At our annual general meeting, held June 16 in Montreal, I explained why SOCAN had not yet seen the effects of the recession. Two major factors contribute to that phenomenon. There is significant lag between the time international royalties are collected at their sources and the time when they are remitted to us and then distributed to you, our members. The monies received by SOCAN at the end of 2008 and throughout a good chunk of 2009 were collected by our sister performing-rights organizations around the world before the recession hit. Similarly, there is a delay between the time advertising (which affects many of our media income sources) is sold and the time the commercials are aired, paid for and corresponding licence fees are remitted to SOCAN.

Some experts are now predicting that 2009 television revenues could be 7 percent lower than last year, and could go down by another 5 percent in 2010. Since most of SOCAN’s tariffs are calculated as a percentage of revenue, as that revenue increases or decreases, so does SOCAN’s. But this remains to be seen. As a result, it is difficult to predict exactly what the impact of this recession will be on SOCAN.

The good news is that we have had time to prepare for it. Indeed, management has been vigorously controlling expenses and has developed contingency plans in the event that the impact is more severe than we forecasted. We are confident that this — along with continued growth of cable and satellite television (so-called non-broadcast television) and additional revenues derived from new income streams such as satellite radio, the use of your music on the Internet, increased licence fees from background music suppliers and higher general licensing revenues as a result of our increased business-development activities — will compensate, in whole or in part, for the reductions that we may see from foreign sources and traditional broadcasting.

Our objective, as we weather the storm, is to provide as much stability as possible for our members’ royalty stream while maintaining the highest level of service possible. So far, we are completely on target with this objective.

Uploaded Autumn 2009

Comments? Questions? Suggestions? Send them to Rick MacMillan, Words & Music Corporate Editor, at wordsandmusic@socan.ca.

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