SAMRO reports ‘strong’ revenue growth for 2023

The achievements, SAMRO said, were secured amid a challenging economic environment characterised by increased load shedding (electricity cuts), which resulted in elevated business operating costs for most licensees. In addition, the collective management organisation (CMO) said its steadfast commitment to serving its members yielded a significant improvement in overall performance.

During it annual general meeting in December, SAMRO announced that its revenue grew by 15.3%, from R514.9m ($27m) in 2022 to R593.7m in 2023.

SAMRO’s total revenue is derived from a diverse array of sources, including licence fees collected from private, public and community broadcasters, and revenue from general licensing agreements with establishments such as malls, hospitals and hotels for the public performance of music. SAMRO also generates income from distribution and streaming agreements with digital service providers and from agreements with video-on-demand platforms. Additionally, it generates revenue through licensing agreements for music used in user-generated content and collects foreign income from licensing agreements outside South Africa.

“The reduction in the cost-to-income ratio is a remarkable achievement, thanks to the implementation of prudent expenditure management strategies and operational efficiencies,” SAMRO CEO Annabell Lebethe said.

Simultaneously, the CMO successfully decreased its CTI ratio to 25% last year. “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%,” Lebethe said.

She added that royalty income generated from the use of SAMRO members’ music in foreign countries increased by 4.1% from R24.5m in 2022 to R25.5m in 2023.

“The increase signifies a positive 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. In addition, our new business endeavours have yielded an increase of 24.8% in licence renewals compared to 2022. 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.”

SAMRO said the increase in revenue had a significant positive impact on its total amount available for distribution, which increased by 22.2%, from R452.3m in 2022 to R552.8m in 2023. Notably, the CMO distributed R73.8m in the Television category and achieved its biggest distribution in the Radio and General category to date of R147m compared to R121m 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. This is evident in the increase in the number of distributions from 15 in 2022 to 21 in 2023,” Lebethe said. “Our success in the previous year speaks volumes about our steadfast dedication to delivering unparalleled value to all our stakeholders and we take pride in the fact that our team’s relentless efforts have not only resulted in achieving our goals but also in meeting the expectations of our stakeholders.”

In 2019, SAMRO said it was instating measures to ensure it operated on principles of prudent financial management that would benefit its primary stakeholders. Five years later, it seems like the measures have paid off.

“We have begun to tighten the belt from within,” then SAMRO interim CEO Ditebogo Modiba said at the time. “Unfortunately, this affects the organisation’s ability to employ more personnel, but we cannot continue increasing staff at the expense of our members. This is why we have put a freeze on our headcount and reduced the use of temporary staff.”