MUSIC CONNECTS US 2016 Annual Report 3 Message from President 4 Message from CEO 6 The ASCAP Board 9 Advocacy 11 Innovation MISSION 13 Membership 14 Success WE ARE THE WORLD LEADER in performance royalties, advocacy and service for songwriters, composers 16 Celebration and music publishers. Our mission is to ensure that our music 17 Commitment creator members can thrive alongside the businesses who use 19 Communication our music, so that together, we can touch the lives of billions. 20 Licensing ASCAP 2 2016 ANNUAL REPORT OME WOULD HAVE US Our work, our music, is overregulated believe that we are living in and undervalued in the modern music a divided world. That there marketplace due to outdated and are insurmountable barriers overreaching federal regulations that between us — race, religion, govern how we license our work. ideology, wealth, nationality We are working hard to improve the and who you choose to love. system. Each year we hold a “Stand with Songwriters, composers, lyricists Songwriters” Advocacy Day on Capitol Hill Sand publishers know the truth. We know and meet with policymakers on various that no matter who we are or where we points on the political spectrum to urge come from, we are not so different from them to support legislation that provides one another. We are all human and share reasonable, free market reforms for the new universal experiences. music economy. What we do, creating music — wheth er We also hold grassroots meetings we write songs, scores, symphonies, lyrics — around the country with legislators and speaks to our shared experience and what it ASCAP members from their districts. means to be human. Music connects us in a And we support our champions in A message way that no other art form can. As songwriters Congress through our PAC — the ASCAP from ASCAP and composers, our music connects what is Legislative Fund for the Arts. in our hearts to potentially millions of hearts Last year, ASCAP members held President and around the world. Music publishers create op­ more than 40 meetings with members of portunities for that music to thrive and endure. Congress and their staff to discuss our Chairman That’s a powerful thing. issues. In addition, we had the support As music creators, we hold that power of thousands of music creators who Paul Williams within us. Each one of us can do amazing attended the 2016 ASCAP “I Create things. As an organization of music Music” EXPO and joined our advocacy creators, ASCAP can do amazing things. campaign. Thousands more wrote to Because ASCAP connects our members to their representatives in support of the livelihoods, advocacy, community, support Songwriter Equity Act. and professional development to help them With a new Congress, a new grow their careers. administration and shifting political ASCAP is the only US performing rights priorities, we need to keep sending a loud organization owned and operated by and clear message that reforming the songwriters, composers and publishers. music licensing system matters to everyone The ASCAP Board of Directors is elected who loves music. by and from our membership and that is no ASCAP just experienced an small thing. That sets us apart. Combining incredibly successful year. Our strong unique perspectives and yes, even financial results matter for each and differences, we work together on common every songwriter, composer and music goals and make decisions that achieve publisher who depends on the important the best outcome for ALL of us — our work ASCAP does every day. I am both collective community. proud and grateful for ASCAP CEO Beth ASCAP exists to ensure that those of us Matthews and her exceptional team for who create music and those who use our continually improving our operations music can both benefit from this beautiful to grow royalties and support the partnership. Our democratic model, professional development of songwriters combined with a pioneering spirit and and composers. United with a truly relentless innovation, has withstood the dedicated and visionary Board of test of time and remains the best way going Directors, ASCAP is building a stronger forward to preserve the value of music future for all members, from those just and efficiently deliver to our customers starting out to those whose music is an incredible repertory that is unrivaled beloved around the world. around the world. As an organization of music creators, we are best at communicating to our leaders in Washington why reforming our music licensing system is so vital to both our nation’s well­being and to our economy. ASCAP 3 2016 ANNUAL REPORT AM THRILLED TO REPORT THAT IN 2016 ASCAP ACHIEVED HISTORIC high financial results with record-breaking revenues of $1.059 billion. In a 5.6% increase over the previous year, we distributed $918 million to our 600,000 song- writer, composer and music publisher members. 2016 was the second year of our six-year strategic transformation plan to secure the future for ASCAP members in the rapidly changing music world. Revenues from ASCAP’s licensing efforts in the US alone grew nearly 6% in 2016 to $759 million, up $42.2 million over 2015, fueled primarily by a 41% increase in revenues from Iaudio streaming services as well as higher revenues from satellite radio and General Licens- ees, such as bars, clubs, restaurants, hotels, live concerts and more. Foreign revenues totaled $300 million, up $1.5 million year over year in US dollars. AS- CAP’s international revenues would have exceeded last year’s performance by $12.9 million A message had it not been for the strengthening US dollar which resulted in lower foreign exchange rates. from ASCAP Domestic distributions of $631 million from ASCAP-licensed and administered CEO Beth performances in the US grew nearly 10%, up $55.5 million over 2015. ASCAP operates on a not-for-profit basis and delivers 88 cents of every dollar Matthews collected back to members for performances of their music. With a 2016 operating expense ratio of 12%, ASCAP remains among the most efficient Performance Rights Organizations in the world, while transforming to stay ahead of massive changes in the music industry. ASCAP’s strategic investments to grow General Licensing revenues continue to pay off for members with a 7.2% annual growth rate over the past four years. ASCAP licensed over 18,000 new businesses in 2016 and also instituted a number of innovations $45M TOTAL 2016 REVENUE Revenue Growth Increase $1,014 +4% $1,059 $ $298 +0.9% $300 1.059 $716 +6% $759 Foreign 2015 Amounts noted 2016 Domestic BILLION in $MM 2016 DOMESTIC LICENSING REVENUE $ 759 MILLION $42.2 million from 2015 ASCAP 4 2016 ANNUAL REPORT A message from ASCAP CEO Beth Matthews (continued) Distribution $51M Growth Increase +5.6% $867 $918 $287 $294 -2% $573 $631 +8% Foreign ¢ OF EVERY 88DOLLAR ASCAP COLLECTS goes back to our songwriter, composer Amounts noted and music publisher members as royalties 2015 2016 Domestic and in $MM Administered 2016 DOMESTIC LICENSING DISTRIBUTIONS $ MILLION 631$55.5 million from 2015 in General Licensing, such as greater automation in plans that give employees more control while reducing reporting to drive compliance and create efficiencies ASCAP’s future cost base. that reduced our cost of new license acquisitions over I am deeply grateful to work with ASCAP’s the last three years by 50%. visionary, committed and highly knowledgeable ASCAP’s record high revenues and distributions in Board of Directors. They continue to anticipate 2016 are a testament to the amazing repertory of music changes on the hori zon and seek ways to maximize we are privileged to represent, and to our investment in opportu nities for our members in an ever-evolving innovations that enable us to continue to grow revenues, landscape. I am also fortunate to have an executive leverage our scale and increase efficiencies in our leadership team with a wealth of experience from operations. ASCAP is committed to transforming and the music, digital and me dia sectors who have innovating to secure a healthy future for music creators transformed ASCAP into a modern, progressive and publishers. In 2016 alone, we processed over one organization that is built for growth, while trillion performances, welcomed 40,000 new members, continuing to be home to the world’s greatest and secured a steady stream of future royalties for music creators. our members by closing multi-year deals across major platforms, including satellite and terrestrial radio. ASCAP continues to strengthen its core operations. We entered into a new strategic and long-term data agreement with Nielsen to provide greater depth, transparency and reporting and tracking accuracy to members. ASCAP also modernized its employee benefits. We closed our outdated pension plan and moved towards smarter 401(k) and retirement savings ASCAP 5 2016 ANNUAL REPORT The ASCAP Board of Directors as of April 2017 The ASCAP Board of Directors as of April 2017 Hit songwriters Priscilla Renea and MoZella blow off a little steam after walking the halls on Capitol Hill ADVOCACY In 2016, thousands T THE ASCAP “I CREATE Advocacy Day on Capitol Hill. The of ASCAP members MUSIC” EXPO IN APRIL, event featured a delegation of from across the 2016, more than 1,300 ASCAP members, including Brian country joined songwriters, composers, McKnight, Monica, Savan Kotecha, Aproducers and publishers emailed MoZella, Brett James, Priscilla Renea, their voices to help change the their representatives in support of the Jennifer Higdon, Khari “Needlz” Cain, narrative for music Songwriter Equity Act and signed their Randy Goodrum and ASCAP Board creator rights in names to #StandWithSongwriters members Desmond Child, Dan Foliart, Washington DC. petition guitars. Among the members Wayland Holyfield, Dean Kay, James who signed the guitars were Erica M.