Message from CEO (Autumn 2006)

Welcome to this edition of SAMRO Notes. In SAMRO’s Annual Report for 2005 I mentioned that these are defining times faced by the music business and that, as a South African organisation, SAMRO would continue to give substance to that which makes us unique including our commitment to true empowerment.

There have been many developments at SAMRO since our Autumn Edition of SAMRO Notes and we suggest that retaining this Edition of SAMRO Notes as a reference would be helpful in your dealings with your society.

I would like to commence this message to you with a reminder of SAMRO’s mandate which can be summarised as follows:

• To administer the rights of broadcasting, performing in public, and transmitting in a diffusion service, your musical works – and the works of members of our affiliated societies all over the world -- here in South Africa;
• to issue licences to anyone wishing to broadcast, perform in public, or otherwise transmit music to the public;
• to collect the appropriate licence fees from the hundreds of thousands of premises using music legitimately all over South Africa;
• to distribute the computed royalties to the composers, lyricists and publishers –tens thousands of them, spread over many countries of the world -- whose music is actually used here; and
• to take appropriate legal steps against anyone infringing any of those rights we administer.

During the first ten years of our new democracy, SAMRO has seen significant progress being made, with growth in revenues and in distributions by the society to its members and affiliates as well as transformation taking place within the society itself.

Actual growth in licence fees and other royalty income collected by the SAMRO Group rose from R 62,9 million in 1996 to R 183,1 million in 2005. Half year results for 2006 indicate an improvement of the order of 14% on the figures for 2005. Over the past five years SAMRO has distributed just under R 500 million to our members and members of our affiliates.

SAMRO continues to make progress in what history may well record as the most dynamic period in the music business world wide, especially with the convergence of technologies in the fields of transmission and digitization of musical works.

In the last three to four years, wide ranging changes have occurred within SAMRO to position the society for a sustainable future. These have been guided by a clear vision for the society. SAMRO is committed to represent and develop the interests of all its stakeholders in a manner so as to maximise returns to our members and affiliates and to take our rightful place as a leader in the wider music business. In the field of collective management of rights, SAMRO is undoubtedly still the leader on the African continent. This, however we believe, should not lead to complacency or presumption and much work remains to be done. Our management should be in harmony with the social, political, economic and technological environment in which we operate.

Significant progress has been made with the organisational change currently under way at your society. In our endeavour to ensure that rights holders receive their fair economic rewards due from all music users, we have undergone a realignment of the executive and management teams. Introduced a new management system as well as reviewed our business processes and procedures. The planned changes are anticipated to be fully implemented by the end of the 2006/2007 financial year.

During the past year, SAMRO commenced changes across the organisation and the benefits of wide ranging initiatives are beginning to flow through to the society’s operational performance and members. The first phase of the strategy involving structural changes and other areas mentioned above is well underway. The objective of optimising SAMRO’s operating base is included in the next phase and it is here where members can expect to experience greater benefits of the changes currently being implemented.

Also, during the past year SAMRO’s bold new Corporate Identity was unveiled signifying the organization’s transformation at different levels, designed to take us into this 21^st century. It is one of the most visible components of the organization’s transformation. SAMRO has now been structured into four main divisions namely;

In the field of human capital, we are exited about the acquisition of some great and talented people who will certainly assist SAMRO in delivering on its brand values of CONVENIENCE, EXCELLENCE, REATIONSHIPS and TRUST.

In line with our views on SAMRO playing a more meaningful role in the wider South African music business, the society became involved in the launch of the South African Music Industry Co-operation Initiative (SAMICI), a broad based initiative involving many stake holders including music publishers, composers’ associations, collective management organisations, record companies, musicians’ groups, broadcasters, concert promoters, regulatory authorities and various government departments.

We believe that this initiative will add impetus to the transformation of the South African music business as well as the promotion of South African music. Initial projects include the hosting of an annual music conference and exhibition for all stakeholders in the music business (Moshito Conference and Exhibition), regular visits by independent music publishers and record labels to the MIDEM international music fair in France to market their music, as well as the establishment of the South African Music Exports Council (SAMEX).

SAMRO, together with other partners has, over the past ten years, become involved in assisting with the establishment of new collective management societies in Africa. Its staff and resources are used for the training and development of staff from other societies on our continent. We believe in the establishment of strong collection societies so that you our member may also receive your just dues from the use of your music outside our borders.

Support is also rendered to SADC member initiatives involving the World Intellectual Property Organization (WIPO), the International Confederation of Societies of Authors and Composers (CISAC) and UNESCO with the object of ensuring an effective level of authors’ rights administration in the SADC. On a wider African front, SAMRO participates in the multifarious activities of CISAC's African Committee. For the past ten years we have also served on the board of directors/administrative council of CISAC and continue to serve on its various technical committees.

About five years ago SAMRO together with other African societies’ leaders embarked upon a bold initiative, known as Partnership for Progress, to improve the collections, distributions and corporate governance of continental societies. Between the years 2000 and 2004 this initiative, has seen an increase in collections on the continent of the order of 23% in real Euro terms.

From the cover of this edition of SAMRO Notes you will have observed that I will stand down as CEO on 30 June 2006. We shall deal with this in more detail in the Autumn Edition of SAMRO Notes as well as through our website which I would encourage you to visit at www.samro.org.za.

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