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2020 ASCAP Annual Report

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2020 ASCAP Annual Report BILLIE EILISH PERFORMS DURING THE 62ND ANNUAL GRAMMY AWARDS Photo by Emma McIntyre/Getty Images for The Recording Academy WE ARE… grateful to serve our family of songwriters, composers and music publishers so they can keep creating the music the world needs now. ASCAP is 100% committed to protecting the value of our members’ music. We give them the tools, support and guidance they need to grow their careers, and the vital connections they need to succeed. USHER PERFORMS DURING THE 62ND ANNUAL GRAMMY AWARDS Photo by Kevin Mazur/Getty Images for The Recording Academy 2020 ANNUAL REPORT 2 A MESSAGE FROM ASCAP PRESIDENT AND CHAIRMAN OF THE BOARD PAUL WILLIAMS I hope all of you and your loved ones are staying but innovated and optimized to help our writers and healthy, finding positive ways to cope and seeing publishers. In fact, in 2020 ASCAP executed not one the light at the end of this long tunnel. We all are but ten distributions to our members entirely re- still facing hard challenges, as individuals, as fami- motely for the first time in ASCAP history. lies, as a community and as a country. ASCAP is its members – a gloriously diverse family Yet, the eternal optimist in me sees great hope, of music creators, and in 2020 we came together change and opportunities as we rise above this dark like never before to make a genuine impact. We chapter. That’s because I believe in you and the power took strong action to support our community, fos- of our collective. As music creators, you are instru- ter innovation, educate our members, protect equi- ments of healing and your music is giving solace, in- ty in the workplace, boost participation in the 2020 spiration and strength to the world. Thanks to you, election and create a lasting, much-needed trans- we are more connected to each other and committed formation in how we treat each other. to a better future than ever before. We fought hard in Congress for COVID-19 relief 2020 showed just how essential ASCAP’s work is to measures that would help our members, made a the lives of our members. And I am so impressed by significant MusiCares donation and launched the the extraordinary efforts the ASCAP team has made Music Unites Us website to share vital resources to to make up for revenues lost due to the pandemic help our members weather the pandemic. and to deliver the financial security and support mu- We even developed creative new ways to celebrate sic creators need to survive the crisis of our lifetime. our members whose music met this challenging I am in awe of how ASCAP CEO Beth Matthews and moment and succeeded. Congratulations to all the ASCAP team – without missing a beat! – quickly of you who topped the charts, made history and pivoted to remote working and didn’t just respond, shaped our culture in numerous ways. (Continued next page) 2020 ANNUAL REPORT 3 CYNTHIA ERIVO (PRS), winner of the 2020 BERNIE TAUPIN, winner of the 2020 Oscar MICHAEL R. JACKSON, winner of the 2020 ANTHONY DAVIS, winner of the 2020 NATALIA LAFOURCADE (SACM), winner of World Soundtrack Award for Best Original for Best Original Song for “(I’m Gonna) Love Pulitzer Prize in Drama for A Strange Loop Pulitzer Prize in Music for The Central three 2020 Latin Grammys for Album of Song for “Stand Up” from Harriet Me Again” Park Five the Year, Best Alternative Song and Best Regional Song As we turned the page on 2020, we received im- benefits to music creators and licensees alike, our issues moving forward. And it is only possible, portant news that affects all of our songwriter, that market-based solutions are the answer – not thanks to all of you who took action and poured composer and music publisher members. After compulsory licensing, and that songwriters must your blood, sweat and tears into sharing your ex- nearly two years since the US Department of be paid fairly. This is what we have been saying all periences with the DOJ during this process. You Justice (DOJ) first launched a formal review of along. This is progress. made a difference for every single songwriter and the ASCAP and BMI consent decrees, composer in America. the DOJ officially closed its review As we usher in a new administration and a and announced it would take no action new Congress in Washington, DC, ASCAP to modify or terminate the decrees at WE TOOK STRONG ACTION TO SUPPORT OUR COMMUNITY, will always be in your corner – leading the this time. FOSTER INNOVATION, EDUCATE OUR MEMBERS, PROTECT way, celebrating your music, advocating ASCAP has long advocated for modern- EQUITY IN THE WORKPLACE, BOOST PARTICIPATION IN THE for your rights, and making sure your voice izing our 80-year-old consent decree. is heard. Our commitment to defending the 2020 ELECTION AND CREATE A LASTING, MUCH-NEEDED And while we were disappointed that value of your music will never waiver. no action was taken, we are encour- TRANSFORMATION IN HOW WE TREAT EACH OTHER. Remember, music is a shortcut to emotion. aged to see the DOJ announcement ac- Freedom to feel…and to heal. Today we knowledge some of the following truths: need your music more than ever. that songwriters are the backbone of the music These acknowledgements are enormously import- industry, that collective licensing provides great ant in terms of how the government approaches Thank you for being part of the ASCAP family. 2020 ANNUAL REPORT 4 STRENGTH + RESILIENCE A MESSAGE FROM ASCAP CEO BETH MATTHEWS 2020 challenged all of us unlike any other year in modern During a time period in which the global pandemic di- history. It also defined ASCAP’s dedication to our mem- rectly affected revenues for many companies that license bers. That meant strengthening our commitment to our music, ASCAP grew royalties for its songwriter, compos- mission to serve our songwriters, composers and music er and publisher members by $29 million, or 2.5%, for a publishers by taking every step necessary to secure their total of $1.213 billion available for distributions. Domestic livelihoods and careers. Inspired by our members each distributions from ASCAP-licensed and administered per- and every day, the ASCAP team proved that innovation, formances hit $891 million, an increase of $22 million and efficiency and progress really can be escalated in a crisis. foreign distributions totaled $322 million. As a reminder, ASCAP operates on a not-for-profit basis and distributes I am pleased to say that ASCAP overcame the unprece- all revenues collected, less operating expenses. dented headwinds of 2020 to continue its record-break- ing revenue streak, collecting more than $1.327 billion in How did we accomplish such progress in the midst of a revenues, a $53 million increase over 2019. global pandemic? It helps to have the greatest communi- ty of music creators in the world. It also helps to have the 2020 marked the sixth year of ASCAP’s strategic plan to greatest team of talented, hard-working and passionate transform its business and grow revenues. During the exe- employees committed to the mission of ASCAP, which is cution of the strategic plan from 2015 through 2020, ASCAP to protect and advocate for our members. Together, we exceeded performance goals and drove ASCAP revenues harnessed strength and resilience to overcome the many to a 6% compound annual growth rate (CAGR) and ASCAP challenges this crisis has thrown at us. distributions to a 7% compound annual growth rate. When COVID-19 first hit last March, ASCAP seamless- 2020 domestic and foreign revenues both saw significant ly pivoted to remote work and gave our employees the increases. As compared to 2019, foreign revenue rose by tools, support and flexibility to adjust their lives to contin- 9% to $358 million. Domestic revenue for 2020 was up ue to deliver excellent service for ASCAP members. by 2.5% at $969 million, an increase of $24 million from 2019. The growth of domestic revenue was driven in part We quickly made operational changes and expense cuts by gains of 28% in audio streaming revenue and 8% in au- to mitigate the pandemic’s impact. We optimized and ag- dio/visual, matching shifting music consumption trends gressively executed our collection efforts. As so many of during the pandemic. ASCAP’s strategy to mitigate the our valued licensees closed their businesses or suffered impact of COVID-19 helped to offset uncontrollable de- revenue declines, we finalized important deals with ma- clines in other sectors, including a 30% decline in reve- jor licensees that were positively impacted by consumer nues from businesses that were shut down or at reduced behavior during the pandemic. We did this to make up capacity during the last three quarters of 2020, such for revenue loss in categories that were outside of our as live concerts and events, music venues, bars, clubs, control. In addition to the many multi-year deals already restaurants, retail stores, hotels and more. in place for 2020, we closed or renewed over 130 deals in categories such as Cable, Broadcast TV, radio and Au- dio/Visual and Audio Streaming. (Continued next page) 2020 ANNUAL REPORT 5 SIX-YEAR PLAN 2020 = $53 MILLION REVENUES OVER 2019 .2 .2B BILLION .22B .B .0B CAGR* +6% .0B 2015-2020 20 20 20 20 20 2020 *Compound Annual Growth Rate We accelerated our distributions, including our Symphony, and BMI to display more detailed, authoritative and con- 120 countries around the world. Recital and Education royalties, and adjusted our financial sistent copyright ownership data for performing rights for management protocols to stabilize distributions and give more than 20 million songs in our combined repertories ASCAP’s seven traditional red carpet award shows rec- our members more financial security going forward.
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