2024 Integrated Report Highlights
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Chairperson's Message - SAMRO 2024 Achievements
Last year, SAMRO addressed operational efficiencies and improved systems and processes. This year, we built on these improvements to add value for our members, paying out R429 million in royalties, a new record for SAMRO. We also experienced double-digit revenue growth, collecting R684 million in licensing fees and closing in on our ambitious target to reach R1 billion in revenue by 2025.
We also explored new royalty collection opportunities. We concluded a R5.4 million licensing deal with technology giant Amazon. These improvements reflect our progress in addressing inefficiencies in our royalty income collection processes.
As part of the strategy review process, we set new targets to achieve revenue of R1.2 billion and distribute R1 billion in royalties by 2028. We upgraded our core system and implemented new IT systems to streamline our finance, licensing, and distribution functions. These enhancements are essential as we aim to further increase distributions and decrease the number of unclaimed royalties due to incorrect or insufficient documentation. This year, we distributed R14.9 million of unclaimed royalties.
Words from our CEO
SAMRO had an incredible year, achieving double-digit growth and delivering more value to our members. The global music industry is constantly evolving, driven by the emergence of digital technologies that have transformed both music production and consumption. Music royalties are essential for many music creators, songwriters, and composers. As a member-centric organisation, SAMRO administers our members’ musical works and advocates for their intellectual property rights. We maintain strong relationships with both global and local industry peers. SAMRO has 89 reciprocal agreements with Collective Management Organisations (CMOs) worldwide, ensuring that we collect revenue for our members in the relevant jurisdictions. SAMRO remains one of 18 CMOs represented on the CISAC board and is also a member of the CISAC Africa Region Executive Committee, which was established in November 2023.
SAMRO had an outstanding financial year, achieving double-digit growth in collections despite a challenging economic environment. This growth highlights the effectiveness of our strategic focus on increasing revenue and confirms that licensees recognise the value of music in their businesses. We also saw an increase in digital revenue, fueled by the global rise of music and video-on-demand streaming services. Digital platforms continue to present significant growth opportunities for rights holders, and we are moving in the right direction to capitalise on these opportunities. In addition, we achieved the lowest cost-to-income ratio in a decade by implementing cost-containment measures, including reassessing supplier and service costs and managing headcount. These efforts enabled us to allocate more resources towards creating value for our members. In 2024, we distributed R429.2 million, the highest amount to date, and increased the royalties available for distribution by 12.6%, reaching R622.2 million (2023: R552.8 million).
We also reduced the undocumented works balance by 1.9% to R284.9 million (2023: R290.4 million). Moreover, SAMRO has made significant progress in paying out unclaimed royalties to members whose details have not been updated. Since 2021, we have focused on tracking members with unidentified or undocumented works due to insufficient details, improving distribution and enhancing our reputation among rights holders and the public.
Thank you for your trust in SAMRO.
CEO of SAMRO
Financial Performance Highlights
Total Company license revenue in 2023
14.1
We achieved the lowest cost-to-income ratio in 10 years. SAMRO’s total revenue increased from R593.7 million to R683.8 million. This growth was primarily driven by digital revenue, which makes up 12% of our revenue.
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.
Cost-to-income ratio
22.9% in 2024 25.0% in 2023
Local Licensing Revenue
Local licensing revenue makes up 95% of total revenue
14
Royalty income from affiliated societies
40.3
2024
License and Royalty Income (%)
The Board has set an ambitious target of seeing SAMRO reach
R1.2 Billion
in revenue by 2028.
Distributions
Number of distributions
21 Distributions in 2023 (Compared: 15 distributions in 2022)
Total available for distribution (Company) in 2024
11.8
Total distribution paid to members in 2024
48.3
SAMRO Membership Base
930
24 943
121 295
R780 million
INTERNAL SOCIAL IMPACT:
EXTERNAL SOCIAL IMPACT: MEMBERS AND COMMUNITIES
OUR FOUR CSI PILLARS
Upcoming programmes will focus on
Fuelling music creation
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
