ANNUAL REPORT
2014
1923 1,7 TOTAL OPERATING INCOME IN SWEDEN AND ABROAD 1.7 BILLION
STIM FOUNDED 1923
77629 1359 407 % 18 8,5 NUMBER OF STIM AFFILIATES 77,629 – AN INCREASE OF 45 PERCENT IN 7 YEARS
NUMBER OF NOTIFIED WORKS WITH AT LEAST ONE STIM-AFFILIATED AUTHOR 1,359,407
8.5 MILLION ALLOCATED FOR SCHOLARSHIPS
REVENUE FROM ONLINE PERFORMANCE HAS INCREASED BY 18 PERCENT COMPARED TO 2013
30 000 00 ALLOCATES SEK 30 MILLION ANNUALLY FOR EFFORTS TO PROMOTE MUSIC
Did you know that STIM…
• is the Swedish performing rights society (Svenska Tonsättares Internationella Musikbyrå). • is owned by those who create music and music publishers. • is a non-profit incorporated society. • works on behalf of its affiliated authors and music publishers. • defends their economic interests in accordance with copyright legislation. • also acts on behalf of counterpart organizations in other countries. • issues licenses to those who wish to use and distribute music. • collects license fees. • distributes the remuneration to creators and music publishers on an individual basis. • promotes Swedish music culture.
3
%
Collective strength 8 05 The STIM process from license to distribution 8 06 1.4 billion to members 8 08 Sweden’s thirteenth city 8 12 In the big, wide world 8 15 Songs with the most revenue from abroad 2014 8 16 STIM – balance of payments with foreign counterparts 8 18 Annual scholarships 8 20 Broader lineups, new target groups, and better attendance 8 22 Broad cultural support and publishing 8 24 New pricing models for a digital world 8 27 Background to the fore 8 28
00
Equality among personnel and unified IT support 8 30
The Board of Director 8 32 The STIM sphere 8 33 STIM’s committees 8 38 Administration Report 8 40
Notes 8 51 9
3 STIM ANNUAL REPORT 2014
7
STIM in figures 8 02
Collective strength
STIM is owned by its affiliated authors and music publishers and our role is to ensure that composers and lyricists get paid when their music is used. 2014 saw record numbers of STIM-affiliated authors and music publishers, we collected fees for more works than ever before, and – not least – we distributed the most money ever to our rightsholders. Our members also enjoyed a successful year. Live music in Sweden set new records, for festivals and individual concerts alike, while Swedish art music and pop music enjoyed success in the charts and as the recipients of international awards. The rapid technological changes we’ve seen in the market continued, and STIM is working continually to find pricing models to suit the market and increase revenue for our affiliated authors. Take, for example, conventional TV viewing, which fell in favor of video on demand services for the first time, and streaming music, which continued to rise. Despite a successful year, current and future circumstances remain increasingly unsure and uncertain. Globalization and digitization are changing our world at a rate that makes it hard to keep up. We believe that STIM’s collective model is the best way to secure the value of music in the long term, and as such we must also adapt if we are to remain a viable option for our rightsholders and for those who use music to enrich people’s lives. 2014 was a year in which STIM continued its change process and in many ways set the stage for the future. We refined our organization, held several meetings with our members to discuss issues such as increased transparency, and I took over as CEO in August. Looking to the future is an exciting prospect. One of our key pointers for 2015 is cooperation. We will cooperate with the organizations that own us, namely FST, SKAP and Musikförläggarna, and we will cooperate with our members and affiliates so as to prevent a decline in the value of music. Moreover, we will cooperate with our fellow organizations in Germany, the UK, and the Nordics to considerably improve the collective management of music rights.
Karsten Dyhrberg Nielsen, Chief Executive Officer
5 STIM ANNUAL REPORT 2014
We believe in the strength of the non-profit, collective management of our members’ rights. But this is a model that now faces competition and must never be taken for granted. This was clearly seen in 2014 and we must continually adapt if we are to remain relevant.
The STIM process from license to distribution MONEY IN
STIM ANNUAL REPORT 2014
6 INTERNET & MOBILE Digital services (in Sweden and even certain services in Europe, so-called direct licensing). Music reports on the number of streams/views.
REPRODUCTION OF RECORDINGS (mechanical reproductions for the entire Nordic region, administered by NCB) Issuers of DVDs, CDs, downloads, etc. Reports on copies produced and sales figures.
IDENTIFICATION MATCHING Royalty payments to authors and music publishers are based on reports on which music has been played, recorded, downloaded, or streamed. The information in the reports is linked to entries in the works register.
PUBLIC PERFORMANCES Operations that use music publicly (radio, TV, stores, restaurants, events, concerts, etc.). Music reports from music users.
ICE ABROAD STIM’s international counterparts collect money, identify STIM-affiliated rightsholders, and send reports and money to STIM as regards the above. STIM then distributes the money to the right author and, in applicable cases, the music publisher too without any administrative deductions.
STIM’s works register containing all information about authors, music publishers, and their shares of the works.
The royalties are distributed according to STIM’s distribution rules and paid to the musical works’ creators and their publishers, as well as to STIM’s international counterparts, which forward the remuneration to their members. The money is distributed after all deductions for expenses, national funds, scholarships, and subsidies.
ROYALTY PAYMENTS Royalty payments are made several times a year.
MONEY OUT AUTHORS AND MUSIC PUBLISHERS Specification of what the payment concerns, which songs are covered by the payment, the concerned music use areas, and the amount.
By becoming affiliated with STIM, authors and music publishers instruct STIM to manage their economic rights as laid down in copyright legislation. The author or publisher notifies STIM of their musical works. These are documented by being entered in the works register with details of current ownership shares. Information about foreign musical works is also entered in the works register.
ABROAD STIM forwards collected money, fees, and reports to counterpart organizations in other countries, which in turn distribute the revenue to their affiliated authors and music publishers.
STIM instructs its counterparts in other parts of the world to protect the economic rights of STIM-affiliated members in these other territories. The remuneration is forwarded to STIM for further distribution to STIM-affiliated members. Similarly, STIM represents rights to foreign music performed in Sweden.
7 STIM ANNUAL REPORT 2014
DISTRIBUTION
ROYALTIES 2014
1.4 billion to members More money in. More money out. That’s the easiest way to summarize 2014 in two simple statements. “Swedish music continues to succeed, and that means more money for the authors,” says STIM’s Finance Director Kina Paulsson.
STIM ANNUAL REPORT 2014
8
In 2014, STIM distributed SEK 1.4 billion, which is a record – again. And almost 90 percent goes to the rightsholders. Once again, the largest increase in revenue was seen in online and new media, at just short of 18 percent. “The increase has, however, plateaued significantly compared to previous years. Parallel to this, record sales continue to decline, although we can’t really describe it as a dramatic drop,” says Kina. Revenue from abroad increased by ten percent, but that’s largely due to the weakening of the Swedish krona during the year. “If, for example, we consider revenue from live music, it appears to have fallen dramatically. But that’s not really the case, as some live music is now reported as background music and the accrual accounting used meant that the figure was unusually high the previous year. We always invoice live music in arrears because we have to wait for the music reports, which means an initial reliance on estimates.” Royalties are affected by the received reports and the distribution principles. In 2014, STIM invested resources in reducing payments based on analogous data and increasing actual reporting (read more on page 29). “Each year, we receive money that we cannot distribute because we lack necessary information, such as incomplete reports, no registered recipient for the money, or the lack of an established analogous data procedure to distribute the money. Distributing that money is outside our regular payment procedures, and it’s a situation we’d like to change,” says Kina.
Mechanical reproduction Performance
1600 1400
DISTRIBUTABLE INCOME, SEK M
1200 1000 800 600 400 200 0
2010
2011
2012
2013
2014
Radio and TV 21,2%
International 32%
Background music 11,8% Online and new media 16%
Other revenue 1,1% Private copying levy 0,7%
Foreign music with STIM-affilated sub-publishers 27%
Foreign music 36%
Music with STIM-affiliated authors and music publishers 37%
ADMINISTRATIVE COSTS AND DEDUCTIONS The internationally applied measure of the efficiency of copyright organizations is the so-called administrative overhead. This is the share of total revenue from music performance used to cover the organization’s administrative costs, and in 2014 this figure was 9.4 percent in STIM’s case. The amount that is distributed is affected in part by the administrative costs and in part by the distribution decisions that have been made. The amount deducted from Swedish performance rights for administrative costs was SEK 156.7 million. STIM also made a deduction for so-called national funds totaling SEK 30.7 million or 1.9 percent, providing a total cost deduction of 11.3 percent for 2014. In the case of online performance, only an administrative deduction of up to 10 percent is made with no deduction for national funds. STIM’s annual general meeting decides on the allocation to the annual STIM scholarships. The amount can total a maximum of three percent of the money distributed to Swedish rightsholders. In the case of remuneration for performances abroad, STIM makes no administrative or other deductions. In the case of revenue from STIM affiliates’ mechanical reproduction rights from NCB, STIM makes no administrative or other deductions. The deductions for costs are made by the international societies before the revenue reaches STIM for distribution.
STIM – DISTRIBUTABLE INCOME, SEK M
2014
2013
%
Performance in Sweden
903.7
851.5
6.1%
Performance abroad
537.7
487.7
10.3%
Performance abroad for distribution by STIM
44.9
34.2
31.3%
Other revenue
53.7
35.1
53.0%
1,540.0
1,408.5
9.3%
-196.9
-168.7
16.7%
1,343.1
1,239.8
8.3%
161.9
186.7
-13.3%
1,505.0
1,426.5
5.5%
Total income Operating costs For distribution, including national funds Mechanical reproduction STIM – distributable income
DISTRIBUTION OF INCOME, SEK M
2014
2013
%
Distributed for performance in Sweden
727.8
682.9
6.6%
30.7
31.3
-1.9%
8.5
8.7
-2.3%
Distributed for performance abroad
537.7
487.7
10.3%
Distributed for performance abroad, distributed by STIM on behalf of others
38.4
29.2
31.5%
Distributed for mechanical reproduction
161.9
186.7
-13.3%
1,505.0
1,426.5
5.5%
Distributed for national funds Awarded scholarships
Distribution of income
9 STIM ANNUAL REPORT 2014
Mechanical reproduction 9,6%
Live music 4,9%
PAYMENT OF PERFORMANCE REVENUE, SWEDEN 2014
TOTAL REVENUE PER REVENUE CATEGORY, SWEDEN 2014
International, for distribution by STIM 2,7%
DISTRIBUTION PER REVENUE CATEGORY 2014 (2013)* DISTRIBUTION CATEGORY
STIM ANNUAL REPORT 2014
10
REMUNERATION DISTRIBUTED
COLLECTED REMUNERATION IS AMOUNT, SEK M AFFECTED BY THE CHARACTER OF THE PERFORMANCE/WORK
AMOUNT FOR DISTRIBUTION, SEK M
% MUSIC WITH STIM-AFFILIATED AUTHORS AND MUSIC PUBLISHERS
% FOREIGN % FOREIGN MUSIC WITH MUSIC STIM-AFFILIATED SUB-PUBLISHERS
1
Concerts Subsidized concerts featuring art music
Total based on all music reports for the category (joint minute value)
Grading, Categorization Large/small concert
4.2
(5.1)
3.3
(4.1)
38
(37)
16
(14)
46
(49)
2
Church concerts
Total based on all music reports for the category (joint minute value), as well as on sampling reports from CCLI
Grading, sampling
2.3
(2.0)
1.8
(1.6)
53
(53)
13
(13)
34
(34)
4
Dance – Night Clubs
Total based on music reports for the category from Dee-Jay Promotions (joint minute value)
Grading
27.4
(24.6)
21.5
(19.8)
26
(39)
30
(26)
44
(35)
5
Other live music, reported Concerts and other live performances
Per music report (income per performance)
Grading
59.6
(57.7)
47.3
(46.5)
55
(53)
19
(21)
26
(26)
6
Other live music, not reported
Reused music reports from the category Other live music, reported
Grading and according to analogous data respectively
22.4
(44.7)
17.6
(36.0)
59
(61)
17
(16)
24
(23)
7
Theater music
Per music report (income per performance)
Grading
1.1
(1.0)
0.9
(0.8)
31
(38)
28
(25)
41
(37)
8
Background music, reported Mechanically reproduced background music
Per music report (income per performance)
Grading
1.1
(1.0)
0.9
(0.8)
15
(42)
40
(27)
45
(31)
9
Background music, not reported
Reused music reports from SR, commercial radio, TV, online, and from NCB (record sales and downloads)
Grading and according to analogous data respectively
147.1
(133.8)
115.5
(107.8)
39
(40)
26
(26)
35
(34)
10 Swedish Radio (SR)
Total based on all music reports for the category (joint minute value)
Grading
51.8
(50.7)
40.7
(40.8)
35
(37)
23
(22)
42
(41)
11
Per music report (income per channel)
Grading
62.6
(67.5)
49.2
(54.4)
27
(30)
25
(23)
48
(47)
12 Commercial radio
SVT (Swedish Television)
Per music report (income per channel)
Grading
25.7
(24.9)
20.2
(20.1)
24
(30)
35
(32)
41
(38)
213.1
(193.4)
171.4
(155.7)
17
(17)
32
(31)
51
(52)
2.6
(2.8)
2.1
(2.3)
40
(41)
25
(26)
35
(33)
13 Commercial TV
Per music report (income per channel)
Grading
14 Community radio
Sampling reports from KRN, reports directly from rightsholders, and reused music reports from P4 local radio (SR)
Grading, sampling, and according to analogous data respectively
15 Movie theaters
Per music report and film
16 Online, reported
Per music report (income per service)
Grading
13.9
(14.4)
11.0
(11.6)
26
(16)
31
(35)
43
(49)
259.3
(220.6)
241.5
(199.8)
56
(51)
21
(27)
23
(22)
19 Online, not reported
Reused music reports from SVT, SR, and commercial radio
Grading and according to analogous data respectively
9.5
(7.3)
8.5
(6.6)
27
(31)
31
(28)
42
(41)
17 Compensation for private copying
Reused music reports from TV, SR, and NCB (record sales and downloads)
According to analogous data
11.1
(11.8)
11.1
(11.8)
58
(59)
33
(31)
9
(10)
18 Library levy
Borrowing statistics from libraries
2.5
(2.5)
2.5
(2.5)
99
(99)
1
(1)
0
(0)
20 International & 96
Reports from foreign collecting societies
537.7
(487.7)
537.7
(487.7)
48
(48)
52
(52)
0
(0)
21 International, for distribution by STIM
Reports from foreign collecting societies and reused music reports from TV
44.9
(34.2)
38.4
(29.2)
10
(6)
55
(47)
35
(37)
NCB Mechanical reproduction rights
Reports from NCB regarding record sales and downloads in the Nordics and Baltics
161.9
(186.7)
161.9
(186.7)
45
(45)
55
(55)
0
(0)
Grading and according to analogous data respectively
Note: Grading has no effect on mechanical reproduction rights or in film. *) Read more about analogous data distribution on page 29.
STIM ANNUAL REPORT 2014
11
TOVE LO Tove began her career as a songwriter in 2011 when she started working with Warner Chappell. In the fall of 2014, she climbed all the way to number three of the Billboard Hot 100 with the song Habits (Stay High). One favorite album: LORDE PURE HEROINE
1000
400 300 200 100 0
2010
2011
2012
2013
* Percentages reflect change over previous year.
2014
12.8%
-13.3%
150
-10.4%
-14.9%
200
-19.1%
8.3%
500
MECHANICAL REPRODUCTION REVENUE, SEK M
PERFORMANCE REVENUE SWEDEN, SEK M
600
20.2%
700
7.2%
800
8.5%
900
6.1%
250
100
50
0
2010
2011
2012
2013
* Percentages reflect change over previous year.
2014
OUR RIGHTSHOLDERS
Sweden’s thirteenth city
STIM ANNUAL REPORT 2014
12
74,403 authors and 3,226 music publishers. That’s how many affiliates STIM had at the end of December 2014. Together, these two groups could fill Stockholm’s Globen concert venue five times over or form Sweden’s thirteenth largest city, if for some reason they should want to live together. Perhaps the best way to illustrate the extent of STIM’s work is in figures. In 2014, for example, royalties were paid for a total of 1,323,013 musical works in STIM’s distribution process. That’s an increase of more than 160,000 works over the previous year. “As a comparison, the figure for 2000 was 220,000 works, which is just a sixth of the volume handled today. This is down to the introduction of digital music services, which enable us to listen to hundreds of unique works every day. That wasn’t possible fifteen years ago,” says Robert Gehring, Head of STIM’s Member Service. “Our service mandate also includes providing support to our affiliates. Last year, we received about 20,000 e-mails and 13,000 phone calls from our affiliated authors, music publishers, and the general public.” In 2014, 3,180 authors and 101 music publishers joined STIM. Foreign rightsholders are also increasing in number – last year STIM had 1,076 members and music publishers domiciled abroad in 67 different countries. The percentage of new female members has also increased, from 22.4 to 25.6 percent. All in all, almost 20 percent of STIM’s members are female. And the number of authors receiving more than SEK 100,000 a year from STIM has increased by 12 percent compared to 2011. “Today, STIM is bigger than ever. And these figures also show the confidence we’ve inspired in music creators throughout the world. Not to mention the resulting responsibility that falls to us. As such, we’ve invested a great deal of energy in listening to our members this past year. Among other things, in September STIM held a dialog meeting on STIM’s international cooperation, analogous royalties, and future challenges. STIM also publishes the periodical STIM-Magasinet four times a year, and has conducted a pilot study on how to best develop the ‘My Pages’ online service.” “This past year, we’ve focused a great deal on how we distribute the money, and we’ve prepared an extensive survey on which music sources customers use in their operations, as well as which channels, music suppliers, and online services are used.” Music surveys are important if the analogous data is to reflect the actual use of music in cases where we cannot obtain detailed reports. One of the highlights of the year was the STIM Music Expo event, which almost 800 composers, lyricists, music publishers, and music students attended for advice and inspiration. “This was the sixth time we’ve arranged the event and it’s become an important meeting place for the entire music industry – not just affiliated songwriters and music publishers,” says Robert.
STIM MUSIC EXPO 2014
STIM ANNUAL REPORT 2014
13
Almost 800 songwriters, musicians, and other members of the music industry congregated at the STIM Music Expo event at the beginning of November.
80000
1 200 000
70000
50000
800 000 600 000 400 000 200 000 0
Author
60000
1 000 000
NUMBER OF MEMBERS
NUMBER OF NOTIFIED WORKS WITH AT LEAST ONE STIM-AFFILIATED AUTHOR
Publisher
1 400 000
2010
2011
2012
2013
2014
40000 30000 20000 10000 0
2010
2011
2012
2013
2014
STIM ANNUAL REPORT 2014
14
ADAM NORDÉN Adam is one of our most acclaimed composers for film, TV, and advertising. He’s received a Swedish Guldbagge Award and a prize at the international TV festival in Reims, France. Recently, I’ve been listening to a lot of: GREGORY PORTER LIQUID SPIRIT
STIM INTERNATIONALLY
In the big, wide world
No fewer than 114 weeks in the top ten, more than 340 weeks in the top one hundred, and 14 weeks at number one for a total of 20 songs. These are a few of the figures that illustrate Swedish dominance in the Billboard chart last year. At most, STIM-affiliated songwriters had five songs in the top ten at the same time, and eleven songs among the top one hundred. “Max Martin also received his first American Grammy in 2014, for Producer of the Year. He’s had 19 songs top the Billboard chart – and only Paul McCartney and John Lennon have bettered that. So he’s in good company,” says Sara Kilander, STIM’s Head of Operations. Furthermore, Tim “Avicii” Bergling had a number one hit in England with David Guetta’s Lovers on the Sun, and Mats Tärnfors and Andreas Stone Johansson each had a song on Japanese band Arashi’s best-selling album The Digitalian. As expected, Swedish songwriters were well represented in the Eurovision Song Contest – at the final in Copenhagen no fewer than six entries were penned by STIM-affiliated authors. “There’s almost no end to the success enjoyed by Swedish music,” says Sara. “Max Martin, Icona Pop, and Swedish House Mafia all received awards at the American copyright organization ASCAP’s annual awards show, Erik Hassle was one of the writers on Shakira and Rihanna’s duet Can’t Remember to Forget You, and Tove Lo was the first Swedish artist in 20 years to reach the number three spot of the Billboard Hot 100 chart, with the song Habits (Stay High).” The total number of STIM-affiliated songwriters with overseas income in excess of SEK 100,000 has also increased, to 243 people compared to 215 people in 2013. “This figure has increased every year for the past fifteen years, which is fantastic development. And we continue to work for better pay for the authors,” says Sara. Swedish contemporary art music is in demand in Sweden, Europe, Asia, and the USA. Ylva Q Arkvik, Lars Bröndum, Malin Bång, Thomas Jennefelt, Victor Lisinski, Miklós Maros, Fabian Svensson, and Henrik Denerin are a few of the composers that have achieved great success abroad. “Henrik Denerin’s works were performed in France, Poland, Germany, Japan, and the USA. And several of Sven-David Sandström’s works were performed last year, including his Matteuspassion for nine soloists, a choir and an orchestra in Berlin,” says Sara. “Karin Rehnqvist and Claes Holmgren’s Klockrent – En Mycket Stor Konsert won first prize at Prix Italia and fourth place at Prix Europa, while Rolf Martinsson was appointed Composer in Residence for the Netherlands Philharmonic and Chamber Orchestras.”
15 STIM ANNUAL REPORT 2014
Swedish music continues to reap great success abroad – not least in the market many consider the toughest to break: America The US. Swedish songwriters topped the Billboard Hot 100 during fourteen of the year’s 52 weeks, and in art music Swedish composers saw international success.
Several Swedes also proved a great success at major international festivals. Works by Paula af Malmborg Ward, Sten Melin, and Henrik Strindberg were enthusiastically received at Dark Music Days in Reykjavik. And Classical NEXT in Vienna featured works by Emil Råberg, Lisa Stenberg, Björn Sikström, Mirjam Tally, Anna Eriksson, Anders Hultqvist, and Mattias Petersson. “One of the best highs of the year was in London on June 13, when the BBC Symphony Orchestra performed Transit Underground by Tobias Broström and Symphony No 2 … sunt lacrimae rerum … by Mats Larsson Gothe. The same concert also featured Hugo Alfvén’s suite from Bergakungen and piano music by Ture Rangström. All of them received rave reviews in the English press,” says Gustaf Bergel, head of operations at Svensk Musik. The success of Swedish authors is one of the reasons behind STIM’s international work, which is conducted on several fronts. STIM’s reputation as a credible and reliable organization has spread way beyond Sweden’s borders – among both rightsholders and other industry stakeholders. “STIM and British PRS for Music own the joint venture company and music database ICE Services AB. In 2015, the other Nordic countries together with Iceland, the Baltics, and NCB plan to start using ICE,” says Sara. “Buma/Stemra is already a customer.” In order to uphold its affiliated members’ rights, STIM is focusing on the direct licensing of digital music services in Europe. In 2014, STIM and its British and German counterparts, PRS for Music and GEMA, continued their plans to cooperate on simplifying the licensing and handling of both national and pan-European music rights. The collective repertoire will be one of the largest in Europe, with several million works available for download, subscription, and streaming services. “The matter is currently under the scrutiny of the EU as regards antitrust. They’ll provide a verdict in July 2015, so hopefully joint direct licensing can become a reality after that,” says Sara.
STIM ANNUAL REPORT 2014
16
Songs with the most revenue from abroad 2014 (WITH AT LEAST ONE STIM-AFFILIATED AUTHOR) TITLE
AUTHORS
ARTIST
01 Don’t You Worry Child
Hedfors, A/Ingrosso, S/Angello, S/Lindström, M/Zitron, M
Swedish House Mafia
02 I Knew You Were Trouble
Swift, T/Martin, M/Shellback
Taylor Swift
03 I Love It
Eklöw, L/Berger, P/Aitchison, C
Icona Pop
04 Wake Me Up
Bergling, T/Dawkins, E/Einziger, M
Avicii
05 One More Night
Shellback/Martin, M/Kotecha, S/Levine, A
Maroon 5
06 Hey Brother
Bergling, T/Pontare, V/Al Fakir, S/Maggio, V/Pournouri, A
Avicii
07 Reckoning Song
Avidan, A/Kleinman, H/Nir, R/Peled, R/Sheleg, Y/Winokur, O
Asaf Avidan & The Mojos
08 I Follow Rivers
Zachrisson, LL/Yttling, B/Nowels, R
Lykke Li
09 I Could Be The One
Vredenberg, M/Pournouri, A/Rotteveel, N/Bergling, T/Parmenius, J/Wiklund, L
Avicii, Nicky Romero
10 Roar
McKee, B/Walter, H/Perry, K/Martin, M/Gottwald, L
Katy Perry
STIM ANNUAL REPORT 2014
17
MALIN BÅNG Malin began studying composition in 1993 and received her Master’s from the Royal College of Music in Stockholm eleven years later. Today, she’s resident composer for the German ensemble Curious Chamber Players. One favorite album: One of my absolute favorite albums is APARELHAGEM by Brazilian DJ DOLORES and ORCHESTRA SANTA MASSA.
STIM – BALANCE OF PAYMENTS WITH FOREIGN COUNTERPARTS, SEK THOUSAND (FIGURES FOR 2013 IN PARENTHESES) COUNTRIES
TO ABROAD
Finland
84,648
(80,032)
72,661
(68,055)
11,987
(11,978)
4,562
(4,635)
184,697
(148,553)
157,816
(126,653)
26,880
(21,900)
9,677
(11,275)
Iceland
3,017
(2,072)
2,820
(1,949)
196
(123)
359
(291)
Norway
52,961
(60,298)
41,639
(46,290)
11,322
(14,008)
6,184
(6,967)
Estonia
1,697
(2,131)
1,551
(1,960)
146
(171)
113
(103) (45)
Latvia
STIM ANNUAL REPORT 2014
OF WHICH REVENUE FOR SWEDISH MUSIC ABROAD
Denmark
Lithuania
18
OF WHICH SUB-PUBLISHER REVENUE FOR FOREIGN MUSIC
TOTAL FROM ABROAD
Total Nordics & Baltics Belgium France
0
(2,224)
0
(2,030)
0
(194)
58
9,660
(0)
8,234
(0)
1,427
(0)
33
(27)
336,680
(295,310
284,721
(246,936)
51,958
(48,374)
20,986
(23,342)
4,127
(4,303)
–
–
4,127
(4,303)
633
(446)
15,996
(14,697)
–
–
15,996
(14,697)
9,761
(10,385)
Greece
1,873
(490)
–
–
1,873
(490)
187
(284)
Ireland
1,249
(2,102)
–
–
1,249
(2,102)
893
(585)
942
(748)
–
–
942
(748)
132
(81)
Italy
10,064
(6,763)
–
–
10,064
(6,763)
2,280
(2,957)
Netherlands
10,534
(11,110)
–
–
10,534
(11,110)
5,873
(3,963)
Poland
2,699
(2,524)
–
–
2,699
(2,524)
174
(213) (70)
Israel
Portugal
559
(706)
–
–
559
(706)
67
Romania
935
(1,512)
–
–
935
(1,512)
172
(9)
Russia
918
(1,949)
–
–
918
(1,949)
239
(299)
4,938
(3,778)
–
–
4,938
(3,778)
756
(725)
375
(351)
–
–
375
(351)
27
(26)
Switzerland Slovakia Spain UK Czech Republic
5,043
(4,740)
–
–
5,043
(4,740)
1,413
(1,999)
30,641
(25,054)
–
–
30,641
(25,054)
50,015
(50,409)
634
(629)
–
–
634
(629)
130
(185)
Germany
31,876
(23,461)
–
–
31,876
(23,461)
8,445
(7,969)
Hungary
1,189
(1,490)
–
–
1,189
(1,490)
134
(94)
4,240
(4,095)
–
–
4,240
(4,095)
895
(811)
788
(1,260)
–
–
788
(1,260)
239
(192)
129,620
(111,762)
–
(–)
129,620
(111,762)
82,466
(81,701)
Austria Rest of Europe Total Europe (excl. Nordics & Baltics)
1,112
(1,159)
–
–
1,112
(1,159)
40
(548)
Australia
Argentina
8,280
(9,368)
–
–
8,280
(9,368)
6,375
(5,407)
Brazil
5,270
(3,698)
–
–
5,270
(3,698)
244
(979)
416
(322)
–
–
416
(322)
19
(9)
8,006
(7,380)
–
–
8,006
(7,380)
332
(254)
Hong Kong Japan Canada
5,511
(6,559)
–
–
5,511
(6,559)
5,331
(6,022)
Korea
1,504
(831)
–
–
1,504
(831)
88
(270)
Mexico
1,029
(739)
–
–
1,029
(739)
171
(0)
748
(584)
–
–
748
(584)
7
(3)
1,148
(1,384)
–
–
1,148
(1,384)
116
(328)
38,666
(49,382)
–
–
38,666
(49,382)
122,404
(117,096)
2,737
(1,283)
–
–
2,737
(1,283)
551
(519)
74,426
(82,688)
–
(–)
74,426
(82,688)
135,680
(131,435)
540,726
(489,760)
284,721
(246,936)
256,005
(242,824)
239,132
(236,478)
Singapore South Africa USA Other Total rest of the world (excl. Europe, Nordics & Baltics) Total
Total foreign revenue SEK
540,726,520
STIM ANNUAL REPORT 2014
19
62%
8%
24%
2%
2% 2%
+10% compared to 2013
Annual scholarships
STIM ANNUAL REPORT 2014
20
Every year, STIM earmarks three per cent of its members’ Swedish royalties for scholarships. Only STIM-affiliated authors are eligible to apply for such scholarships, which are awarded once a year. Of scholarship funds totaling SEK 8.5 million for 2014, SEK 4.9 million was allocated to STIM scholarships while the remaining SEK 3.6 million was divided equally between FST and SKAP. Beste, Ansgar Engdahl Hamilton, Sven Filipsson, Jens Humlén, Joel Lundgren, Filip Lörstad, Henrik Mårtensson, Hugo Simmerud, Patric Amsler, Katrine Arkbro, Ellen Augustsson,Mikael Baars, Girilal Bartonek, Anders Berg,Christoffer Björklund, Claes Bodén, Ulrika Brunnberg, Jesper Byström, Britta Cissoko, Maher Diakité, Jason Duncanson, Johan Egland, Per Forsberg, Marta Franzén, Elin Frid, Karl Frid, Pär Furbacken, Victor Gefors, Hans Gorgis, Daniel Gran, Fredrik Granberg, Magnus Groundstroem, Max Hasselquist Jarl, Joakim
Hellström, Pontus Holmlander, Per-Åke Härdig, Sofia Hörnberg, Tomas Jernberg,Sofia Johansson, Emil Jones, Adrian Jonsson, Lena Kallerdahl, Fabian Kallerdahl, Lindha Karlsson,Daniel Kentros, George Koitzsch,Jimmy Krumlinde, Jerker Krunegård, Markus Lamu, Robert Larsson Knobel, Halina Larsson Sander, Ellekari Lee, Jonna Liftig, Vanessa Lind, Pontus Lindh, Lars Lindvall, Robin Löfgren, Lisa Mases, Petra Matzols Arkö, Björn Moir, Casey Möller, Frans Neib, Isabel Nilsson, Anders Nkolina Mvemba, José Norudde, Anders Nurulla-Khoja, Farangis
Nygårdh, Petter Olenius, Adam Olsson, Linnea Olsson, Rickard Ottander, Niklas Parkman, Sara Persson, Cecilia Pfannenstill, Andreas Rosén, Canan Rosenquist, Tim Samuelsson, Maja Sandgren, Joakim Shalan Ottosson, Alexander Sjöö, Joel Skarin, Jesper Spada, Julia Stenberg, Lisa Stenström, Thomas Strand, Marlene Svensson, Johan Söderlund, Andreas Ternheim, Anna Thurfjell, Lovisa Tian, Leilei Tilliander, Andreas Valfridsson, Jonas Wennerberg Wickman, Felix Verbaan, Karin Willemark, Lena von Malmborg, Ann-Karin Zetterberg,Torbjörn Ågren,Morgan Öberg, Linn
STIM SCHOLARSHIPS 2014
STIM ANNUAL REPORT 2014
21
One of the highlights of the year is when STIM gets to hand out scholarships on its own premises. Many of this year’s scholarship recipients came to our offices to accept their diplomas in person and to meet other creators.
LIVE MUSIC
STIM ANNUAL REPORT 2014
22
Broader lineups, new target groups, and better attendance Big, bigger, biggest. 2014 was the year when live music records were broken one after another. “Biggest across the board was Håkan Hellström’s concert at Ullevi in Gothenburg this past summer, with 68,000 people in attendance. Never before in Sweden have that many people been gathered to see a music event,” says Sara Kilander, STIM’s Head of Operations. Interest in live music in Sweden continues to grow. The ten biggest festivals broke attendance records and the money collected by STIM totaled almost SEK 7.3 million – which is also more than ever. “For the most part, the high profile festivals were the ones that attracted a lot of people. Bråvalla sold 57,000 tickets while 49,000 people attended the one-day STHLM Fields festival. Both figures are records,” says Sara. A trend seen in 2014 was for the major festivals to offer broader lineups than in the past. House music, for instance, has gained a stronger footing and is featured at festivals aimed at broader target groups. There are still niche festivals, such as Sweden Rock, but for attracting a really big audience a mixed lineup seems to be a winning concept. The existing festival audience doesn’t disappear while new groups join them, such as many people born in the 1940s and 50s. “The major festivals have the greatest opportunity to book the most popular acts, while the medium-sized and smaller festivals more often focus on Swedish and local music,” says Sara. One bad year can be enough to bring a festival to an end. During the year, Furuvik Reggae Festival, Popadelica, and Hultsfred all disappeared, while STHLM Fields, Sónar Stockholm, and Yard Festival had their premieres. The ten commercial festivals with the highest attendances were Bråvalla, Sweden Rock, Way Out West, STHLM Fields, Summerburst Stockholm, Summerburst Gothenburg, Storsjöyran, Emmabodafestivalen, Stockholm Music & Arts, and Kentfest. 2014 was also a successful year for Swedish art music. In total, 169 STIM-affiliated composers had 339 works performed throughout the year, which is a significant increase. This figure is also higher in reality as not all performances are reported to Svensk Musik. “We have composers who had as many as eight works performed during the year, both in Sweden and abroad,” says Gustaf Bergel, head of operations at Svensk Musik. The year’s successful authors included Katarina Leyman, Miriam Tally, Andrea Tarrodi,
STIM ANNUAL REPORT 2014
23
MATS LARSSON GOTHE Mats has composed for many different genres and had his first major break with the opera Poet & Prophetess, which premiered at NorrlandsOperan in 2008. In June, the BBC Symphony Orchestra performed his second symphony. One favorite album: GUSTAV MAHLER SYMPHONY NO. 10 VIENNA PHILHARMONIC Conductor: Daniel Harding Record label: Deutsche Grammophon Released: 2008
Paula af Malmborg Ward, Sven-David Sandström, Vladimir Levitt, Johan-Magnus Sjöberg, Henrik Denerin, Martin Larsson, Benjamin Staern, Mats Larsson Gothe, and Lars Bröndum. “All of these authors had new works performed in 2014, and almost all of them were commissioned pieces. STIM supports them with travel grants administered by Svensk Musik and via the promotion committee’s efforts to extend the reach of Swedish music.” Festivals during the year included Sound of Stockholm, the Båstad Chamber Music Festival, Signal in Gävle, and the Composers Festival with Anders Hillborg. Many established composers wrote works specially for these festivals.
STIM PROMOTES SWEDISH MUSIC CULTURE
Broad cultural support and publishing STIM ANNUAL REPORT 2014
24
STIM = money. For many people, STIM is quite simply the organization that ensures that songwriters and composers are paid for the use of their music. But STIM also helps keep Swedish culture diverse, such as by publishing works and supporting copyright-protected music projects. STIM is able to allocate up to ten percent of Swedish revenue (after deductions for costs) to increase the awareness, availability, and performance of contemporary Swedish music. This is achieved through, for example, the subsidiary Svensk Musik Swedmic AB, which in 2014 invested SEK 6.3 million in Swedish music. “Music publishers are not able to publish everything written by STIM-affiliated composers. As such, each year we receive about 400 manuscripts from STIM-affiliated composers and market them by selling or leasing the works to artists, ensembles, and orchestras throughout the world. When new orchestral works are to be performed, we finance and manage the printing of complete orchestral scores,” says Gustaf Bergel, head of operations at Svensk Musik. In 2014, Svensk Musik ensured that 30 different works were performed, comprising sixteen orchestral works, six operas, and eight chamber music works. In the case of operas, for example, the figure is twice that of 2013. Svensk Musik has its own music score company, Edition Suecia, which last year completed the final three volumes of the Swedish opera anthology. “There are seven volumes in all, and it’s kind of the crowning glory of all that we’ve published. The anthology has gained a great deal of attention both in Sweden and abroad, not least among music schools. Aside from the actual lyrics, everything is in both Swedish and English, so it’s ready for an international launch,” says Gustaf. STIM-affiliated authors can apply for travel grants in order to attend when their works are performed abroad or premiered in Sweden. Svensk Musik takes care of the administration and awarded travel grants to 82 authors in 2014.
STIM’s Promotion Committee 25 STIM ANNUAL REPORT 2014
STIM’s Promotion Committee works to increase the performance of copyright-protected Swedish music – across all genres – both in Sweden and abroad. This is achieved by supporting various projects that create the necessary conditions for future music creation. The Promotion Committee is managed by SKAP, FST, and Musikförläggarna. Fredrik Wetterqvist chairs the committee. In 2014, the Promotion Committee decided to support some forty projects, spending a total of more than six million Swedish kronor. Some of these projects were conducted last year while others will begin in 2015. “In 2014, we kicked off a major German initiative encompassing several projects to promote Swedish music in one of the most important music nations in Europe. By conducting many projects in the same country, we believe that we’ll achieve better results than if we spread our resources more thinly,” explains STIM’s Project Coordinator Mattias Franzén. The German projects include a major art music manifestation at the Swedish embassy in Berlin and a meeting between Swedish film music composers and representatives from the German film industry. “Another ongoing initiative, and one which I believe can prove successful, is ‘My five Swedish Favorites’, in which prominent German culture journalists have written articles about Swedish music and created public playlists. This project doesn’t cost much money, but helps underpin the image of Swedish music as a relevant art form. The playlists include everything from Roxette to Lars-Erik Larsson.” A few other projects that the Promotion Committee supported during the year include the noted podcast Skaparna (The Creators), in which female music creators were interviewed, and a project that enabled Swedish music scores to be presented at the music convention in Frankfurt. “Young Nordic Music, which presented newly composed Swedish art music at high schools in Skåne, the marketing of Swedish composers in conjunction with the Stockholm Jazz Festival, and an initiative involving cross-genre meetings at the Visby International Centre for Composers are further examples,” says Mattias. “The Visby International Center for Composers (VICC) is one of just a few places in the world where professional composers – regardless of genre – can meet to exchange ideas, insights, and experiences. And STIM’s grant is of great importance if we are to keep this international meeting place up to date and of interest to our guests,” says Sten Melin, executive director at VICC.
STIM ANNUAL REPORT 2014
26
ACE WILDER Alice Gernandt, which is her real name, has merits that include writing songs that have made the top ten in Germany. Her major breakthrough back home came in 2014 in Melodifestivalen, the competition to determine Sweden’s entry in the Eurovision Song Contest, with the song Busy Doin’ Nothin’. Two favorite albums: LORENTZ – KÄRLEKSLÅTAR JESSIE WARE – TOUGH LOVE
THE DIGITAL MARKET
New pricing models for a digital world It started back in 2013 and really made its mark last year. For the first time, conventional TV viewing lost out in favor of various on demand services. As a consequence, STIM invests a great deal of energy in following market development and adapting its pricing models.
STIM ANNUAL REPORT 2014
27
New TV viewing patterns have disjointed the old value chain as everyone attempts to get as close as possible to consumers. The traditional TV companies now offer different on demand services and compete with everyone from Netflix to online newspapers. “Daily viewing of scheduled TV fell by six minutes a day in 2014. For the commercial channels, this means a drop in advertising revenue. As such, we have to continually adapt our pricing models to ensure their applicability to new services. And we conduct this work in consultation with customers to ensure the best possible outcome,” says Nicklas Sigurdsson, Head of Sales and Marketing. The increase seen during the year was mostly in streamed video on demand, with providers such as HBO, Netflix, CMore, Viaplay, and TV4 Play Premium growing. “Parallel to this, we can see how the TV companies are trying to reduce their rights costs by using companies that sell music rights bought outright for a fixed price. As a result, we have to show the value of music and be transparent and easily understood, in relation to both those who pay and those who are paid,” says Nicklas. Streamed music also continues to grow while downloads are falling and everything would seem to indicate that streaming will soon dominate throughout Europe. All in all, online revenue increased by 17.9 percent, including European licensing.
17.9% 41.1%
250 200
70.9%
43.4%
150 100 50 0
137.5%
ONLINE AND NEW MEDIA REVENUE, SEK M
300
2010
2011
2012
2013
* Percentages reflect increase over previous year.
2014
STIM AND BACKGROUND MUSIC
Background to the fore “Background music” is a phrase that is sometimes used to describe music that’s just there. But the phrase is starting to gain new meaning. The trend is for the music selection in, for example, stores and restaurants to be made more consciously, as research shows the importance of music to sales.
STIM ANNUAL REPORT 2014
28
6% IN INCREASED REVENUE IN RESTAURANTS.
The music played in stores, gyms, coffee shops, and other public places is used with increasing awareness. A recent survey conducted by HUI Research shows, for example, that a store can increase its revenue by as much as 36 percent simply by choosing the right music. “We’re also seeing an increase in the number of companies providing background music. For example, during the year Spotify launched its Soundtrack Your Brand service, which offers music to stores, coffee shops, restaurants, and other establishments,” says Nicklas Sigurdsson, Head of Sales and Marketing. Another company that successfully delivers music solutions to gyms and sports centers is Swedebeat, which was awarded the 2014 STIM Guitar for its awareness of the value of music and for ensuring that music creators are compensated for their work. STIM’s income for background music increased somewhat in 2014 in all sub-categories, and market coverage has improved. “We introduced a new customer system in 2013, and last year we linked it to the PAR address register. This helps us keep track of the market. Say, for example, a clothing chain opens a new store, we’re automatically informed. We can then contact them about a new STIM license.” Digitization affects the use of background music, just as it does all other areas. So during the year STIM reviewed several old agreements, renewed them, and adapted them to the new circumstances. “This results in our authors receiving better compensation when their music is played,” says Nicklas. STIM is also taking a stronger stance against those who do not want to pay for their music, and in a few cases this has led to lawsuits. “A legal process is the last resort when we’ve spent a great deal of time trying to reach agreement. A lawsuit has two purposes: on the one hand we want to protect our members’ income and on the other we want our counterparts to be aware of the rules that actually apply.”
35
45
30
40
30 25 20 15 10 5 0
2010
2011
2012
2013
2014
25 20 15 10
29
5 0
2010
2011
2012
2013
2014
EXAMPLE: The annual license fee for background music in a restaurant/ eatery with 1–20 covers and open at least 312 days a year is SEK 2,425, that is, SEK 7.77 per day of business. For a restaurant with 101–150 covers and open at least 312 days a year, the license fee is SEK 9,763 per year, i.e., SEK 31.29 per day of business. The price for each day of business varies depending on how many days – between 312 and 365 – the establishment is open each year.
EXAMPLE: The license fee for a store with a sales area of up to 100 square meters (1,076 sq. ft.) and open at least 312 days a year. Establishments with a sales area of between 2,001 and 2,500 square meters (21,539–26,910 sq. ft.) and open at least 312 days a year pay a fee of SEK 17,939 per year, i.e., a maximum of SEK 57.49 per day of business. The price for each day of business varies depending on how many days – between 312 and 365 – the establishment is open each year.
18 16
ANALOGOUS DATA STIM has about 30,000 licenses for background music. The majority of these licenses fall into a category that STIM calls “Background music, not reported”. Here we find, for example, restaurants, hairdressers, fitness centers, and hotels that pay a license fee to STIM, but where detailed music reporting from each individual licensee is judged to be impractical. As such, the revenue that STIM receives is distributed to authors in accordance with detailed analogous data (see the distribution table on page 10). The data is based on what customers in statistically significant surveys actually specify as their primary music sources, that is, music use in Swedish Radio, commercial radio, TV, and record sales or downloads in Sweden. This method is neither unusual nor unique and is used by copyright organizations throughout the world.
14
FITNESS, REVENUE, SEK M
12 10 8 6 4 2 0
2010
2011
2012
2013
2014
EXAMPLE: The license fee for a supervised exercise class with up to 25 participants is SEK 13.22 per session/occasion. For an exercise class with more than 75 participants, the license fee is SEK 58.99 per session/occasion.
Analogous data
23%
BACKGROUND 77%
Report
1%
2%
4%
TV
RADIO
ONLINE
99%
98%
96%
25%
LIVE 75%
STIM ANNUAL REPORT 2014
35
RESTAURANTS, REVENUE, SEK M
STORES, SHOPPING MALLS, AND THE LIKE, REVENUE, SEK M
50
STIM AND ITS EMPLOYEES
Equality among personnel and unified IT support STIM ANNUAL REPORT 2014
30
A new CEO and a merger with subsidiary CEE. Those were the two dominant events in terms of personnel in 2014. “The recruitment of a new CEO began in the spring, and in August Karsten Dyhrberg Nielsen began work as CEO at STIM. His previous position was CEO of the Nordic copyright organization NCB,” says STIM’s HR Manager Venke Osnes. The other major event during the year was the merger with STIM’s former subsidiary CEE Services AB, which provides administrative support and development for STIM’s documentation, music reporting, collection, and IT. “By combining the best parts of both operations, we’re better equipped for the future. Our IT work will be more focused when everything is housed in the same company, and we’ll also reduce administration needs.” When the merger took place in May, STIM’s operative Unit, then is headed by Sara Kilander, was expanded. Operations already encompassed service, distribution, sales, and marketing. Now it also includes music reporting and administration, as well as collection and documentation. “The merger means that STIM has twice as many employees as before. We’ve even strengthened the distribution department with another two people, and at the end of the year there were 126 of us working from Stimhuset on Hornsgatan in Stockholm.” 52 percent of employees are women and the percentage of women in managerial positions is as high as 67 percent. In terms of salaries, women receive a little more than men. “There’s a lot of talk about the lack of women in executive positions in the music industry. It’s nice that STIM can help even out those statistics a little,” says Venke.
STIM ANNUAL REPORT 2014
31
JOHAN BECKER Johan got his big break when he won the Swedish reality TV show Fame Factory in 2004. As a composer, he’s written songs for both himself and other artists, and in 2011 he had his first number one single in Japan with the band Exile and the song Rising Sun. One favorite album: ALICE IN CHAINS DIRT An album I’ve listened to constantly since its release.
STIM ANNUAL REPORT 2014
32
STIM’s Board of Directors and CEO Back row, from the left: Martin Jonsson Tibblin (proposed from 2015), Leif Pagrotsky, Monica Ekmark, Kristina Rennerstedt, Mattias Svensson Sandell, Annika Falkenäng. Second row, from the left: Alfons Karabuda, Elise Einarsdotter, Nutta Hultman, Martin Q Larsson, Eric Hasselqvist, Lars Karlsson. Front row, from the left: Eva Botmar, Kjell-Åke Hamrén, Karsten Dyhrberg Nielsen, Douglas Carr.
The STIM sphere SVENSK MUSIK SWEDMIC AB
FST (Society of Swedish Composers), SKAP (Swedish Society of Songwriters, Composers, and Authors), and Musikförläggarna (Swedish Music Publishers Association) each appoint two members and one deputy. FST, SKAP, and Musikförläggarna jointly appoint the chair of the board and a further two members. The STIM local of Unionen appoints one member and two deputies.
Svensk Musik Swedmic AB is a wholly-owned subsidiary of STIM since 2008. Its task is to document and provide information about copyright-protected Swedish music. This is achieved by, for example, cataloging and archiving art music and older popular music and producing music scores for, among other things, orchestral works and works for larger jazz ensembles. Svensk Musik also administers travel grants for STIM-affiliated authors.
Regular members Kjell-Åke Hamrén.............................................................. Chair Martin Q Larsson.................................................................FST Erik Peters...........................................................................FST Alfons Karabuda............................................................... SKAP Johan Ekelund....................................... SKAP (until 8/18/2014) Douglas Carr.........................................SKAP (as of 8/19/2014) Monica Ekmark............................................. Musikförläggarna Eric Hasselqvist.............................................. Musikförläggarna Kristina Rennerstedt........................................External member Leif Pagrotsky.................................................External member Eva Botmar.................................................................Unionen . Deputy members Mattias Svensson Sandell.....................................................FST Ida Lundén..........................................................................FST Dan Bornemark................................................................ SKAP Elise Einarsdotter.............................................................. SKAP Lars Karlsson................................................. Musikförläggarna Nutta Hultman.............................................. Musikförläggarna Annika Falkenäng........................................................Unionen Anders Cangemark......................................................Unionen Notes: During the year, the following individuals acted as chief executive officer of STIM: Helena Woodcock (during the period February–March 2014) and Alfons Karabuda (during the period April–July 2014). At the same time, Helena Woodcock sat on the boards of the companies CEE, ICE, and Kobalt STIM Aggregated Rights AB while Alfons Karabuda sat on the boards of the companies CEE and Kobalt STIM Aggregated Rights AB. During his time as Acting CEO, Alfons Karabuda did not sit on STIM’s board of directors. STIM is owned by its members. We sometimes use the phrase “the organizations that own us” since the members have delegated the task of electing STIM’s board of directors to FST, SKAP, and Musikförläggarna.
Board of Directors Dror Feiler................................................................. FST, Chair Peter Magro.................................................. Musikförläggarna Alfons Karabuda................................ SKAP (through May 2014) Elise Einarsdotter....................................SKAP (as of June 2014)
33 STIM ANNUAL REPORT 2014
BOARD OF DIRECTORS
Group STIM KARSTEN DYHRBERG NIELSEN
STIM ANNUAL REPORT 2014
34
ICE SERVICES AB 50 PERCENT INTERNATIONAL COPYRIGHT ENTERPRISE SERVICES AB JOINTLY-OWNED WITH BRITISH PRS FOR MUSIC CEO CARSTEN DRACHMANN UNTIL MARCH 2015
ICE INTERNATIONAL COPYRIGHT ENTERPRISE GERMANY GMBH
CEE SERVICES AB DORMANT
KOBALT STIM AGGREGATED RIGHTS AB
STIM FASTIGHETS HOLDING AB
SVENSK MUSIK SWEDMIC AB HEAD OF OPERATIONS GUSTAF BERGEL
The agreement with Kobalt STIM Aggregated Rights AB, a collaboration between STIM and Kobalt Music Group, expires in June 2015. Existing licenses will remain in effect during a transition period.
STIMHUSET KB
NCB NORDISK COPYRIGHT BUREAU JOINTLY-OWNED WITH STIM’S NORDIC COUNTERPARTS CEO HÅKAN HILDINGSSON
Group performance – 3-year summary
2014
2013
2012
24,929 (100%)
82,234 (100%)
83,031 (100%)
1,302
1,529
4,514
20
52
48
120,733 (54%)
31,453 (46%)
-
4,185
-2,121
-
-
-
-
2,747 (77%)
4,244 (55%)
6,012 (17%)
-145
1,488
-234
-
-
-
6,325 (64%)
9,699 (64%)
13,032 (67%)
27
2
17
9
10
13
119,677 (21.6%)
116,234 (1.64%)
97,512 (9.81%)
-6,835
1,952
835
94
90
72
25,800 (42%)
23,958 (45%)
12,869 (28%)
12,999
12,793
3,590
-
-
-
CEE Services AB
Operating profit/loss Average number of employees
Kobalt Stim Aggregated Rights AB** Revenue (within the Group, %) Operating profit/loss Average number of employees
Stim Fastighets Holding AB Revenue (within the Group, %) Operating profit/loss Average number of employees
Svensk Musik Swedmic AB Revenue (within the Group, %) Operating profit/loss Average number of employees
ICE Services AB* Revenue (within the Group, %) Operating profit/loss Average number of employees
Stimhuset KB Revenue (within the Group, %) Operating profit/loss Average number of employees
* The figures for ICE Services AB do not include the subsidiary ICE International Copyright Enterprise Germany GmbH. The figures for ICE Services AB have not been revised. ** The agreement with Kobalt STIM Aggregated Rights AB, a collaboration between STIM and Kobalt Music Group, expires in June 2015. Existing licenses will remain in effect during a transition period.
35 STIM ANNUAL REPORT 2014
Revenue (within the Group, %)
CEE SERVICES AB
NCB, NORDIC COPYRIGHT BUREAU
Dormant company
NCB, Nordisk Copyright Bureau, is tasked with upholding the rights of authors and music publishers in the recording, copying, and distributing of protected music and lyrics on CD, vinyl, DVD, and similar media. NCB is owned by STIM and its counterparts in Denmark (KODA), Finland (TEOSTO), Norway (TONO), and Iceland (STEF). NCB also administers the mechanical rights of the Baltic collecting societies, LATGA-A (Lithuania), EAÜ (Estonia), and AKKA-LAA (Latvia). NCB has agreements with copyright societies abroad that administer mechanical rights in a corresponding manner in their countries.
Board of Directors* Helena Woodcock.............................................................Chair Kristina Paulsson...........................................................Deputy Nicklas Lindström........................................................Unionen
ICE, INTERNATIONAL COPYRIGHT ENTERPRISE SERVICES AB STIM ANNUAL REPORT 2014
36
ICE, founded in 2007 with STIM’s UK counterpart PRS for Music as an independent commercial company, is owned on a 50/50 basis by STIM and PRS for Music. ICE’s primary role is to administer the data volumes required to license and distribute the financial remuneration to authors and publishers, Swedish and international, when their works are played, recorded, streamed, or legally downloaded. Board of Directors* Wanda Goldwag............PRS for Music, Chair (as of 11/28/2014) Kjell-Åke Hamrén..................STIM, (Chair until November 2014) Karsten Dyhrberg Nielsen.................. STIM, (elected 9/18/2014) Kristina Paulsson.............................................................. STIM Robert Ashcroft.................................................... PRS for Music Craig Nunn.......................................................... PRS for Music Patrik Lindgren....................................Employee representative
Board of Directors* Anders Lassen.................................................CEO, Koda, Chair Susi Hyldgaard..................................................... Author, Koda Tine Birger Christensen............................ Music publisher, Koda Gudrun Björk Bjanadottir........................................... CEO, STEF Karsten Dyhrberg Nielsen............ CEO, STIM (as of August 2014) Alfons Karabuda................................................... Author, STIM Lars Karlsson........................................... Music publisher, STIM Katri Sipilä.............................................................. CEO, Teosto Kim Kuusi........................................................... Author, Teosto Tommi Tuomainen................................. Music publisher, Teosto Cato Ström................................................................CEO, Tono Bendik Hofseth......................................................Author, Tono Steinar Fjeld............................................ Music publisher, Tono Observers from the Baltic countries Inese Paklone.................................................... CEO, AKKA/LAA Kalev Rattus...............................................................CEO, EAÜ Jonas Liniauskas................................................... CEO, LATGA-A Jakob Friman Magnusson.......................................... CEO, STEF Anne Louise Holsoe.............................Employee representative
KOBALT STIM AGGREGATED RIGHTS AB Kobalt STIM Aggregated Rights AB was a collaboration between STIM and the music publisher Kobalt Music Group that has enabled multi-territorial digital music services to acquire music licenses for the European market. The agreement with Kobalt STIM Aggregated Rights AB, a collaboration between STIM and Kobalt Music Group, expires in June 2015. Board of Directors* Karsten Dyhrberg Nielsen.............. STIM (as of September 2014) Helena Woodcock............................................................. STIM Tomas Ericsson............................................Kobalt Music Group Kristina Paulsson..................................................STIM, Deputy * Kenth Muldin was a representative during the period January–February 2014.
STIM ANNUAL REPORT 2014
37
AVICII In February, Wake Me Up by Tim “Avicii” Bergling became the most played song on Spotify ever, amassing more than 200 million plays. And at the 2014 STIM Music Expo, Tim was awarded a Platinum Guitar for his exceptional achievements. One favorite album: PINK FLOYD DARK SIDE OF THE MOON
“Naturally, songwriters should be paid when their works are performed. As soon as we started the company, we ensured that all rights were in place,” says Johan Blomberg, CEO of Swedebeat AB (left), who together with colleague Linus Sjöberg received a 2014 STIM Guitar.
STIM’s committees
STIM ANNUAL REPORT 2014
38
ASSESSMENT COMMITTEE FOR MUSIC AND COPYRIGHT
DISTRIBUTION COMMITTEE
Provides opinions on similarities between musical works in copyright disputes.
Preparatory body for the Board in distribution issues.
Helena Woodcock...................................................STIM, Chair Jonas Nordin....................................................STIM, Secretary Peo Nylén.....................................................Musikförläggarna Douglas Carr................................................................... SKAP Mattias Svensson Sandell....................................................FST
SCHOLARSHIP COMMITTEE Awards STIM’s scholarships. Ragnar Grippe................................................................. Chair Stefan Gullberg..............................................Musikförläggarna Sarah Riedel.................................................................... SKAP Jesper Nordin.....................................................................FST Eva Lindal....................................................................External Josephine Forsman......................................................External
GRADING COMMITTEE Establishes praxis for grading and deals with grading complaints. Regular members Mats Edén....................................................................... SKAP Torgny Söderberg............................................................. SKAP Jonas Valfridsson................................................................FST Ylva Q Arkvik.......................................................................FST Kristina Fryklöf...............................................Musikförläggarna Deputy members Jan Levander................................................................... SKAP Anna Einarsson................................................................ SKAP Kristina Forsman.................................................................FST Johan Ramström................................................................FST Ingemar Hahne.............................................Musikförläggarna
Karsten Dyhrberg Nielsen................... Chair (as of August 2014) Kenth Muldin...................................Chair (until February 2014) Martin Q Larsson................................................................FST Chrichan Larson..................................................................FST Alfons Karabuda.............................................................. SKAP Örjan Strandberg............................................................. SKAP Kettil Skarby..................................................Musikförläggarna Monica Ekmark.............................................Musikförläggarna Kjell-Åke Hamrén..............................................................STIM
COMMITTEE FOR NATIONAL FUNDS Preparatory body for the promotion of Swedish music. Kjell-Åke Hamrén............................................................. Chair Alfons Karabuda.............................................................. SKAP Martin Q Larsson................................................................FST Monica Ekmark.............................................Musikförläggarna Karsten Dyhrberg Nielsen....................STIM (as of August 2014) Kenth Muldin................................... STIM (until February 2014)
FEES COMMITTEE Preparatory body for the annual general meeting to propose fees to regular and deputy members of STIM’s Board of Directors, committees, and subsidiary boards. Sten Melin..........................................................................FST Claes Ånstrand................................................................ SKAP Margareta Neld.............................................Musikförläggarna
STIM’S PROMOTION COMMITTEE (SPN) Initiates and supports projects that aim to improve the availability and recognition of new Swedish music – both nationally and internationally. Fredrik Wetterqvist............................................. Chair, external Alfons Karabuda.............................................................. SKAP Mårten Karlsson.............................................................. SKAP Dror Feiler..........................................................................FST Anne Pajunen....................................................................FST Gunnar Helgesson.........................................Musikförläggarna Nutta Hultman..............................................Musikförläggarna
STIM’s organization*
39
CEO
HUMAN RESOURCES
SECRETARIAT
VENKE OSNES
LEGAL HELENA WOODCOCK
COMMUNICATION KARIN JIHDE
FINANCE KINA PAULSSON
STIM ANNUAL REPORT 2014
KARSTEN DYHRBERG NIELSEN
STRATEGY & IT CHARLOTTE VON SYDOW
*Applies as of May 1, 2015
REPORTING & COLLECTION NILS DANIELSSON
RIGHTSHOLDERS
SALES AND MARKETING
SARA KILANDER
NICKLAS SIGURDSSON
Administration Report The Board of Directors and the Chief Executive Officer of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a., corporate identity number 702002-3524, hereby present the annual report and consolidated financial statements for the 2014 financial year.
STIM ANNUAL REPORT 2014
40
DESCRIPTION OF OPERATIONS STIM is a special-interest copyright organization for music authors and publishers. STIM administers and licenses rights to music and lyrics on their behalf. Through its international network, STIM also represents rights to the worldwide repertoire of music. Moreover, STIM promotes the creation and distribution of new Swedish music. At year-end, STIM had more than 77,600 affiliated composers, lyricists, arrangers, and music publishers. STIM upholds the economic rights of authors and music publishers under copyright legislation Based on inter-governmental agreements and reciprocal agreements with STIM’s counterpart organizations abroad, rights to both domestic and international music in Sweden are protected. When a rightsholder joins STIM, they transfer their legal rights to recompense in connection with public performance, recording, and mechanical reproduction to STIM. STIM ensures that anyone who plays music in public or who records, downloads, or streams music has a valid license and pays a fee. STIM then pays the monies received to the owner or owners of the rights to the music. As such, STIM licenses all the music of the world to users of music and distributes the revenue collected to the individual rightsholders, both Swedish and international. This means that anyone who wishes to use music in, for example, a radio broadcast, a store, or a night club can easily obtain access to millions of musical works with a license from STIM. It also means that the owners of the copyright to the music are paid for the use of their music. Together with British copyright organization PRS for Music, STIM owns the company ICE (International Copyright Enterprise Services AB) for managing the works documentation required to license works and collect financial compensation for rightsholders. ICE, with a recently founded subsidiary in Berlin, is owned by the parties on a 50/50 basis.
ORGANIZATION Kenth Muldin left STIM in February 2014, after more than ten years as Chief Executive Officer, and in August 2014 Karsten Dyhrberg Nielsen took over the role. During the interim period, Helena Woodcock (February to April) and Alfons Karabuda (April to August) were acting CEOs. On May 1, 2014, the operations of the subsidiary CEE Services AB, including its personnel, were transferred to the parent society STIM. In August 2014, Johan Ekelund stepped down from STIM’s Board of Directors and was replaced by former deputy Douglas Carr.
NON-FINANCIAL PERFORMANCE INDICATORS HR policy and equal opportunities plan Objective and follow-up dialogs provide a basis for skills development. Openness and transparency are important cornerstones of the organization. All employees can freely access our extensive personnel policy. Work environment policy Work environment management at STIM aims to create conditions that favor a positive atmosphere and environment at work. A clear policy is used to support STIM’s ongoing management of the work environment. Responsibility for the work environment falls to each immediate manager. Equal opportunities plan At STIM, work conditions and development opportunities are to be independent of gender, ethnicity, sexual orientation, functional disability, age, religion, and faith. At STIM, we expect everyone to act to ensure a workplace characterized by equality.
Occupational health services In cooperation with health and fitness company Korpen, STIM is a health-certified company, offering health and fitness opportunities to its employees. Measures include workplace massages, exercise on company time, and gym memberships for all employees. The company’s health and fitness committee actively works to inspire and motivate employees to improve their health with regular health and fitness activities.
SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL YEAR
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
In March 2015, a decision was made to reorganize ICE. In conjunction with this, Carsten Drachmann will quit as chief executive officer and Craig Nunn, finance director at PRS for Music, will step in as acting chief executive officer.
In February 2014, the European Parliament adopted the new EU directive on collective rights management. This directive states that music rights organizations shall openly disclose details relating to their finances and management, and that it shall be easier for consumers to use digital services in more than one country. The directive is expected to be incorporated in Swedish legislation as of 2016. Two extraordinary general meetings were held in the winter of 2013/2014. Both meetings were attended by a simple majority. However, at the second meeting held on February 18, the Board’s proposal to change the distribution rules was rejected as it just fell short of a qualified majority. As such, the distribution rules are unchanged from their current form. In June 2014, ICE (International Copyright Enterprise Services AB) signed an agreement with Belgium-based SABAM. It also opened offices for a wholly-owned subsidiary in Berlin in order to better facilitate Germany’s GEMA becoming an ICE customer. The Nordic constellation Polaris Nordic – which is comprised of the copyright organizations Koda (Denmark), TONO (Norway), and Teosto (Finland) – signed a Letter of Intent with ICE. Together with British PRS for Music and German GEMA, STIM is working to find a common licensing solution. This work is expected to reach completion during 2015, although the matter is currently under the scrutiny of the EU Commission as regards its antitrust policy. In September 2014, the company Stim Fastighets AB, including the property Stettin 7, was sold, providing the Group with a profit of SEK 262.7 million. During the year, STIM began work on its strategy and this is expected to be completed in the spring of 2015. The strategy work is headed by the CEO and will result in a strategic governing document for STIM’s operations for the period 2015–2018.
The first YouTube royalties, for compensation for the use of music in Europe during the fourth quarter of 2013, were distributed in March 2015.
In order to protect affiliated members’ rights, STIM has filed lawsuits against a number of companies that do not pay STIM license fees, including rental car company Fleetmanager and several restaurant companies. In April 2015, SF Anytime, owned by Bonnier, was sued as STIM claims that the company breaches copyright law by not compensating authors for music included in its film offering. The agreement with Kobalt STIM Aggregated Rights AB, a collaboration between STIM and Kobalt Music Group, expires in June 2015. The decision to end the collaboration means that KStar will not sign any new licenses, but the existing licenses will remain valid during a transition period.
SIGNIFICANT RISKS AND UNCERTAINTIES Stim Fastighets AB was sold in September 2014. However, the buyer is not in agreement with STIM as regards the exact size of the purchase consideration and has informed STIM that part of the purchase consideration may be appealed. This has been taken into consideration in the annual accounts. New Swedish legislation on collective rights management, based on the EU’s collective rights management directive, is being drawn up. The exact formulation of the new legislation remains uncertain. The joint work of STIM, PRS for Music, and GEMA to create a hub for common licensing is currently under the scrutiny of the EU Commission. New markets and payment models, international and national, have continually changed in recent years. These changes are expected to continue in the future, which leads to uncertainty regarding future investments.
41 STIM ANNUAL REPORT 2014
CEO Kenth Muldin left STIM in February 2014 and Karsten Dyhrberg Nielsen took the helm in August.
ICE began delivering services to Buma/Stemra at the beginning of the year.
SALES AND PERFORMANCE
Group CONSOLIDATED PROFIT (SEK THOUSAND) Operating income Operating costs Result from participations in joint venture companies*
STIM ANNUAL REPORT 2014
42
2014
2013
2012
2011
2010
2,015,408
1,619,218
1,479,909
1,433,025
1,390,641
-219,588
-181,568
-175,602
-159,968
-168,237
-4,495
298
-439
-1,404
-13,126
-1,461
–
–
–
–
-1,542,763
-1,441,004
-1,312,033
-1,288,499
-1,227,287
2,678
1,679
5,783
13,844
3,695
Impairment of non-current receivables from other companies Distribution Interest Appropriations and taxes Profit/loss for the year
-71
-246
-138
-140
-86
249,709
-1,621
-2,520
-3,142
-14,400
*In 2013, the Group changed the accounting policy. Comparative figures have been recalculated.
Group The Group’s revenue during the financial year was SEK 2,015.4 (1,619.2) million. Operating costs totaled SEK 219.6 (181.6) million. The result from participations in associated companies amounted to SEK -4.5 (0.3) million.
Distributable income in the Group totaled SEK 1,792.5 (1,439.3) million.
Parent Society PARENT SOCIETY’S PROFIT, SEK THOUSAND
2014
2013
2012
2011
2010
1,677,956
1,584,064
1,455,816
1,419,234
1,373,137
-196,853
-168,717
-159,926
-151,242
-147,007
-1,461
–
–
–
–
1,479,642
1,415,347
1,295,553
1,267,992
1,226,130
Interest
8,338
11,461
16,551
16,822
5,370
Appropriations and taxes*
17,026
-273
-408
3,685
-4,213
1,505,006
1,426,535
1,312,033
1,288,499
1,227,287
Operating income Operating costs Impairment of non-current receivables from other companies Operating profit/loss
Distributable income
*In 2013, the Group changed the accounting policy and reclassified group contributions from operating profit to appropriations. Comparative figures have been recalculated.
Parent Society The Parent Society STIM’s total sales for the financial year totaled SEK 1,678.0 (1,584.1) million, corresponding to an increase of 5.9 (8.8) percent compared to the previous year. Revenue for the performance of music both in Sweden and abroad increased by SEK 112.9 (102.5) million, or 8.2 (8.1) percent, while revenue from mechanical reproduction decreased by SEK -24.9 (21.2) million, or -13.3 (12.8) percent.
The Parent Society STIM’s net distributable income totaled SEK 1,505 (1,426.5) million, corresponding to an increase in royalty payments to rightsholders equal to SEK 78.5 (114.5) million, or 5.5 (8.7) percent.
FINANCIAL POSITION
GROUP CONTRIBUTIONS
Group The Group’s accumulated profit at yearend was SEK 225.5 (-24.2) million.
During the financial year, the Parent Society received group contributions from subsidiaries totaling SEK 17 (-0.06) million.
Liquidity Cash and cash equivalents totaled SEK 380.7 (9.9) million for the Parent Society and SEK 408.1 (28.3) million for the Group. Surpluses are invested in short-term fixed interest funds in accordance with the current investment policy.
PROPOSED APPROPRIATION OF PROFIT The following amount is available for appropriation by the Annual General Meeting: Retained earnings, SEK 4,841 Profit for the year, SEK 0 Total 4,841 The Board proposes that the available earnings be carried forward, SEK
4,841
43 STIM ANNUAL REPORT 2014
Parent Society STIM’s equity at year-end totaled SEK 1.2 (1.2) million, or 0.1 (0.1) percent of the balance sheet total. Liabilities to rightsholders at year-end totaled SEK 881.8 (809.5) million.
Income statement GROUP (SEK THOUSAND)
NOTE
PARENT SOCIETY 2014 2013
2014
2013
1,539,992
1,390,287
1,486,234
1,373,356
Mechanical reproduction revenue
161,874
186,698
161,874
186,698
Other revenue
313,542
42,233
29,848
24,010
2,015,408
1,619,218
1,677,956
1,584,064
Operating income Performance revenue
STIM ANNUAL REPORT 2014
44
Total operating income
1, 3
Operating costs External costs
2, 3, 6
-92,837
-73,949
-101,746
-106,274
Personnel costs
2, 4, 5
-104,831
-87,843
-83,079
-52,440
Depreciation/amortization
2, 9–11
-21,920
-19,776
-12,028
-10,003
-219,588
-181,568
-196,853
-168,717
-4,495
298
–
–
-1,461
–
-1,461
–
-1,542,763
-1,441,004
-1,505,006
-1,426,535
247,102
-3,055
-25,364
-11,188
Total operating costs
Profit/loss from participations in joint venture companies
13
Impairment of non-current receivables from other companies Distribution
7
Operating profit/loss Interest income
3,137
3,311
8,791
13,077
Interest expense
-459
-1,631
-453
-1,616
249,780
-1,376
17,026
273
Profit/loss before tax Appropriations Profit/loss before tax Tax on profit for the year Profit/loss for the year
21
–
–
17,011
-56
249,780
-1,376
-15
217
-71
-246
15
-217
249,709
-1,621
0
0
Balance sheet (SEK THOUSAND) ASSETS
NOTE
GROUP 12/31/2014 12/31/2013
PARENT SOCIETY 12/31/2014 12/31/2013
Fixed assets Intangible assets 8
1,730
5,846
1,730
5,758
System development costs brought forward
9
34,427
36,066
31,420
34,345
36,157
41,912
33,150
40,103
382,888
428,242
–
–
Total intangible assets Tangible assets Buildings and land
10, 22
Construction, extensions, and redevelopment in progress Equipment
11
Total tangible assets
691
642
–
–
6,804
9,860
6,193
7,021
390,383
438,743
6,193
7,021
300
300
Financial assets Participations in group companies
12
–
–
Participations in joint venture/associated companies
13
34,826
39,326
54,051
1
–
–
100,387
480,754
26,179
34,850
26,179
34,850
3,706
2,889
3,706
2,889
494
988
494
988
65,205
78,052
185,117
519,781
Receivables from group companies Receivables from joint venture/associated companies Other financial assets
2
Other non-current receivables Total financial assets Deferred tax claims
21
Total fixed assets
1,013
790
1,013
790
492,758
559,497
225,473
567,695
Current assets Current receivables Accounts receivable
172,600
174,405
151,615
171,243
Receivables from group companies
–
–
81,037
33,078
Receivables from joint venture/associated companies
–
1,071
–
669
16,728
15,999
14,075
15,641
1,282
689
782
113
277,251
261,733
224,677
235,180
Total current receivables
467,861
453,897
472,185
455,924
Current investments
313,070
7,912
313,070
7,912
95,101
20,357
67,660
1,959
Other receivables Tax claims Prepaid expenses and accrued revenue
Cash and bank balances Total current assets Total assets
14
876,032
482,166
852,915
465,794
1,368,790
1,041,663
1,078,389
1,033,489
45 STIM ANNUAL REPORT 2014
Current investment in new IT systems
8 (SEK THOUSAND)
NOTE
GROUP 12/31/2014 12/31/2013
PARENT SOCIETY 12/31/2014 12/31/2013
Equity and liabilities Equity Restricted equity Contributed capital
STIM ANNUAL REPORT 2014
46
5
5
5
5
Other restricted equity
1,226
1,226
1,226
1,226
Total restricted equity
1,232
1,231
1,231
1,231
Accumulated deficit/unrestricted equity Accumulated deficit/unrestricted equity
-24,171
-22,544
5
5
Profit/loss for the year
249,709
-1,621
–
–
Total accumulated deficit/unrestricted equity
225,538
-24,165
5
5
226,770
-22,934
1,236
1,236
Total equity
15
Provisions Provisions for pensions
2, 21
Total provisions
4,605
3,590
4,605
3,590
4,605
3,590
4,605
3,590
571
–
–
–
571
–
–
–
–
22,676
–
22,676
–
–
–
–
8,892
8,975
7,481
6,099
907,871
823,994
881,753
809,473
–
–
2,867
7,153 –
Non-current liabilities Non-current liabilities
16
Total non-current liabilities Current liabilities Bank overdraft facility
17
Liabilities to credit institutions Accounts payable Distribution liabilities
18
Liabilities to group companies Liabilities to joint venture/ associated companies Tax liabilities Other liabilities Accrued expenses and prepaid revenue
19
Total current liabilities Total equity and liabilities
–
–
–
444
–
198
–
19,372
12,011
6,237
4,552
200,266
193,351
174,011
178,709
1,136,844
1,061,008
1,072,547
1,028,663 1,033,489
1,368,790
1,041,663
1,078,389
Pledged assets
20
–
176,045
–
–
Contingent liabilities
20
See note 20
See note 20
See note 20
See note 20
Cash flow statement GROUP (SEK THOUSAND)
NOTE
2014
2013
PARENT SOCIETY 2014 2013
Operating activities 1,981,317
1,469,639
1,660,978
1,427,860
-1,434,573
-1,294,925
-1,402,033
-1,294,925
Payments to suppliers and employees
-412,451
-212,194
-203,288
-202,904
Cash flow from operating activities before interest paid and income taxes paid
134,293
-37,480
55,657
-69,969
Payments to rightsholders
18
Interest received
3,137
3,311
8,791
13,077
Interest paid
-459
-1,631
-453
-1,616
Income taxes paid
-319
-270
-233
-241
136,652
-36,070
63,762
-58,749
Cash flow from operating activities Investing activities Investments in intangible assets
8
-4,057
-10,507
-1,761
-8,607
Investments in tangible assets
10, 11
-10,020
-28,757
-3,202
-1,597
Disposal of tangible assets
10, 11
272,223
499
715
496
3,417
-3,194
59,842
-3,193
Investments in financial assets Amortization of financial assets Current financial investments Investments in subsidiaries Cash flow from investing activities
22
4,363
–
274,179
10,680
-305,158
58,793
305,158
58,791
–
–
–
-50
-39,232
16,834
24,615
56,520
Financing activities Loans from credit institutions
-22,676
-77,324
-22,676
-77,324
Cash flow from financing activities
-22,676
-77,324
-22,676
-77,324
Cash flow for the year
74,744
-96,560
65,701
-79,553
Cash and cash equivalents at beginning of year
20,357
116,917
1,959
81,512
Cash and cash equivalents at year-end
95,101
20,357
67,660
1,959
47 STIM ANNUAL REPORT 2014
Payments from customers
Accounting and valuation policies
ACCOUNTING POLICIES STIM ANNUAL REPORT 2014
48
The accounting and valuation policies applied conform to the Swedish Annual Accounts Act and the general recommendations of BFNAR 2012:1 as issued by the Swedish Financial Accounting Standards Council. These combined regulations were first applied in 2013, entailing a change of accounting policy. The applied policies are unchanged compared to the previous year unless otherwise stated below.
CONSOLIDATED ACCOUNTS The consolidated accounts include subsidiaries where the parent company, directly or indirectly, controls more than 50 percent of the votes or otherwise exercises a controlling influence. The consolidated financial statements are prepared in accordance with the acquisition method, whereby the equity of the subsidiaries at acquisition – calculated as the difference between the fair values of assets and liabilities – is eliminated in its entirety As such, consolidated equity includes only that portion of the equity of the subsidiaries that has arisen after acquisition.
ASSOCIATED COMPANY ACCOUNTING Associated companies are those companies in which the Group has a significant but not controlling influence, which in general means holdings encompassing 20% to 50% of the votes. Holdings in associated companies are reported in accordance with the equity method. When applying the equity method, the investment is initially valued at acquisition value. The reported value is then increased or decreased by the holding company’s share of the associated company’s profit or loss. Any dividends that are received reduce the reported value.
JOINT VENTURE COMPANY ACCOUNTING Joint venture companies are those companies in which the Group has a joint controlling influence over operations and a right to the net assets of those operations. Joint venture companies are reported in accordance with the equity method. With the equity method, participations in a company are reported at acquisition value at the acquisition date and are
then adjusted to reflect the Group’s share of the change in the joint venture company’s net assets. The consolidated income statement includes the Group’s share in the results of joint venture companies. The financial statements for the Parent Society recognize shares in joint venture companies at acquisition value less any impairment losses.
REVENUE RECOGNITION Operating income includes – after the deduction of value added tax – rental revenue throughout the term of the lease and royalties in accordance with the economic implications of the current agreement. Business grants and library levies are requested annually from the Swedish Arts Council and Sweden’s Legal, Financial, and Public Procurement Agency respectively. Interest revenue is recognized using the effective return.
DISTRIBUTION The annual revenue from providing rights for public performances is burdened with the society’s expenses for this area of operations. The remainder comprises a liability to the society’s members and affiliated members who have transferred their rights. Following a decision at the annual general meeting, a maximum of three percent of the remuneration due to the society’s members and affiliates may be used for scholarship purposes. Furthermore, following a decision by the annual general meeting and in accordance with special rules, creativity in musical fields that are vulnerable to market forces is supported with special initiatives in such fields. Regarding royalties from foreign organizations that cooperate with the society, such royalty payments are made without the above-mentioned deductions. The amounts to be paid for rights provided via the society are distributed in accordance with the rules established at the annual general meeting held on May 22, 2008 and at the extraordinary general meeting held on June 18, 2008. The Board of Directors determines how these rules are to be applied and continually reviews the system. Regarding changes to the distribution rules, the stipulations of the Articles of Incorporation on changes to said Articles apply.
CURRENT ASSETS
Intangible assets, such as computer software, are recognized at acquisition value less deductions for accumulated depreciation according to plan. “Off-the-shelf� software is expensed directly. Costs related to software developed or substantially modified on STIM’s behalf is capitalized as an intangible asset if said software is deemed to lead to probable economic benefits that after a year exceed the costs incurred. Development costs brought forward for acquired software are depreciated on a straight-line basis over the estimated service life, although subject to a maximum of 10 years. Depreciation is applied as of the time at which the asset is ready to be placed in service. As such, no depreciation is applied to investments in progress. Tangible assets are reported at acquisition value less deductions for accumulated depreciation according to plan. Expenditure to improve the performance of assets, above their original level, is added to the carrying value of the asset. Expenses for repairs and maintenance are recognized as costs. Tangible assets are depreciated on a straight-line basis over the estimated service life of the asset. A straight-line method is applied to all categories of tangible and intangible assets.
Financial instruments Financial instruments are classified into the following categories: financial assets valued at fair value through the income statement, financial assets that can be sold, loans receivable, and accounts receivable, as well as loans payable and accounts payable. Classification depends on the purpose for which the instrument was acquired. Financial assets valued at fair value through the income statement This class of financial instrument comprises financial assets held for trading. A financial asset is classed in this category if it is acquired with the primary purpose of selling it in the near future. Derivative instruments are always included in this category, except in cases where the derivative instrument is part of a hedge transaction. The society has classified endowment insurance linked to pension commitments as financial assets valued at fair value through the income statement. Financial instruments that can be sold This class includes financial instruments that can be sold and that are not derivatives. Financial instruments in this category are valued at fair value. Loans receivable and accounts receivable Loans receivable and accounts receivable have established payments and are held with no intention of trading. They are included under current assets with the exception of items with a due date more than one year after the balance sheet date, which are classified as non-current assets. Valuation after the acquisition date is at the accumulated acquisition value with the application of the effective interest method, with deductions for any decline in value. Impairment of accounts receivable and loans receivable is reported in the income statement under Other external costs. Loans payable and accounts payable Loans payable and accounts payable are reported after the acquisition date at the accumulated acquisition value with the application of the effective interest method. Purchases and sales of financial instruments are reported on the transaction date, that is, the date when a binding agreement is entered. All financial instruments that are not valued at fair value are initially valued at acquisition cost, adjusted for transaction costs.
THE FOLLOWING DEPRECIATION PERIODS ARE APPLIED: Components in buildings Shell, roof, and windows............................................. 50 years Tenant adaptations....................................................... 5 years Facade....................................................................... 30 years Overhead walkways and elevators .............................. 25 years Passages, locks, and fiber ............................................ 15 years Plumbed facilities and plumbing..................................10 years Building facility............................................................10 years Other fixed assets System development...................3, 5, and 10 years respectively Plant and machinery.................................................... 5 years Computers................................................................... 3 years In the case of the property Krukomakaren 17, 56 percent of the building is held for investment purposes. No division into components was made in 2013 for the property Stettin 7 as the property was sold in 2014.
49 STIM ANNUAL REPORT 2014
INTANGIBLE AND TANGIBLE ASSETS
PROVISIONS
INCOME TAXES
A provision is reported in the balance sheet when the Group has a present legal or constructive obligation as a result of past events, settlement of the obligation is expected to result in an outflow of resources, and the amount to be settled can be estimated reliably. If the point in time at which settlement is made has a significant effect, the provision is calculated by discounting the expected future cash flow. Discounting is applied at a pre-tax interest rate that reflects current market assessments of the time value of money.
Income tax reporting includes current tax and any deferred tax. Deferred tax is calculated in accordance with the balance sheet approach for all significant temporary differences. A temporary difference exists when the book value of an asset or a liability differs from the value for tax purposes. Such a difference can arise, for example, in the event of the appreciation or depreciation of an asset or when applied accounting policies differ between an individual group company’s accounts and the consolidated accounts. Deferred tax is calculated using the tax rate that has been decided or announced as of the balance sheet date and that is expected to apply when the deferred tax claim is realized or the deferred tax liability is settled. Deferred tax claims are reported to the extent it is probable that future taxable surpluses will exist against which the temporary differences can be offset.
STIM ANNUAL REPORT 2014
50
CONTINGENT LIABILITIES/GUARANTEE COMMITMENTS A contingent liability (guarantee commitment) is reported when there is a possible obligation arising from past events and its presence will be confirmed by one or more uncertain future events or when there is an obligation that has not been reported as a liability or provision due to it not being probable that an outflow of resources will be required.
CASH FLOW STATEMENT EMPLOYEE BENEFITS The Group’s plans for benefits once employment has ended encompass both defined benefit and defined contribution pension plans. With a defined benefit pension plan, the pension is based on final salary and the number of years of membership in the plan. The Group carries the risk of the established benefits being paid. Certain defined benefit pension plans are secured with an insurance plan from Alecta, and this is a defined benefit pension plan encompassing several employers. The company has not had access to such information as necessary to report this plan as a defined benefit pension plan. As such, Swedish ITP pension plans secured with insurance from Alecta are reported as a defined contribution plan. With defined contribution plans, the company pays set premiums to a separate legal entity. Once the premium is paid, the company has no further obligations. The company has pension commitments with values linked to separate endowment insurance policies held by the company. The value of the endowment insurance always covers the obligation to pay pensions, but not the obligation to pay special employer’s contributions in conjunction with the pension being disbursed. The company’s obligation is limited to the amount for which the endowment insurance was acquired. Benefits to employees such as salary and pension are reported as costs in the period in which the employee conducted the services the benefits cover.
The cash flow statement is prepared in accordance with the direct method. The reported cash flow consists only of the transactions that involve incoming or outgoing payments. Cash and cash equivalents comprise cash at bank and cash in hand.
FOREIGN CURRENCY The Group receives a not-inconsiderable part of its revenue in foreign currencies. The amounts are accounted for in Swedish kronor, calculated at the exchange rates prevailing on the date of conversion. Purchases and sales are essentially conducted in the same currency and as such currency exposure is limited. Receivables and liabilities in currencies other than the functional currency are translated using the closing rate on the balance sheet date (unrealized).
LEASING Fixed assets obtained via leasing are classified in accordance with the leasing agreement’s economic implications. Items leased via finance leasing are reported as fixed assets and future leasing fees are reported as interest-bearing liabilities. In the case of leased items classified as operating leases, the leasing cost is reported as an operating cost in the income statement. The Group has no significant finance leases. As such, all lease agreements are reported as operating leases, which means that the leasing fees, including additional initial charges but excluding costs for services such as insurance and maintenance, are reported as costs on a straight-line basis throughout the term of the lease.
Note 1
Operating income PARENT SOCIETY 2014 2013
2013
1,539,993
1,390,288
1,486,234
1,373,356
Performance of Swedish and foreign music in Sweden
957,418
868,432
903,659
851,501
Of which online and new media
227,940
Performance licenses
322,541
244,871
268,782
Radio
28,298
27,767
28,298
27,767
Public service radio
51,825
50,659
51,825
50,659
Public service TV
62,560
67,506
62,560
67,506
Swedish TV
179,574
163,278
179,574
163,278
Foreign TV
17,090
15,379
17,090
15,379
Copyswede – TV
16,489
14,717
16,489
14,717
Movie theaters
13,869
14,352
13,869
14,352
Concerts and festivals
72,762
89,794
72,762
89,794
Stores and sales rooms
44,003
45,550
44,003
45,550
Restaurants
28,782
27,031
28,782
27,031
Night clubs, dance, bar DJs
27,442
24,637
27,442
24,637
Hotels
25,578
22,414
25,578
22,414
Sports and fitness
22,787
19,695
22,787
19,695
Municipal, county council, and care
18,114
15,262
18,114
15,262
Music at work
11,756
9,464
11,756
9,464
Theater, variety, and cabaret
4,579
5,280
4,579
5,280
Church concerts and musical church services
4,294
4,893
4,294
4,893
Transport
3,474
4,635
3,474
4,635
Other
1,601
1,248
1,601
1,248
Performance of Swedish music abroad and foreign music subpublished by STIM-affiliated publishers for entire Nordic region
537,710
487,688
537,710
487,688
Performance of Swedish and foreign music abroad distributed by STIM on behalf of others
44,865
34,168
44,865
34,168
161,874
186,698
161,874
186,698
313,543
42,232
29,849
24,009
2,276
1,500
–
–
Mechanical reproduction licenses Relates to the right to record, reproduce, and sell recordings. See also Note 18. Licensing was administered by NCB, Nordisk Copyright Bureau, of Copenhagen for the Nordic territory. Other revenue STIM/Svensk Musik, sheet music hire and recorded media sales STIM/Svensk Musik government grant/subsidy
1,952
2,039
–
–
Private copying levy
11,120
11,756
11,120
11,756
Library levy
2,500
2,500
2,500
2,500
949
1,268
949
1,268
13,572
13,093
–
–
262,744
–
–
–
Administrative contribution from NCB Rental revenue Profit from sale of buildings and land Other Total operating income
18,430
10,077
15,280
8,485
2,015,409
1,619,218
1,677,957
1,584,063
51 STIM ANNUAL REPORT 2014
GROUP 2014
Note 2
Operating costs External costs
2014
GROUP 2013
PARENT SOCIETY 2014 2013
Office and administration
78,996
59,326
86,951
89,526
853
854
8,686
6,439 10,147
Rental costs
STIM ANNUAL REPORT 2014
52
IT operation
6,736
4,133
8,385
System development and maintenance
3,566
11,907
1,739
8,668
Development costs brought forward
-5,142
-10,241
-4,015
-8,506
Property costs Total external costs
7,829
7,970
–
–
92,837
73,949
101,746
106,274
Personnel costs Salaries and other remuneration
70,854
57,378
55,407
33,694
Social security expenses
21,183
18,207
16,933
10,747
Pension costs
10,586
8,682
8,700
5,968
Other personnel costs
2,208
3,576
2,039
2,031
Total personnel costs
104,831
87,843
83,079
52,440 5,892
Of which Board of Directors, CEO, and Deputy CEOs Salaries and other remuneration
10,933
7,251
9,204
Social security expenses
3,357
2,278
2,813
1,851
Pension costs
1,039
2,304
717
1,969
1,833
1,288
1,693
1,163
576
405
532
365
Of which Board of Directors Salaries and other remuneration Social security expenses
Salaries and social security expenses totaling SEK 596 (564) thousand for an employee within national funds are presented in Note 7 (Distribution). Depreciation System development costs brought forward
9,811
6,383
8,713
6,293
Equipment
3,734
4,710
3,315
3,710
Buildings
8,375
8,682
–
–
21,920
19,776
12,028
10,003
219,588
181,568
196,853
168,717
Total depreciation/amortization
Total operating costs
DEFINED CONTRIBUTION PLANS Certain pension plans are secured with an insurance plan from Alecta. This is a defined benefit pension plan encompassing several employers. The company has not had access to such information as necessary to report this plan as a defined benefit pension plan. As such, Swedish ITP pension plans secured with insurance from Alecta are reported as a defined contribution plan.
PENSION COMMITMENTS SECURED WITH ENDOWMENT INSURANCE The outcome of certain other pension plans is linked to the development of individually signed endowment insurance policies.
The value of the endowment insurance always covers the obligation to pay pensions, but not the obligation to pay special employer’s contributions in conjunction with the pension being disbursed. A surplus arises when value growth is better than expected and this surplus falls to the policyholder. The value of the surplus fund as per December 31, 2014 was SEK 44 (23) thousand. The endowment insurance has been pledged as security. No part of the year’s provision is covered by the Swedish Pension Obligations Vesting Act. The market value of the endowment insurance is established through the annual statement issued by the concerned bank or equivalent. The value of the endowment insurance as per December 31, 2014 was SEK 3,706 (2,889) thousand.
Note 3
Intragroup transactions Of the Parent Society’s total operating costs for 2014, 21.8 (43.9) percent is attributable to purchases from other group companies.
Note 4
53
Average number of employees 2014
2013
Average number of employees
Of which men
Average number of employees
Of which men
Parent Society
99
49%
60
53%
Subsidiaries
29
59%
62
47%
128
51%
122
50%
Number on balance sheet date
Of which men
Number on balance sheet date
Of which men
10
70%
10
70%
7
43%
8
63%
12
38%
12
42%
15
73%
16
81%
8
38%
9
56%
16
47%
17
47%
Average number of employees
Group Board members and senior executives
Parent Society Board members, including employee representatives Deputy board members, including employee representatives Chief executives, deputy chief executives, and other senior executives Group Board members, including employee representatives Deputy board members, including employee representatives Chief executives, deputy chief executives, and other senior executives
STIM ANNUAL REPORT 2014
Of the Parent Society’s total operating income for 2014, 4.3 (1.2) percent is attributable to sales to other group companies.
Note 5
Terms of employment for chief executive officer PARENT SOCIETY
STIM ANNUAL REPORT 2014
54
Agreement has been reached with the Chief Executive Officer on severance pay equal to 24 months’ salary during the first year of employment, 18 months’ salary during the second year of employment, and, thereafter, 12 months’ salary if notice is served by STIM for reasons other than gross negligence on the part of the Chief Executive Officer under Swedish law. The mutual period of notice is six months.
Note 6
Auditors’ fees GROUP
PARENT SOCIETY 2014 2013
2014
2013
345
388
250
250
35
30
35
30
87
–
87
–
467
418
372
280
Auditing KPMG AB Auditors appointed by STIM Other non-auditing services Total auditors’ fees
Note 7
Distribution GROUP 2014
2013
PARENT SOCIETY 2014 2013
Distribution – performance licenses 780,491
706,151
736,356
691,630
537,710
487,688
537,710
487,688
Performance abroad distributed by STIM on behalf of others Total performance distribution Distribution – of mechanical reproduction licenses Distribution – of national funds* Total distribution
38,375
29,214
38,375
29,214
1,356,576
1,223,053
1,312,441
1,208,532
55
161,874
186,698
161,874
186,698
24,313
31,252
30,692
31,305
1,542,763
1,441,004
1,505,006
1,426,535
STIM ANNUAL REPORT 2014
Performance in Sweden Performance abroad
*National funds include salary and social security expenses for one employee totaling SEK 596 (564) thousand.
Note 8
Current investment in new IT systems GROUP
PARENT SOCIETY 2014 2013
2014
2013
Opening acquisition value
5,846
33,207
5,758
Acquisitions during the year
4,156
7,185
3,029
7,097
-8,272
-34,546
-7,057
-34,546
1,730
5,846
1,730
5,758
Reclassifications Closing acquisition value
33,207
Note 9
System development costs brought forward GROUP Opening acquisition value
STIM ANNUAL REPORT 2014
56
2014
2013
PARENT SOCIETY 2014 2013
126,130
88,262
124,318
Acquisitions during the year
1,168
3,322
–
1,510
Reclassifications
8,272
34,546
7,057
34,546
Sales and disposals
-2,164
–
-2,164
–
Closing accumulated acquisition value
133,407
126,130
129,211
124,318
Opening depreciation/amortization
-90,064
-83,678
-89,973
-83,678
-9,811
-6,386
-8,713
-6,295
896
–
896
–
-98,980
-90,064
-97,791
-89,973
34,427
36,066
31,420
34,345
Depreciation/amortization during the year Sales and disposals Closing accumulated depreciation/amortization Closing residual value
88,262
Note 10
Buildings and land GROUP
PARENT SOCIETY 2014 2013
2014
2013
365,116
338,960
–
–
6,768
26,156
–
–
Buildings Opening acquisition value Acquisitions during the year Sales and disposals
-92,182
–
–
…
Closing accumulated acquisition value
279,702
365,116
–
–
Opening depreciation/amortization
-77,321
-68,638
–
–
Depreciation/amortization during the year
-7,900
-8,682
–
–
59,262
–
–
–
Sales and disposals Closing accumulated depreciation/amortization
-25,959
-77,320
–
–
Closing residual value, buildings
253,743
287,796
–
–
140,446
140,446
–
–
-11,301
–
–
–
Land Opening acquisition value Sales and disposals Closing acquisition value, land Closing residual value, buildings and land
129,145
140,446
–
–
382,888
428,242
–
–
On September 12, 2014, Stim Fastighets AB was sold, including the property Stettin 7. In the case of the property Krukomakaren 17, 56 percent of the building is held for investment purposes.
Note 11
Equipment Opening acquisition value
PARENT SOCIETY
2014
2013
2014
2013
30,093
28,886
24,449
23,523
Acquisitions during the year
3,252
2,600
3,202
1,597
Sales and disposals
-7,352
-1,393
-2,965
-671
Closing accumulated acquisition value
25,993
30,093
24,686
24,449
Opening depreciation/amortization
-20,233
-16,388
-17,427
-13,927
-3,726
-4,775
-3,315
-3,710
Depreciation/amortization during the year
4,770
929
2,250
210
Closing accumulated depreciation/amortization
Sales and disposals
-19,189
-20,233
-18,492
-17,427
Closing residual value
6,804
9,860
6,193
7,021
Note 12
Participations in group companies PARENT SOCIETY Corporate identity number
Reg’d office
Share of equity, %
Number of shares, thousands
Carrying value 12/31/2014
Carrying value 12/31/2013
CEE Services AB
556723-5923
Stockholm
100
100
100
100
Svensk Musik Swedmic AB
556754-1338
Stockholm
100
1
100
100
Kobalt STIM Aggregated Rights AB
556884-6371
Stockholm
100
50
50
50
Stim Fastighets Holding AB
556842-4880
Stockholm
100
1
50
50
300
300
Subsidiaries
Total participations in group companies
Subsidiaries, indirectly owned Stimhuset KB
Corporate identity number 969696-4361
Reg’d office Stockholm
During the year, CEE transferred its ownership in Stimhuset KB to STIM. The limited liability owner is Stim Fastighets Holding AB. During the year, Stim Fastighets Holding sold Stim Fastighets AB (556745-2841).
57 STIM ANNUAL REPORT 2014
GROUP
Note 13
Participations in joint venture and associated companies PARENT SOCIETY Joint venture company, indirectly owned International Copyright Enterprise Services AB
STIM ANNUAL REPORT 2014
58
Corporate identity number
Reg’d office
Share of equity and votes, %
Number of shares, thousands
Carrying value 12/31/2014
Carrying value 12/31/2013
556723-5907
Stockholm
50
50,001
54,050
–
In 2014, CEE Services AB transferred its share in International Copyright Enterprise Services AB to STIM. ICE International Copyright Enterprise Services AB established a wholly-owned German subsidiary, ICE International Copyright Enterprise Germany GmbH (HRB162426B), during the year.
GROUP Opening balance
39,326
Translation reserve
39,028
-5
–
Participation in results from joint venture companies
-4,495
298
Closing balance
34,826
39,326
Note 14
Prepaid expenses and accrued revenue GROUP Accrued performance revenue
PARENT SOCIETY 2014 2013
2014
2013
242,039
230,522
192,345
207,268
Accrued revenue, private copying levy
18,217
17,168
18,217
17,168
Prepaid expenses
6,859
6,844
5,490
4,551
Other
10,135
7,199
8,626
6,193
277,251
261,733
224,677
235,180
Total prepaid expenses and accrued revenue
Note 15
Changes in equity GROUP 2014
2013
PARENT SOCIETY 2014 2013
Restricted equity 5
5
5
5
Other restricted equity
1,226
1,226
1,226
1,226
Total restricted equity
1,232
1,231
1,232
1,231
Unrestricted equity Accumulated deficit/unrestricted equity
-24,171
-22,544
5
5
Profit/loss for the year
249,709
-1,621
–
–
Total unrestricted equity
225,538
-24,165
5
5
Total equity
226,770
-22,934
1,236
1,236
Note 16
Non-current liabilities GROUP 2014
2013
PARENT SOCIETY 2014 2013
Deposit, tenants TUGG House of Shapes Total non-current liabilities
71
–
–
–
500
–
–
–
571
–
–
–
Note 17
Bank overdraft facility GROUP
PARENT SOCIETY 2014 2013
2014
2013
Utilized overdraft facility
–
22,676
–
22,676
Unutilized overdraft facility
–
77,324
–
77,324
59 STIM ANNUAL REPORT 2014
Contributed capital
Note 18
Distribution liabilities GROUP 2014
2013
PARENT SOCIETY 2013 2014
Distribution – of performance revenue, Sweden
STIM ANNUAL REPORT 2014
60
Undistributed revenue from previous years
634,923
556,019
620,401
556,019
Payment to STIM-affiliated rightsholders
-249,679
-215,959
-235,157
-215,959
Payment to foreign collecting societies
-132,276
-116,286
-132,276
-116,286
Outstanding payments of previous years’ revenue
252,969
223,774
252,969
223,774
Revenue for the year for distribution
818,865
735,366
774,730
720,844
Payment to STIM-affiliated rightsholders
-248,947
-210,741
-230,929
-210,741
Payment to foreign collecting societies
-129,898
-113,475
-129,898
-113,475
Outstanding payments from revenue for the year
440,020
411,150
413,903
396,628
Outstanding payments at year-end
692,989
634,924
666,872
620,402
Undistributed revenue from previous years
181,575
143,359
181,575
143,359
Payment to STIM-affiliated rightsholders
-80,032
-55,517
-80,032
-55,517
Outstanding payments of previous years’ revenue
101,543
87,842
101,543
87,842
Distribution of performance revenue, international
Revenue for the year for distribution Payment to STIM-affiliated rightsholders Outstanding payments from revenue for the year Outstanding payments at year-end
537,710
487,688
537,710
487,688
-431,598
-393,955
-431,598
-393,955
106,112
93,733
106,112
93,733
207,655
181,575
207,655
181,575
Distribution – of mechanical reproduction revenue Undistributed revenue from previous years
7,496
9,790
7,496
9,790
Payment to STIM-affiliated rightsholders
-7,496
-9,790
-7,496
-9,790
0
0
0
0
Outstanding payments of previous years’ revenue
Revenue for the year for distribution
161,874
186,698
161,874
186,698
-154,647
-179,202
-154,647
-179,202
Outstanding payments from revenue for the year
7,227
7,496
7,227
7,496
Outstanding payments at year-end
7,227
7,496
7,227
7,496
907,870
823,994
881,753
809,473
Payment to STIM-affiliated rightsholders
Total distribution liability at year-end
Note 19
Accrued expenses and prepaid revenue
Prepaid performance revenue
2014
2013
PARENT SOCIETY 2014 2013
161,320
170,708
161,320
Prepaid rental revenue
7,005
7,012
–
–
Accrued vacation pay liability
3,557
3,603
3,363
2,423
Accrued social security expenses and payroll tax Other accrued expenses Total accrued expenses and prepaid revenue
170,708
3,120
3,928
2,570
2,140
25,264
8,100
6,757
3,438
200,266
193,351
174,011
178,709
Note 20
Contingent liabilities and pledged assets CONTINGENT LIABILITIES
PLEDGED ASSETS
As of May 24, 2010, STIM agreed to stand surety for ICE Services AB’s rental agreement with Förvaltningsbolaget Alvikshus HB.
As a general security for STIM, during the year Stimhuset KB raised mortgages totaling SEK 176.0 million on the property Krukomakaren 17 (Hornsgatan 103), as security for loans and overdraft facilities. As per December 9, 2014, the mortgage deed was transferred from SEB to Sweden’s electronic property owners archive.
GROUP 2014
2013
PARENT SOCIETY 2014 2013
For provisions and liabilities related to liabilities to credit institutions: Property mortgages
–
176,045
–
–
Total pledged assets
–
176,045
–
–
In addition, endowment insurance policies held by the parent company have been pledged as security for provided pension commitments. See Note 2. The fair value of the endowment insurance including payroll tax, as per December 31, 2014, amounted to SEK 4,605 (3,590) thousand.
61 STIM ANNUAL REPORT 2014
GROUP
Note 21
Taxes GROUP 2014
2013
PARENT SOCIETY 2014 2013
Tax on profit for the year Current tax for current year
STIM ANNUAL REPORT 2014
62
-245
-270
-233
-241
Current tax attributable to previous years
-49
-766
25
-766
Change in deferred tax for the year
233
790
223
790
-71
-246
15
-217
Profit/loss before tax
252,527
-1,376
-15
217
Tax based on the current tax rate
-55,556
303
3
-48
Total tax as per the income statement
The difference between the reported tax expense and the tax expense based on the current tax rate is explained by:
Tax effect of costs that are not tax deductible
-817
-73
-801
-50
56,725
27
334
27
Tax effect of change in temporary differences
–
-440
–
–
Tax effect due to unvalued deficit deductions
-828
-87
–
–
Tax effect due to deduction of foreign tax
453
–
453
–
Tax attributable to previous years
-49
24
25
24
Reported tax expense
-71
-246
15
-217
Tax effect of revenue that is not taxable
TEMPORARY DIFFERENCES
PENSION COMMITMENTS
Temporary differences arise in those cases where the carrying values and values for tax purposes of assets and liabilities differ.
As per December 31, 2014, the Group’s temporary difference with respect to pension commitments amounted to SEK 4,605 (3,590) thousand, corresponding to a deferred tax claim of SEK 1,013 (790) thousand.
GROUP
PARENT SOCIETY 2014 2013
2014
2013
Other provisions for pensions
1,013
790
1,103
790
Total deferred tax
1,103
790
1,103
790
Deferred income taxes
Note 22
Acquisition of subsidiary Final settlement of the purchase consideration was made in 2012 with the payment of an additional SEK 0.4 million.
GROUP
PARENT SOCIETY 2014 2013
2014
2013
300,989
300,989
–
–
Additional purchase consideration
–
–
–
–
Acquisition-related costs
–
–
–
–
300,989
300,989
–
–
Cash purchase consideration on day of possession
Total acquisition value
The Group’s profit/loss includes the limited partnership’s operations.
impact on the Group’s cash and cash equivalents comprised the following amounts:
In the acquisition of the limited partnership, the total value of the acquired assets and liabilities, the purchase consideration, and the
GROUP
PARENT SOCIETY 2014 2013
2014
2013
300,989
300,989
–
–
–
–
–
–
300,989
300,989
–
–
Cash and cash equivalents in acquired company
–
–
–
–
Effect on the Group’s cash and cash equivalents
–
–
–
–
Paid purchase consideration previous years Buildings and land Total purchase consideration
63 STIM ANNUAL REPORT 2014
On December 30, 2011, Stim Fastighets Holding AB acquired all shares in Stimhuset KB (corporate identity number: 969696-4361) for a total purchase consideration of SEK 300.6 million as specified below.
The income statements and balance sheets will be presented to the Society’s Annual General Meeting to be held on May 26, 2015 for adoption.
Stockholm, Sweden, April 22, 2015
64 STIM ANNUAL REPORT 2014
Kjell-Åke Hamrén Chair of the Board
Karsten Dyhrberg Nielsen Chief Executive Officer
Alfons Karabuda
Martin Q. Larsson
Monica Ekmark
Leif Pagrotsky
Douglas Carr
Erik Peters
Eric Hasselqvist
Kristina Rennerstedt
Eva Botmar
Our auditors’ report was submitted on April 22, 2015
Anders Malmeby Certified Public Accountant KPMG AB
Kettil Skarby Auditor appointed by the annual general meeting
Auditors’ Report To the Annual General Meeting of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a., corporate identity number 702002-3524
We have audited the annual accounts and consolidated accounts of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a. for the year 2014. The annual accounts and consolidated accounts of the society are included in the printed version of this document on pages 40-64. Responsibilities of the Board of Directors and the Chief Executive Office for the annual accounts and consolidated accounts The Board of Directors and the Chief Executive Officer are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with the Swedish Annual Accounts Act, and for such internal control as the Board of Directors and the Chief Executive Officer determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with generally accepted auditing standards. For a certified public accountant, this entails conducting the audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the society’s preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the cir-
cumstances, but not for the purpose of expressing an opinion on the effectiveness of the society’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Chief Executive Officer, as well as evaluating the overall presentation of the annual accounts and consolidated accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the annual accounts and consolidated accounts have been prepared in accordance with the Swedish Annual Accounts Act and present fairly, in all material respects, the financial position of the Parent Society and the Group as of December 31, 2014 and of their financial performance and cash flows for the year then ended in accordance with the Swedish Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the annual general meeting of the society adopts the income statement and balance sheet for the Parent Society and the Group.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriation of the society’s profit or loss and the administration of the Board of Directors and the Chief Executive Officer of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a. for the year 2014. Responsibilities of the Board of Directors and the Chief Executive Officer The Board of Directors is responsible for the proposal for appropriation of the society’s profit or loss, and the Board of Directors and the Chief Executive Officer are responsible for administration under the Swedish Economic Associations Act.
65 STIM ANNUAL REPORT 2014
REPORT ON THE ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS
STIM ANNUAL REPORT 2014
66
Auditor’s responsibility Our responsibility is to express an opinion with reasonable assurance on the proposed appropriation of the society’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden. As a basis for our opinion on the Board of Directors’ proposed appropriation of the society’s profit or loss, we examined whether the proposal is in accordance with the Swedish Economic Associations Act. As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken, and circumstances of the society in order to determine whether any member of the Board of Directors or the Chief Executive
Officer is liable to the society. We also examined whether any member of the Board of Directors or the Chief Executive Officer has, in any other way, acted in contravention of the Swedish Companies Act, the Swedish Annual Accounts Act, or the Articles of Incorporation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions We recommend to the Society’s Annual General Meeting that the profit be dealt with in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Chief Executive Officer be discharged from liability for the financial year.
Stockholm, Sweden, April 22, 2015
Anders Malmeby Certified Public Accountant KPMG
Kettil Skarby Auditor appointed by the annual general meeting
STIM ANNUAL REPORT 2014
67
Production: Lotta Lundén, STIM, Alexandra Carmback, Publik. Text: Krister Insulander, Publik. Photo: Peter Cederling, except pages 11 & 13, photo: Victor Gårdsäter, page 17, photo: Kristoffer Wieche, and page 21, photo: Fredrik Hjerling. Graphic design and background photos: Wickholm Formavd. Printers: Norra Skånes offset. Compliant with ISO 14001 and Nordic Swan. Paper: Arctic Matt 130 g. Cover: Arctic Silk 250 g.
STIM ANNUAL REPORT 2014
68
www.stim.se