The American Society of Composers, Authors and Publishers (ASCAP) has reaffirmed its commitment to its non-profit structure, following the announcement of record-breaking collections and royalty distributions for 2023.
The move comes amid ongoing industry discussions sparked by rival organization BMI’s shift to a for-profit model in 2022.
ASCAP reported a 14.1% increase in collections, reaching $1.737 billion. Correspondingly, payouts to songwriters and publishers climbed 14.7% to $1.592 billion.
This marks another year of record-breaking results for the non-profit performance rights organization (PRO).
It also reignites the debate surrounding the business model transition of ASCAP’s rival, BMI.
In 2022, BMI announced its decision to become a for-profit entity, after operating as a not-for-profit business since it was founded in 1939.
ASCAP, clearly with an eye on that change at BMI, reiterated this week that it does not charge a commission or take a profit for its services.
It said in a statement accompanying its financial results that “ASCAP’s 10% overhead rate means that 90 cents of every dollar collected was paid to ASCAP members”.
ASCAP said this resulted “in the highest value exchange applied to the lowest overhead rate provided to creators and publishers of any U.S. PRO”.
(Relevant: BMI stopped publicly reporting its annual payouts figure last year.)
Some have argued that BMI’s transition from a non-profit to a for-profit PRO will see the org prioritize shareholder interests over songwriters and publishers, potentially impacting royalty distributions and transparency.
Such fears have only been further stoked, it’s fair to say, from BMI’s sale to a consortium led by the private equity house New Mountain Capital.
That consortium, which also includes Google‘s CapitalG investment arm, closed a $1 billion-plus acquisition of BMI earlier this month.
“ASCAP’s mission and not-for-profit business model are more important now than ever before, as artificial intelligence transforms the music landscape, and the need for legislative advocacy to protect creators in DC has never been more important.”
Paul William, ASCAP
BMI President & CEO Mike O’Neill said in an October 2022 note to the company’s affiliates that the org’s for-profit move “will open up new and important opportunities for us to invest in our business.”
ASCAP had earlier commented on BMI’s shift, saying, “We pay songwriters, not shareholders.”
Most recently, ASCAP said that unlike its competitors, it has no debt, no shareholders, no private owners and no private equity investors, making ASCAP’s music creator and publisher members the sole beneficiaries of ASCAP’s collections.
Chairman of the Board and President of ASCAP, Paul Williams, on Wednesday (February 28) said, “ASCAP’s mission and not-for-profit business model are more important now than ever before, as artificial intelligence transforms the music landscape, and the need for legislative advocacy to protect creators in DC has never been more important.”
The PRO maintains that its structure allows for a stronger focus on advocacy for creators.
“ASCAP will always be a champion for the humans who create music and demand transparency and fair payment from those who exploit our work. ASCAP makes it possible for our songwriter and composer members to write the next song, to earn a living and to support their families. No one else in the industry has the backs of songwriters like ASCAP,” Williams added.
“As we like to say, private equity never wrote an iconic love song which is why we fight purely for songwriters, composers and publishers, not for those who use creators and their works of art for their own profits or to secure their own debt.”
Elizabeth Matthews, ASCAP
The organization’s annual 2023 report also revealed a 12.6% increase in domestic revenue from US-licensed performances to $1.327 billion.
ASCAP noted that its collected audio streaming revenue gained 21%, general licensing revenue rose 23%, radio revenue increased 10% and audio-visual revenue climbed 3% from 2022.
Internationally, ASCAP’s members’ work generated total foreign revenues of $410 million, marking a surge of $66 million or 19.3% over the prior year.
Over 960,000 members contribute to ASCAP’s musical catalog, which includes artists like Beyoncé, Billy Joel, Cardi B, and more.
Since the implementation of ASCAP’s strategic growth plan in 2015, the organization said it has maintained a compound annual growth rate (CAGR) of 7% for total revenue through 2023, accompanied by an 8% CAGR for total distributions over the same period.
ASCAP Chief Executive Officer Elizabeth Matthews, said, “We are delivering industry-leading technical innovation, legislative advocacy and revenue growth that solely benefits our members, not outside investors or shareholders.”
“As we like to say, private equity never wrote an iconic love song which is why we fight purely for songwriters, composers and publishers, not for those who use creators and their works of art for their own profits or to secure their own debt. ASCAP differs from others because our mission and purpose is clear and unique.”
On February 13, ASCAP marked its 110th year and announced several top music creators joining the organization including A-list songwriter and producer Jack Antonoff, pop artist PinkPantheress, Jared Leto and Shannon Leto of alternative rock band 30 Seconds to Mars, and South African singer-songwriter Tyla.
Music Business Worldwide