal framework GLOBAL IT EXPENSES Sacem continues to overhaul its following topics: With 1,317 employees at the end of 2019, Sacem’s operations are subject to IT systems in order to improve its Sacem’s teams are organised around its the Code of Intellectual Property and competitiveness and provide more “core business” activities: management to a range of internal and external 1,317 • Continuation of the overhaul of permanent employees – 58% women efficient tools for members and clients. computerised processing of rights of members (admission, deposit of works, controls. At the European level, a €51.1M It is working on service optimisation for and distribution channels. distribution, etc.), collection of dues 2005 recommendation on copyright of which €22.6 was counted both the process component and the (regional network, licences, international, management led to a fragmentation Finalisation of the online processing as investment user experience. We are adapting our • etc.), and support services (legal, IT, of repertoires, forcing online music chain with the “URights” solution and digital tools (Internet, mobile apps, finance, HR, communication, cultural platforms to multiply requests for the upcoming integration of VoD social networks, etc.) to the needs of action, etc.). The teams are spread over authorisation of their activities. (video on demand) and SVoD our audiences. URights enables the 65 locations in France (mainland France 94 (subscription video on demand). management of the exponential and Overseas territories). The human The increased complexity of the young students joined Sacem volume of online music and video • Implementation of advanced resources policy supports Sacem’s market is partly responsible for the on professionalisation contracts data exchanges and improves the solutions for management of the strategy, concentrating its efforts on Directive on Collective Management identification of the rights associated relationship between members the organisation of work (development of adopted in 2014 and transposed into with these operations. and clients. trades and organisations, modernisation French law by the Act of 22 December • Transformation of the information of information systems, etc.), professional 2016. This directive primarily reflects a Sacem’s research & development system into a cloud platform, training, and relying on a sustained desire to improve the governance and policy is designed to enhance the open to the outside, capable of social dialogue. transparency of national and other 78 value of works in the repertoire and instantaneously orchestrating flows European rights management trainees welcomed maximise authors’ rights. It is particularly and interactions with its ecosystem. Finally, the HR strategy is continuing organisations by strengthening focussed on blockchain and artificial with its active CSR (Corporate Social disclosure requirements and control Construction of a new operational intelligence. Sacem also is helping • Responsibility) policy and is planning of their activities by the rights holders. model in order to deliver projects develop schools and start-ups in new key actions in terms of professional These provisions – already widely faster, bringing more value. partnership with other CMOs equality and diversity. adopted in France – will enable (Collective Management Organisations). greater harmonisation of the rules 88/ 100 In 2018, a major company agreement across all the European rights societies. Gender Equality Index was signed with all the unions on the development and reconfiguration of For collective management the annual and monthly remuneration organisations in the music industry, and Moonlight Benjamin structure. In particular, it aimed to therefore for Sacem, the Directive also Songwriter, performer improve support for the implementation aims to facilitate the delivery of multi- of France’s new pay-as-you-go income repertoire and pan-European licenses for tax on 1st January 2019. the use of online music works. Through various specific initiatives, Sacem has During the lockdown period, teams campaigned for many years to improve carried out their missions from their the market for online music, whether homes, managing exceptional aid through national licenses to operate measures and ensuring that our online rights, multi-territory licenses members and clients could continue to use entire repertoires, management their activities. mandates for international publisher accounts or through the Armonia platform developed in partnership with other European authors’ rights organisations.

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FOCUS ON SACEM’S BUSINESS MODEL

COLLECTIONS CASH INFLOWS Our business model explained The graph opposite shows how the These amounts are transferred as cash in-flows (collections) balance resources to Cultural Aid through the with cash out-flows (attribution to legal 25% Private Copying. In addition to €1,119.2M COLLECTIONS rights holders from distribution and these undistributable amounts, the net social and cultural services), in addition expenses are also financed through to the legal resources to 25% (Private deductions for administrative costs. Copying). The necessary processes These deductions are calculated as a FUNDS FOR DISTRIBUTION €1,119.2M carried out by Sacem to deal with rate on amounts input to distribution distribution calculations generate calculations. The rates chart is validated suspense accounts in Sacem’s by the Board of Directors and depends SACEM financial statements. on the type of uses. For instance, the €953.7M different rates used for the General When a line from a programme Rights collected by Sacem’s regional transferred by the clients cannot be network show four levels based upon matched to a registered work from the actual costs for collection and RESOURCES UNDISTRIBUTABLE the works database, the distribution IT distribution; while the rate used for DEDUCTION FOR systems generate suspense accounts to BIEM/IFPI record producers’ contracts ADMINISTRATION COSTS €32.2M keep the money due for these lines on reflects the Cannes agreements signed hold. Over three years the calculations by many European CMOs. These rates €166.0M €133.7M NET NON-RECURRING INCOME are processed again to pay the rights can be updated as needed by decision holders as soon as the programme is of the Board in their assignment to €0.4M updated, manually corrected, or as the check the statutes rule to keep a work is registered late. But after three cumulated net result around 0 (+/-5% years, the remaining amounts in of actual expenses of the year) as for suspense accounts are accounted a non-profit company like Sacem. FUNDS FOR DISTRIBUTIONS: €953.7M for as resources to finance costs, in conformity to Sacem’s statutes.

These amounts, called undistributables, DISTRIBUTION FOR SOCIAL AND 25% PRIVATE VARIANCE do not include undistributables linked RIGHTS HOLDERS CULTURAL COPYING OF SUSPENSE to Private Copying rights as stated by ACCOUNTS & NET French law (Intellectual Property Code). RESULT RESERVE €854.8M €47. 3M €22.6M €29M 85.2% DISTRIBUTABLE COLLECTIONS

36 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 37 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS COLLECTION DISTRIBUTION

Fully committed to increasing the value of its members’ rights, Sacem relies on a solid and efficient Sacem works tirelessly to optimise the distribution of royalties and invest substantially in support of regional network, innovative IT systems and cutting-edge technologies. Collection revenue surpassed creation, guiding creators and promoting their work. The result: funds distributed rose 2.2% in 2019 €1.1 billion (+5% compared with 2018). Including mandates managed by Sacem, collection income from 2018. surpassed €1.5 billion.

GENERAL RIGHTS (REGIONAL NETWORK) FUNDS FOR DISTRIBUTION

2019 €334.0M 2019 €953.7M +4.6% +2.2% 2018 €319.2M 2018 €933.2M

TV/RADIO (INCLUDING TV OPERATORS) M€ 2019 2018 Sacem members 581.6 541.2 2019 €320.7M % Mandators (managed by Sacem)/other collecting societies 273.2 220 +2.5 Social & Cultural programmes 47.3 42.8 TOTAL SACEM DISTRIBUTABLE 2018 €313.0M Cultural projects (25% PC) 22.6 28.5 FUNDS (INC. MANDATES) 2019 Variance of suspense accounts & net result reserve 29.0 100.6 ONLINE (MUSIC AND VOD/SVOD) Sub-total 953.7 933.2 €1,335.1M Variance of suspense accounts on mandates 3.8 2018 : €1,333.5M 2019 €231.1M Other mandators/other collective societies and mandators 391.9 396.4 % +30.0 SACEM AUTHORS’ RIGHTS Total distributable including mandates 1,335.1 1,333.5 2018 €177.8M COLLECTIONS 2019 The percentage of collected authors’ rights that we distribute to our members is among the highest in our industry. Our members are our lifeblood, and we are dedicated to PRIVATE COPYING €1,119.2M ensuring that each one receives the best possible return for their creativity. 2018: €1,066.5M 2019 €85.6M % -13.1 OTHER MANDATES 2018 €98.5M 2019 €391.9M % INTERNATIONAL -1.1 2018 €396.4M 2019 €85.1M -3.5% 2018 €88.1M OPERATIONS

CD/DVD/BR 2019 €177.5M +5.6% 2019 €62.7M 2018 €168.1M -10.3% 2018 €69.9M 2019 2018 Personnel expenses 139.2 137 Other operating expenses 48.2 46.6 OTHER MANDATES Net amortisation and provision 19.8 17.1 TOTAL SACEM COLLECTIONS Other income -29.7 -32.6 2019 €393.5M (INC. MANDATES) 2019 Total operating costs 177.5 168.1 -9.6% 2018 €435.1M €1,512.6M Most of our expenses relate to our staff and systems. Sacem has some of the most 2018: €1,501.6M knowledgeable and experienced people in our industry, supported by advanced technology and cutting-edge processes.

38 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 39 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS FINANCIAL PERFORMANCE (COMBINED ACCOUNTS) Consolidated collections rose 0.7% over Sacem always endeavours to distribute Sacem invests in IT resources and human 1.2 CONSOLIDATED AND STATUTORY COLLECTIONS 2019, exceeding €1.5 billion. This rights as accurately as possible, generally resources to improve the quality of data M€ 2019 2018 Var Var% performance is mainly due to Sacem’s based on detailed programmes for the following quarters, by improving own collections, which grew by nearly submitted by its clients. The objective programmes and by manually Sacem 1,119.2 1,066.5 52.6 4.9% €52.6 million over the year, essentially is to attribute in the fairest possible way, identifying the works. General rights (regional network) 334.0 319.2 14.8 4.6% due to the extremely strong growth of the amounts collected, to the works TV/Radio (including TV Operators) 320.7 313.0 7.7 2.5% the online segment (see 1.2). used and their beneficiaries. If the Online (music and VoD/SVoD) 231.1 177.8 53.3 30.0% work is not identifiable, we keep on Private Copying 85.6 98.5 -12.9 -13.1% Since 2012, collections have been rising suspense accounts the rights related International 85.1 88.1 -3.1 -3.5% by 3% per year, while expenses have to the mismatched data between CD/DVD/BR 62.7 69.9 -7.2 -10.3% increased by 2.1% per year. The latter programmes and the works increase is due solely to IT investments. (incomplete programmes, Since 2015, excluding IT, expenses have unregistered works). Other Mandates 393.5 435.1 -41.6 -9.6% been stable — indeed they have even Private Copying non-Sacem repertoire 187.2 213.6 -26.4 -12.4% fallen in inflation-adjusted terms. Other mandates & miscellaneous 206.3 221.5 -15.2 -6.9%

1.1 KEY CONSOLIDATED FIGURES TOTAL 1,512.6 1,501.6 11.0 0.7% % of % of M€ 2019 collections 2018 collections Var Var% The collecting operations managed by Sacem and its employees can be divided into two categories: Collections 1,512.6 100.0% 1,501.6 100.0% 11.0 0.7% 1. Sacem collections Collections from mandates and others Revenue breakdown by sector Sacem 1,119.2 74.0% 1,066.5 71.0% 52.6 4.9% Royalties relating to Sacem’s repertoire decreased by – €41.6 million, or – 9.6%, These figures show the growing Mandates & Other 393.5 26.0% 435.1 29.0% -41.6 -9.6% (contribution of Sacem members), to mostly due to private Copying non- importance of the online segment in the repertoires of foreign collective Sacem repertoire – €26.4 million. Sacem’s portfolio. It represented 21% Net expenses to be financed through deductions -177.5 -168.1 -9.4 5.6% management organisations with a of revenue in 2019, vs 17% in 2018. Operating expenses -207.2 13.7% -200.7 13.4% -6.5 3.2% reciprocity mandate, or to some This growth is expected to continue mandates as described above. in the future. Other operating income 2.9 -0.2% 4.6 -0.3% -1.7 -37.0% These collections showed growth Interest and other income 27.1 -1.8% 27.8 -1.9% -0.7 -2.4% in 2019 (+5%; €52.6 million vs 2018). Net non recurring income -0.4 0.0% 0.2 0.0% -0.6 -348.8% COMBINED FIGURES – STATUTORY FIGURES – The growth registered by Online SACEM SACEM Distributable royalties 1,335.1 88.3% 1,333.5 88.8% 1.6 0.1% collections (music and VoD/ SVoD), (+30%, +€53.3 million vs 2018), validates Sacem’s 14% 5% massive investment policy in this market 8% segment, particularly regarding the Variation in distribution reserves -18.5 -1.2% -104.5 -7.0% 86.0 -82.3% 7% URights project. It confirms that online 12% Variance on the reserve of net result 3.6 0.2 3.4 1,977.8% business will be an essential driver 22% Variance on the suspense accounts -22.0 -104.7 82.6 -78.9% of growth for the next few years. 21%

30% Distribution -1,316.7 87.0% -1,229.0 81.8% -87.6 7.1% General rights collections posted 4% 4.6% growth (+€14.8 million vs 2018). 6% In favour of Sacem members -628.9 41.6% -584.1 38.9% -44.9 7.7% Concerning Sacem’s private copying 6% Distribution to Sacem members -581.6 -541.2 -40.4 7.5% 21% repertoire, the rights are over €85 million. 15% 29% Social and cultural programmes -47.3 -42.8 -4.5 10.5% In favour of other collecting societies or mandators -665.1 44.0% -616.4 41.1% -48.7 7.9% 2. Mandates Mandators (by Sacem) incl. other CMOs -273.2 -220.0 -53.2 24.2% Royalties relating to mandates granted to General rights (regional network) General rights (regional network) Mandators (by SDRM) incl. other CMOs -2.5 -3.5 1.0 -29.1% Sacem by the following: (2018: 21%) (2018: 30%) Other Mandators -389.4 -392.9 3.5 -0.9% TV/Radio (including TV Operators) TV/Radio (including TV Operators) French collective organisations In favour of cultural aid projects • (2018: 20%) (2018: 29%) benefiting from Private Copying (both (25% Private copying levy) -22.6 1.5% -28.5 1.9% 5.9 -20.7% Online (music and VoD/SVoD) Online (music and VoD/SVoD) authors’ and neighbouring rights). (2018: 12%) (2018: 17%) French collective organisations Surplus / Deficit 0 0 • Private Copying Sacem repertoire Private Copying Sacem repertoire commissioning Sacem with the (2018: 7%) (2018: 9%) collection of a part of their International (2018: 6%) International (2018: 8%) neighbouring royalties. CD/DVD/BR (2018: 5%) CD/DVD/BR (2018: 7%) • French collective organisations commissioning Sacem with the COMBINED FIGURES – MANDATES collection of a part of their TV/ AND OTHERS Radio royalties. Private Copying non-Sacem repertoire (2018: 14%) Other mandates & miscellaneous (2018: 15%)

40 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 41 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

FINANCIAL PERFORMANCE (COMBINED ACCOUNTS)

1.3 NET EXPENSES 1.5 FUNDS FOR CULTURAL SERVICES — SO-CALLED 25% PRIVATE COPYING RESOURCES M€ 2019 2018 Var Var% Sources of income and use of funds (25% Private Copying levy for cultural aid) Personnel expenses -139.2 -137.0 -2.2 1.6% Other operating expenses -48.2 -46.6 -1.6 3.4% M€ 2019 2018 Var Var% Depreciation and amortization -19.8 -17.1 -2.7 16.0% Collection of royalties attributed to cultural aid projects (1) 22.6 28.5 -5.9 -20.7% Operating expenses -207.2 -200.7 -6.5 3.2% Financial sources of income 0.2 0.5 -0.2 -48.5% Total revenues 22.8 29.0 -6.1 -21.2%

Other operating income 2.9 4.6 -1.7 -37.0% Net financial income 27.1 27.8 -0.7 -2.4% Aid for creation and production (2) 11.1 9.4 1.7 18.0% Net non-recurring income -0.4 0.2 -0.6 -348.8% Aid for live performances (2) 12.3 11.1 1.2 10.7% Aid for training artists (2) 1.7 1.6 0.1 7.2%

Net expenses -177.5 -168.1 -9.4 5.6% Aid for artistic and cultural education 0.9 1.1 -0.2 -16.6% Fund for the Creation of Music (FCM) (3) 1.6 1.6 0.0 0.0%

Net expenses ratio -11.7% -11.2% Franco-American Cultural Fund (FACF) (4) 0.6 0.6 0.1 8.8% Overhead expenses 2.3 2.2 0.1 2.4% Operating costs are controlled, and Our cost structure is as follows: • 10% of current expenditure is Total expenses 30.5 27.6 2.9 10.6% investments strongly focused. related to our IT investments and • 70% of expenses are personnel the transformation of the company Surplus for the financial year -7.6 1.4 -9.1 -642.1% To meet the challenges of competition costs that remain very stable (its processes and the evolution of its and globalisation, we are striving to make over time. business model). These investments Cultural aid disbursed by Sacem is (3) The subsidy paid to the Fund for the The main fields that benefited from sure that our society can, technologically 20% are other recurring operating are the main source of variation • financed partly by the budgets allocated Creation of Music (FCM), an initiative these additional sources were: speaking, increase its processing capacity expenses (mission costs + overheads, in expenses. to voluntary aid and partly by the sources financed by all the collective societies and become more efficient (thanks to etc.) and they also are very stable of income provided for by Article L. active in the musical field, can also be Funding in favour of young audiences URights for the online segment). With this over time. • in mind, IT investments have increased by 324-17 of the Intellectual Property Code. added to these disbursements. or community actions; half since 2013. • Funding for editorial pre-production; (1) These collections correspond to the (4) The Franco-American Cultural Activities in defence of authors’ rights rights collected from the private Fund (FCFA) was created in 1996 to • 1.4 INFORMATION ON THE COSTS RELATED TO SOCIAL AND CULTURAL SERVICES (EXCLUDING THE 25% (for example, the fight against piracy); Copying and legally attributed to promote the cinematic arts on both FROM PRIVATE COPYING RESOURCES) cultural aid. sides of the Atlantic and to encourage • Funding for live performances in Sources of income and uses of funds (for social and cultural aid) dialogue between professionals in music festivals; M€ 2019 2018 Var Var % (2) The cultural aid payments are broken both countries. FCFA is financed via • Funding for developing French music down between four legal categories the 25% Private Copying levy, in Collection of royalties attributed to social and cultural aid (1) 47.3 42.8 4.5 10.5% around the world (touring abroad). as defined in Article R. 321-6 of the agreement with the American Collection of royalties attributed to Optimisation Funds (2) 1.4 1.9 -0.5 -24.3% Intellectual Property Code, i.e. aid for professional guilds representing Other sources of income (accruals) 3.1 2.0 1.1 56.8% creation and production, aid for the audio-visual creators (DGA, WGAW Total revenues 51.9 46.7 5.2 11.1% promotion of live performances and and MPA). aid for the training of artists (authors, Contingency Funds 31.5 30.7 0.7 2.4% composers and performers) and as The Cultural Action department has Solidarity Funds 1.9 1.8 0.2 8.5% defined in Article L. 324-17 of the increased sources of income over the Intellectual Property Code, i.e. aid for last two years, therefore funds used for Voluntary Cultural Aid – Optimisation Funds (2) 1.4 1.9 -0.5 -24.3% artistic and cultural education. cultural aid increased from €27,6 million Voluntary Cultural Aid – Non-Optimisation Funds (3) 0.4 0.3 0.1 33.2% in 2018 to €30.5 million in 2019. Total expenses 35.2 34.7 0.5 1.6%

Surplus for the fiscal year 16.6 12.0 4.6 38.5%

Sacem’s Articles of Association provide (2) The collection of royalties intended for In addition to the Optimisation Funds, for the possibility of contingency, Optimisation Funds, i.e. direct aid given there are other ‘voluntary’ cultural aid solidarity and assistance action in favour to certain members via the mark-up of resources, i.e. outside the scope of the of its members and the payment of royalties which they have been paid. legal 25% Private Copying levy (see 1.5). services in the framework of social aid. These Optimisation Funds support: The financing of social and cultural aids (3) Voluntary cultural aid payments is mainly done via: • Jazz improvisers outside Optimisation Funds are mainly • Young pop authors and composers comprised of promotions for the (1) The collection of certain royalties broadcasting of music in French The royalties generated by public calculated as a percentage of the • regions, support for artists wishing to performances or the recent recording collections net of deductions withheld self-produce their music, endowments of symphonic music, electroacoustic from royalties to finance operating to the winners of certain awards such music, poetry, etc. expenses; this percentage cannot as the Sacem Grands Prix, etc. statutorily exceed 10%. The average • Composers and publishers of deduction rate as a percentage of soundtracks for audiovisual collections is around 5.8%. documentaries

42 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 43 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS TRANSPARENCY REPORT

The transparency report 6. Total amount of remuneration paid 8. Financial information on the c) Amount of operating and financial Financing of costs (M€) during the previous year to (a) the cost of managing rights and other costs relating to services other than was prepared in accordance Deductions persons mentioned in paragraph 1 of services that the organisation rights management, including social, with Article R321-14 of the on rights article L. 323-13 and (b) members of provides to rights holders: cultural and educational services; Current Intellectual Property Code. the Supervisory Board, along with a) Total amount of operating The amount of operating costs relating Usage type activity other benefits granted to them and financial costs broken down by to cultural and educational services as Voluntary collective 1. Accounts for the 2019 financial year See Appendix 12 of the financial category of rights managed; where provided for in article L 324-17 of the CPI management 123.2 Sacem accounts for the year ending statements. costs are indirect and cannot be is €2.3 million. TV/Radio (including TV 31/12/2019 and auditor’s report on the attributed to one or more categories Operators) 52.4 year’s accounts (available on sacem.fr). 7. Amount of revenue from the of rights, an explanation of the d) Types of resources used to cover General rights (Regional exploitation of rights, broken down method used to allocate them the amounts; network) 47.5 2. Report on the year’s activities by category of rights managed and is also given; Operating costs for rights management International 4.3 Report from the manager for the 2019 type of use, and amount of income are funded as follows: Online (music and VoD/SVoD) 16.2 financial year (available on sacem.fr). from investing this revenue with Costs (M€) CD/DVD/BR 1.8 details on how this income is used Net operating and personnel Resources (M€) 3. Number of refusals to grant Other 1.1 expenses 125.4 Deductions on rights 129.3 operating licences in accordance Legal collective 2019 Other operating expenses 52.3 Variation of deductions on with the provisions of paragraph 3 of Collections (M€) Total management 6.1 Charges for provisions and rights pending allocation 4.4 article L. 324-7 and main categories Private copying 6.1 Voluntary collective depreciation 19.8 Non-apportionables 32.2 of reason for refusal management 1,033.6 Total 129.3 Sacem did not refuse any authorisations Other income -2.9 Net resources 166.0 General rights (Regional Financial result -25.4 during the 2019 financial year. network) 334.0 These deductions cover costs incurred Extraordinary result 0.4 Surplus/Deficit -3.6 TV/Radio (including cable and by collection and distribution activities. 4. Description of the collective satellite operators 320.7 Net costs 169.6 management organisation’s legal The shortfall for the financial year is offset Online 231,1 f) Percentage of the cost of rights and governance structure The breakdown of costs by category against the carry-over of the surplus from management and other services International 85.1 A non-trading company governed by of rights consists of separating the the previous financial year of €9.5 million. provided by the organisation to rights articles 1832 et seq. of the Civil Code and Phono/Video 62.7 costs of voluntary collective management The surplus at 31.12.2019, €5.9 million, is holders relating to revenue from the the provisions of Title II, Book III of the from the costs of compulsory collective the first resource of the management exploitation of rights for the relevant French Intellectual Property Code (CPI). Mandatory collective management. For the second category, account for the following financial year, financial year, by category of rights management 85.6 Sacem essentially manages the unless the General Assembly decides to managed; where the costs are The Society is governed by a Board Private copying 85.6 distribution of funds. The cost of allocate it following a proposal by the indirect and cannot be attributed to of Directors; the 19 members and distributing compulsory collective Board of Directors; a decision that can one or more categories of rights, an substitute member are elected by only be taken if the management Total 1,119.2 management is marginal compared explanation of the method used to the General Assembly. to the cost of voluntary collective account balance and Sacem’s allocate them is also given; Categories of rights and types of use1. management. continued activity are guaranteed. The Board of Directors appoints a Sacem manages two categories of rights: The average percentage is 15.1%, Chief Executive Officer who is the b) Amount of operating costs and The amount of operating costs relating calculated according to the method manager of Sacem. • Rights managed legally by collective financial expenses corresponding to cultural and educational services that appears in annex 17-2 of the management solely to the management of rights, (see c) is financed by the amounts Sacem accounts. The activities of the Board of Directors broken down by category of rights under article L 324-17 CPI. Rights managed voluntarily by and the Chief Executive Officer are • managed, highlighting the amount of Providing a breakdown of the rights by collective management supervised by the Supervisory Board; management fees deducted or offset e) Amount of deductions made category is not economically viable due its 6 members are also elected by the Types of use depend on the sector from revenue from the exploitation from revenue from the exploitation to the marginal cost of mandatory General Assembly. of activity. of rights or income from investing of rights, broken down by category of collective management. this revenue; where the costs are rights managed and type of use, and 5. List of legal entities controlled The amount of financial revenue indirect and cannot be attributed to purpose of the deductions; The full transparency report will be by the organisation in accordance (€25.4 million) is deducted from one or more categories of rights, an available on sacem.fr after the Sacem with article L. 233-16 of the French management fees. explanation of the method used to General Assembly. commercial code, including total allocate them is also given; capital, proportion of capital held, Cf. 8a) year-end results for the last financial year, and net and gross carrying amount of shares held See Appendix 15 of the financial statements.

1 Definitions according to rule no. 2017-07 of 01/12/2017 issued by the French accounting standards authority

44 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 45 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Statutory auditor’s report on the transparency report Income and expenses statement FOR THE YEAR ENDED DECEMBER 31, 2019 AT 31 DECEMBER 2019

Statutory auditor’s certificate on We performed all of the procedures that This certificate serves as a special report In €000 we considered necessary in accordance within the meaning of Articles L. 326-8 the information provided for in 2019 2018 with professional guidance issued by and R. 321-14 IV of the Intellectual Operating income 1°, 7° to 10° of II and III of Article the French Association of Independent Property Code. R. 321-14 of the Intellectual Auditors (Compagnie nationale des Other operating income 13,136 12,907 Property Code communicated in commissaires aux comptes) relating Paris, April 25, 2020 Deductions 178,349 175,428 the annual transparency report to this assignment. This work, which Reversal of provisions 561 244 provided for in Article L. 326-1 constitutes neither an audit nor a limited French original signed by Transfer of expenses 3,192 1,820 examination, consisted, on a test basis or of the aforementioned code through the use of any other selection Didier KLING Total I – operating income 195,238 190,400 methods, in: The Statutory auditor CRCC of Paris TO THE ANNUAL GENERAL MEETING OF SACEM • obtaining an understanding of This is a free translation into English Operating expenses In our capacity as the statutory auditor of procedures put in place by SACEM of the Statutory Auditors’ certificate Purchases and other external expenses 50,630 47,409 your company SACEM and in application to produce the information provided on the information provided for in 1°, Taxes and duties 6,667 6,529 of Articles L. 326-8 and R. 321-14-IV of for in 1°, 7° to 10° of II and III of Article 7° to 10° of II and III of Article R. 321-14 Personnel expenses 138,541 136,453 the Intellectual Property Code, we drew R. 321-14 of the Intellectual Property of the French Intellectual Property Amortisation and depreciation 18,109 17,080 up this certificate on the information Code communicated in the annual Code communicated in the annual Net provisions 2,230 195 transparency report provided for transparency report provided for in provided for in 1°, 7° to 10° of II and III Other operating expenses 3,146 3,256 of Article R. 321-14 of the Intellectual in Article L. 326-1 of the Article L. 326-1 of the aforementioned Property Code communicated in the aforementioned code; code, issued in French and it is provided Total II – Operating expenses 219,323 210,922 annual transparency report provided for • carrying out the necessary solely for the convenience of English- in Article L. 326-1 of the aforementioned reconciliations between this speaking users. This report should be code for the financial year ending information and the accounting read in conjunction with, and construed Operating result (I – II) -24,085 -20,523 December 31, 2019. from which it derives and checking in accordance with, French law and professional auditing standards that they are consistent with the Financial income applicable in France. This information has been established elements used as basis for the From shareholdings 4,970 4,256 under the responsibility of your Manager preparation of the annual financial Interest and related receivables 25,436 25,550 from the accounting books used in the statements of SACEM for the year Sacem preparation of the annual accounts of ended December 31, 2019; 225, Avenue Charles de Gaulle your company for the year ended 92521 NEUILLY SUR SEINE Total III – Financial income 30,406 29,807 verifying the consistency of this December 31, 2019 and the internal • information with the internal management data of SACEM related management data of SACEM related Financial expenses to the accounts. It is our role to certify to the accounts; Interest and related receivables 0 0 this information. • checking the arithmetic accuracy Total IV – Financial expenses 0 0 The transparency report has been of the information produced; approved by your Board of Directors. • assessing whether this information achieves fair representation. Financial result (III – IV) 30,406 29,807 As part of our statutory audit mission, we audited the annual accounts of your On the basis of the work that we Net income from ordinary activities (I – II + III – IV) 6,321 9,284 company for the financial year ended performed, we have no comment December 31, 2019. Our audit, carried to make on the information provided Non-recurring income 285 4,595 out in accordance with the professional for in 1°, 7° to 10° of II and III of Article R. Write-back of amortisation in the field 93 3,715 standards applicable in France, was 321-14 of the Intellectual Property Total V – Non recurring income 285 4,595 intended to express an opinion on the Code communicated in the annual annual financial statements taken as a transparency report provided for whole, and not on specific items of these in Article L. 326-1 of the Non recurring expenses 707 4,378 accounts used for the determination of aforementioned code. this information. Therefore, we have not Total VI – Non recurring expenses 707 4,378 performed our audit tests and our samplings for this purpose and we Non-recurring result (V – VI) -421 218 express no opinion on these items taken alone. Total income (I + III + V) 225,930 224,802

Total expenses (II + IV + VI) 220,030 215,300

Excess of management levies at 31 December 5,900 9,502

46 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 47 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Balance sheet Balance sheet continued AT 31 DECEMBER 2019 AT 31 DECEMBER 2019

In €000 In €000 Amortisation and Liabilities 2019 2018 depreciation (to 2019 2018 Assets Gross be deducted) Net Net Equity Fixed assets Intangible assets: 178,113 112,165 65,949 60,193 Capital 13,213 13,156 Concessions, patents, licences, brands, processes, software 154,626 112,165 42,462 42,586 Advance payments and instalments 23,487 0 23,487 17,607 Total I – Equity 13,213 13,156

Tangible assets: 128,989 84,216 44,772 42,733 Provisions Land 15,938 0 15,938 14,057 Buildings 52,515 36,226 16,289 16,864 Provisions for contingencies and expenses 3,150 2,971 Other tangible assets 60,197 47,991 12,206 11,458 Advance payments and installments 340 0 340 355 Total II – Provisions 3,150 2,971

Investments: 34,846 75 34,771 32,858 Debt Shareholdings 10,645 0 10,645 10,645 Bank loans and debts 51 110 Long term receivables from investments 16,744 0 16,744 14,969 Loans 6,563 0 6,563 6,642 Sundry debts 1,210,247 1,139,960 Other financial assets 894 75 819 602 Deposits received (gifts and bequests) 3,723 3,641 Collections to be distributed 959,531 896,483 Total I – fixed assets 341,948 196,456 145,492 135,784 Users – foreign societies 5,123 5,545 Non-paid notified rights 200,902 194,768 Current assets Members 40,969 39,523 Receivables: 481,071 2,367 478,705 393,418 Clients and related accounts receivables 241,072 0 241,072 235,592 Trade payables and related accounts 12,640 15,174 Other receivables: Members 32,017 2,367 29,650 31,832 Tax and social security debts 70,222 69,338 Other operating receivables 3,990 0 3,990 4,348 Miscellaneous receivables 203,992 0 203,992 121,647 Other debt 11,165 12,266

Transferable security investments 840,598 0 840,598 907,572 Excess of the social aid of members’ fund 322,221 305,575

Available funds 204,188 0 204,188 158,191 Cultural aid (25% Private Copying levy) 24,361 32,002

Total II – current assets 1,525,857 2,367 1,523,490 1,459,181 Total III – Debt 1,650,907 1,574,425

Accruals and deferred income Accruals Miscellaneous advance expenses 4,188 0 4,188 5,089 Excess of management levies at 31 December 5,900 9,502 Insufficiency of levies 0 0 0 0

Total IV – Accruals 5,900 9,502 Total III – accruals and deferred income 4,188 0 4,188 5,089

Total liabilities (I + II + III + IV) 1,673,170 1,600,054 Total assets (I+II+III) 1,871,993 198,823 1,673,170 1,600,054

48 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 49 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Notes to the statutory financial statements

ACCOUNTING RULES AND MAIN ACCOUNTING RULES a and b ter. Inventory value of f. Other receivables Provisions for liabilities and charges b. Private copying collections PRINCIPLES AND METHODS fixed assets Other receivables are recorded at their are established in conformité́ with Following the recommendations At each closing, the society assesses nominal value. CRC regulation 2000-6 on liabilities. A from the supervisory commission for Sacem’s annual financial statements a and b. Intangible assets and whether there is any indication of provision is recognised when the society collective management organisations for are prepared in accordance with French tangible fixed assets impairment of tangible and intangible Receivables are written down, where has an obligation to a third party resulting copyright and related rights, rights from legal provisions, in particular Regulation An intangible asset or tangible assets. Indications of impairment are appropriate, by means of a provision from a past event, and it is probable or private copying levies, collected and No. 2014-03 of the French Accounting fixed asset is recognised as an asset obsolescence, physical deterioration, to take into account any collection certain that it will result in an outflow of remitted by Copie France, are now Standards Authority (Autorité des when the following conditions are significant changes in the mode of use, difficulties that may arise. resources to the third party, and the recorded gross in Sacem’s collections. Normes Comptables) relating to the simultaneously met: and other external indications. amount can be reliably estimated. As a result, all collection and distribution Plan Comptable Général, and are up g. Investment Securities costs are now borne by Sacem. to date with the various supplementary It is probable that the entity will • If this is the case, the Company The portfolio consists primarily of i. Exceptional results regulations on the date of preparation receive the related future economic determines the present value of these bonds, negotiable debt securities and Income and expenses that are not, by c. Review and valuation of the said annual financial statements, in benefits assets and compares it to their net book capitalisation contracts that are readily their nature, occurrence or materiality, by components of recent particular ANC Regulation No. 2016-07 of • Its cost or value can be measured value to calculate any impairment. convertible to a known amount. part of the ongoing activities of Sacem property holdings December 26, 2016 and ANC Regulation with sufficient reliability are recorded as extraordinary income Sacem has reviewed its approach by No. 2018-02 of July 6, 2018. The present value is the higher of current Investment securities are recorded in the and expenses. land and construction components for a bis. Intangible fixed assets market value vs. usage value. balance sheet at their original value. the office acquisitions made in 2016 in Since the 2018 financial year, Sacem Software is recorded at acquisition cost j. Off-balance sheet commitments Lyon, Reims and Lieusaint, as well as in has also applied the new ANC regulation or, when created internally, at production c. Financial fixed assets Sacem’s general investment policy has The liability for “End-of-career benefits” 2019 in Rueil-Malmaison. n°2017-07 of 1 December 2017 relating to cost when it can be measured with Financial fixed assets are shown in the always been based on the principle of is determined using the “projected unit the harmonisation of accounting rules sufficient reliability. balance sheet at their acquisition cost. the security of invested capital. credit method”. The analysis carried out made it possible and the presentation of summary If their present value is lower than the to retain a share of 25% for land and documents from collective management Depreciation is calculated on a straight- acquisition cost, an impairment loss As part of this approach to ensure the 75% for construction. organisations for copyright and related SIGNIFICANT EVENTS OF THE line basis between 2 and 9 years is recognised. security and quality of its investments, rights. (Regulation approved by order FINANCIAL YEAR depending on the probable period of use. Sacem has always refrained from This breakdown by component was of 26 December 2017 published in the a. Continued implementation of the d. “user” receivables making arbitrages, keeping the securities thus applied to the net book value Journal Officiel of 30 December 2017). Urights platform b bis. Tangible assets Receivables are recorded at their nominal until maturity in order to always be able at 31 December 2018 for the former In 2016, Sacem and the IT services Tangible fixed assets are valued at their value. They correspond to invoices for to benefit from the capital guarantee. acquisitions and the purchase value In addition to the information provided company IBM entered into a ten-year acquisition cost (purchase price and rights issued to users. mentioned in the notarial deed for for in ANC Regulation No. 2014-03 on strategic agreement to develop a global incidental expenses). Since the 2013 Consequently, this portfolio is presented Rueil‑Malmaison. the general accounting plan, the annex copyright management platform for financial year, it was decided to enter the Receivables presenting a risk of as cash and cash equivalents and no to the annual financial statements online music. costs related to the acquisition of fixed irrecoverability are not subject to impairment is recorded on the basis of This led to a reversal of previous includes the new information assets on the assets side of the balance depreciation, since royalties are only market prices at the end of the year. depreciation on land for €93,359, mentioned in Articles 131-2 to 131-8 This tool improves the identification of sheet and to depreciate them over the transferred to the rights holders after recorded as extraordinary income of the new regulation. rights attached to works exploited online duration of the corresponding asset. they have been collected in advance. For information, potential capital losses in the accounts for the year. and optimises data analysis and the on investments as of 31 December 2019 The general accounting conventions have recognition of authors’ works. Depreciation is calculated on a straight- Thus, in the event of irrecoverability, a amount to €5,216,723, with potential In addition, a reclassification of been applied, in compliance with the line basis over the estimated useful life of reduction in receivables is recorded as capital gains at €38,485,492. €1,231,969 was made between principle of prudence, in accordance with This application makes it possible to the asset: an asset, offset on the liabilities side by a the buildings and land headings for the basic assumptions whose purpose is track contractual relations, pricing and reduction in the item “fees notified to h. Provisions acquisitions prior to the financial year. to provide a true picture of SACEM’s invoicing, along with the monitoring Buildings 30 years users but not paid”, with no impact on Sacem recognises the following assets and liabilities, financial position • of collections to speed up distribution the management account. provisions on the liabilities side of the Buildings are depreciated on a straight- and results: • Fixtures and fittings 3, 5, 10 in the context of the increasing volume balance sheet: line basis over their residual life, on the or 20 years of contracts managed, data to e. “Member” receivables value retained for the construction. Continuity of operations Transport equipment 5 years be processed, and collections to • • A provision is set aside each year for The “Medals for Work” provisions: the • be distributed. • Consistency of accounting policies • Office furniture and equipment member accounts that are in deficit and Medals for Work reward seniority of from one year to the next 3, 5 or 10 years present a risk of non-payment through service to the Sacem. Their award is The platform was put into service in the Independence of fiscal years the absence or insufficiency of royalties. accompanied by the payment of a • • Computer equipment 3 or 5 years second half of 2018 with an eye to the This provision amounted to €2,366,779 bonus for 20 and 30 years of seniority. • Materiality gradual transfer of the contracts at the end of December 2019. The provision is determined using the Equipment, the unit value of which is less managed in this new platform. . “projected unit credit” method. The basic method used for valuing than €500 excluding VAT, is recognised balance sheet assets is the historical as an expense for the financial year. • Other provisions correspond Deployment continued during the 2019 cost method. to specifically identified risks financial year with the implementation and charges. of a new version and the introduction of new functionalities.

50 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 51 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Notes to the statutory financial statements continued

d. Valuation of personnel costs e. Reporting and collection of artists’ In return for this mandate, Sacem h. Workplace agreements i. Sacem Polynesia The Coronavirus health crisis that we are relating to IT developments and authors’ dues and contributions charges management fees of 3% In April 2019, Sacem signed an Sacem and SDRM (Société pour currently experiencing has an impact on Expenses associated with the Article 23 of the Social Security of the amount of the corresponding agreement with the trade unions on l’administration du droit de reproduction the organisation of Sacem’s activity, both production phase of IT developments Financing Act for 2018 provided for the contributions collected on behalf of the creation of a Time Savings Account mécanique) created, by a constituent internally and in its relations with its (i.e. organic analysis/detailed design, transfer of the collection of artist-authors’ ACOSS. This invoicing amounted to (Compte Épargne Temps) allowing general meeting on 5 March 2018, a civil stakeholders and members. programming/codification, tests and test contributions and fees, starting from €242,726 for the year 2019. employees to accumulate and use company on Polynesian territory called sets, documentation required for use) 2019 income, from Agessa (Association days not taken according to the “Sacem Polynesia”, of which they are the Following the government’s adoption are composed of external and internal for the Management of Authors’ Social f. Mandate signed with Scam conditions defined in this agreement. two partners (75 % for Sacem and 25 % of emergency measures to stem the costs, using both external service Security) and MDA (Maison des Artistes) In return for the mandate signed in The agreement is for a period of for SDRM). spread of the Covid-19 virus, Sacem providers and internal company to the URSSAF network. June 2019 between Sacem and Scam, three years. made every effort to ensure the employees. Sacem receives a remuneration of The purpose of Sacem Polynesia is operational continuity of its services An agreement was signed in July €325,000 (excl. tax) for participation in The deal was therefore recognised in the exercise and administration, in and to continue to take concrete With regard to internal costs related to 2019 between ACOSS (Agence centrale the management costs of the mandate the financial statements for the year. French Polynesia, of all copyrights action to support its members. personnel directly contributing to the des organismes de sécurité sociale) relating to the “Media” and “Videograms- The rights acquired and recorded at the relating to the public performance, production of these IT developments, a and Sacem relating to the declaration Phonograms” operations. end of the period in the 2019 financial public representation or reproduction All departments have arranged to study was carried out over the financial and collection of social insurance statements represent a debt of €285,177 of protected works belonging to the ensure the continuity of activities year with a follow-up by management contributions, the general social g. Implementation of pay-as-you- including social security charges. repertoire of its members and of the and services to our members with control in order to evaluate them. On the contribution, contributions for the earn income tax regime societies that have given the members a the implementation of the Business basis of these estimates, it was decided repayment of the social debt, and In order to comply with the obligations The incentive agreement currently mandate to collect in French Polynesia. Continuity Plan, and in particular by to recognise the corresponding costs in the professional training contribution, of the tax authorities, Sacem effectively in place was renewed for the next working from home. the accounts. deducted from the amounts of royalties implemented, as of January 1, 2019, the three years. Of Sacem’s 2019 collections, €1,125,247 paid to authors for whom France is withholding of income tax at source on were from Polynesia. Since the duration of the health Thus, the IT staff directly involved in declared as their tax residence. salaries paid to employees and In addition, Sacem decided to use crisis is unknown, its effects are not the production of IT developments have allocations due to members. the option offered by the 2020 Social POST-CLOSING EVENTS yet measurable at the time of writing been reassigned to them on the basis of ACOSS also mandates Sacem to Security Financing Law to pay out an Financial income takes into account the this commentary on the 2019 financial time spent and an average daily rate grid ensure, on behalf of ACOSS to the Sacem has complied with the exceptional “purchasing power bonus.” exceptional deterioration in stock market statements; it is also not possible to charged according to qualification. users of its repertoire, the collection of French Accounting Standards Authority prices between the closing date of the estimate its consequences on the 2020 the broadcasters’ contribution as well as (Autorité des Normes Comptables) Its amount was set at €800 for a full financial year on 31 December 2019 and financial year and for the members. Four profiles were selected (research the professional training contribution regulation no. 2018-02 of July 6, 2018 by year on a full-time basis, for employees the date of preparation of the annual developer, operations developer, project owed by the broadcasters. adapting its accounting plan to account having received in 2019 a gross salary of financial statements. Indeed, given the The complete financial statements manager, manager). for this withholding. less than 1.5 times the minimum wage, exceptional situation at the beginning of and their appendices are available These amounts are based on the and €500 for employees having received 2020, Sacem decided to revise downward on sacem.fr after the annual Sacem Over the financial year 2019, four amount of gross royalties (excluding in 2019 a gross salary of between 1.5 and the value of all financial products whose general meeting. projects gave rise to the reallocation of taxes) collected by Sacem from the 2 times the minimum wage. liquidation is subject to certain market €1,116,000 in personnel costs incurred broadcaster/user of its repertoire conditions. In this context, the total by the company, which were recorded whose tax residence is in France. The amount paid out totalled €188 446. amount of financial income has been under “assets in progress” in the balance revised from 29,558 k€ to 25,436 k€, i.e. sheet and under “capitalised production” a reduction of 4,122k€. in the income statement (see annex 6-5). These costs are recognised as development work progresses.

52 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 53 STRATEGIC REVIEW MANAGEMENT REPORT TRANSPARENCY REPORT FINANCIAL STATEMENTS

Statutory auditor’s report on the financial statements FOR THE YEAR ENDED DECEMBER 31, 2019

TO THE SACEM GENERAL These assessments were made in the • The note “Element 8 – financial 5. Responsibilities of management As specified by article L.823-10-1 of the • it assesses the appropriateness of ASSEMBLY context of our audit of the annual commitments” in the annex mentions and those charged with governance French Commercial Code, our mission Management’s application of the financial statements taken as a whole, end-of-career payments to employees in relation to the annual accounts of certification of the accounts does going concern accounting policy 1. Opinion prepared in accordance with the amounting to €15.4 million as of Management is responsible for the not include guaranteeing the viability and, depending on the information In compliance with the assignment conditions described above, and in the 31 December 2019 and lays out the preparation of financial statements or the quality of the management of collected, whether or not there is entrusted to me by your shareholders’ context of the formation of our audit methods of the evaluation of this that present a true and fair view in your society. any significant uncertainty related to meeting, we have audited the opinion expressed above. We do not commitment. Our work consisted of accordance with the accounting rules events or circumstances that could call accompanying SACEM financial express an opinion on individual items in examining the data used, assessing and principles applicable in France and Within the framework of an audit carried into question the society’s ability to statements for the year ended these financial statements. the assumptions made and verifying for implementing the internal control out in accordance with the professional continue as a going concern. This December 31, 2019. These financial that the aforementioned note to the procedures it deems necessary to practice standards applicable in France, assessment is based on information statements were approved by the Board Your society, as a collective annex provides adequate information. prepare financial statements that are the Statutory Auditors exercise their gathered up to the date of its report, of Directors on 16 April 2020 on the basis • copyright management organisation, In general, we have verified the free from material misstatement, professional judgment throughout it being nevertheless recalled that of the information available at that date, administers these rights within the appropriateness of these estimates. whether due to fraud or error. the audit. subsequent circumstances or events in the context of the evolving health framework of legal and voluntary In preparing the annual accounts, it is could jeopardise the continuity of crisis linked to Covid-19. In our opinion, management. To this end, it collects 4. Verification of the management the responsibility of the management to Furthermore: operations. If the auditor concludes the financial statements give a true and from users the royalties relating to the report and other documents sent assess the company’s ability to continue that there is a material uncertainty, fair view of the financial position and exploitation of works due to rights to the members as a going concern, to present in these The auditor identifies and assesses the he or she draws the attention of the assets and liabilities of the society as of • holders, in particular its members, In accordance with professional accounts, where appropriate, the risks of material misstatement of the readers of his or her report to the December 31, 2019 and of the results of and to other collective management standards applicable in France, we also necessary information relating to the financial statements, whether due to information provided in the annual its operations for the year then ended in organisations, to which it applies performed the specific verifications ability to continue as a going concern fraud or error, defines and performs accounts about that uncertainty or, accordance with the accounting rules deductions to cover its management, required by law. and to apply the appropriate accounting audit procedures to address those if that information is not provided or and principles applicable in France. social, cultural and educational costs. policy, unless the company is to be risks, and obtains audit evidence that is not relevant, he or she writes a As part of our assessments of the We have nothing to report with wound up or cease trading. it considers sufficient and appropriate qualified certification or a refusal 2. Basis for the opinion accounting treatment of these respect to the fair presentation and to provide a basis for its opinion. to certify. Audit framework transactions, we verified the the conformity with the financial The annual financial statements were The risk of not detecting a material We conducted our audit in accordance • it assesses the overall presentation appropriateness of the accounting statements of the information given in approved by your Board of Directors misstatement due to fraud is higher with professional standards applicable of the annual accounts and evaluates principles applied, particularly with the management report of the Manager on April 16, 2020. than the risk of not detecting a in France. whether the annual accounts reflect reference to Article 621-11 of the dated April 16, 2020 and in the other material misstatement due to error the underlying operations and events general chart of accounts relating documents addressed to the members 6. Responsibilities of the statutory because fraud may involve collusion, We believe that the information we have in such a way as to give a true and to the accounting treatment of with respect to the financial position and auditor in relation to the audit of the falsification, willful omission, collected is sufficient and appropriate to fair view. these transactions in accordance the financial statements. With respect to annual accounts misrepresentation or circumvention provide a basis for our opinion. with Article L.324-9 of the French events that occurred and information It is our responsibility to report on the of internal controls. Paris, April 25, 2020 Intellectual Property Code, and known subsequent to the closing date financial statements. Our objective is to Our responsibilities under these • It seeks an understanding of internal we ensured that they were of the financial statements relating obtain reasonable assurance that the standards are set out in the section controls relevant to the audit in order French original signed by correctly applied. to the effects of the Covid-19 crisis, financial statements taken as a whole “Auditor’s Responsibilities Relating to to design audit procedures that are management has informed us that are free from material misstatement. the Audit of the Financial Statements” appropriate in the circumstances, but Didier KLING The first paragraph of the note they will be reported to the General of this report. • not for the purpose of expressing an The Statutory auditor CRCC of Paris “Item 1 – Accounting rules and Meeting called to approve the Reasonable assurance represents a opinion on the effectiveness of methods” in section “III – Post balance financial statements. high level of assurance, but does not Independence internal controls. This is a free translation into English sheet events” of the notes to the guarantee that an audit conducted in We conducted our audit in accordance it assesses the appropriateness of the of the Statutory Auditors’ certificate financial statements sets out the It should be noted that our verifications accordance with professional standards • with the independence rules applicable accounting methods used and the on the information provided for in 1°, methods for determining certain relating to the transparency report of practice will consistently detect any to us for the period from January 1, 2019 reasonableness of the accounting 7° to 10° of II and III of Article R. 321-14 financial income when they are referred to in Article L326-1 of the material misstatement. Misstatements to the date of issuance of our report and, estimates made by management, as of the French Intellectual Property subject to market conditions. French Intellectual Property Code and may arise from fraud or error and in particular, we did not provide any well as the information about them Code communicated in the annual Our work consisted of reviewing addressed to the members are the are considered material when it is services prohibited by the Code of Ethics provided in the financial statements. transparency report provided for in the management’s assessment of subject of a certificate drawn up reasonable to expect that they could, of the Statutory Auditors. Article L. 326-1 of the aforementioned the criteria for the implementation, pursuant to the provisions of Articles individually or in the aggregate, code, issued in French and it is provided the associated calculations, and to L.326-8 and R.321-14 IV of said code, influence the economic decisions that 3. Justification of the assessments solely for the convenience of English- verify the appropriateness of the which is separate from this report. users of the accounts take on the basis In accordance with the requirements speaking users. This report should be accounting treatment and the of the accounts. of Articles L.823-9 and R.823-7 of the read in conjunction with, and construed information provided in the appendix. French Commercial Code relating to the in accordance with, French law and justification of our assessments, we bring professional auditing standards to your attention the following matters applicable in France. which, in our professional judgment, were of major importance for the audit Sacem of the annual financial statements for 225, Avenue Charles de Gaulle the year. 92521 NEUILLY SUR SEINE

54 SACEM ANNUAL REPORT AND ACCOUNTS 2019 SACEM ANNUAL REPORT AND ACCOUNTS 2019 55 Glossary Credits

Definition Contents page: Oxmo Puccino, credit: Nefis Dhab; L’Impératrice, credit: Lionel Flusin; Polo & Pan, credit: Barrere & Simon; Dahae Boo, credit: all rights reserved; Aya Nakamura, credit: all rights reserved; Blick Bassy, credit: Justice Mukheli ADAGP French society of Authors of Visual Arts ADAMI Collective management organisation for the rights of performers AFDAS Training organisation for songwriters and performers Page 2–3: Oxmo Puccino, credit: Nefis Dhab AGESSA Authors’ Social Security Management Association Page 4–5: Polo & Pan, credit: Barrere & Simon ANC French Accounting Standards Board Page 6–7: Aya Nakamura, credit: all rights reserved API Application Programming Interface Page 8–9: L’Impératrice, credit: Lionel Flusin Armonia First pan-European hub for licensing online services Page 10: Bruno Lion, credit: Marc Chesneau BIEM International organisation representing mechanical rights societies Page 12: Jean-Noël Tronc, credit: Éric Garault CISAC International Confederation of Societies of Authors and Composers Page 14–15: concert crowd: IStock CMO Collective Management Organisation Page 16–17: anonymous musicians, credit: Henri Vogt; Sacem Twitter; anonymous musicians, credit: Dmitry Berkut CPI French Intellectual Property Code Page 18–19: Paul Cohen Scali, credit: Marc Chesneau; Pierre Chépélov, credit: Guillaume Bounaud 2017; Dahae Boo, credit: all rights Copie France Collective management society that collects private copying levy reserved; Benjamin Garzia, credit: Capucine de Chocqueuse; Thomas Lacôte, credit: Caroline Doutre; Yves Chauris, credit: DGA Directors Guild of America Luc Hossepied DSP Digital Service Provider Page 20: Alain Souchon, credit: Nicolas Krief; Clara Luciani, credit: Fiona Torre; Christian Vander, credit: Jean-Baptiste Millot; Blick FACF Franco-American Cultural Fund Bassy, credit: Nicolas Krief; Oxmo Puccino, credit: Nicolas Krief; Christophe Julien, credit: Nicolas Krief; Dany Boon, credit: François Darmigny; Ben Mazue, credit: Nicolas Krief; DJ Snake, credit: all rights reserved; Keren Ann, credit: Amit Israeli; Jean Fauque, credit: FCM Musical Creation Fund Nicolas Krief; Caravan Palace, credit: Florent Drillon; Bernard Gonner, credit: Nicolas Krief; Alain Schneider, credit: Nicolas Krief; General rights Authors' rights collected in France by the Sacem regional network (concerts, shows, background music, Fabien Cali, credit: Nicolas Krief; Florentine Mulsant, credit: Nicolas Krief; Henri Belolo, personal collection, - Scorpio Music, Lady nightclubs, cinemas, etc) Gaga, Anthony Rossomando, Mark Ronson, Andrew Wyatt, credit: Lester Cohen; Johnny Hallyday, crédit: Cyril Moreau GESAC European Grouping of Societies of Authors and Composers Page 21: Céline Garcia, credit: Sarah Bastin; Cleo T, credit: Fabian Albertini; Robi, credit: Marikel Lahana; The Blind Suns, credit: GDPR General Data Protection Regulation Philippe Lecourtier; The Rodeo, credit: Daguin Giamarchi; Clothilde Chalot, credit: Florent Drillon; Bis, credit: Allain Huchet IFPI International Federation of the Phonographic Industry Page 22: Board of directors, credit: Christian Baron, Marc Chesneau, Lionel Pages IRCEC Supplementary pension institution for education and creation Page 25: Blick Bassy, credit: Justice Mukheli MPAA Motion Picture Association of America Page 26: Youn Sun Nah, credit: Sung Yull Nah MPA Motion Picture Association Page 27: PNL, credit: Tcrvts/Skeeva NPVR Network Personal Video Recorder Page 29: Coeur de Pirate, credit: Étienne Denis; Anitta, credit: Isaac Brekken; Keren Ann, credit: Amit Israëli; Sandra Nankoma, Private Copying Private Copying is a system which allows private individuals to copy works for their own private use, while credit: Guilio Molfase; Sama, credit: Renaud Bouchez; Anggun, credit: Darius Salimi remunerating creators Page 31: Benjamin Garzia, credit: Capucine de Chocqueuse RAAP Regime for professional artists and authors Page 32: Caravan Palace, credit: Florent Drillon RAES Sacem Mutual Assistance Allowance Scheme Page 33: Florentine Mulsant, credit: Nicolas Krief RACL Regime for lyrical authors and composers Page 34: Moonlight Benjamin, credit: Nöt SACD French Society of Dramatic Authors and Composers Page 36–37: concert crowd: IStock SCAM French Civil Society of Multimedia Authors SCPP Society for the collection and distribution of recorded-music producers SDRM French Collecting Society for Mechanical Reproduction Rights for Authors, Composers and Publishers SPEDIDAM Society for the collection and distribution of artists' and performers' rights SPPF Society for the collection and distribution of independent recorded-music producers SVoD Subscription video on demand (SVoD) refers to a service that gives users unlimited access to a wide range of programmes for a monthly flat rate VoD Video-On-Demand, which allows consumers to select and watch the video content they want, when and where they want WGA Writers Guild of America WGAW Writers Guild of America West

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