Annual Report 2014 and Accounts My Sacem

Sacem Annual Report and Accounts 2014 Sacem is one of the world’s leading cultural and creative rights companies, collecting close to €1.3 billion, including €829.7m My Sacem from author’s rights, and distributing royalties protects to over 276,000 songwriters, composers and publishers around the world. adapts We play a core role in cultural and artistic development within France and internationally, inspires investing over €52m annually in the support of talent and creativity across all ages, activities and communities. Our mission is to protect and enhance the value of our members’ rights, and to inspire artistic creativity and support long-term cultural sustainability.

“ The Board of Directors has complete confidence in the ability of the Executive Board and the employees throughout Sacem to deliver on the Society’s objectives.”

Laurent Petitgirard Conductor and composer Chairman of the Board of Directors

Adapt Inspire Adapting to a changing Inspiring artistic and marketplace is key to our cultural creativity is of success, particularly in an critical importance in increasingly digital and ensuring a sustainable data-driven world. heritage, and is central to our responsibilities.

Protect Protecting our members’ rights is at the heart of our activities, and we work hard to maximise value and accuracy. Welcome to our 2014 Annual Report. If you would like to learn more about Sacem, please visit our website at: www.sacem.fr

Strategic overview

A summary of our 02 My Sacem activities, approach and 08 Sacem at a glance achievements, the role we play in society, and 10 Highlights of 2014 how our business model 16 Chief Executive’s Q&A and strategy enable us to deliver successfully 18 Business model for our members.

My Sacem 02

Management report

A detailed report and 20 General information analysis of our operations, 32 Economic position markets and governance, and trends affecting future 40 Future development development.

Chief Executive’s Q&A 16

Financial statements

The audited financial 41 Statutory auditor’s report ¤829.7m statements and 42 Income and expenses notes relating to our authors’ rights performance for the year statement – ¤444.1m: mandates ended 31 December 2014. 43 Balance sheet All together, we collected 45 Notes to the financial €1,273.7m in 2014. statements 46 Appendices

Our business model explained 18

ANNUAL REPORT 2014 | SACEM 01 “ Sacem is the Father The value of Christmas of creators... cooperatives without royalties Sacem is a private non profit we would have no company and operates as remuneration. Thank a cooperative. Songwriters, composers and publishers you to Sacem for come together and bring rewarding us for a job their works to Sacem that sometimes takes which then negotiates on their behalf with music several years.” users. Many creators have Pierre Henry no income other than the Composer, Electroacoustic music royalties collected by the collective society. 153,000 Members in France and throughout the world comprising 147,300 creators and 5,700 publishers. protectsMy Sacem Our core objective is to protect our members’ rights. We work hard to maximise returns, through sophisticated systems and transparent working practices.

“ Authors right gives life to our dreams... I am a proud member of Sacem.” Fred Rister Songwriter/composer Writing partner of David Guetta

02 SACEM | ANNUAL REPORT 2014 and aids. cultural programmes and social on Spent €52.6m

the world. the authors’ in societies of most international all the is –Sacem members including 18,530 foreign represented Nationalities 164 ofprogramme support. and have an ongoing in difficulty, publishers and to authors annually more thanmillion 30 euros development. We allocate their of stage every at of spectrum creators awide after looks which our model, strengthen and We to sustain aim of socialresponsibility. sense astrong has Sacem responsibility Social “Authors protection right is at particularly at atime when the heartthe ofSacem internet piracy puts the survival ofculturalsurvival and SACEM 03 2014 |SACEM REPORT ANNUAL or every publisher publisher every or “ President of Sacem President Publisher, Honorary DavoustGérard companies. with key 26and partnerships more than 12,000 members evolving. has It currently Sacem PLUS is constantly members. and expectations of Sacem todesigned the meet needs was exclusiveof advantages, PLUS,aprogramme Sacem PLUS Sacem our business our of sustainability the for are instrumental societies management collective size, its of regardless F artistic creativity creativity artistic Songwriter/composer . ” Angélique Kidjo Angélique

at risk.at ’ s focus,

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Financial statements Management report Strategic overview adaptsMy Sacem Our success depends on our ability to adapt. In our rapidly changing marketplace, we constantly invest in and develop our processes, systems and technology to ensure that we keep ahead.

“  In the digital age, the author’s rights are a guarantee of freedom for the composer that Sacem strongly promotes in Europe and in the world.”

Issam Krimi Jazz composer

251.6bn Downloads and streams processed by Sacem IT in 2014.

“ Google Play was the first digital service to conclude licenses with Armonia when we launched our service in Europe in 2012. As our business has grown rapidly the constructive relationship we have built between Armonia and its members - among them Sacem - is a benefit to creators, music consumers and the whole ecosystem.” Sami Valkonen Head of International Music Partnerships Google Play

04 SACEM | ANNUAL REPORT 2014 ight now we want to focus on our best best our on focus to want we now ight “ acem has been extremely supportive of of supportive extremely hasacem been “ R taking shape in the next months.” next the in shape taking be will hopefully that partnerships for further ideas interesting very some already are There synergy. this of potential the explore to like much very would and together well very work Bmat and Sacem feel –we project Armonia the in delivery Spotify Officer Executive Chief Ek Daniel Bmat Officer Executive Chief Alex Loscos S composers and songwriters with us.” with composers songwriters and for fairermusic economy stronger, a better, build to and service, music subscription biggest world’s the both build to publishersand helping in composers songwriters, talented supremely their of work the for and support, continued their Sacemfor thank like We to would health. to music industry the Spotify’s goal is return to understands and that launch, our since Spotify in countries. 33 12.5totalling works million works, American Latin and number of Anglo-American alarge as well as societies of well-knownrepertoires Itrepertoires. represents the large number of musical a for licences European pan- issuing for point delivery asingle provides It online services. musical for hub licence European is the leading Armonia Armonia

distribution systems. distribution its documentation and overhauling as well as music invoicing systems its online on strengthening working been has Sacem years two past For the world. the in territory every audiovisualcontent and in music which offers service coming fromany Internet which Sacem represents works concerning data to process able tois be ofOne the key challenges processing Data

ANNUAL REPORT 2014 05 |SACEM REPORT ANNUAL world. globalised in increasingly an development opportunities new creating and efficiency optimising its operational whilst and customers, members its for services royalties,enhance develop newboard technologies to on taken has Sacem technology Innovative

Financial statements Management report Strategic overview inspiresMy Sacem A critical part of our responsibility is to inspire creativity and performance. We have a strong programme of activity, creating opportunities for authors, artists and publishers to flourish.

“ Sacem is an integral partner in my journey as a composer.” Ibrahim Maalouf Jazz composer/songwriter

Investing in our French law requires that 25% of Private Copying levy cultural heritage to be dedicated to cultural Our unique business projects. We are able to model has resulted in support significantly in a 1, 6 3 8 wide range of national and Sacem being one of the Cultural projects supported most successful collective international cultural events by Sacem in 2014. societies in the world, and activities designed to and this in turn enables encourage and promote us to fulfil a role that is of creativity and expression. fundamental importance to the sustainability of our cultural heritage.

Gilberto Gil Singer/songwriter “ Sacem is a society which perfectly fulfills its mission with great professionalism.”

Pascaline Gineste Director of Legal and European Affairs

06 SACEMSACEM | | ANNUALANNUAL REPORTREPORT 20142014 acem collects my royalties royalties my collects acem “ Composer/songwriter Zaz S to live my dreams.” my live to opportunity the me gives and artist development is key.artist whose in role publishers, and producers for as well business awareness, as and performance of terms in artists for support direct include These activities. of initiativesrange and througha wide authors and artists emerging nurturing and supporting to dedicated we are creativity, at and Sacem and culture of future the Young key is to talent creative talent Developing young internationally. and Europe across France, within projects cultural of a wide through range talent express and develop their can artists and authors and emerging established environment in which both an byalike, providing artists and partners that consumers, benefits circle creates a virtuous This promoting talent. and nurturing in part our we play that critical is it culturalsustainable future, a to ensure order In all for creative future sustainable a Ensuring

future creators. build theof confidence development help and creative encouraging tocontribute strongly which concerts and workshops masterclasses, system encompassing the educational throughout and associations of partnerships programme have a well-established We creativity. and skills topeople develop their involves young encouraging programme sustainability our of A key part education and development Training,

SACEM 07 2014 |SACEM REPORT ANNUAL acem is an essential “ ¤2.6m voluntary aids). voluntary ¤2.6m Private Copying and (¤18.4mactivities 25% To cultural support €21m Contemporary music composer Contemporary Escaich Thierry S and promotes. and protects it which engine for creation,

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Financial statements Management report Strategic overview Sacem at a glance in 2014 We are a world leader in a rapidly evolving marketplace, committed to maximising the value of our members’ rights and to delivering the best returns. We do this through constant process and systems innovation, and by implementing our unique business model which enables us to collect and distribute efficiently and fairly.

¤829.7m 2m authors’ rights Works on which royalties were distributed in 2014. – ¤444.1m: mandates All together, we collected €1,273.7m in 2014.

16.9% Key facts 716,000 Sacem’s net cost-to-collections Contracts completed by Sacem with ratio. almost 500,000 customers including audiovisual media such as TV and radio, internet service providers, telecoms broadcasters, streaming and downloading platforms, theatres, local authorities, associations, cafés, restaurants, shops, clubs and cinemas. €52.6m 90m Invested across a range of International works and 2 million cultural and social activities songwriters, composers during the year. and publishers represented by Sacem.

08 SACEM | ANNUAL REPORT 2014 Guadeloupe Martinique Reunion equity and traceability.equity commitment to transparency, our reflects and DNA our of part is accuracy of degree This the actual exploitation of works. to collected royalties of 80% and distribute royalties, matching and accurately efficiently collect to us enable systems unique Our efficiency and Accuracy and online platforms. fromlargely evolving digital proliferation of data resulting the manage and predict to ability the us giving market, innovationtechnological in our of forefront the at We are Innovation

us different What makes SACEM 09 2014 |SACEM REPORT ANNUAL regional hubs and 70 local offices. 70 local and hubs regional internationally comprising six ground throughout France and withassets, teams on the valuable most our of one is Our extensive regionalnetwork network strong A levels our throughout society. at all and performance creativity inspire to designed activity of programme astrong have we and beliefs, our of heart the at is cultural sustainability Supporting future the Inspiring Monaco Lebanon Luxembourg

Financial statements Management report Strategic overview Highlights of 2014 This has been a year of investment and successful development, as we continue to maximise the value of our members’ rights.

January February

Daft Punk’s historic success Launch of Sacem Université Agreement with Wixen Music At the 56th Grammy Awards Sacem launched its educational Wixen Music has granted ceremony in Los Angeles, platform, Sacem Université, with Sacem a contract to manage Daft Punk won five awards, an inaugural conference entitled the repertoires of Wixen Music including album of the ‘Music, Science and Health’. Its Publishing, Inc. and Sharandall year and record of the mission is to offer training and Music on the internet and for year for Random Access raise awareness about culture mobile platforms. According to Memories, an album which and its values, the issue of this agreement, which has been demonstrates the talent royalties, the creative and artistic in effect since the second quarter of the two songwriters professions and how the cultural of 2014, Sacem will deliver the and composers, Thomas and creative industries and licences and administer the Bangalter and Guy-Manuel royalty collection management rights held and/or controlled by de Homem-Christo, both operate, by implementing a multi- Wixen Music Publishing, Inc. and members of Sacem. Antoine disciplinary approach which Sharandall Music, which notably Chabert was also awarded covers historical, scientific, include The Doors, Santana, The best sound engineer for economic and legal aspects. Black Keys, Tom Petty, Journey Random Access Memories, and Rage Against The Machine. and the French DJ Cédric A forum for open debates, Gervais won the award for exchanges and sharing, Sacem best remix for Summertime Université is for all audiences, Sadness by Lana Del Rey. and is based on a collaborative, In addition, the Gypsy Kings partnership-based approach were awarded best world with an international dimension. New European Union Directive music album. In 2014, Sacem Université for multi-territorial licences worked with a significant number The European Union adopted New online submission of media and professional a Directive on collective rights service for members partners at two conferences, and management and on the granting We continue to develop signed long-term partnerships of multi-territorial licences for services for our members. with Ina Expert and France online uses of music works. Songwriters and publishers Culture Plus. The Directive aims to ensure can now file their works that rights holders have an online – a service for which influence on the management there is very strong demand of their rights and also aims to from members. They can help collective management also access detailed reports organisations to operate more matching TV, radio, DSP and effectively on the basis of the background music usage to standards set by the European royalty payments. Union. The new provisions will also facilitate the granting of multi-territorial licensing by rights collective societies for the use of music on the internet. The Directive must be adopted by Member States before 10 April 2016.

10 SACEM | ANNUAL REPORT 2014 February visit morepleasant music makestheircustomer’s 72% ofbusinessmanagersthink Background music have musicinhairdressers 90% ofcustomerspreferto Music inhairdressers have musicincafés 85% ofcustomerspreferto Music incafés 90% 85% 72% to musicwhilstclothesshopping 90% ofcustomersenjoylistening Music inclothingstores listen tomusicwhileshopping supermarkets finditpleasantto 70% ofcustomersin Music insupermarkets puts theminagoodmood Of employeesfindthatmusic Music intheworkplace 70% 96% 90% and homeware stores. supermarkets cafés, restaurants, as clothing shops, hairdressers, music in commercial outlets such value the significant of confirmed withcoupled a study, field on music. The second survey, source of informationprimary the still are media television and without it. Audiovisual, radio and 75% say they couldn’t do to music, listen 99% people: of the livesthe heart of French revealedsurvey that music is at first The Média. Mood and artists/musicians) representing companies and Adami/Spedidam record Scpp representing Sppf/ members four its for remuneration rights/equitable managing neighbouring society French with (the Spré partnership were commissioned by Sacem in surveys Two MediaCT Ipsos study field and survey sales: of point in music of value the music, and French The SACEM 11 2014 |SACEM REPORT ANNUAL and newspapers (33%). television(59%), (46%) media traditional – radio 75% through so do these of and news, music about up-to-date like to keep people French ten in Nine French. the for music of source still the primary are audiovisual media that reveals study The 1st

Financial statements Management report Strategic overview Highlights of 2014 continued

April June August

1,425 festivals under Agreement renewal Strengthening the Publishers the microscope with FREE Assistance Programme At the Printemps de Bourges In June, we renewed our We launched this initiative festival, Sacem, Irma agreement with FREE, five years ago as a (Information and Resources one of the leading French programme designed Centre for Popular Music) internet telecommunications to help publishers support and CNV (National Song operators, to cover the the development of Variety and Jazz Centre) distribution of its television authors and composers, presented a barometric services on ADSL and fibre and to showcase Sacem’s survey on the festival networks. repertoire. We have now phenomenon, including completely upgraded and genres, seasons, territories expanded it, making it easier and ages. In total, there for publishers to access are currently 1,425 music and implement the system, festivals providing a rich and and have increased the diverse cultural landscape budget from ¤300,000 to throughout France. During ¤1.2 million. the year, Sacem was represented at a large number of festivals through its cultural activities, and July organised a large number of industry meetings during the festivals. Agreement with Netflix Signed in July in preparation for Netflix’s launch in France in September, this agreement focuses on payments to our members whose repertoire features in the audiovisual works broadcast by Netflix. The agreement reflects our ongoing commitment to protecting and defending the interests of our members, as well as our ability to anticipate the arrival of new digital players in the market.

12 SACEM | ANNUAL REPORT 2014 e at ole appreciate our partnership with with partnership our appreciate ole e at “ W in today’s new environment.” new today’s in rights authors’ of value the maximize to ways to continuing to forward look We aPRO. as to lead vision their and transparency their Sacem, Ole Majorly Indie Majorly Ole Corporate and Development Affairs President, Vice Godard Gilles

digital environment. in the fair remuneration receive thatensure authors to keen is worldwide users active million 50 than more grow successfully and with – is continuing toservice music subscription biggest world’s –the Ek by Daniel Swedish company founded with Spotify.contract The develop, we renewed our continues toAs streaming Renewal contract of Spotify September collaborate with them on innovative new new innovative on them with collaborate

YouTube. and Play, Beatport Deezer, online such as Google services with multinational agreements signed hasalready Armonia in Europe, publishers andcomposers music songwriters, of societies to all Open licenses. pan-European shop that aims to encourage isSiae, a Armonia one-stop and Sgae 2013in by Sacem, licences in the world. Created for international portal biggest the joined Armonia, publishers, for and music authors society the cooperative Swiss Suisa, Suisa joins Armonia royalties. of protection developing for strategies the of tomorrow toin participate theexperts legal encourage to aims and technologies, information and communication and/or rights property in intellectual specialising prize is intended for students The Authors’ (RIDA). Rights the Review International of with Prize in partnership the Authors’ Sacem Rights UniversitéSacem launched PrizeRights ofLaunch the Authors’ October

SACEM 13 2014 |SACEM REPORT ANNUAL mobile network. overits television the services SFR to cover the of distribution we a signed new with contract addition, In offers. TV PC its as well as networks fibre and ADSL on services television its of SFR to cover the distribution with the contracts operator Renewal of agreements Agreements with SFR

Financial statements Management report Strategic overview Highlights of 2014 continued

November

STÉPHANE MOUCHA / GRAND PRIX DE LA MUSIQUE POUR L’IMAGE

AYO / GRAND PRIX JOHNNY FÉLOCHE / JEAN-PIERRE BUCOLO / DU RÉPERTOIRE SACEM HALLYDAY / PRIX FRANCIS LEMARQUE GRAND PRIX À L’EXPORT PRIX SPÉCIAL DE LA CHANSON FRANÇAISE, DE LA SACEM CRÉATEUR

BERNARD CAVANNA / GRAND PRIX DE LA MUSIQUE SYMPHONIQUE, CARRIÈRE

OSCAR BIANCHI / ROKIA TRAORÉ / GRAND PRIX DE LA MUSIQUE GRAND PRIX DES MUSIQUES DU MONDE SYMPHONIQUE, JEUNE COMPOSITEUR

IBRAHIM MAALOUF / “PRAYER IN C” GRAND PRIX DU JAZZ LILLY WOOD & THE PRICK / PRIX ROLF MARBOT DE LA CHANSON DE L’ANNÉE

BRUNO LION / MARTIN SOLVEIG / PASCAL OBISPO / ÉLIE SEMOUN / FRANÇOIS HANSS / PEERMUSIC GRAND PRIX GRAND PRIX GRAND PRIX DE L’HUMOUR GRAND PRIX GRAND PRIX DE L’ÉDITION DES MUSIQUES DE LA CHANSON FRANÇAISE, DE L’AUTEUR-RÉALISATEUR MUSICALE ÉLECTRONIQUES CRÉATEUR-INTERPRÈTE DE L’AUDIOVISUEL

Grands Prix award winners affiche_75x200_2015_V1.inddSacem 2 Grands Prix – 05/02/2015 14:28 rewarding talent Sacem Special Prize: JOHNNY HALLYDAY We are not only dedicated to Grand Prix for French music continuously refreshing our PASCAL OBISPO (creator-singer): repertoire and supporting current creativity and cultural Grand Prix for French music (creator): JEAN-PIERRE BUCOLO diversity, but we are equally committed to supporting Grand Prix Jazz: IBRAHIM MAALOUF creative development that Grand Prix for audiovisual FRANCOIS HANSS represents a significant author-director: contribution to our artistic and cultural heritage. Grand Prix for world music: ROKIA TRAORE Grand Prix of the Sacem repertoire AYO The Sacem Grands Prix for export: ceremony is one of the major annual cultural events in France. Grand Prix for humour: ELIE SEMOUN It recognises and honours the Francis Lemarque Prize: FELOCHE writers, directors, authors, composers, publishers and Grand Prix for music for image: STEPHANE MOUCHA performers who are members BRUNO LION – of Sacem. Grand Prix for musical publishing: PEERMUSIC They reflect the vitality of the Grand Prix for symphonic music BERNARD CAVANNA Francophone music scene, and (career): remind us that behind each work Grand Prix for symphonic music OSCAR BIANCHI there are authors, composers (young composer): and publishers who could not do their work without copyright. Grand Prix for electronic music: MARTIN SOLVEIG PRAYER IN C – LILLY Rolf Marbot Prize for song of the year: WOOD & THE PRICK

14 SACEM | ANNUAL REPORT 2014 November mobile network. the over services television its of Telecom to cover the distribution with Bouygues agreement We a alsosigned new networks. optic fibre and ADSL on services television its of Telecom to cover the distribution with Bouygues agreement our we renewed November In Agreements with Bouygues industries nowindustries have a turnover and creative cultural European The study reveals that the by Gesac. investigated and EY by out carried growth’, astudy of generators creative sectors, and cultural European ‘The of sawDecember the publication for Europe! Culture, an opportunity December SACEM 15 2014 |SACEM REPORT ANNUAL www.creatingeurope.eu at found be can study This 1.2 people. million over employs and annually is around worth €25.3 billion musicThe industry European 19.1% 30. under are whom of Europeans, 7million than more employ and billion €535.9 of

Financial statements Management report Strategic overview Chief Executive’s Q&A Jean-Noël Tronc Stronger together!

“ Our number one priority is to Q How would you describe Sacem’s global activity in accelerate our digitisation – 2014 – the highlights and the challenges? we have achieved more than 50% In 2014, we reached a total online registrations and created level of collections approaching €1.3 billion – of which almost new tools to enhance user access €830m represent royalty collections relating to Sacem’s and information systems.” own members and royalty collections relating to foreign collective societies with a reciprocity contract – and distributed royalties to 276,000 rights holders across the world. These numbers give a good understanding of Sacem’s global activity, and reflect the real footprint of our activities encompassing not only our own members but also on behalf of other rights owners.

Q Do you feel that you have more effectively controlled your costs over the last year and how would you give an example of that improved control and improved bookkeeping? We are fully committed to keeping our costs under control while developing Sacem and the value of our members’ rights. Examples of our recent actions on costs are the new tenders for IT and procurement, our new website which will diminish paperwork and manual processing of our members and clients, and our partnership with world-class solutions provider Bmat to share online data management costs with other collective societies in Europe. This report is a good example of our improved bookkeeping. For the first time it will be published not only in French, but also in English for better international 16 SACEM | ANNUAL REPORT 2014 transparency. service, launched in January 2014, January in launched service, works registration online our example, – for digitisation our to is accelerate priority one number Our France. in launch its even before Netflix with licence a to Europe secure in first the 2014, In providers. we were service digital with important timethe is particularly shortest in monetisation best the Getting clients. and to members our level the of service improving rightstogethermembers’ with our for monetisation best the delivering on toWe focus need 2015? of remainder the with starting years, three next the for €46.4 to million, of €506.9 members to Sacem distributions combine 2014 for distributions total which our at to is look stakeholders our all for benefits the way to analyse the in highest the world. Another €11 of one is this inhabitant, per At France. in around we collect that inhabitant per collections level high of very the is model business of our efficiency the way One to world. the measure to throughout other rightholders and to members our distribute we that can of collections share the key to is maximise Our focus 2014? in Sacem on the level of from distribution of €22.6 million. – new works and repertoires to the development of new contributing and diversity cultural supporting –directly projects €519.5 to cultural and million, of mandators and societies Q members.our implications this brings for the benefit of We are at the forefront of managing the consumed is changing faster than ever before. The way music is created, published and Q

social programmes of What are your key priorities key your priorities are What How would you comment

million, to other collective collective tomillion, other

better cope with the challenges with cope thebetter challenges to order in to processes online relating members our for services shared to is leverage Armonia with oneour priority number future, the In societies. European eight with works already which alliance through the Armonia with other societies, especially partnership on based is strategy international Our regions. vibrant these copyright across developing author’s rights and to to is contribute ambition our and members, 8,500 than Eastern societies, with more Middle and African biggest the We of 164 one are nationalities. international society, representing an always been has Sacem your profile? international the next three years. three next the over relationship customer online 15% to have clients of afully our least at for is ambition a primary paper, on so completely almost based is process current the rights, theRegarding general more. and magazines music travel or insurances, on discounts training, and education web tools, music professional with easier to make life the of aworking is designed programme benefits members’ The years. two next PLUS the in by Sacem three on registered of members number the to is multiply ambition and unidentified works. Our datavisualisation new 360° as such have works’ their usage, on we that data the all with members our provide and boosted been have services member for tools of monthly registrations. Our 50% than more now covers Q

How do you plan to develop to develop youHow plan do SACEM 17 2014 |SACEM REPORT ANNUAL – stronger together! Sacem believe at we firmly As forward. way best the by is far management collective ensure and recognition fairness is increasingly complex, and to world our –because us join So creators and publishers. to of royalties both distribution accurate of collection rightsand and efficient to guarantee model best the provide willalso but instrumental remain not only will Sacem as such companies revolution, the role of collective ofdigital the rule the more and more is becoming fragmentation where changing, rapidly is environment consumption where evolving constantly new and today. is it than creators our In for necessary so and robust so management has never been of collective strength the that is truth to The online. comes it when the new – particularly challenges with to deal able not simply are composers and new songwriters them without fact in revenues, distributing and way of collecting a too traditional are and past to belong the Organisations) Management (Collective CMOs you maythat while think that be would message My us! Join of artists? next generation Q adds value. Sacem ways many the which in about international community to the message positive a very sends international membership growing Our data. of big

What is your message for for message your is What

Financial statements Management report Strategic overview Business model and strategy Dedicated to maximising the value of our members’ rights

Collection

Priorities We have well developed, robust and well-proven processes, and are fully focused on maximising the value of royalties for all our members. Our strong network and innovative systems, combined with a commitment to technological development, mean that we are well positioned to maintain our leading position.

In 2014 We collected ¤1,273.7m made up of ¤829.7m from our own authors’ rights and ¤444.1m through mandates from other societies.

TV/Radio (including cable, satellite, broadband) €320.4m

General rights collected by the regional network (concerts, €280.7m shows, background music, nightclubs, cinema)

International €76.4m Subtotal of collections Private Copying €829.7m (Sacem repertoire) €64.8m

CD/DVD €56.7m

Internet €30.6m Total collections including mandates Mandates and other (from other collective societies and publishers) €444.1m €1,273.7m

18 SACEM | ANNUAL REPORT 2014 Expenses Distribution

Priorities Priorities We are committed to Our priority is to continue to distribute maintaining transparency and as high a level of royalties as possible, openness, and will continue to the highest degree of fairness to invest in the best talent and accuracy. Strategic overview and expertise.

In 2014 In 2014 Sacem’s net cost-to-collections We distributed €1,095.5m within France and ratio amounted to 16.9%. around the world to 276,000 rightholders. Management report

Personnel expenses Sacem members €506.9m €133.1m

Social programmes Financial statements Other operating expenses Subtotal of €46.4m distributions (Sacem) €47.6 m Distribution to companies and foreign authors SPRD €686.5m Net amortisation and provisions €110.6m

Cultural projects €13.3m (25% Private Copying levy)

Other income €22.6m Total distributions Other collective societies including mandates -€42.1m and mandators €408.9m €1,095.5m Total expenses Variation in distribution reserves €151.9m €26.4m

ANNUAL REPORT 2014 | SACEM 19 Management report 1. General information One of the world’s leading authors’ rights collective societies

1.1. Our operations We also play a crucial role in Sacem governance also includes Established in 1851, Sacem is the sustainability of musical and eleven different committees. a private non-profit non-trading cultural creativity. For over fifty The two statutory committees, entity managed by its members years we have been implementing elected by the General Assembly – mainly songwriters, composers a range of cultural development and independent of the Board and music publishers. Our role programmes, encompassing of Directors and departments, is to negotiate with users and all the richness and diversity of exercise supervisory functions: collect and accurately distribute cultural creativity. Our activities the Supervisory & Accounts royalties to our members when include supporting creative Committee meets once a week their work is available publicly, careers, encouraging the renewal to check the Society’s receipts, for example through audiovisual of repertoires, facilitating the expenses and accounts. media, concerts, festivals, the distribution of creative output and The Programming Committee internet, cinemas, nightclubs and helping young professionals get a checks programmes, tables shops, or reproduced through, start in the business. Since 1985 and distribution documents. for example, digital files, CD, these cultural activities have been DVDs or video games. We funded by revenues from royalties The IPC Committee, provided also manage the collection on Private Copying – enabling us for in Article R. 321-6-3 of the and distribution of royalties to to support 1,638 projects across IPC (Intellectual Property Code) members of other similar French a range of cultural genres in 2014. and also elected by the General and international organisations Assembly, gives opinion in cases 1.2. Governance which have given Sacem a where there has been a refusal Founded and managed by its mandate to represent them. to communicate a document to members – songwriters/authors, a member. All three committees Support, protect and defend composers and publishers of report on their activities to the Our business operations music, authors of dubbing and General Assembly. involve supporting creative subtitles, poets, humourists and people, protecting their author-directors – Sacem is a There are also four regulatory repertoire and defending their private, non-profit non-trading committees, which are interests both nationally and entity which operates as a consultative and whose members internationally. Sacem is a cooperative. Elected by the are appointed by the Board member of various international Sacem General Assembly, the of Directors: an Audiovisual organisations working for the Board of Directors is made up of Committee, Variety Committee, rights of creative people and six authors, six composers and Authors-Directors Committee the protection of copyright, six music publishers (one-third and Symphonic Committee. including the International renewable each year in June), Furthermore, there are four Confederation of Societies as well as an author-director as technical committees: an of Authors and Composers a permanent member and an Assistance for Self-production (Cisac), the International Office author-director as a substitute. Committee, a Memoires of Mechanical Publishing (Biem), The Board of Directors makes Committee, a Professional and the European Consortium all decisions essential for the life Training Committee and a of Societies of Authors and of Sacem. It appoints the CEO, Young Audiences Committee. Composers (Gesac). In France who manages the Society and is we work alongside other industry responsible for implementing the groups lobbying for similar rights, policies defined by the Board. and strive to deliver the best quality of services and support for our members.

20 SACEM | ANNUAL REPORT 2014 (Vice-Président), Jean-Max Rivière, Arlette Tabart, Thierry Communal, Nelly Querol, Christian Gauber, Patrick Lemaître. Patrick Gauber, Christian Querol, Nelly Communal, Thierry Tabart, Arlette Grumbach Rémy Rivière, Séchan, David Jean-Max (Président), (Vice-Président), Petitgirard Laurent Lidon, Christine Petit, Jean-Claude Galibert; Duteil, Yves Nicolas Sarraut, Anaïs, Marion to right: Elisabeth row, left Zeitoun, Second Frédéric Pankratoff, Dominique Salhani, Jean-Marie Lion, Bruno Perathoner, Serge to right: row, left First 2015-2016 for Directors of Board ■ ■ by: surveillance to fivefold subject is Sacem transparency. guarantees efficiency and operations management Sacem of examination The supervision. detailed regular such undergo Few private companies Supervision ■ ■ How Sacemisrun of Directors and the CEO. the and of Directors of bothindependent the Board General Assembly. They are by the years three for elected and two publishers, each authors, two composers Committee St T Publishers Composers Songwriters he he atutory auditors. Supervisory & Accounts &Accounts Supervisory , made up of two of up two , made ■ Supervisory&Accounts ■ Programming Two statutorycommittees IPC R.321-6-3Committee in participate Assembly General The elects ■ ■ ■ ■ ■ Comptes des Cour he ■ for Cultural Projects. Cultural for Private used Copying’ is from howchecks the ‘25% share T validates changes. statutory Communication, which T (SPRDs). Societies Distribution and Collection forCommittee Royalty thethrough Supervisory T he French Parliament, which and of Culture Ministry he audits elects appoints their peers) (elected by of Directors The Board Management General appoints SACEM 21 2014 |SACEM REPORT ANNUAL ■ YoungAudiences ■ ProfessionalTraining ■ Memoires Self-production ■ Four ■ Variety ■ Symphonic ■ Authors-Directors ■ Audiovisual Four regulator committees. various boards and our across publishers and creators 153,000 representing members 90 transparency.and With of governance standards to high run is Sacem that ensure Our members governance Strong Assistance for technical y commi commi ttees

ttees

Financial statements Management report Strategic overview Management report 1. General information continued 716,000 Contracts set up on behalf of over 500,000 clients.

1.3. Members 1.5 Collections 1.5.3. Licensing Sacem currently has 153,000 1.5.1. International This year provided the opportunity members (up from 149,000 in Sacem collects royalties for to finalise all agreements on 2013) in France and throughout its members in 94 countries the distribution of programmes the world, comprising 147,300 worldwide through 161 agreements via ADSL and mobile networks creators and 5,700 publishers. Its signed with 114 foreign societies. with the main operators, thereby members include music authors, Moreover, in some territories, making these media Sacem’s composers and publishers; like Luxembourg, Lebanon prime source of collections. author-directors; poets; dubbing and Monaco, Sacem signs In an environment in which and subtitle authors; and authors contracts directly or through music is increasingly being of humorous texts and sketches, its local structure with music accessed via the internet, among others. An indication of broadcasters, from whom rights new ways to access the internet our appeal is that 4,330 new are collected before being – and therefore potential new members joined in 2014. distributed to members. customers – are appearing With 18,530 foreign members In countries with which every day. We also negotiate from 164 different nationalities, Sacem has agreements, it is that contracts on a daily basis and Sacem is the world’s most country’s copyright society that have signed several hundred internationally diverse establishes contracts and collects licences with all the online music authors’ Society. Through 161 royalties, before transferring broadcasting services, covering representation contracts with 114 relevant royalties to Sacem for all modes of delivery – such as companies, it is represented in the repertoire that it represents, downloading, rental, permanent 94 countries across the world, which Sacem then distributes or temporary reproduction, and also has a direct presence to its members. This type of communication, and association in Monaco, Luxembourg and agreement is often reciprocal, with audiovisual works – business Lebanon. with both authors’ societies being models (including free services, responsible for the other’s rights services financed by advertising Over 60,000 Sacem members within its jurisdiction. and subscription services) have registered their own space and associated territories and on the Sacem.fr website and use 1.5.2. Our clients repertoires. These agreements the various online services. Since From hairdressers to streaming aim not only to protect Sacem’s January 2014, members are able platforms through audiovisual members but also to support the to register their works with a few media and nightclubs, we have development of these increasingly clicks at any time of the day or more than 716,000 contracts with successful services, leading night, with guaranteed levels of close to 500,000 highly diverse to an increase in payments to security and confidentiality. clients. All have free and legal creators and publishers. All the access to works across all genres 1.4. Repertoire key digital players have entered which are the basis of Sacem’s We represent, manage and into contracts with Sacem. With worldwide repertoire. By paying protect 90 million works Netflix, the agreements were royalties, client users of music are throughout the world and across signed in July 2014 before the keeping musical creation alive and the range of creative genres. service was even up and running participating in its sustainability. This repertoire is expanding in France. every day – in 2014, more As these new systems have than 1.7 million new works multiplied, another challenge were added. has emerged: the fragmentation of repertoires introduced by the European Commission in 2005. In this context, our partnership with Umpi (Universal 22 SACEM | ANNUAL REPORT 2014 which provides a single delivery delivery asingle provides which tool is operational an Armonia SPA and (Portugal). (Switzerland) Suisa (Belgium), Sabam (Hungary), Artisjus societies: by joined been additional rights has and services, musical online European for licence portal unique and sole the is Armonia andedge is a considerable asset. akey competitive represents 2012, in (Italy) Siae also and (Spain) Sgae Luxembourg), and (France by Sacem jointly The Armonia created portal, role in the negotiation of licences. amajor plays operators internet by worldwide the repertoires of their use pan-European the Publishing for International) A varied repertoire varied A 18,530 membersfromoutsideFrance > > > > > 7% America North      M Ad M of programmes M M usical videos usical usical documentaries usical illustrations video for usic vertising music vertising Audiovisual America South 9%

data files. data files. appropriate tools to process the the to to members provide its companySpanish Bmat in order the with apartnership through a digital copyright platform In 2014, launched Armonia YouTube. and Deezer, Beatport Google, including services online with agreements licensing the and signing of members new of influx aregular through to expand continuing is Armonia 12.5 countries. 33 in works million totalling works, American Latin and ofnumber Anglo-American alarge well as as societies of well-known repertoires the It represents repertoires. musical of number alarge for licences point for pan-European issuing > > > > > > > RnB Reggae Rap Song Jazz music Symphonic Techno Africa North 23% Europe 36% Music 1 Africa 7% > > > > > > > music Electro- Instrumental  Zouk W music Traditional orld music orld East Middle 6% ANNUAL REPORT 2014 |SACEM REPORT 23 ANNUAL business, sense the direction the the direction the sense business, ofmusic the pulse the to feel able sustainable creativity, we are forward driving and music whothe are playing people with touch close in being By and members. customers relationships with our regional close to maintain and collection to ensure accurate and efficient us enabling offices, 70and local hubs six regional comprising France internationally and teams on the ground throughout We have members. our for best very the of delivering terms in assets valuable most of our one is network regional extensive Our 1.5.4. regional Our network > Sketches > > > > > 12% Subtitles Dubbing Humour Poems Editorials outside France.outside 164from countries are members our Of 1. Asia 6% Content Pacific 0.4%

Financial statements Management report Strategic overview Management report 1. General information continued

economy is heading, foresee the Top 20 French hits abroad* issues that music creators and publishers are faced with, and be Title Writers Publishers Artists ready to best serve the interests 1 Danza Kuduro F. Barkati / P. De Oliveira / Hella Publishing / Together Publishing Ltd / Crown P Music Don Omar feat. Lucenzo of our members by adapting F. Toigo / Big Ali / W. Landron Publishing / Emi Music Publishing France / Because Éditions quickly to changing markets and circumstances. 2 Comme d’habitude C. François / J. Revaux / Nouv Barclay / Jeune Musique Éditions Claude François / Franck G. Thibaut Sinatra / Paul Anka 1.5.5. Private Copying Since being adopted in France 3 Mr Saxobeat V. Prodan / A. Nemirschi Play On 911 / Media Pro Music Entertainment Alexandra Stan in 1985 thanks to the Lang Law, 4 Les Feuilles Mortes J. Kosma / J. Prévert / J. Enoch Enoch Cie Yves Montand the private copying levy has made it possible to compensate 5 Romeo et Juliette Opus 64 S. Prokofieff Le Chant du Monde for the loss of revenue suffered 6 Hello M. Solveig / M. Sorbara Temps d'Avance / Emi Music Publishing France / Dragonette Martin Solveig / Dragonette by creators as a result of the legal Publishing inc exception allowing private copies to be made of their works. 7 La Vie En Rose E. Piaf / Louiguy Éditions Beuscher Edith Piaf Three-quarters of the levy paid 8 YMCA H. Belolo / J. Morali / V. Willis Black Scorpio Village People by consumers purchasing 9 I Gotta Feeling D. Guetta / F. Riesterer / What A Publishing Limited / Rister Éditions / Will I Am Music Inc / Black Eyed Peas recording equipment such as Will I Am / S. Ferguson / Cherry River Music Co / Headphone Junkie Publishing Llc / Tab hard drives, USB flash drives J. Gomez / A. Pineda Magnetic Publishing / Jeepney Music Inc / Bmg Rights Management / and tablets is redistributed to Emi Music Publishing France creators, while the remaining 25% goes to supporting creation, 10 La Mer C. Trenet / A. Lasry Éditions Raoul Breton Charles Trenet live performances and vocational 11 Born To Be Alive P. Hernandez Saturn Patrick Hernandez training. 12 Le Marchand de Bonheur J. P. Calvet / J. Broussolle Premiere Music Group Les Compagnons de la Private Copying has been under Chanson attack by certain equipment importers who continue to seek 13 Libertango A. Piazzolla Musicali Curci Edizioni / Eleven Music Astor Piazzolla to dismantle this system in France 14 Boléro M. Ravel Éditions Durand and the rest of Europe. Sacem remains dedicated, alongside 15 Tableaux d’une Exposition M. Moussorgski (Public domain) / Hawkes And Son (London) Ltd other authors’ societies, to M. Ravel preserving it across 24 countries 16 The Night Out M. Solveig / M. Tordjman Temps d'Avance / Emi Music Publishing France Martin Solveig in the European Union. 17 Pierre et le Loup S. Prokofieff Le Chant du Monde The Private Copying levy is of crucial importance, being a 18 Symphonie n°5 en Ré D. Chostakovitch Le Chant Du Monde guarantee of cultural diversity mineur Op. 47 and our country’s artistic vitality. 19 Without You D. Guetta / F. Riesterer / What A Publishing Limited / Rister Prod / Ur Iv / Emi April Music Inc / David Guetta feat. Usher G. Tuinfort / T. Cruz / Usher / Foray Music Rico Love 20 Titanium D. Guetta / Sia / N. Van De Wall / What A Publishing Limited. / Emi Music Publishing Ltd. / Long Lost David Guetta feat. Sia G. Tuinfort Brother Management Ltd. / Talpa Music Bv.

24 SACEM | ANNUAL REPORT 2014 Top abroad* hits French 20 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Title Titanium Without You Op. 47mineur n°5Symphonie Ré en Pierre et le Loup NightThe Out Tableaux d’une Exposition Boléro Libertango de Bonheur Le Marchand ToBorn Alive Be Mer La Feeling Gotta I YMCA En Rose Vie La Hello 64 Opus Juliette et Romeo Les Feuilles Mortes Mr Saxobeat Comme d’habitude Danza Kuduro Writers G. TuinfortG. Van /N. /Sia Wall De / D. Guetta Love Rico TuinfortG. /T. / /Usher Cruz /F.D. Guetta / Riesterer D. Chostakovitch S. Prokofieff Tordjman /M. Solveig M. Ravel M. / domain) (Public Moussorgski M. Ravel M. Piazzolla A. J. P. Calvet/J. Broussolle P. Hernandez C. Trenet Lasry /A. Pineda /A. J. Gomez / Ferguson /S. IAm Will /F.D. Guetta / Riesterer /V. /J. Morali Belolo H. Willis PiafE. / Louiguy Sorbara /M. Solveig M. S. Prokofieff /J.J. Enoch Kosma /J. Prévert V. Nemirschi /A. Prodan Thibaut G. /J. C. Revaux / François F. Toigo /W. Ali /Big Landron F. /P. Barkati / Oliveira De utual aid is an essential value value essential an is aid utual “ M often be individual, being being individual, be often may profession our Although values. social genuine with acooperative, are We for Sacem. but together!“ but Individual, alone. never are you means member a Sacem Publishing / Emi Music Publishing France / Because Éditions /Because France Publishing Music /Emi Publishing /Together Publishing LtdHella PMusic /Crown Publishing Publishers Brother Management Ltd. /Talpa Management Bv.Brother Music Ltd. Lost Publishing /Long Music /Emi Limited. A Publishing What Foray Music / Inc Music Iv April /Emi /Ur Prod /Rister Limited APublishing What Le Monde Chant Du Le Chant du Monde Temps d'Avance France Publishing Music /Emi LtdHawkes Son And (London) Éditions Durand Edizioni /Eleven Music Curci Musicali Group Music Premiere Saturn Éditions Raoul Breton France Publishing Music Emi / Management Rights /Bmg Inc Music /Jeepney Publishing Magnetic /Tab Llc Publishing Junkie /Headphone Co Music River Cherry / Inc Music IAm /Will Éditions /Rister Limited APublishing What Black Scorpio Éditions Beuscher inc Publishing Temps d'Avance /Dragonette France Publishing Music /Emi Le Chant du Monde Enoch Cie Play 911 On Entertainment Pro Music /Media Éditions Musique /Jeune Barclay Nouv Composer Alexandre Desplat

*Ranking of exports in 2014 for exploitation in 2013 in 2014 in exploitation for exports of *Ranking SACEM 25 2014 |SACEM REPORT ANNUAL repertoire every day. every repertoire our to added are works New 4,800 Don Omar feat. Lucenzo Artists David Guetta feat. Sia feat. Guetta David Usher feat. Guetta David Solveig Martin Astor Piazzolla Chanson de Compagnons la Les Patrick Hernandez TrenetCharles Black Eyed Peas Village People Piaf Edith Solveig / Dragonette Martin Yves Montand Stan Alexandra /Paul Anka Sinatra Claude François / Franck

Financial statements Management report Strategic overview Management report 1. General information continued

1.6. Mandates Top 20 rights in France* We also collect royalties for: Title Writers Publishers Artists ■■ Artists-singers and producers of music, audiovisual works, 1 Get Lucky T. Bangalter / G. Homem Christo / Because Éditions / Daft Music / More Water From Nazareth Daft Punk visual arts and writing G. Rodgers Nile / P. Williams Publishing Inc / Xlc Music via Copie France (Private 2 Blurred Lines R. Thicke / P. Williams Emi April Music Inc / I Like Em Thicke Music / More Water From Robin Thicke feat. T. I. & Copying). Nazareth Publishing Inc Pharrell Williams ■■ Artists-singers (members 3 Wake Me Up B. Aloe / Avicii / M. A. Einziger Elementary Particle Music / Emi Music Publishing Scandinavia Ab / Avicii feat. Aloe Blacc of the Adami and Spedidam Triomega / Universal Music Corporation collective societies) and 4 Papaoutai Stromae / L. Mandjeku / Mosaert Stromae record producers (Scpp and A. Ottignon Sppf) for the broadcasting of their works in public places 5 Gangnam Style K. Yoo / Psy Sony Music Entertainment Korea / Universal Tunes Psy such as shops and nightclubs. 6 Locked Out Of Heaven B. Mars / P. M. Lawrence / Bmg Gold Songs / Mars Force Music / Music Famamanem Lp / Bruno Mars ■■ Authors of the performing arts, A. Levine Northside Independent Music Publishing Llc / Roc Nation Music / audiovisual works (members Thou Art The Hunger / Toy Plane Music / Universal Music Corporation of Sacd), multimedia works 7 Can’t Hold Us B. Haggerty / R. Lewis Macklemore Publishing / Ryan Lewis Publishing Macklemore & Ryan Lewis (members of Scam) and 8 Treasure B. Mars / P. L. Lawrence / Bmg Gold Songs / Mars Force Music / Music Famamanem Bruno Mars graphic and plastic arts A. Levine / B. Phred Lp / Northside Independent Music Publishing Llc / Roc Nation (members of Adagp) for Music / Thou Art The Hunger / Toy Plane Music / Universal Music audiovisual and multimedia Corporation / Warner Chappell Inc use of their works. 9 Play Hard D. Guetta / F. Riesterer / S. Smith / What A Publishing Limited / Universal Music Z Tunes Llc / Rister David Guetta feat. Ne Yo ■■ International music publishers A. Thiam / G. H. Tuinfort Prod / Piano Songs / Byefall Productions Inc / Bmg Talpa Music Bv (Universal Music Publishing, Wixen Music Publishing, Inc. 10 Thrift Shop feat. Wanz B. Haggerty Ben / R. Lewis Macklemore Publishing / Ryan Lewis Publishing Macklemore & Ryan Lewis and Sharandall Music) for the 11 Bella R. Rebillaud / G. Djuna / Gohan Music / Wati B Éditions Maître Gims digital broadcasting of their B. Vincent / L. Adda worldwide repertoires. 12 Maldon Y. Honore / G. Houllier Bmg Vm Music France Tropical Family / Zouk Machine 13 Stay J. Parker / J. Sudduth Kkids And Stray Dogs / Sony Atv Music Publishing Limited (Uk) / Rihanna Sony Atv Tunes Llc ¤444.1m 14 J’me Tire R. Rebillaud / G. Djuna / A. Diallo Wati B Éditions / R. Rebillaud Maître Gims Collected as a result 15 On Se Connait P. Koeu / Y. Mabiki / N. Rabenja Bomaye Musik Publishing Ltd / Nemesis Musek / Universkalp Youssoupha feat. Ayna of mandates from other 16 Formidable Stromae / L. Capouillez Mosaert Stromae collective societies and 17 La Vie Du Bon Côté K. Alberti / J. Dumas / Keen V / Crescendolls Publishing / Record Two / Yp Keen V publishers. DJ Yaz / Zonee L 18 Let Her Go M. Rosenberg Sony Atv Music Publishing Limited (Uk) Passenger 19 Diamonds M. Eriksen / Sia / Emi Music Publishing Ltd / Matza Ballzack Music / Where Da Kasz At Rihanna T.E. Hermansen / B. Levin 20 Envole Moi J.J. Goldman JRG Éditions Génération Goldman / Jean-Jacques Goldman

26 SACEM | ANNUAL REPORT 2014 Top France* in rights 20 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Title Envole Moi Diamonds Go Her Let Côté Bon Du Vie La Formidable Connait Se On Tire J’me Stay Maldon Bella Wanz feat. Shop Thrift Play Hard Treasure Can’t Us Hold Heaven Of Out Locked Style Gangnam Papaoutai Wake Up Me Lines Blurred Lucky Get Writers J.J. Goldman J.J. T.E. /B. Levin Hermansen / /Sia Eriksen M. M. Rosenberg YazDJ L /Zonee V/ /Keen /J. Dumas Alberti K. Capouillez /L. Stromae P. Koeu /Y. Rabenja /N. Mabiki Diallo /A. Djuna /G. Rebillaud R. J. /J. Parker Sudduth Y. Houllier /G. Honore Adda /L. B. Vincent / Djuna /G. Rebillaud R. Lewis /R. Ben B. Haggerty Tuinfort H. /G. Thiam A. /F. D. / Guetta Smith /S. Riesterer /B. Phred Levine A. /P.B. Mars / Lawrence L. Lewis /R. B. Haggerty Levine A. /P.B. Mars / Lawrence M. YooK. /Psy Ottignon A. / Mandjeku /L. Stromae Einziger /Avicii A. /M. B. Aloe /P. Thicke R. Williams /P. Nile Rodgers G. Williams / T. Christo Homem /G. Bangalter

Publishing Inc / Xlc Music /Xlc Inc Publishing Water /More From Nazareth Music /Daft Éditions Because Publishers JRG Éditions JRG At Kasz Da /Where Music Ballzack Ltd / Matza Publishing Music Emi (Uk) Limited Publishing Music Atv Sony Two /Record Publishing /YpCrescendolls Mosaert /Universkalp Musek Ltd / Nemesis Publishing Bomaye Musik Rebillaud Wati /R. BÉditions Tunes Atv Sony Llc / (Uk) Limited Publishing Music Atv /Sony Dogs Stray And Kkids France VmBmg Music /Wati Music BÉditions Gohan PublishingMacklemore / Ryan Lewis Publishing Talpa /Bmg Inc Bv Productions /Byefall Music Songs /Piano Prod ZTunes Music /Rister Llc /Universal Limited APublishing What Inc Chappell /Warner Corporation /Toy Music Hunger The /Universal Music Plane Art /Thou Music Nation /Roc Llc Publishing Music Independent /Northside Lp Famamanem /Music Music Force /Mars Songs Gold Bmg PublishingMacklemore / Ryan Lewis Publishing Corporation /Toy Music Hunger The /Universal Music Plane Art Thou / Music Nation /Roc Llc Publishing Music Independent Northside / Lp Famamanem /Music Music Force /Mars Songs Gold Bmg Tunes Korea /Universal Entertainment Music Sony Mosaert Corporation Music Triomega /Universal / Ab Scandinavia Publishing Music /Emi Music Particle Elementary Inc Publishing Nazareth Water /More From /ILike Inc Music Em Thicke Music April Emi of royalties and our members’ rights. We continue to ensure the value maximum SACEM 27 2014 |SACEM REPORT ANNUAL *Ranking based on royalties distributed in 2014 in distributed royalties on based *Ranking Daft Punk Daft Artists Jean-Jacques Goldman / Goldman Génération Rihanna Passenger V Keen Stromae Youssoupha feat. Ayna Gims Maître Rihanna Machine Tropical Family /Zouk Gims Maître & Ryan LewisMacklemore Yo Ne feat. Guetta David Mars Bruno & Ryan LewisMacklemore Mars Bruno Psy Stromae Blacc Avicii Aloe feat. Williams Pharrell T. feat. Thicke Robin I. &

Financial statements Management report Strategic overview Management report 1. General information continued

Internet Accuracy and efficiency Identifying the source of each work downloaded or listened to by platform, and allocating the rights attributable to it, is based ■ 80% on the number of downloads or (1) work-by-work plays and on the total number of downloaded or listened-to works. Surveys ■ 11% Live dance events and Nightclubs by surveys For live dance events, rights collected are distributed on the basis of sample repertoires ■ 9% provided by member conductors by taking into account every half year when they liven up consumer habits the dance event. For other dance events, Royalties are matched as accurately and efficiently as possible distribution rates are calculated to the actual use of the works on the basis of 150 half-yearly listenings, which are converted into statistical statements of the 1.7. Distribution Work-by-work music played. Internet and audiovisual media Audiovisual operators also send reports to Royalties relating to TV or Rights collected from nightclubs Sacem listing all the works that radio stations are recorded are distributed on the basis of a are broadcast in a given period. in statements, and are based sample survey conducted every Thanks to its regional network, on how many seconds the week by a specialised company Sacem monitors all programmes broadcast lasts for. with a panel of 110 clubs. of broadcast or reproduced Concerts and shows Data collected is used to works to a very high level of All royalties collected for shows establish detailed statistical accuracy. Sacem uses this data and concerts are distributed statements of the music and intelligence to collect and based on the duration of the works being played. distribute royalties. Close to 80% performed. If this information is of the royalties are distributed Private Copying – audio not available, rights are divided work-by-work in order to reflect, Surveys carried out by audience according to the duration of the as much as possible, the reality measurement companies provide work indicated by its creators. of the music broadcasting us with information on the detailed programmes. This Cinemas sources from which copies have accuracy is the result of the Royalties collected in respect been made, such as radio, CDs considerable technological of films are allocated to each and downloads. Sacem holds the innovation and expertise needed musical work based on the resulting royalties for distribution. to process large volumes of data, duration of use in the film. while at the same time providing CD or DVD reliable documentation. The number of units produced and their retail price allow us to determine the level of royalties

to be allocated. (1) O n condition the amount of rights is above a threshold taking into account the cost and complexity of the necessary operations. 28 SACEM | ANNUAL REPORT 2014 Any works reproduced on Background music Consumer habits distribution. for channels TV from the royalties collects Sacem and are made from television,copies Surveys have shown that most Private –audiovisual Copying vitality of artistic life in France and internationally. to those who are involved in the diversity and From creation to distribution, we provide support our processing capacity.our processing and Elastic Search to increase Cassandra as such technologies We data big use medias. royalties from the traditional the processes which that from online activities processes theseparated hardware which we have terms, practical In world. globalised digital and increasingly royalty in an collection enhance intechnologies to place efficiently We have innovative new 1.8. Technology to members. its by Sacem paid then are royalties The Composers. and of Authors International Confederation the by set Cisac, standards them follow and international between contracts in agreed is data exchange societies between of distribution for procedure The in country.rights societies each of the to rules the according distributed and collected are Royalties for works played abroad International radio. on broadcast or aball at concert, in played been to have need file of this works the area, this in distributions royalty To file. in aspecific in participate of 10 aperiod for years registered are copies 500 selling and CD

of countries. number increasing an across and France in documentation we our update which at speed the increasing We also are basis. awork-by-work on royalties to distribute invoice and order in month every analysed are files report average, 520On sales throughout Europe. Deezer and Spotify for and countries, 54 YouTube for distribution in invoicing and we process today,rewards: example, for reaped have already efforts These systems. distribution and overhauling our documentation well as as invoicing systems, to music improveonline our working we have years been two For past the content. audiovisual world which provides music and the in service any internet from weto that works represent the relating data to process ability keyAnother is the challenge services. online and transmitted by broadcasters being ofdata the quality the byaccompanied a drop in often is volume in growth significant activity.of This online streaming the and globalisation of development the services, and of audiences of fragmentation the challenges. It is a consequence one of our key technological 2013 is explosion total. This the twice nearly transactions, download streaming and 251.6 represented which billion lines report 2.6 usage billion 2014,In we processed

SACEM 29 2014 |SACEM REPORT ANNUAL for distribution purposes. distribution for takenbeen into consideration comprehensive data which have to access have and direct online new works their all register they can new portal, Sacem So, through our the members. for services IT the enhanced technology, we have also the improvedBesides collection holders. copyright their and of works comprehensive global picture and acoherent to produce Cisac FastTrack for new strategy and to a contributing We also are to compensation rightsowners. timely, accurate and efficient enabling industry music the in exchange of information that facilitate the international deliver broadly adopted solutions ongoingiswhose to mission FastTrack and Exchange) Data (Digital of DDEX work the in why participate is we actively This in the royalties chain globally. key the all with players dialogue and relations strong maintain to time, we need At same the paid by Sacem in 2014. in by Sacem paid benefitedfrom theroyalties thethroughout world who have and France in societies collective other of or Sacem of music – publishers members Songwriters, composers, 276,000

Financial statements Management report Strategic overview Management report 1. General information continued

Elsewhere, we are seeing from these funds. Sacem also a wider development of the undertakes cultural projects practice of mash-up and designed to promote solidarity and 88% consumption of music content artistic education (young audiences) Of investments in cultural via User-Generated Content. with the aim of sharing works and projects are made Consequently, despite the opening them up to all audiences. possible through Private advanced nature of the Special attention goes to repertoires Copying. technology that they use to with poor media coverage. recognise the works, UGC At the same time, Sacem also platforms are not always spent €1.7 million in 2014 from successful in identifying them. our optimisation fund to support Sacem and members of Armonia 3,136 songwriters, composers and Key facts 2014 (Sacem Luxembourg, Sgae, publishers across instrumental, Siae, Artisjus, Sabam, Suisa electroacoustic, jazz, symphonic and SPA) have conducted tests and folk music, as well as poetry. with their partner, the Spanish society Bmat, on 50,000 videos 2014 saw the implementation of new representing 2 billion views, programmes and the development revealing that 30% of videos of existing ones, in order that we contained several dozens can better satisfy the needs of of works that had not been creators and their professional identified by UGC platforms. environment and players in the sector. Significant changes include With its modern technology, the reform of the programme for Sacem operates one of the most preproduction funding, new aid ■ 33.3% ■ 12.4% advanced and efficient collection Aid for creation Optimisation Fund for the creation of music for video and production and Actions and distribution models of all and the development of new authors’ societies in the world. ■ 38.1% ■ 8.1% programmes for young audiences. Aid for the realisation Operating costs 1.9. Cultural aid Considerable work was also of live performances In addition to collecting and accomplished in the area of distributing royalties, Sacem ■ 8.1% contemporary music, with the Aid for the training runs support programmes for drafting of a commissioning of artists musical creation, live performance charter to ensure fair remuneration and professional training for for composers. young creators through cultural initiatives. We provide direct Cultural activities focused on support to authors, composers issues relating to media coverage (aid for self-production, residence of repertoires – on radio and programmes, career support, television and on the web – optimisation funds…) and as well as drawing attention publishers as well as broadcasters to the repertoire through (support for concert halls, festivals, specific initiatives. producers…) who showcase Our objective for 2015 is to and promote these artists. Pop, anticipate changes arising from the jazz, rock, contemporary music, constant evolution of the cultural world music, urban music, sector and to continue to deliver electro, original soundtracks, support which meets the needs poetry, humour: all the repertoires of creators and industry players managed by Sacem benefit as closely as possible. 30 SACEM | ANNUAL REPORT 2014 development. business plan and in our general in the of implementation our our bespoke across participation and to encourage active to develop strategic initiatives, ability their to deepen managers innovative teaching methods, for school, using European business aleading ESCP-Europe, with partnership in programme developed a customised throughout France, we have team meetings and seminars employees. Beyond the regular to all strategy the apply better to and to share initiated been 2014,In have activities specific agreements. formal through responsibility social our commitment tosupporting dialogue on –and costs payroll of 3% around for accounts which – training vocational business, of our evolving the nature and how on we work focuses thus and social responsibility. It opportunities of equal values core its and project business 2020’ ‘Sacem our behind ofimplementation the strategy the tois designed support policy resources human Our overseas. and France across over 70 locations in employed are teams These IT, finance and human resources. legal, as such services support and licensing and network; collection our regional activities; communication and cultural innovation, management, central including activities, business of our each around teams in had 1,361 employees structured 2014, 31 at As December Sacem 1.10. Employees sustainability. to of committment our cultural at the heart programme ofOur cultural projects remains management companies. management European other with partnership developed in platform Armonia the through or repertoires, entire use to licenses multi-territory rights, online to operate licenses music, beit through national to online for improve market the for many campaigned years has initiatives,various specific Sacem Through works. music of online use the for licenses European of multi-repertoire and pan- delivery the to facilitate aims also Directive the Sacem, for therefore industry, and music the in For single copyright organisations companies. all theacross European rights ofrules the harmonisation greater –willenable France in adopted widely –already provisions These activities by the rightsholders. of their control and requirements disclosure by strengthening companies rights management of national other and European governance and transparency to improve the adesire primarily 2014. in adopted It reflects on Collective Management Directive the for responsible partly is ofmarket the complexity increased The activities. of their authorisation for requests multiply to platforms music online forcing ofa fragmentation repertoires to led copyright management a recommendation 2005 on level, At European controls. external and of internal range to a and Property Intellectual of to Code the subject Sacem’s are operations framework Legal 1.11. SACEM 31 2014 |SACEM REPORT ANNUAL 119 them: Among 2014 in projects aid cultural 1,638 2014 Cultural projects training courses training 83 festivals and halls concert 779 projects funding pre-production

Financial statements Management report Strategic overview Management report 2. Economic position

2.1. Market environment Collections by our regional Hence, having the processing The global music industry network are the least impacted facilities and enabling is undergoing a deep by the ‘digital revolution’, although technologies in place (and transformation. The fast revenues from tours, shows, constantly upgrading them), proliferation of digital connected concerts and nightclubs have to collect and distribute royalties devices and the almost universal slightly diminished in 2014, while in this environment is an absolute penetration of mobile broadband collections from background necessity for today’s collective are fundamentally changing the music have significantly management and for Sacem. music consumption patterns. improved. The increasing The resulting data is of great attractiveness of music at points value to our members and Radio and TV broadcasting of sale has also been confirmed helps us to develop our remains the most important by two surveys which were communities further, which is source for royalty collections commissioned by Sacem in a key responsibility for the future at Sacem. Historically free February 2014. of collective management. channels experienced a slight drop over the last 5 years with With all the digital equipment This is why we put a lot of the economic crisis (contraction and infrastructure available effort into the development of of advertising). At the same to consumers, many new collaborative platforms, new time, new services and growth opportunities to access music services for our members, chances have emerged with are arising. Thus, in 2014, we saw and initiatives to allow access catch-up TV and general a continued rise in streaming and to the data. video platforms over diverse subscription, with social networks online devices. playing an increasingly important role both as consumer platforms for music and an engine for growth.

32 SACEM | ANNUAL REPORT 2014 Mandators In favour of cultural aid projects (25% Private Copying levy) Copying Private (25% projects aid cultural of favour In Foreign or French collective societies Sacem) (non Foreign or French collective societies (Sacem) In favour of other collective or societies mandators Surplus/Deficit Social and cultural programmes Distributions accounts suspense the on Variance 2.2.1. Key figures 2.2.1. Key performance Financial 2.2. Collections Distribution to Sacem members to Sacem Distribution members Sacem of favour In result of net reserve the on Variance reserves distribution in Variation Net expenses deducted from collections to financed be collections from deducted expenses Net Sacem Operating expenses expenses Operating other and Mandates Other operatingOther income Interest and other income other and Interest Distributable royalties Distributable Net non income recurring -1,095.5 1,273.7 1,121.9 -506.9 -553.4 -401.8 -519.5 -194.0 -110.6 -151.9 829.7 444.1 -46.4 -26.4 -22.6 38.4 -17.1 -9.2 -7.1 €m 0.3 3.4 2014 0 SACEM 33 2014 |SACEM REPORT ANNUAL collections 100.0% 86.0% 40.8% 34.9% 43.4% 88.1% 65.1% 1.8% % of 2.1% -1,133.6 1,305.0 1,148.8 -432.3 -561.3 -551.5 -515.8 -156.2 -109.9 -189.3 3. 64.0% 834.8 470.3 -45.5 -20.8 -15.2 -13.9 30.0 -9.3 -1.4 €m 3.1 0.1 2013 0 collections 100.0% 88.0% 86.9% 36.0% 43.0% 42.3% 1.6% 1.2% % of

Financial statements Management report Strategic overview Management report 2. Economic position continued

2.2.2. Collections (2)  Mandates –– French collective societies The collecting operations Royalties relating to commissioning Sacem with managed by Sacem and its mandates granted to the collection of a part of employees can be divided Sacem by the following: their neighbouring royalties into two categories: –– French collective societies –– French collective societies (1)  Sacem collections benefiting from Private commissioning Sacem with Royalties relating to Sacem’s Copying the collection of a part of repertoire (contribution their TV/Radio royalties. –– Record labels who have of Sacem members) or entrusted Sacem with the the repertoires of foreign centralised collection for some collective societies with a of their foreign subsidiaries reciprocity contract. These collections amounted to –– Publishers who have granted €829.7 million in 2014 and Sacem a multi-territory licence can be found in Sacem’s for internet utilisation statutory accounts.

2014 2013 2014 vs. 2013 €m €m €m % Sacem TV/Radio (including cable, satellite, ADSL operators) 320.4 316.0 4.5 1.4% General rights (regional network) 280.7 281.7 -1.0 -0.4% International 76.4 80.0 -3.6 -4.5% Sacem Private Copying repertoire 64.8 67.0 -2.2 -3.3% CD/DVD 56.7 65.4 -8.6 -13.2% Internet 30.6 24.7 5.9 23.7% Mandates and others Non-Sacem Private Copying repertoire 163.9 198.2 -34.3 -17.3 % Other mandates 262.2 264.9 -2.7 -1.0% Miscellaneous 17.9 7.1 10.8 153.1% 1,273.7 1,305.0 -31.3 -2.4%

2014 revenue breakdown ■ 25% ■ 5% ■ 13% TV, Radio, Operators Sacem Private Non-Sacem Private Copying repertoire Copying repertoire ■ 22% ■ 5% ■ 21% General rights CD/DVD Other mandates ■ 6% ■ 2% ■ 1% International Internet Miscellaneous

34 SACEM | ANNUAL REPORT 2014 variations: with the following single item basis, acumulated on 0.6%, or by fell €5.1collections million, of Sacem types different The 2014.of to €1,273.74 end the at million tocompared 2013, amounting by €31.3 2.4% million, down Total decreased collections – ■ ■ – ■ ■ general rights. To rights. noted: general be to as referred are These restaurants. and cafés, hotels, background in music stores, amusement parks, etc, and and bars in music ambient nightclubs, in of music use the concerts, and shows for of public rights broadcasting the under terms delegations by 70 the collected royalties includes This stable. relatively were rights) (general network royalties. radio in decrease royalties by a balanced slight television in increase a slight remained relatively stable, with collections Media operators. ADSL certain with contracts new favourable todue more is mainly collections these in increase The operators. by and channels radio and channels) local and channels, TNT,channels, theme-based by television (historical paid royalties the are these by 1.4% or €4.5million, – increased broadband) and satellite by cable, broadcast (including sectors Radio (+1.4%) 41% represents which ofgrowth background music A f C T he collections from thehe collections TV/ ollections byollections the regional avourable increase in the the in increase avourable

– – ■ – – ■ by 6% in comparison to 2013. comparison in by 6% fall collections sawits sector in attendances linked toincrease afavourable collections in 5% increase meanwhile,Cinemas, had a organisers of shows. festivals and occasional with the network regional of by business the offset impact was not entirely to 2013. unfavourable This promoters in comparison by tour produced concerts in of 2014 part areduction and renovationfor for hall concert de Paris Bercy Omnisports ofPalais the closure the following rights, in particular 35% of general represents (-1.0%)and concerts which shows in by drop the offset the field developing in this business teams of involvement of level from the benefited has high which and rights, of general link up a large number of of number alarge up link contracts reciprocal Such of France. outside repertoire ofSacem the use the for foreign collective societies from collected royalties are 4.5% these – or million, €3.6 I rate scale. simplified and streamlined a with policy pricing the of implementation a new in invoicing following increase a6% achieved environment, despite market a difficult the employees, regional who, ofthe strong engagement T E T nternational collections fellnternational collections by his growth was partially waspartially growth his hese figures demonstrate demonstrate figures hese lsewhere, the nightclub

SACEM 35 2014 |SACEM REPORT ANNUAL ■ the other mandates. other the of performance favourable the by compensated was contract of Sacd the to cancellation the related in collections decrease in 2013.regularisations The to due one-off mainly 5.6%, or million, by fell €26.2 others Collections from mandates and ■ ■ ■ growth. of SVOD, drivers main the of VOD and development the despite sales physical in drop the have yet to offset 14%. from downloads Sales by fell sales BluRay DVD and from turnover the video, for As Snep). 2014in (Source: by fell 11.5% sales media for physical phonographic BluRay markets. market The ofCD, the DVD and decrease to due structural the mainly is of income source this in decrease The media. etc) BluRay, (DVD, video or etc) vinyl, (CD, audio of physical by producers paid royalties 13.2% or million, are –these C exchange rates. unfavourable of foreign effects the toand Europe relates with Sacem. The decrease foreign collective societies VOD) overVOD) downloading. and audio (both of streaming with the new predominance change, structural undergoing currently is it even though marketThe is growing globally users. music online other or Providers Service Digital from arethese royalties collected 23.7% or million, by €5.9 – I nternet collections increased increased nternet collections D/DVD decreased by €8.6 by €8.6 decreased D/DVD

Financial statements Management report Strategic overview Management report 2. Economic position continued

2.2.3. Net expenses 2014 2013 2014 vs. 2013 €m €m €m % Personnel expenses -133.1 -133.2 0.1 -0.1% Other operating expenses - 47.6 -44.1 -3.5 8.0% Depreciation and amortisation -13.3 -12.0 -1.3 9.6% Operating expenses -194.0 -189.3 -4.6 2.4% Other operating income 3.4 3.1 0.3 8.9% Net financial income 38.4 30.0 8.4 28.1% Net non recurring income 0.3 0.1 0.3 396.8% Net expenses -151.9 -156.2 4.3 -2.8%

Personnel expenses dropped slightly between 2013 and 2014. The headcount decreased by 20, from 1,373 employees with permanent contracts in 2013 to 1,353 in 2014.

Other operating expenses were mainly made up of overhead expenses for the head office and the network delegations throughout France (rent, mail, printing, taxes and duties, maintenance, security, utilities, etc), operational expenses linked to information systems (application maintenance, IT technicians, etc), fees, training and communication expenses, etc. The increase in other operating expenses was largely due to retrospective adjustments of French residence tax and property tax for the head office building in Neuilly-sur-Seine for 2014 and 2013, as the tax authorities re-evaluated the reference rental values in 2014. The increase in net amortisation reflects the growing IT investments over the past two years for the global information system modernisation project, in particular related to the distribution chain and the network invoicing system. The operating expenses represent all of Sacem’s administration and management expenses. The other operating income mainly derives from the contributions of members. The interest and other financial income relates to the optimisation of financial investments which were compliant with the prudential regulations decided by Sacem’s Board of Directors.

36 SACEM | ANNUAL REPORT 2014 the combination of two effects: of two combination the 2014 (€17.1 to due was million) 2013 between distributed and to royalties for be accounts suspense the in increase The of 2014. end the at 4% was ratio reserves actual The expenses. of yearly the ±5% at capped being reserves result, abalanced for rule statutory the to respect Sacem financial statements. It enables 2014 Sacem’s from mainly stems in of €9.2m amount the in result of net reserve consolidated The sheet balance the in 2.2.4. Outstanding royalties

■ ■ ■ ■ accounts at the end of 2014. end the at accounts suspense the in increase an Private hence Copying, from collective benefiting societies 2015 early distributed to the 2014,December to are be and in recorded were payments of these Some paid. were of Private Copying terms the under manufacturers by due hardware and escrow in stored sums of various of 2014. end the at as booked in suspense accounts the royalties collected are schedule, Sacem’s distribution 2015 July with accordance in in distributed be will only 2014.in collections these As collections operators ADSL F G ollowing the settlement rowth in cable/satellite/ in rowth SACEM 37 2014 |SACEM REPORT ANNUAL and others (-5.6%). others and the from mandates collections (-7.0%) with line in about were to mandators attributions The (-0.6%). collections Sacem by reduced the justified (-2.3%),mainly amounts distributable in of decline the (-1.3%), consequence adirect is or French collective societies (-1.7%)members to foreign and to its by Sacem granted attributions in decrease The royalties Attributed 2.2.5.

Financial statements Management report Strategic overview Management report 2. Economic position continued

2.2.6. Social and cultural aids Sources of income and uses of funds (for social and cultural aid)

2014 2013 2014 vs. 2013 €m €m €m % Collection of royalties attributed to social and cultural aid(1) 46.4 45.5 1.0 2.1% Collection of royalties attributed to Optimisation Funds(2) 1.7 1.7 0 -1.4% Other sources of income 0.6 0.3 0.3 104.7% Total revenues 48.7 47.5 1.2 2.6% Contingency Funds 29.9 29.9 0 0.0% Solidarity Funds 1.7 1.7 0 -0.7% Voluntary Cultural Aid – Optimisation Funds(2) 1.7 1.7 0 -1.4% Voluntary Cultural Aid – Non-Optimisation Funds(3) 0.9 1.9 -1.0 -52.5% Total expenses 34.2 35.2 -1.0 -2.9% Surplus of the fiscal year 14.5 12.3 2.3 18.4%

Sacem’s Articles of Association provide for the possibility of contingency, solidarity and assistance action in favour of its members and the payment of services in the framework of social aid. The financing of social and cultural aid is mainly done via: (1) T he collection of certain royalties as highlighted in 2.2.1. – calculated as a percentage of the net collections withheld from royalties to finance operating expenses; this percentage cannot statutorily exceed 10%. (2) T he collection of royalties intended for Optimisation Funds, i.e. direct aid given to certain members via the mark-up of royalties which they have been paid. These Optimisation Funds support: n Jazz improvisers n Young pop authors and composers n The royalties generated by public performances or the recent recording of symphonic music, electroacoustic music, poetry, etc. In addition to the Optimisation Funds, there are other ‘voluntary’ cultural aid resources, i.e. outside the scope of the legal 25% Private Copying levy (see 2.2.7). (3) Non-Optimisation Funds voluntary cultural aid payments are mainly comprised of promotions for the broadcasting of music in French regions, support for artists wishing to self-produce their music, endowments to the winners of certain awards such as the Sacem Grands Prix, etc.

38 SACEM | ANNUAL REPORT 2014 Collection of royalties attributed to cultural aid projects aid to cultural attributed of royalties Collection Sacem action fund (FAS) & Franco-American Cultural Fund (FACF) Fund Cultural &Franco-American (FAS) fund action Sacem Aid for the training of artists training the for Aid ■ ■ ■ ■ were: sources additional these from benefited €15.8 from 2013 in increasing million aid cultural for used to €18.4 2014. in million which fields main The funds with years, two past the for of income sources increased had has department Action Cultural The (4) (2) (1) for Code. provided Property income of sources the by 321-9 L. Intellectual the of partly 2.2.6.) and Article by (see aid to voluntary allocated budgets the by partly financed is Sacem by paid aid cultural The (3) Sources of income and use of funds (25% Private Copying levy for cultural aid) cultural for levy Copying Private (25% funds of use and income of Sources aid 2.2.7. Cultural Fund for the Creation of Music (FCM) of Music Creation the for Fund Total revenues Aid for creation and production and creation for Aid Aid for the realisation of live performances of live realisation the for Aid Overhead expenses Surplus of the financial year year financial of the Surplus Total expenses

■ ■ ■ ■

Ac F F particular. in halls concert and L guilds representing audiovisual creators (DGA, WGAW and MPA). and WGAW (DGA, creators professional audiovisual American the with representing guilds agreement in levy, Copying 25% Private the via FACF financed is countries. both in professionals to encourage and between Atlantic the of dialogue sides both on cinema of art the promoting of aim the with 1996 in created was (FACF) Fund Cultural Franco-American T sources. to these added be T T T .e. aid for creation and production, aid for the realisation of live performances and aid for the training of artists (authors, composers and singers). and composers (authors, artists of training the for aid and performances live of realisation the for aid production, and creation for .e. aid hese collections correspond to the royalties legally attributed to cultural aid. to cultural attributed legally royalties to the correspond collections hese he Sacem Action Fund (FAS) was dissolved in May 2013 with its personnel and activities integrated into Sacem’s Cultural Action Department. The The Department. Action Cultural Sacem’s into integrated activities and personnel 2013 its May in with dissolved was (FAS) Fund Action Sacem he also can field, musical the in active societies collective the all by financed initiative an (FCM), Music of Creation the for Fund the by paid subsidy he i Code, Property 321-9 Intellectual R. the of Article in defined as categories legal three between down broken are payments aid cultural he unding for editorial pre-production. editorial for unding actions. community or favour in of audiences unding young ocal funding managed by the Sacem regional network throughout France, which subsidised festivals festivals subsidised which France, throughout network regional by Sacem the managed funding ocal tivities in defence of authors’ rights (for example, the fight against piracy). against fight the example, (for rights of authors’ defence in tivities (2) (2) (3) (2) (1) (4) 2014 22.6 22.6 18.4 m€ €m €m €m 4.2 5.6 0.6 . 1.3 1.3 . 1.6 1.5 . 1.6 1.7 . 7.2 7.7 SACEM 39 2014 |SACEM REPORT ANNUAL 2013 20.8 20.8 15.8 5.0 2.9 1.2

-0.8 -0.7 01-8.1% -0.1 0.5 2.5 1.8 1.8 2.7 0.1 2 014 2013 vs. 0

-54.2% -15.3% 95.0% 16.0% -1.5% 8.5% 8.5% 6.5% 8.5%

%

Financial statements Management report Strategic overview Management report 3. Future development

3.1. Future plans Members can already enjoy many Copyright protection Sacem 2020 services – such as personalised Beyond transparency and service Our objective is to focus on our access to their repertoire and development, we also intend to commitment to developing a fair the ability to submit all of their increase our capabilities around and effective collection business new works online, access to the defence of copyright. for the music industry and on the distribution rules and Sacem This will happen primarily through protection of copyright. PLUS – a programme enabling the creation and implementation them to benefit from commercial Our ambition is to remain one of Sacem Université, new deals. By July 2015, members of the world’s leading authors’ educational platforms, and will also have access to a new societies in the digital age, sharing and debate of ideas reporting system relating to and to preserve and enhance based on our collaborative and their works, with a tool capable our business model – that of partnership approach. of providing personalised and a non-profit society of authors, detailed analysis of all media It also happens through the in the service of our members, broadcasts for online services mobilisation of hundreds of our remaining strong and proud and the rights generated by members – authors, composers of our diversity across all our their works. An action plan was and publishers – grouped operations. recently approved by the Board together as ‘Angels’ and In this context, an important of Directors to allow the coming participating in advocacy and goal for Sacem in the coming years to accelerate the pace of lobbying in favour of copyright years is to increase services for distributions. and collective management. its members and clients while On the customer side, a This comprehensive strategy promoting the transparency of completely new digital space is backed by a committed its activities with its partners was created on the portal communication policy that around the world. enabling members to access encompasses all social networks. Developing our methodology all their account information, We launched a strategic plan to details of invoices and pricing overhaul our tools and business as well as online payment processes in order to effectively means. This platform also meet these service and facilitates the collection transparency objectives. We have of broadcast information, doubled our annual IT investment contracting and payment for of €7 million in recent years to occasional sessions. These €14 million in order to strengthen online services also include the quality and safety of our the redesign of functionality collection tools and distribution allowing access to our support services in the context of a programmes for cultural projects. strong digital revolution and the globalisation of rights management issues, and to meet the needs of new services. In April 2015 we launched a new portal signalling the development of new services available on a 24/7 basis for all our partners.

40 SACEM | ANNUAL REPORT 2014 also includes evaluating evaluating includes also audit An statements. financial the in disclosures and amounts the about evidence audit to obtain of selection, methods techniquessampling or other using procedures, performing involves audit An misstatement. of material free are statements the whether about financial obtain reasonable assurance to audit the perform and I plan require that standards Those standards applicable in France. with professional accordance in my audit I conducted statements financial the on I –Opinion my on audit. based statements opinionan on financial these to is express role My Directors. of by Board the approved been statements have financial These 31st, December 2014,ended on: to you, year the for report I hereby Meetings, your General Annual to by me entrusted assignment the with compliance In To the Shareholders, 31st, 2014Year December ended auditor’sStatutory on the financial statements report statements Financial be read in conjunction and construed in accordance with French law and professional auditing standards applicable in France. in applicable standards auditing professional and law should French with report This accordance in report. construed management and the in given conjunction in read be information of verification specific to the relating information includes also financial the of report This outside taken statements. information on or captions account individual on financial the on assurance opinion separate audit an to provide not and issuing of awhole as purpose taken the for statements considered were assessments These matters. auditing and assessments Auditor’s the accounting discussing significant paragraph certain of explanatory an includes and statements’ information This not. or financial the on modified ‘opinion whether paragraph the in reports, below such in law presented byis French required specifically information includes speaking report English of Auditor’s Statutory convenience The the for readers. solely provided is and French in issued report Auditor’s Statutory the of English into translation afree is This ■ ■ ■ ■ ■ ■ assessments; (Sacem); musique de éditeurs des auteurs, compositeurs et financial statements of Société disclosures required by law. required disclosures t t t he justification of our our of justification he he audit of the accompanying he specific verificationshe specific and

may be. may case the as levies of statutory net amount an for distribution, future of their purpose the for liabilities as registered haveor been allocated between the members have been assets as recognized receivables and sums collected the that Iassessed years, previous in As members. of its ofworks the property intellectual to the related rights the users Your from company collects attention the following matters: to your Ibring assessments, of my to justification the relating commerce) de (Code Code Commercial 9 ofFrench the L.823- requirements of Article with the In accordance assessments II of – Justification our accounting principles. French with accordance in ended then year the for operations its 31st, 2014, of ofresults the and December at of Company the position offinancial the and liabilities and ofassets view the fair and give atrue statements In my opinion, the financial opinion. myfor audit to abasis provide appropriate and sufficient is obtained Ihave evidence audit the that financial statements. I believe of the presentation overall the well as as made, estimates of accounting reasonableness the and accounting used policies of the appropriateness

SACEM 41 2014 |SACEM REPORT ANNUAL Statutory Auditor Kling Didier 14, April Paris, 2015. statements. the position and financial financial to with the respect shareholders to the the addressed documents in and of Directors of Board the report management the in given ofinformation the statements consistency with the financial the and presentation to fair the as to report I have matters no by law. required verifications specific the I haveperformed also standards applicable in France, with professional In accordance disclosures III and verifications – Specific report. of this part first the in expressed opinion to the contributed therefore and statements taken as a whole, offinancial the of my audit part as wereThese assessments made this commitment. of evaluation of correct ensure Ihave of my assessment, part As 31st, 2014 to 13,462,170 €. which on corresponds December retirementthe benefits lump-sum financial statements mentions 8-1)’ to ofnotes the the (element ‘FinancialSection commitments

Financial statements Management report Strategic overview Financial statements Income and expenses statement

2014 2013 €000 €000 Operating income Other operating income 26,039 25,544 Deductions 146,072 139,103 Reversal of provisions 1,911 521 Transfer of expenses 1,740 1,672 Total I – Operating income 175,762 166,840 Operating expenses Purchases and other external expenses 46,953 46,128 Taxes and duties 6,444 4,352 Personnel expenses 133,023 133,026 Amortisation and depreciation 12,945 10,640 Net provisions 2,214 1,969 Other operating expenses 3,795 4,168 Total II – Operating expenses 205,375 200,282 Operating result (i - ii) -29,613 -33,442 Financial income From shareholdings 4,880 5,805 Marketable securities 34,524 27,4 0 9 Total III – Financial income 39,404 33,215 Total IV – Financial expenses 0 0 Financial result (iii - iv) 39,404 33,215 Net income from ordinary activities (i - ii + iii - iv) 9,790 -227 Non recurring income 232 322 Total V – Non recurring income 232 322 Non recurring expenses 1,505 263 Total VI – Non recurring expenses 1,505 263 Non recurring result (V - VI) -1,273 59 Total income (i + iii + v) 215,398 200,377 Total expenses (ii + iv + vi) 206,881 200,545 Excess of management levies at 31 December 8,517 -168

42 SACEM | ANNUAL REPORT 2014 Cash and cash equivalents equivalents cash and Cash Total assets –Current II Marketable securities Total –Accruals III ofInsufficiency management levies at 31 December Prepaid expenses Accruals Total assets (I + II +III) +II Total (I assets

Receivables: Current assets Total assets I–Fixed Other financial assets financial Other Intangible assets: Fixed assets

Balance sheet statements Financial Property, plant and equipment: Financial investments:Financial Assets O T Loans Land software  Ad C Lo Shareholdings Ad O Buildings rade receivables Sundry Sundry debtors Members O oncessions, patents, licences, brands, processes, ther receivables: ther tangible assets tangible ther ng term receivables from investments from receivables term ng vance payments and instalments and payments vance vance payments and instalments and payments vance ther operating receivables operating ther 1,509,082 1,255,382 100,380 199,336 3,2 1,732 831,826 261,987 161,569 251,460 121,755 96649,622 59,646 13,290 29,325 10,645 61,049 7090 9 87,0 12,577 7989 8 27,9 1461,931 31,426 Gross 5,889 3,235 2,241 2,241 00¤0 00¤000 ¤000 ¤000 ¤000 503 557 214 0 Amortisation Amortisation depreciation deducted) 2014 142,284 4,09 147,70 58,906 58,906 83,378 33,755 (to be be (to 3,693 5,425 1,762 SACEM 43 2014 |SACEM REPORT ANNUAL and and 0 0 0 0 0 0 0 0 1,249,957 1,361,373 830,094 258,294 199,336 161,569 109,176 29,495 38,377 26,227 13,290 29,325 10,645 10,024 12,577 7 94 29 27, 28,184 41,474 5,889 3,235 2,241 2,241 503 557 Net 214 0 1,205,322 1,315,145 803,361 149,500 192,383 252,460 107,726 30,290 28,526 40,677 29,246 10,645 36,758 21,086 19,591 13,739 27,425 2,305 2,098 1,930 5,740 9,121 2013 Net 168 167 212 –

Financial statements Management report Strategic overview Financial statements Balance sheet continued

2014 2013 Liabilities €000 €000 Equity Capital 11,955 11,409 Total I – Equity 11,955 11,409 Provisions Provisions 2,759 2,738 Total II – Provisions 2,759 2,738 Debt Bank loans and debts 0 0 Deposits received (gifts and bequests) 3,001 2,872 Collections to be distributed 788,049 777,510 Users – foreign societies 5,570 4,585 Non-paid notified rights 155,939 158,761 Members 36,115 36,995 Trade payables and related accounts 10,020 7,14 8 Tax and social security debts 64,000 59,228 Other debt 21,609 18,821 Excess of the social aid of members’ fund 237,19 4 222,666 Cultural aid (25% Private Copying levy) 16,645 12,411 Total III – Debt 1,338,143 1,300,998 Accruals Excess of management levies at 31 December 8,517 0 Total IV – Accruals 8,517 0 Total liabilities (I + II + III + IV) 1,361,373 1,315,145

44 SACEM | ANNUAL REPORT 2014 respective item. of the over duration the off them to write and sheet, balance the in of assets to purchase the related expenses the to record decided 2013, year fiscal been Since has it price and incidental expenses). at Tangible assessed are assets Tangible(b) assets use. of likely the duration on depending over 2,method 5years 3, 4or toaccording the straight-line calculated are amortisations The cost. production of its conservative assessment a at in-house, created is it purchase value or, when its at booked is Software Intangible assets (a) principles and accountingMain rules 6 of No. 2008-04 Notice and of 321-8 R. by Article prescribed provisions to specific the subject No. 2014-03) regulations (ANC of Accounts Chart General notably those of the National France, in force in provisions the legislative regulatory and with accordance in up drawn were accounts annual Sacem principles Accounting and rules Notes to the financial statements Notes to financial the statements Financial

March 2008 of CNC. 2008 March

their purchase cost (purchase their purchase cost (purchase the Intellectual Property Code Code Property Intellectual the

royalties. any receiving longer no are which accounts debit member concern the estimated risk. They mostly of amount the at constituted are value. Impairments nominal their at booked are Receivables receivables Other (e) loss. or profit the on impact royalties’ without account any by theoffset ‘notified uncollected be will insolvency, receivables the event the in of Thus, collection. cash their prior after rightholders to the paid only are royalties their as depreciated be will not of non-recovery risk is there which nominal value. in Receivables their at booked are Receivables receivables ‘User’ (d) recognised. willbe cost impairment an then cost purchase their than less is value current If their cost. at their sheet purchase balance Investments appear in the Investments (c) ■ ■ ■ ■ ■ ■ use: of duration likely the on depending method toaccording the straight-line is calculated depreciation The ■ ■ ■ ■ ■ ■ 5 years. in the fiscal year’s expenses. fiscal the in booked is taxes), (excluding €500 than less value unit E I 2 F T 20 years. –3, 4, 5, 10installations or O B T equipment –2, 5years. 3, 4or T equipment ransport equipment ransport , 3, 4, 10 5or years. urniture and office supplies – supplies office and urniture quipment which has a a has which quipment uildings – 30 years. – 30 uildings ffice equipment and and equipment ffice

–

SACEM 45 2014 |SACEM REPORT ANNUAL in the balance sheet liabilities: in sheet the balance long-term commitments social books theSacem following Provisions(g) capital gains were €82,343,555. €2,737,949were potential the and 2014 31 at December assets potential capital losses of financial For information purposes, the market price. of the basis the on recognised is impairment no and treasury in held is Accordingly, portfolio this to maturity. held are These amounts. into cash convertible which aresecurities easily debt traded and of bonds composed mainly is portfolio The Marketable securities (f) ‘projected credit units’ method. credit ‘projected toare according determined the ‘Retirement package’ commitments Non-balance sheet commitments(i) items. recurring non as booked are activities, ordinary character, of Sacem’s part significant their or occurrence, their nature, by not, their are Income and expenses which result Non recurring (h) contingencies and expenses. to identified specifically otherThe provisions relate ■ ■ credit units’ method. to ‘projected the according provisionThe is determined of service. years 30 20 and for of abonus payment the by accompanied awards: E mployee’s of length service

Financial statements Management report Strategic overview Financial statements Appendices

Deductions in % of total collections 2013 (000) € 834,766 2014 (000) € 829,660

2014 2013

2014/2013 €000 % % % €000

Total expenses 206,881 200,545 to be deducted – Transferred expenses -1,740 -1,672 – Net book value of assets disposed -45 -172 Expenses 205,096 24.72 0.92 23.80 198,701 Other operating income -25,556 -3.08 -0.02 -3.06 -25,543 Net expenses 179,539 21.64 0.90 20.74 173,158 to be deducted – Financial result (*) -39,404 -4.75 -0.77 -3.98 -33,215 Net expenses net of financial result 140,136 16.89 0.13 16.76 139,943 To be deducted – miscelleanous income -2,581 -0.31 -0.23 -0.08 -672 – insufficiency/excess of management levies 8,685 1.05 0.74 0.31 2,563 Deductions 146,240 17.6 3 0.64 16.99 141,834

46 SACEM | ANNUAL REPORT 2014 Grand total Grand Shareholdings Investments Buildings Other tangible assets Advance payments and instalments Investment-related receivables Investment-related Other financial assets Loans Statement of fixed assets Advance payments and instalments processes brands, licences, patents, Concessions, assets Intangible (4) (2) (5) (3) MANON and €7.3 for million SELECT €1 for million, (WEBDR applications of release the and developments software from are movements main he (1) Land Tangible assets

on tangible assets. for €844,874, furniture office for €87,763, supplies office for €42,579, miscellaneous technical equipment for the for Headquarters €201,971. for €6.7 million). companies. T 2015. 1January on effective became to Sacem SESAM from transfer asset the company; this of 100% hold D  T R T €46,368. for l’église de rue office head S offices for €500,000.  T T (2) he real estate investments relate to the acquisition of the Sacem Luxembourg premises for €1.5 million (land and buildings) and the Rennes delegation delegation Rennes the and buildings) and (land €1.5 for million premises Luxembourg Sacem the of acquisition to the relate investments estate real he he auction sale of Sacem art works for €44,675, company car sales for €47,062, and sale of office equipment for €47,949 had a decreasing effect effect €47,949 for adecreasing had equipment €47,062, for office of sale sales and car €44,675, for company works art Sacem of sale auction he equipment IT and computers €1,956,848, personal for computers mainframe of acquisition to the relate assets tangible other in investments main he he change in investment-related receivables include the results, call for funds and repayments of the Neuilly, Châteaudun and Villette real estate estate real Villette and Châteaudun Neuilly, the of repayments and funds for call results, the include receivables investment-related in change he acem also carried out renovation works in the Marseille delegations for €83,696 and the Aix-en-Provence delegations for €27,631 as well as at the €27,631 the for at as well as delegations Aix-en-Provence the and €83,696 for delegations Marseille the in works renovation out carried also acem enovation works at the head office accounted for €74,753. for accounted office head the at works enovation uring fiscal year 2014, Sacem sold its shareholdings in SAS Fast Track for €37, and acquired the remaining shares of SESAM for €32 in order to to order in €32 for SESAM of shares remaining the €37, Track for Fast acquired SAS in and shareholdings its 2014, sold year Sacem fiscal uring (2) (1) (4) (3) (5) (1) Gross values at values Gross 1 January 3,60 237,16 116,166 30,290 59,393 56,561 90,703 10,645 21,086 69,618 13,739 5,740 €000 2014 167 212 – accrued interests value creations, Acquisitions, accruals and between line increases by increases of new loans, new loans, transfers transfers 39,389 10,210 7682 27,6 17,472 items, 5,534 3,225 1,656 5,138 6,173 €000 342 557 735 53 0

Decreases by line items line transfers transfers between between 18,006 18,006 18,450 SACEM 47 2014 |SACEM REPORT ANNUAL €000 445 445 – – – – – – – – – deactivations, repayments of accrued reductions Disposals, Disposals, spin-offs, spin-offs, interests of loans, of 6,300 6,639 6,499 €000 193 140 140 – – – – – 6 0 0 Gross values at at values Gross 31 December 100,380 251,460 121,755 59,646 13,290 29,325 10,645 61,049 7090 9 87,0 12,577 5,889 €000 2014

503 557 214

Financial statements Management report Strategic overview Financial statements Appendices continued

Amortisation statement

Decreases/ amortisation relating to Increases/ assets removed Amortisation at allocations from the balance Amortisation at 1 January during the sheet and 31 December 2014 fiscal year reversals 2014 €000 €000 €000 €000 Intangible assets Concessions, patents, licences, brands, processes 50,026 8,880 – 58,906 50,026 8,880 0 58,906 Tangible assets Buildings 31,967 1,788 – 33,755 Other tangible assets 47,4 40 2,277 95 49,622 79,407 4,065 95 83,378 Total amortisation of fixed assets 129,434 12,945 95 142,284

Provisions and depreciation statement

Increases/ Decreases/ Amount at allocations reversals Amount at 1 January during the during the 31 December 2014 fiscal year fiscal year 2014 Sections and items €000 €000 €000 €000 Provisions Provisions for contingencies For litigations(1) 598 88 300 386 Provisions for expenses Employee’s length of service award 2,064 204 – 2,268 Others 77 29 – 105 2,738 321 300 2,759 Depreciation On members’ debt accounts 1,866 132 66 1,931 On miscellaneous receivables(2) 1,545 1,762 1,545 1,762 On traded debt securities 1,732 – – 1,732 5,143 1,894 1,611 5,425 Grand total 7,8 81 2,214 1,911 8,184

Of which additions and reversals Operating 7,8 81 2,126 1,611 8,184 Non recurring result – 88 300 –

(1) Provisions for litigations: These provisions cover labour litigation costs based on the actual risk exposure. (2) Provisions for depreciation of miscellaneous receivables: The repayment of the current account advance by GRD Design to Sacem justifies the reversal of the provision. The allocation relates to a current account advance that Sacem had granted to GRD Limited within a project implementing an international music database.

48 SACEM | ANNUAL REPORT 2014 Prepaid expenses accounts related and assets fixed on Debts debts security social Tax and Loans Other debts: Other Other financial assets Loans due beyond one year one beyond due Loans year one within due Loans Total Other receivables User receivables Current assets Statement of receivables and debts by maturity debts and receivables of Statement limited to the ‘social programme’ resources. is Sacem’s regime, of this commitment character to non-annuity the regards with Consequently, and allocation scheme. ofassistance the terms the under paid be could which amount, allocation future guaranteed no is there year. ongoing the for ofpoints value the Hence, service the re-assesses year,Each of Directors Board the allocations. of quarterly form the in resources additional from benefit conditions, certain under can, points, of anumber aids. on based rights social obtained having members’ members of Sacem’s programmes, terms the €237,193,824.86 social guaranteed of Under =€278,449,655.78 which of debt surplus to the undry refer (1) accounts related and Trade payables receivables Investment-related Fixed assets Total Deferred income Debts Receivables Su Members Non Users C

ollections toollections be distributed S ndry debt ndry -paid notified royalties (1) 1,346,660 8,4 788,049 788,049 282,908 9,3 199,038 199,336 278,450 5,3 155,939 155,939 amount amount 40064,000 64,000 62,651 12,577 36,115 ANNUAL REPORT 2014 |SACEM REPORT 49 ANNUAL Gross Gross Gross 5,889 6,439 3,581 5,570 2,241 8,517 €000 €000 342 193 214 Due within Due within 1,094,152 one year year one year one 263,271 25,941 62,146 36,115 6,439 2,086 3,581 5,570 8,517 €000 €000 – – – Due beyond Due beyond 262,508 262,508 one year one year one 19,637 12,577 5,889 €000 €000 505 298 154 214

Financial statements Management report Strategic overview Financial statements Appendices continued

Accrued income Amount of accrued income included in the following balance sheet items:

Amount €000 Accrued interests on bonds, bills and similar securities 15,576 Accrued interests on interest-bearing bank accounts 47 Accrued interests on savings accounts 388 Trade receivables 3,449 Other receivables: Social organisations, state and sundry debtors 3,150 Total 22,610

Expenses to be paid Amount of expenses to be paid included in the following balance sheet items:

Amount €000 Bank loans and debts 0 Trade payables 1,701 Tax and social security debts 25,435 Debts on fixed assets 384 Other debts 1,665 Total 29,186

Prepaid expenses and deferred income

Expenses Income €000 €000 Operating expenses/income Prepaid expenses 1,914 Inventory 327 Excess of management levies 31 December – 8,517 Total 2,241 8,517

Share capital structure The share capital is variable. It is made up of the members’ admission fees at their historical book value. 4,274 admissions were registered in 2014. On 31 December 2014, Sacem had more than 151,000 members. The admission fee was at €127 for the fiscal year 2014 (same as 2013). Transfer of expenses Concerning the income from private copying, the Board of Directors decided, from the 2004 fiscal year onwards, to reintroduce the principle of withholding administration expenses relating to the running costs related to management of cultural aid (25% Private Copying levy). The line item ‘transfer of expenses’ conveys this decision.

50 SACEM | ANNUAL REPORT 2014 Income from investment in subsidiaries and associates debt Sundry Financial commitment support Elements concerning related and associated companies associated and related concerning Elements relate expenses non to recurring The the following: adjustments. miscellaneous and debts of irrecoverable by mandators settlements claims, of insurance to repayments the relates and to €208,998 amounted income recurring non other The works.art and furniture of office disposal the revenue from to sales the relates of €22,882 income recurring non The result Non recurring Lump sum retirement benefits Bank guarantees for members Financial commitments Other receivables receivables Investment-related Shareholdings ■ ■ ■ (2) n n n n agreements. to company according are n packages retirement he (1) Items Commitments given

■ ■ ■

miscellaneous adjustments. miscellaneous € € € A F T the case of a cash shortage at SDRM, thus avoiding capital losses for SDRM which would have an impact on the accounting of this asset category. asset this of accounting the on impact an have would which SDRM for losses capital avoiding thus SDRM, at shortage acash of case the or the evaluation, the following assumptions were made: s a majority holder of SDRM, Sacem has committed itself to implement necessary measures to prevent a pre-matured sale of traded securities in in securities traded of sale apre-matured to prevent measures necessary to implement itself committed has Sacem SDRM, of holder s amajority

123,113 €39,778 and to of exchangerate differences to gains/loss refers €83,335 of which 1,337,349 projects. IT linked to scrapped 44,712 assets. of value sold book of net T A 1 S S S aking into account a turnover per age bracket identical to that of 2013. of to that identical bracket age per aturnover account into aking ome employees are only likely to retire voluntarily between the age of 65 and 67. and 65 of age the between voluntarily to retire likely only are employees ome 64. and 62 of age the between voluntarily to retire likely are employees ome acem employees do not work after the age of 67. of age the after work not do employees acem .50% discount rate (TMO 2nd half of 2014) and a social security rate of 47.37%. of rate security 2014) asocial of and half 2nd (TMO rate discount .50% (1) (2) SACEM 51 2014 |SACEM REPORT ANNUAL companies companies Affiliated Affiliated Amounts relating to 10,640 12,377 11,540 17,516 4,880 €000 Associated companies Amount 13,462 €000 €000 752 63

5 –

Financial statements Management report Strategic overview Financial statements Appendices continued

Individual training entitlements A collective agreement on lifelong vocational training, defining the terms and certain conditions of the application of Law No. 2004-391 of 4 May 2004, which was signed on 6 September 2006.

Entitlements accrued and not exercised on 31 December 2014 Volume of training hours 146,092.80

Average headcount Indicator 114 of the social balance sheet, combined head office/regions average headcount Indicator 123 of the human resources report, temporary workers.

Employees Salaried made available employees to the company Executives 295 – Senior staff 264 21.58 Employees 925 – Total 1,484 21.58

List of subsidiaries and associated companies

Share of the Result of the outstanding last fiscal year Subsidiaries and associates Capital in euros capital in euros A – Detailed information regarding the subsidiaries and associated companies 1 – Subsidiaries (more than 50% of the outstanding capital): SDRM 61 59/61 282,083 Sacem Luxembourg 10,000 75% 0 SCI OF 225-227 AVENUE CHARLES DE GAULLE 914,700 75% 5,655,240 SCI CHATEAUDUN 304,900 75% 395,072 SCI VILLETTE 2,286,735 2/3 513,381 SESAM 80 100% 0 2 – Associates (10 to 50% of the outstanding capital): F.T . ‘The Digital Copyright Network’ 37,000 14.4% Not provided B – General information concerning other subsidiaries and associates 1 – Subsidiaries not referred to in A: (a) French None None None (b) foreign None None None 2 – Associates not referred to in A: (a) French – BIEM 412 1/27 Not provided (b) foreign None None None

52 SACEM | ANNUAL REPORT 2014 European Community) the of State a Member from televised awork of in the national territory, changes, any without and full by cable, simultaneously, in authorise the retransmission 132-20-1 L. to Article (right

according to the law/CPI management is entrusted which for 2 –Payments copying of audio works) audio of copying 311-1 L. Article private the (for Total Total works) audiovisual of copying 311-1 L. Article private the (for Rights ReproductionMechanical and Normal Users Public Performance Rights Attribution of rights atyear of the end rights Attribution fiscal he ‘attributed amounts’ refer to the corresponding amounts in the individual account of the rightholder. the of account individual the in amounts corresponding to the refer amounts’ ‘attributed he (**) (*) by the rightholders management is entrusted which for 1 –Payments

Nature of payments DRM D

EP I T ncluding provisional deductions for expenses (€29,250,158) and for social aid (€24,572,401). aid social for (€29,250,158) and expenses for deductions provisional ncluding

of the previous (S 31 December ee Liabilities in Outstanding Outstanding year’s balance previous fiscal rights on 508,425 128,643 637,068 87,977 6 50,909 31,270 14,735 3,894 1,009 sheet) €000 year (1)

of the fiscal fiscal the of Collections Collections 829,660 763,282 144,936 618,346 48,883 66,377 15,946 €000 year 845 703 (2) Loss Statement) Management Management (See Profit(See and 125,562 145,011 147,810 19,450 2,798 1,926 €000 levy 550 155 167 (3)

(Article L.321-9) L.321-9) (Article for creation attributed attributed to the aid aid the to Amounts Amounts 22,598 22,598 16,370 6,227 €000 (4) – – – – – attributed to attributed SACEM 53 2014 |SACEM REPORT ANNUAL Amounts Amounts social or cultural cultural 44,534 46,428 42,024 1,894 1,566 2,510 €000 209 aid aid (5) 95 24 attributed to attributed rightholders Amounts Amounts 572,680 2,2 129,098 122,521 450,159 617,491 32,913 48145,185 44,811 10,748 €000 292 857 (6) (6) (*) (*) ((3)+(4)+(5)+(6)) (See Liabilities in(See of the current 31 December Outstanding Outstanding year’s balance current fiscal rights on 683,310 509,027 638,125 (1)+(2)- 12,946 27,378 3,632 1,228 sheet) sheet) €000 = (7) year (**)

Financial statements Management report Strategic overview Financial statements Appendices continued

Summary of the amounts remaining to be attributed to the rightholders

Gross collections Outstanding amounts Previous Current Previous Current fiscal year fiscal year fiscal year fiscal year Rightholders €000 €000 €000 €000 Total 834,766 829,660 36,874 35,936

Summary of the amounts remaining to be attributed individually Payments for which management is entrusted by the rightholders:

This financial year Copyright holders €000 Public Performance Rights and Normal Users 458,836 Mechanical Reproduction Right – Sacem management 170,652 Total 629,488

Summary of the amounts remaining to be attributed individually Payments for which management is entrusted according to the law:

Amount Year of Sections and items €000 collections Article L. 132-20-1 (right to authorise the retransmission by cable, simultaneously, in full and without any changes, in the national territory, of a work televised from a Member State of the European Community) Not applicable Article L. 311-1 (for the private copying of audio works) 5,190 2014 4,016 2013 2,633 2012 Sub-total 11,838 Article L. 311-1 (for the private copying of audiovisual works) 1,360 2014 1,372 2013 1,107 2012 Sub-total 3,838 Total 15,677

Ernati sum eum volenis eturehe nemporest, vidunt audis mi, quam dolupta tecepe nos mincti consequid et adipisc iendio tem. Itae. Ita sitatemos ex et od quam quist a plabores et quos quam, conet pre non pore aut excerum fugia in pro iditis pa quidipis maio invello resecto tatessi tem re, optibust laborit iistia nati receriam quo tet derrum exceperitis vel essere dus, quidebi squam, consequas esti quid molupti dignate sum niaturest reperit aliquia dollabo reptist eium volectur audi dolut a disimus diti resequi con nest voluptio quistio. Ibus denes ellit quia eicil mi, odi toria sa

54 SACEM | ANNUAL REPORT 2014 SGAE SELECT SDRM SCPP SCI SCAM SACD SABAM RIDA Copying Private MANON IT IRMA IPC GESAC General rights FCM FastTrack FACF ESCP Elasticsearch DSP DRM DEP DDEX CNV CMO CISAC Catch-up TV APACHE(or CASSANDRA) CASSANDRA BIEM ARTISJUS ARMONIA ANC ADSL ADAMI ADAGP Glossary

Spanish Society of Authors and Publishers ERP enterprise resource planning and Publishers French Collecting Society for MechanicalReproduction Rights for Authors, Composers exploitation of sound recordings and music videos. Society of Phonogram Producers: collects and distributes royalties for its members for the Company Investment Property French French Civil of Society Multimedia Authors Composers and Authors Dramatic of Society French A Belgian Society of Authors, Composers and Publishers French International Review of Authors’ Rights creators. remunerating use, while private own their for works to copy individuals private allows which asystem is copying Private system Invoicing Information technology Information and Resources Center for Popular Music Code Property Intellectual French European Grouping of Societies of Authors and Composers nightclubs, cinema…) Royalties collected by the regional network shows, (concerts, background music, Fund for the Creation of Music industry. entertainment and media music, the in solutions adopted broadly The leading technical developer for the network infrastructure required to deliver CulturalFund Franco-American Business School in Paris Search Engine Foundation) (Apache Provider Digital Service rightsMechanical Public rights performance Digital Data international Exchange: standards for sharing musical data Jazz and Variety Song, for Centre National French Collective Management Organisation International Confederation of Societies of Authors and Composers phone, or other electronic device connected to the Internet. acomputer, using broadcasted been have they after programs TV watching for A system Database Management System (Apache Foundation) International organisation representing mechanical rights societies Hungarian Bureau for the Protection of Authors’ Rights services online licensing for hub pan-European First French Accounting Standards Board Asymmetric Digital Subscriber Line French Collective Management Society for Performing Artists and Musicians Arts Visual of Authors of Society French Definition SACEM 55 2014 |SACEM REPORT ANNUAL

Financial statements Management report Strategic overview Glossary continued

Definition SIAE Italian Society of Authors and Publishers SNEP French National Phonographic Producers’ Union SPA Portuguese Authors’ Society SPEDIDAM Society for the Collection and Distribution of Artists’ and Performers’ rights SPPF French Phonogram producers’ collecting society SPRD Collecting and Distributing Society SPRE French society managing neighbouring rights/equitable remuneration for its four members: SPPF/SCPP representing record companies and ADAMI/SPEDIDAM representing artists/musicians SUISA Swiss Cooperative Society of Music Authors and Publishers SVOD Subscription video on demand (SVoD) refers to a service that gives users unlimited access to a wide range of programs for a monthly flat rate TMO Average bond rate TNT French National Digital Terrestrial Television (DTT in English) UGC User-Generated Content: any form of content created by users of an online system or service VOD Video-On-Demand, which allows consumers to select and watch the video content they want, when and where they want WEBDR Customer Relationship Management System

56 SACEM | ANNUAL REPORT 2014 Front cover: David Guetta ©Ellen Von Unwerth, ZAZ ©Yann Orhan Inside front cover: Guitar image ©Marc Chesneau, Trumpeter image ©Getty Images/Blend Images – KidStock, Man reading a device image ©Getty Images/Westend61 Page 01: ZAZ ©Yann Orhan, Jean-Noël Tronc ©Marc Chesneau Page 02: Pierre Henry ©B.Mangin, Fred Rister ©Thomas Bartel Page 03: Angélique Kidjo ©Richard Pierce Page 04: Issam Krimi ©Radio France/Thomas Lavelle, Sami Valkonen ©Michael Chia Page 05: Alex Loscos: all rights reserved, Daniel Ek: all rights reserved Page 06: Ibrahim Maalouf ©Denis Rouvre, Gilberto Gil ©Daryan Dornelles Page 07: Thierry Escaich ©Auditorium de Lyon, ZAZ ©Yann Orhan Page 08: Concert image ©Marc Chesneau, Guitar image ©Marc Chesneau Page 09: Keyboard image ©Marc Chesneau, Tablet and Guitar images ©Getty Images Page 13: Gilles Godard ©Casey Curry Page 16: Jean-Noël Tronc ©Marc Chesneau Page 21: Board ©Lionel Pages Page 25: Alexandre Desplat ©Brigitte Lacombe Back cover: A ngélique Kidjo ©Richard Pierce Daft Punk ©David Black, Clothing/Designer: Hedi Slimane for St. Laurent Designed and produced by Instinctif Partners www.instinctif.com Sacem Annual Report and Accounts 2014

+33 (0)1 47 15 47 15 47 +33 (0)1 15 47 facebook.com/LaSacem twitter.com/sacem www.sacem.fr 225, avenue Charles225, de Gaulle Phone 92528 Neuilly sur Seine92528 Cedex France