Johannesburg – The Southern African Music Rights Organisation (SAMRO) has recorded remarkable revenue growth in 2023, which has enabled the organisation to pay out more royalties to artists.
SAMRO this week said the revenue growth was secured amid a challenging economic environment characterised by increased load-shedding.
Foreign royalty income, generated from the use of SAMRO members’ music in foreign countries, witnessed an increase of 4.1%, from R24.5 million in 2022 to R25.5 million in 2023.
“The increase signifies a growth trajectory in the use of SAMRO Members’ repertoire internationally, emphasising SAMRO’s adeptness in successfully collecting foreign income and managing mutual relationships with sister societies as per the bilateral agreements,” said SAMRO CEO Annabell Lebethe.
The signing of Amazon, a new Video-on-Demand (VOD) licensee, has further bolstered SAMRO’s revenue streams.
“In addition, our new business endeavours have yielded an increase of 24.8% in licence renewals compared to 2022,” said Lebethe.
“The increase in revenue is particularly noteworthy as many licensees faced financial challenges amid high inflation, increased interest rates, and the impact of load-shedding.”
At the 2023 Annual General Meeting held in December, SAMRO announced that it achieved a total revenue growth of 15.3%, from R514.9 million in 2022 to R593.7 million in 2023.
Simultaneously, the organisation successfully decreased its Cost-to-Income ratio to 25% in the same year.
“The reduction in the Cost-to-Income ratio is a remarkable achievement, thanks to the implementation of prudent expenditure management strategies and operational efficiencies,” explained Lebethe.
“Compared to the past five years, when the organisation’s Cost-to-Income ratio was as high as 40%, the significant decrease to 25% in 2023 is a testament to our commitment to creating value for our members, as lower costs mean higher royalty distributions.
“Our target is to bring the CTI% down to 20%.”
SAMRO’s total revenue is derived from a diverse array of sources.
This includes license fees collected from private, public, and community broadcasters, as well as revenue from general licensing agreements with establishments such as malls, hospitals, and hotels for the public performance of music.
Additionally, SAMRO generates income through licensing agreements with Digital Service Providers for the distribution and streaming of music, as well as from agreements with VOD platforms for the provision of music content.
Revenue is also obtained from licensing agreements covering music used through User Generated Content.
In addition, SAMRO collects foreign income from licensing agreements and other activities conducted outside the domestic market.
SAMRO said the increase in revenue had a significant positive impact on SAMRO’s total amount available for distribution which increased by 22.2%, from R452.3 million in 2022 to R552.8 million in 2023.
Notably, SAMRO distributed R73.8 million in the Television category and achieved its biggest distribution in the Radio and General category to date of R147 million compared to R121 million in 2022.
“We have an unwavering commitment to delivering value to our members, and as part of this commitment, we have implemented a strategic plan to enhance our efforts to increase the frequency of royalty distributions to our members,” explained Lebethe.
“This is evident in the increase in the number of distributions from 15 in 2022 to 21 in 2023.”
