2016 Annual Report

MUSICCONNECTS

US

MISSIONWE ARE THE WORLD LEADER in performance royalties, advocacy and service for songwriters, composers and music publishers. Our mission is to ensure that our music creator members can thrive alongside the businesses who use our music, so that together, we can touch the lives of billions.

2016 ANNUAL REPORTASCAP

3 Message from President4 Message from CEO6 The ASCAP Board9 Advocacy

11 Innovation13 Membership14 Success16 Celebration17 Commitment19 Communication20 Licensing

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A message from ASCAP President and Chairman Paul Williams

SOME WOULD HAVE US believe that we are living in a divided world. That there are insurmountable barriers between us — race, religion, ideology, wealth, nationality and who you choose to love.

 Songwriters, composers, lyricists and publishers know the truth. We know that no matter who we are or where we come from, we are not so different from one another. We are all human and share universal experiences.  

What we do, creating music — wheth er we write songs, scores, symphonies, lyrics — speaks to our shared experience and what it means to be human. Music connects us in a way that no other art form can. As songwriters and composers, our music connects what is in our hearts to potentially millions of hearts around the world. Music publishers create op­portunities for that music to thrive and endure. That’s a powerful thing.  

As music creators, we hold that power within us. Each one of us can do amazing things. As an organization of music creators, ASCAP can do amazing things. Because ASCAP connects our members to livelihoods, advocacy, community, support and professional development to help them grow their careers.

ASCAP is the only US performing rights organization owned and operated by songwriters, composers and publishers. The ASCAP Board of Directors is elected by and from our membership and that is no small thing. That sets us apart. Combining unique perspectives and yes, even differences, we work together on common goals and make decisions that achieve the best outcome for ALL of us — our collective community.

ASCAP exists to ensure that those of us who create music and those who use our music can both benefit from this beautiful partnership. Our democratic model, combined with a pioneering spirit and relentless innovation, has withstood the test of time and remains the best way going forward to preserve the value of music and efficiently deliver to our customers an incredible repertory that is unrivaled around the world.

As an organization of music creators, we are best at communicating to our leaders in Washington why reforming our music licensing system is so vital to both our nation’s well­being and to our economy.

Our work, our music, is overregulated and undervalued in the modern music marketplace due to outdated and overreaching federal regulations that govern how we license our work.  

We are working hard to improve the system. Each year we hold a “Stand with Songwriters” Advocacy Day on Capitol Hill and meet with policymakers on various points on the political spectrum to urge them to support legislation that provides reasonable, free market reforms for the new music economy.

We also hold grassroots meetings around the country with legislators and ASCAP members from their districts. And we support our champions in Congress through our PAC — the ASCAP Legislative Fund for the Arts.

Last year, ASCAP members held more than 40 meetings with members of Congress and their staff to discuss our issues. In addition, we had the support of thousands of music creators who attended the 2016 ASCAP “I Create Music” EXPO and joined our advocacy campaign. Thousands more wrote to their representatives in support of the Songwriter Equity Act.

With a new Congress, a new administration and shifting political priorities, we need to keep sending a loud and clear message that reforming the music licensing system matters to everyone who loves music.

ASCAP just experienced an incredibly successful year. Our strong financial results matter for each and every songwriter, composer and music publisher who depends on the important work ASCAP does every day. I am both proud and grateful for ASCAP CEO Beth Matthews and her exceptional team for continually improving our operations to grow royalties and support the professional development of songwriters and composers. United with a truly dedicated and visionary Board of Directors, ASCAP is building a stronger future for all members, from those just starting out to those whose music is beloved around the world.

2016 ANNUAL REPORTASCAP

BILLION

TOTAL 2016 REVENUE

$ 759$42.2 million from 2015

2016 DOMESTIC LICENSING REVENUE

MILLION4

A message from ASCAP CEO Beth Matthews

$1.0592015 2016

Revenue Growth

I AM THRILLED TO REPORT THAT IN 2016 ASCAP ACHIEVED HISTORIC high financial results with record-breaking revenues of $1.059 billion. In a 5.6% increase over the previous year, we distributed $918 million to our 600,000 song-writer, composer and music publisher members. 2016 was the second year of our six-year strategic transformation plan to secure the future for ASCAP members in the rapidly changing music world.

Revenues from ASCAP’s licensing efforts in the US alone grew nearly 6% in 2016 to $759 million, up $42.2 million over 2015, fueled primarily by a 41% increase in revenues from audio streaming services as well as higher revenues from satellite radio and General Licens-ees, such as bars, clubs, restaurants, hotels, live concerts and more.

Foreign revenues totaled $300 million, up $1.5 million year over year in US dollars. AS-CAP’s international revenues would have exceeded last year’s performance by $12.9 million had it not been for the strengthening US dollar which resulted in lower foreign exchange rates.

Domestic distributions of $631 million from ASCAP-licensed and administered performances in the US grew nearly 10%, up $55.5 million over 2015.

ASCAP operates on a not-for-profit basis and delivers 88 cents of every dollar collected back to members for performances of their music. With a 2016 operating expense ratio of 12%, ASCAP remains among the most efficient Performance Rights Organizations in the world, while transforming to stay ahead of massive changes in the music industry.

ASCAP’s strategic investments to grow General Licensing revenues continue to pay off for members with a 7.2% annual growth rate over the past four years. ASCAP licensed over 18,000 new businesses in 2016 and also instituted a number of innovations

$1,014 $1,059

+6%

+4%

$45MIncrease

+0.9%

Amounts noted in $MM

Foreign

Domestic

$716 $759

$298 $300

2016 ANNUAL REPORTASCAP

$867

2015 2016

Distribution Growth

$918

+8%

+5.6%

$51MIncrease

-2%

$631

$287

Amounts noted in $MM

Foreign

Domestic and Administered

$294

$573

A message from ASCAP CEO Beth Matthews (continued)

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$ 631$55.5 million from 2015

2016 DOMESTIC LICENSING DISTRIBUTIONS

MILLIONin General Licensing, such as greater automation in reporting to drive compliance and create efficiencies that reduced our cost of new license acquisitions over the last three years by 50%.

ASCAP’s record high revenues and distributions in 2016 are a testament to the amazing repertory of music we are privileged to represent, and to our investment in innovations that enable us to continue to grow revenues, leverage our scale and increase efficiencies in our operations. ASCAP is committed to transforming and innovating to secure a healthy future for music creators and publishers. In 2016 alone, we processed over one trillion performances, welcomed 40,000 new members, and secured a steady stream of future royalties for our members by closing multi-year deals across major platforms, including satellite and terrestrial radio.

ASCAP continues to strengthen its core operations. We entered into a new strategic and long-term data agreement with Nielsen to provide greater depth, transparency and reporting and tracking accuracy to members. ASCAP also modernized its employee benefits. We closed our outdated pension plan and moved towards smarter 401(k) and retirement savings

plans that give employees more control while reducing ASCAP’s future cost base.

I am deeply grateful to work with ASCAP’s visionary, committed and highly knowledgeable Board of Directors. They continue to anticipate changes on the hori zon and seek ways to maximize opportu nities for our members in an ever-evolving landscape. I am also fortunate to have an executive leadership team with a wealth of experience from the music, digital and me dia sectors who have transformed ASCAP into a modern, progressive organization that is built for growth, while continuing to be home to the world’s greatest music creators.

OF EVERY DOLLAR ASCAP COLLECTS goes back to our songwriter, composer and music publisher members as royalties

2016 ANNUAL REPORTASCAP

88¢

The ASCAP Board of Directors as of April 2017

The ASCAP Board of Directors as of April 2017

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In 2016, thousands of ASCAP members from across the country joined their voices to help change the narrative for music creator rights in Washington DC.

AT THE ASCAP “I CREATE MUSIC” EXPO IN APRIL, 2016, more than 1,300 songwriters, composers,

producers and publishers emailed their representatives in support of the Songwriter Equity Act and signed their names to #StandWithSongwriters petition guitars. Among the members who signed the guitars were Erica Campbell, Pat Benatar, LaShawn Daniels, James Fauntleroy, Nate Ruess of fun., OMI and Adam Schlesinger.

A month later, on May 18, the guitars made the journey to DC as part of ASCAP’s “Stand With Songwriters”

Advocacy Day on Capitol Hill. The event featured a delegation of ASCAP members, including Brian McKnight, Monica, Savan Kotecha, MoZella, Brett James, Priscilla Renea, Jennifer Higdon, Khari “Needlz” Cain, Randy Goodrum and ASCAP Board members Desmond Child, Dan Foliart, Wayland Holyfield, Dean Kay, James M. Kendrick, Leeds Levy, Irwin Z. Robinson, Alex Shapiro, Paul Williams and Doug Wood, who walked the halls of Congress to meet policymakers to urge them to update the WWII-era federal laws that regulate how songwriters license their works. They

Hit songwriters Priscilla Renea and MoZella blow off a little steam after walking the halls on Capitol Hill

ADVOCACY

2016 ANNUAL REPORTASCAP

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also advocated for passage of the bipartisan Songwriter Equity Act. The groups on the Hill met with more than 35 Congressional offices from across the musical spectrum.

On “Stand With Songwriters” Advocacy Day, ASCAP debuted a new video featuring songwriter members delivering a personal appeal for music licensing reform by highlighting a number of notable changes to American culture since the laws were written in 1941.

Thanks to ASCAP’s advocacy leadership, by year’s end the Songwriter Equity Act had gained 40 co-sponsors in the House of Representatives and six in the Senate.

In August, the Department of Justice made a decision to institute 100% licensing, provoking an outcry from all corners of the music industry. ASCAP and BMI devised a joint strategy to most effectively address the DOJ’s proposal. ASCAP took the lead with respect to legislative efforts and BMI focused on a legal strategy. Throughout the summer and fall, we came together to host three town hall meetings for our respective members and associates in Los Angeles, Nashville and New York. Later, in October, ASCAP and BMI collaborated to hold both a House and Senate briefing for Congressional staffers on Capitol Hill.

Within a week of debuting in May 2016, ASCAP’s #StandWithSongwriters video received more than 30,000 views across ASCAP’s social media channels. The accompanying social media campaign yielded more than six million impressions of #StandWithSongwriters and two million impressions of #SongwriterEquityAct.

ADVOCACY

Rep. Darrell Issa (R-CA) is pictured (holding guitar) with (l-r) ASCAP President Paul Williams, Randy Goodrum, ASCAP Board members Dean Kay and Wayland Holyfield, ASCAP CEO Beth Matthews, Brett James, Needlz, Brian McKnight (in back) and Savan Kotecha

Brian McKnight at We Write the Songs

Composer Jennifer Higdon at We Write the Songs

2016 ANNUAL REPORTASCAP

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INNOVATIONIn 2016, we gave members and licensees new tools, greater transparency and best-in-class digital experiences to make doing business effortless and efficient.

ASCAP continues to provide best-in-class digital experiences and new support services to members. In 2016, we redesigned and relaunched a new website, a new online Member Access portal and a more transparent repertory database. These digital product and service innovations made it easier for members

and licensing partners to manage their catalogs and do business with ASCAP, resulting in a 200% increase in member engagement. In addition, ASCAP entered into a new strategic data agreement with Nielsen to provide greater depth, transparency and reporting and tracking accuracy to ASCAP members.

performances processed by ASCAP in 2016ONE TRILLION

2016 ANNUAL REPORTASCAP

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A NEW ACEIn 2016, ASCAP’S public ACE repertory database of over 10.5 million works was redesigned to include ASCAP shares of licensed works, making it more transparent, easier to search and a valuable tool for licensees, music supervisors and members.

A NEW DIGITAL TEAMASCAP continues to focus on creating a more efficient, transparent music marketplace, and in 2016 created a new Digital Team, who created modernized, more intuitive ASCAP.com and Member Access experiences. Additionally, they are developing new experiences, re-engineering existing processes and creating new partnerships that will transform the way members and licensees interact with ASCAP.

A NEW ASCAP.COM AND MEMBER ACCESSIn December, ASCAP relaunched its redesigned website and dedicated Member Access portal, providing members with a unified online experience across desktops, mobile devices and other platforms so that ASCAP members can easily conduct their business globally, 24/7. Within the new Member Access, members have improved self-service options, more information at a glance, a simplified process for reporting performances, the ability to contact ASCAP with a single tap, and much more.

A NEW STRATEGIC DATA AGREEMENTACAP is committed to remaining flexible and nimble by pursuing partnerships with best-in-class service providers. Our new data agreement with Nielsen will enable ASCAP to leverage the music industry’s most trusted data to deliver enhanced reporting, business tools and services to its members with increased transparency and efficiency through ASCAP’s relaunched Member Access portal.

A NEW APPROACH TO A MODERN WORK FORCEOur dedication to securing ASCAP’s future financial stability includes strengthening core operations. In 2016, ASCAP modernized its employee benefits by closing its outdated pension plan and moving towards 401(k) and retirement savings plans that give employees more control while reducing ASCAP’s future cost base. ASCAP also supports a work/life balance for our employees, and in 2016 began to provide employees with 20 days paid parental leave for

all new parents, as well as 20 days paid leave to care for an immediate family member with a serious illness. Among other new employee programs, we launched “ASCAP Notes the Cause,” a volunteer service opportunity allowing our employees to give back to the community in New York City.

ASCAP employees volunteer with City Harvest in New York City as part of a new program called “ASCAP Notes the Cause.”

2016 ANNUAL REPORTASCAP

INNOVATION

13 2016 ANNUAL REPORTASCAP

Over 40,000 music creators chose ASCAP in 2016, joining some of the top names in music, who renewed their agreements with ASCAP into the future. Every single one of them is a valuable part of the ASCAP repertory - quite literally. The growing breadth and success of our membership means the ASCAP license is that much more essential to music users, which translates to higher licensing revenues and expanded royalty distributions - and, of course, more music for fans to enjoy.

MEMBERSHIPASCAP’s membership surpassed 600,000 professional songwriters, composers and publishers in 2016.

Kelly Clarkson

Paul McCartney

Timbaland

Max Martin

Lionel Richie

Usher

Katy Perry

Skrillex

Hans Zimmer

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The industry loved ASCAP music as much as the fans, bestowing many of its highest honors on our members.

Hamilton wins 11 Tonys, including Best Musical and Best Original Score for ASCAP member Lin-Manuel Miranda, who also won a 2016 Pulitzer Prize.

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Greg Kurstin accepts the Song of the Year Grammy for Adele’s “Hello.” He also won Producer of the Year, Album of the Year and Record of the Year at the 2017 Grammys

Elvis Costello & Tom Petty are inducted into the Songwriters Hall of Fame, along with ASCAP members Marvin Gaye and Chic’s Bernard Edwards

Justin Paul & Benj Pasek accept the Best Original Song Oscar for “City of Stars” from La La Land. The songwriting team also won the Golden Globe.

Marc Anthony was named Person of the Year at the 2016 Latin Grammys.

ASCAP 2016 ANNUAL REPORT

SUCCESS

15 2016 ANNUAL REPORTASCAP

SUCCESS

PAUL “NINETEEN85” JEFFERIESHot R&B/Hip-Hop Songwriter#1 Hot R&B/Hip-Hop Songs Producer“One Dance”, “Too Good”

ASHLEY GORLEY#1 Hot Country Songwriter“American Country Love Song,” “You Should Be Here”

DREW TAGGART (CHAINSMOKERS)#1 Hot Dance/Electronic Songwriter#1 Hot Dance/Electronic Producer“Closer,” “Don’t Let Me Down”

MATTHEW WEST #1 Hot Christian Songwriter“Grace Wins,” “Mended”

14#1 on the year-end

song charts

9ASCAP

members wroteTOP 10 SONGS

on the Billboard Hot 100 year-end chart

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CELEBRATIONOur members had plenty to be proud of in 2016. We toasted their success

and paid tribute to music icons in all genres at our annual award shows.

2016 ANNUAL REPORTASCAP

-Walk the Moon play their smash hit “Shut Up and Dance” at the ASCAP Pop Awards, after winning the ASCAP Vanguard Award.

Kelsea Ballerini kicks off the ASCAP Country Music Awards with her hit “Love Me Like You Mean It”

Q-Tip accepts the ASCAP Golden Note Award on behalf of A Tribe Called Quest at the ASCAP Rhythm & Soul Awards

ASCAP Christian Music SongwriterArtist of the Year Matthew West, Songwriter of the Year Ben Glover and David Garcia, who co-wrote Song of the Year “Flawless” with Glover

Salsa superstar Luis Enrique accepts the ASCAP Voice of Music Award at El Premio ASCAP

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COMMITMENT

2016 ANNUAL REPORTASCAP

LaShawn Daniels, Priscilla Renea, Audra Mae and Chris DeStefano

At the ASCAP EXPO's Writers Jam

Jules Pegramrecords an original cue with a 60-piece orchestra

during the 2016 ASCAP Film Scoring Workshop with Richard Bellis, one of three scoring

workshops supported by ASCAP

Green River Ordinance

surrounded by adoring music loversat the 2016 Sundance ASCAP Music Café

ASCAP's support for our members doesn’t end when they cash their royalty checks. We invest in our members’ long-term success and foster the hits of tomorrow, through high-

profile song camps, workshops in multiple genres, showcases at major industry events like the Sundance Film Festival and SXSW and networking events across the country.

COMMUNICATIONClear, effective communication with our members, licensing partners, legislators and music fans is central to ASCAP’s success.

From the relaunched ASCAP.com and Member Access portal to our Inside Music newsletters and our social media channels, ASCAP information reaches our songwriter, composer and

music publisher members in multiple ways, wherever they are. We ensure that members receive the most important news, announcements and “take action” advocacy alerts they need to improve their lives as professional music creators. In 2016, as part of a strategic initiative to change the conversation with our licensees, we continued to share helpful information with them about the strength of ASCAP’s repertory, new tools that make licensing more efficient and how the ASCAP license connects to their business success. This led to improved relationships, new agreements and fostered a healthy, cooperative partnership with some of our most important customers.

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LICENSINGThanks to ASCAP’s continued commitment to innovation, strong partnership development and mutually beneficial licensing agreements, 2016 was another record-breaking year for ASCAP licensing.

newly-licensed businesses added

in 2016

18K

WITH 2016’s record-breaking revenues of $1.059 billion, including domestic revenues of $759 million, up $42.2 million over 2015, it is clear that ASCAP’s new approach to our relationships with our licensing partners is paying off in a big way. Among the many highlights on the licensing front, we:

• Secured a five-year agreement with the commercial radio industry (RMLC) that provides for increases paid by radio stations to perform music by members via terrestrial, over-the-air broadcasts as well as certain digital transmissions, which enables ASCAP to stabilize and grow revenues for our members

• Reached a final 5-year agreement with SiriusXM Satellite Radio

• Licensed more than 18,000 new businesses on top of the more than 700,000 businesses ASCAP has already licensed

• Completed a new final license agreement with background music suppliers, including Mood Media

• Rolled out a new discount program with the California Restaurant Association, the first of many future partnerships between ASCAP and the restaurant industry

• Completed successful infringement litigation suits, resulting in additional money going to our members and further education to licensees about the importance of licensing music

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2016 ANNUAL REPORTASCAP

CONNECTSYOU