2023 Integrated Report Highlights
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Chairperson's Message - SAMRO 2023 Achievements
SAMRO is a leader in music collection societies on the African continent and holds a prominent position in CISAC, the world's largest creative sector network. Our Board, comprising seasoned artists, professionals, and entrepreneurs, shares a passion for the music industry's future. The appointment of SAMRO's women-led executive team, including CEO Annabell Lebethe, signifies our commitment to gender-driven change. Regrettably, the passing of Board member Gloria Bosman in March 2023 was a poignant loss. Her brief yet impactful contribution enriched our perspectives and guided the organisation toward future aspirations.
SAMRO remains vigilant in lobbying policymakers to safeguard members' exclusive rights amid challenges posed by the Copyright Amendment Bill (CAB). The proposed Fair Use provision requires careful consideration, and SAMRO continues to invest in advocacy and educational efforts to raise awareness about its potential impact on creators.
Ethics and good governance are paramount. SAMRO has undertaken a forensic investigation into irregular payments, registering criminal cases of fraud where necessary. Collaboration with law enforcement agencies and a renewed focus on members' Code of Conduct are steps toward fostering an ethical culture within the organisation. In closing, I extend sincere appreciation to our members, the Board, and our dedicated leadership team. Together, we have achieved the necessary, the possible, and now, the impossible. The vision of being a leading and most-admired CMO in Africa is within our grasp.
SAMRO's commitment to creating and promoting value for our members is evidenced by a 22% increase in total distributions. The focus extends beyond reducing costs to ensuring that funds collected directly benefit our members. Achieving a significant milestone, we distributed R147 million in royalties in the Radio and General category and R73.8 million in royalties in the Television category. The expansion of royalty collection to digital platforms such as TikTok, Facebook, and Netflix, with the first distributions from Netflix and TikTok, showcases SAMRO's adaptability to the evolving technological landscape.
Words from our CEO
In 2023, the music business fully emerged from the COVID-19 pandemic and embraced the rise of digital innovation. This has supported SAMRO in growing its multiple revenue streams and empowering our members. In my inaugural report as CEO, it's a privilege to connect with you and share the exciting journey we embark on together. As I step into this role following the esteemed Mark Rosin, I recognise the weight of the responsibility and the legacy that precedes me.
SAMRO, the beacon of Africa's music industry, continues to shine globally. Our commitment to safeguarding members' interests becomes increasingly vital, especially amid challenges posed by emerging technologies like AI and potential amendments to the Copyright Act.
Our global network thrives, with reciprocal agreements reinforcing our bonds with international societies. As one of only two African countries on the CISAC Board, SAMRO actively shapes global policy, advocating for artists and creators on issues such as AI and copyright.
The recent passage of the Copyright Amendment Bill in September 2023 is a pivotal moment, and we share your concerns, particularly about the fair use principle.
As we navigate these challenges together, SAMRO stands firm in its commitment to championing your rights, fostering global collaborations, and providing unwavering support to our members.
Thank you for your trust in SAMRO.
CEO of SAMRO.
Words from the CEO
SAMRO, the beacon of Africa's music industry, continues to shine globally. Our commitment to safeguarding members' interests becomes increasingly vital, especially amid challenges posed by emerging technologies like AI and potential amendments to the Copyright Act.
Our global network thrives, with reciprocal agreements reinforcing our bonds with international societies. As one of only two African countries on the CISAC Board, SAMRO actively shapes global policy, advocating for artists and creators on issues such as AI and copyright.
The recent passage of the Copyright Amendment Bill in August 2023 is a pivotal moment, and we share your concerns, particularly about the fair use principle.
As we navigate these challenges together, SAMRO stands firm in its commitment to championing your rights, fostering global collaborations, and providing unwavering support to our members.
Thank you for your trust in SAMRO.
CEO of SAMRO.
Financial Performance Highlights
Total Company license revenue in 2023
15.3
Total revenue increased by 15.3% to R593.7 million (2022: R514.9 million). Local licensing revenue makes up 95% of total revenue and increased by 15.9% to R568.2 million (2022: R490.4 million). Royalty income from affiliated societies increased by 4.1% to R25.5 million (2022: R24.5 million). The Board has set an ambitious target of seeing SAMRO reach R1 billion in revenue in the medium term. We are gaining ground every year and are now well beyond pre-COVID group revenue levels. SAMRO’s licensing revenue constitutes 89.1% of total income at the group level (2022: 94.4%). We are making progress in diversifying our revenue streams; however, broadcast users such as the SABC, MultiChoice and eTV remain our most significant income contributors.
Cost-to-income ratio
25.0% in 2023 25.9% in 2022
Local Licensing Revenue
Local licensing revenue makes up 95% of total revenue
15.9
Royalty income from affiliated societies
4.1
2023
License and Royalty Income (%)
The Board has set an ambitious target of seeing SAMRO reach
R1 Billion
in revenue by 2026.
Distributions
Number of distributions
21 Distributions in 2023 (Compared: 15 distributions in 2022)
WE DID OUR FIRST DISTRIBUTION OF NETFLIX AND TIKTOK ROYALTIES IN THE MOBILE AND INTERNET SEQUENCE 4 DISTRIBUTION
Total available for distribution (Company) in 2023
22.2
Total distribution paid to members in 2023
3.5
R25 million
Cleared undocumented royalties for 2023
SAMRO Membership Base
889
23 524
124 506
R691 million
INTERNAL SOCIAL IMPACT:
EXTERNAL SOCIAL IMPACT: MEMBERS AND COMMUNITIES
OUR FOUR CSI PILLARS
Preservation and promotion of South African music legacy.
Upcoming programmes will focus on:
A Year in Review
Digital Growth
In the dynamic landscape of the past four years, our digital licensing income has witnessed remarkable growth. The shift from traditional broadcasting to on-demand video streaming services has been a pivotal trend. During the 2023 financial year, digital revenue surged by an impressive 89%. The trajectory of digital licensing remains a strategic focus, with anticipated further growth in the upcoming financial year.
General Licensing and Resilience:
General licensing encompasses a diverse array of music users—from clubs and bars to malls and restaurants—engaged in public music playback. Fees are meticulously structured to align with the unique nature of each business. In the past year, we observed substantial growth in new businesses, coupled with a commendable 24.8% increase in renewals compared to 2022. This achievement is particularly noteworthy as many licensees faced financial challenges amidst high inflation, interest rates, and the impact of load shedding.
Global Resonance:
Foreign royalty income generated from the global use of SAMRO members' music is a testament to our global impact. This income, collected by sister societies through bilateral agreements, constituted 4.3% of total revenue, a marginal decrease from 4.8% in 2022.
Expenditure Management and Financial Efficiency:
Cost control remains a central focus and our adept management reduced the cost-to-income ratio from 29.5% (2022) to an impressive 25%. Employee costs, amortisation of intangible assets, professional fees, IT costs, legal fees, and investment management fees are among the substantial contributors.
Credit control has been vigilantly managed amid current economic conditions. Notably, smaller licensees facing increased pressure have been carefully monitored, resulting in minimised expected credit losses on trade receivables.
At 25.0%, SAMRO's cost-to-income ratio is at its lowest in over a decade, exemplifying our dedication to creating value for our members. This financial prudence directly translates into higher distributions. Looking forward, our ambitious target is to further reduce the cost-to-income ratio to 20%, solidifying our commitment to financial excellence.
Distributions, Cash Flow, and Liquidity:
Despite the financial challenges, SAMRO exhibited resilience through effective expenditure management, resulting in a 22.2% increase in distribution allocation to R552.8 million. The Board's prudent approach to solvency and liquidity, amidst economic uncertainties, reflects SAMRO's commitment to maintaining a sound financial position.
Investments and Disposals:
SAMRO's investment income soared by 124.9% to R43.0 million, driven by favorable interest rates. Notably, SAMRO successfully concluded the disposal of a portion of land and buildings in January 2023, generating R18.9 million.
Capital Expenditure:
SAMRO is in the process of upgrading its ERP system, with an in-house development plan for a new member services and distribution system.
Governance at SAMRO
Members of the Board act in good faith and discharge their fiduciary duties with diligence and care.
- Legal and regulatory compliance
- IT and cyber security
- Health and safety compliance
- Ethics and integrity
- Financial complianceInternal controls and audits
- Risk management
