Record revenues, but losses due to multi-year business expansion efforts
TORONTO, Nov. 4, 2020 /CNW/ – SOCAN today announced final 2019 financial results, including record domestic and international collections for the company’s member music creators, music publishers and visual artists. The company also announced significant financial losses due to past investments in the acquisition, creation, and financing of the new business venture Dataclef Inc.
Highlights of SOCAN’s 2019 results:
Distributions to members totaled $296-million, a 6% decrease compared with the $315-million distributed in 2018. The disparity was due primarily to the steep learning curve required for the company’s newly deployed technology to process international and television income. Significant progress has been made in these areas in 2020, as SOCAN continues to leverage this new technology to meet the data-intensive demands of the digital age.
In 2016, SOCAN through its wholly owned subsidiary Dataclef Inc., embarked on a plan to implement the organization’s strategic vision. The 2019 financial results include losses that resulted in an impairment of $41.7-million to the advances made by SOCAN to fund its subsidiary operations since 2016.
“At the time of our investment in these operations, we were exploring new ways to support our members by creating other revenue streams and leveraging new technologies,” said interim CEO Jennifer Brown. “Business plans didn’t come to fruition in the way we anticipated. Through the evaluation process, it became clear that we should divest ourselves of Dataclef assets. We are, however, encouraged by significant success with our new technology system and our improved matching and processing capabilities.”
Through extensive evaluation and analysis, SOCAN has developed a plan to manage the losses, which have not impacted distributions.
Aspects of the plan include the sale of Dataclef assets, a significant reduction in SOCAN’s overhead expenses, a reorganization of the Dataclef operation, and new management leadership, all of which have already been put into action.
SOCAN’s management and Board of Directors have also committed to sharpening the company’s focus on core work for members: expanded domestic licensing of music; continual improvement of the depth, accuracy and speed of royalty distributions; and investing in ways that will allow our team to focus on our core purpose of helping music creators and publishers thrive.
The accounting firm Grant Thornton LLP has reviewed SOCAN’s financial plan to manage the financial impairment and has provided SOCAN with its support.
SOCAN will hold its annual general meeting online on November 10, 2020, to discuss the organization’s 2019 results and financial plan in detail. The meeting is available online to members of the organization who earned royalties in 2019. SOCAN’s 2019 annual report and financial statements audited by KPMG will be made available in concert with the meeting.
About SOCAN
SOCAN is a rights management organization that connects more than four-million music creators worldwide and more than a quarter-million businesses and individuals in Canada. More than 160,000 songwriters, composers, music publishers and visual artists are its direct members, and more than 100,000 organizations are Licensed To Play music across Canada. With a concerted use of progressive technology and unique data as well as a commitment to lead the global transformation of rights management, SOCAN is dedicated to upholding the fundamental truths that music and visual arts have value and creators and publishers deserve fair compensation for their work. For more information: www.socan.com
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