March 06, 2007 09:36 ET

ASCAP Redefines Role of Performing Rights Organization, Reports Record Revenues, Royalty Payments for Year 2006

World's Leading PRO Attracts Record Number of New Members With Valued Career Enhancement Services, While Reducing Operating Costs

NEW YORK, NY -- (MARKET WIRE) -- March 6, 2007 -- Boldly redefining and broadening the role of a performing rights organization, ASCAP (American Society of Composers, Authors and Publishers) today reported record revenues of $785 million and royalty payments of $680 million for 2006, as well as an all-time low operating expense ratio of 12.0 percent.

ASCAP attributes its stellar performance to multiple factors. These include growing revenues from the licensing of existing and new music channels, outstanding operational efficiency and the introduction of numerous high value new services. These factors are helping to attract record new members. In 2006, ASCAP welcomed 40,000 new members, more than any other rights organization in the world.

Revenues for 2006 exceeded 2005 by $37 million, a 5 percent growth rate, while royalty distributions increased by $34 million, or almost 5.3 percent over the prior year. Both U.S. and foreign royalties showed strong gains, with domestic distributions totaling over $486 million, up 6.3 percent, and international distributions reaching $211.7 million.

"Our overarching priority each year is to put more money in the pockets of our members -- hard working songwriters, composers, lyricists and music publishers. That's a goal we clearly met in 2006," said John LoFrumento, ASCAP CEO. "To continue achieving such results, we are investing in new technologies that enable us to operate more efficiently and are significantly broadening the scope of professional services we offer to enhance the career opportunities of our members."

Contributing to the strong revenue growth was ASCAP's recently negotiated licenses with both terrestrial and satellite radio. In 2006, total radio revenues increased 11 percent to $22 million. Of that amount, terrestrial radio revenues rose by $14 million, and satellite radio revenues rose by $8 million. ASCAP anticipates continued growth from satellite radio as a result of a new five-year agreement with XM Satellite Radio that derives revenues from both advertising and subscriber fees.

In television, ASCAP recently completed a new license agreement with ABC, resulting in a significant increase in that network's fees. The arrangement covers performances by ABC across the Internet, broadband and wireless platforms, as well as video-on-demand, subscription video-on-demand and pay-per-view.

Overall in 2006, revenues from Internet and wireless license agreements grew more than 70 percent to $13.8 million. However, with the rapidly expanding array of delivery systems and venues for performances of music -- and with advertising dollars rapidly shifting to cable, the Internet and wireless -- ASCAP is taking strong steps to establish licensing terms with new media that ensure fair rates of pay for music creators.

On February 28, 2007, ASCAP filed a cross-motion in the United States District Court for the Southern District of New York, asking the Court to confirm that all Internet transmissions of musical works to the public, including digital streams and downloads, are public performances -- as the United States Copyright Law requires and Congress has stated. The trial is set to begin on May 21.

"We strongly believe that our members are entitled to be compensated for all Internet transmissions of their music to the public -- including the public performance that is an essential part of a music download," said LoFrumento.

Beyond its growing revenue streams from licensing agreements, ASCAP has introduced a host of services and initiatives designed to support and advance the careers of music creators. These include:

--  MusicPro Insurance, which provides affordable instrument, studio and
    tour coverage.  Music Pro has achieved an annual growth rate of 42 percent.
--  Mediaguide, which tracks broadcast and Internet performances via
    digital fingerprinting technology.  Mediaguide not only satisfies ASCAP's
    performance tracking needs, but also generates revenues from 150
    independent labels and publishers that now subscribe to the service's
    monthly reports.
--  A partnership with i-SAFE Inc., the worldwide leader in Internet
    safety education, to conduct a national anti-piracy education program for
    middle school students.  No other rights organization has established or
    deployed such a leadership initiative.
--  "I Create Music" EXPO, the only large-scale gathering expressly
    designed for music creators to share their knowledge and experiences.  The
    first EXPO attracted over 1,900 people in April 2006, and the second annual
    event is scheduled for April 19-21, 2007, in Los Angeles.
--  PREP (Performing Rights Enterprise Program), a sophisticated
    technology platform that gives members online access to ASCAP's performance
    and royalty distribution databases.  Major components of PREP are now in
    use, with other capabilities scheduled to go live by next year.
"Our record financial performance in 2006 validates our strategy of redefining and broadening the role of ASCAP to include our traditional functions -- performance tracking and royalty distribution -- as well as our new capabilities -- professional services that empower the careers of members," said LoFrumento. "As digital technology transforms the music landscape, we believe ASCAP is uniquely positioned to serve the needs of all music creators."

About ASCAP:

Established in 1914, ASCAP is the first and leading U.S. Performing Rights Organization representing the world's largest repertory totaling over 8 million copyrighted musical works of every style and genre from more than 275,000 composer, lyricist and music publisher members. ASCAP has representation arrangements with over 70 music rights organizations such that the ASCAP repertory is represented in nearly every country around the world. ASCAP protects the rights of its members and foreign affiliates by licensing the public performances of their copyrighted works and distributing royalties based upon surveyed performances. ASCAP is the only American Performing Rights Organization owned and governed by its writer and publisher members.

Contact Information