STIM Annual Report 2012

Page 1


S tands for the Swedish Performing Rights Society I s an economic association that is owned by thosewho create music and by music publishers I s a non-profit organization W orks on behalf of its registered authors and music publishers D efends their economic interests as defined in the Swedish Copyright Act A lso works on behalf of corresponding organizations in other countries I ssues licenses to those who wish to use and distribute music C ollects the licensing fee D istributes royalties to individual authors and their music publishers P romotes Swedish musical culture


2012 ANNUAL REPORT

STIM in numbers

3

A word from the CEO

4

The STIM process – from license to distribution

6

Distributions in 2012 were at an all-time high

8

STIM soon as big as Skellefteå

12

Swedish composers' successes are paving the way for global collaboration

14

Scholarships

17

Multi-faceted festival year –and sold-out arenas

18

STIM - promoting the Swedish music culture

20

Streamed music increasing in popularity – and now TV is next

22

Music choice important for business

24

Gender equality organization – equipped for the future

26

The STIM sphere

28

STIM committees

32

Administration Report

36

Notes

42


2012 | STIM ANNUAL REPORT


2012 | STIM ANNUAL REPORT

STIM IN NUMBERS

TOTAL OPERATING INCOME IN SWEDEN AND ABROAD

SEK 1.5 BILLION NUMBER OF STIM MEMBERS

71,291

AN INCREASE

OF 40% IN SEVEN YEARS

INCOME FOR

ONLINE PERFORMANCES INCREASED BY

43.4%TO 2011 COMPARED

SEK 8.1 MILLION

ALLOCATED TO SCHOLARSHIPS

NUMBER OF REPORTED WORKS

WTIH AT LEAST ONE STIM-AFFILIATED AUTHOR

1,223,058 FOUNDED 1923

3


2012 | STIM ANNUAL REPORT

A FEW WORDS FROM CEO

KENTH MULDIN STIM is an organization for authors and music publishers. We exist so that authors are paid when their music is used. After deducting costs, all revenue is sent to the authors and music publishers. STIM is a genuine not-for-profit organization. Our affiliates make the decisions in STIM. This is a fantastic strength and has contributed to making STIM a dynamic organization. One piece of particularly good news is that STIM's authors and music publishers developed strategies at an early stage for how the use of music on the Internet can be licensed. In 2012 we reaped the benefits of this long-term project. One of the important guiding principles for STIM's owners has been to be receptive to change. The ability to utilize technological developments and changes in the market to benefit our members has been very important in recent years. Benefits for our members in practice also mean good, simple solutions for music users. The initiatives STIM has taken online are examples of this. It is important that we provide a valuable service and create added value for both rightsholders and licensees. Our focus is to make the administration of music rights simple, effective and transparent. In 2012 STIM experienced: • continued international successes for our authors • strong growth in the online market • revenue growth in other important areas • intensive development of national and international licensing systems • strong focus on international cooperation projects • major involvement in EU's work with the Collective Management Directive • creation of new methods for promoting the Swedish music culture and the promotion of Swedish music • work to reform STIM's distribution rules • move of STIM's office and the establishment of ”The STIM Building” STIM-licensed revenue increased in total by more than 8 percent. Revenue from the online area increased by more than 43 percent. Revenue from TV decreased by more than 6 percent, which is due to the fact

4

that in 2011 this item included unusually high retroactive revenue. The markets for background music and live music are showing an increase of more than 12 percent. Foreign revenue decreased by 1 percent due to foreign exchange rates and the restructuring of distribution procedures at some collecting societies. Mechanical reproduction revenue continued to fall, but the curve is not as dramatic as many people expected. In 2012 STIM's revenue from NCB decreased by 10 percent. The total costs for STIM's operations as a whole increased 4 percent. However, a comparison of total operating income to total operating costs shows that STIM's administrative overhead ratio is basically unchanged at just under 11 percent. The Swedish STIM distributions to authors and music publishers increased by almost 10 percent. Overall, 2012 was a good year for STIM. However, several challenges are waiting just around the corner. We would like to: • develop, streamline and improve the licensing in Sweden • develop and establish international licensing and administration cooperations • create even better services for our affiliates • finalize in 2013 the reforms to STIM's distribution rules This means that 2013 will be a year when many important initiatives fall into place. I am convinced that STIM will continue to welcome change, and I look forward to participating in the development of collective rights management.

Kenth Muldin CEO


5


2012 | STIM ANNUAL REPORT

THE STIM SYSTEM FROM LICENSE

TOÂ PAYMENT The Copyright Act provides the creator of a musical work the copyright to that work. This person is entitled to decide whether the musical work is to be performed in public, recorded, copied or otherwise distributed, and to grant permission to do so. The act establishes entitlement to economic compensation. By becoming a registered member of STIM, authors and their music publishers instruct STIM to manage their economic rights, as laid down in the law on copyright. Those who become registered members of STIM notify details 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. STIM licenses the works, collects the royalties due and then pays them to the authors and their music publishers on an individual basis. The amount of the royalty is based on the tariffs or agreements stipulated in the signed agreement. STIM instructs its counterparts in other parts of the world to defend the economic rights of STIM-affiliated members in their respective territories. The payment is sent to STIM for onward distribution to the STIMaffiliated members. In the same way, STIM represents rights to foreign music performed in Sweden. Payments to authors are calculated on the basis of reports about which music has been played, recorded, downloaded or streamed. The information in the reports is linked to the details in the works register on who at the time owns the rights to the musical works used. The royalties are distributed according to STIM's distribution rules and paid to the musical works' creators and their publishers, as well as to corresponding foreign organisations. These organisations subsequently forward remuneration to their members.

6


2012 | STIM ANNUAL REPORT

Money in

INTERNET/MOBILE PERFORMANCES/MECHANICAL REPRODUCTIONS MUSIC REPORTS FROM ONLINE MUSIC SERVICES

PUBLIC PERFORMANCES IN SWEDEN

RECORDINGS (MECHANICAL REPRODUCTION) IN SWEDEN PRODUCTION CONTENT TO WORKS FROM THE PRODUCER CORRESPONDING ORGANIZATIONS IN OTHER COUNTRIES

IDENTIFICATION MATCHING

MUSIC REPORTS FROM ARTIST OR ORGANIZERS CORRESPONDING ORGANIZATIONS IN OTHER COUNTRIES

DISTRIBUTION OF MONEY BETWEEN WORKS AND RIGHTSHOLDERS

DIRECTORY OF WORKS

PAYMENT PAYMENT IS MADE SEVERAL TIMES A YEAR

Money out MUSIC PUBLISHERS

CORRESPONDING ORGANIZATIONS IN OTHER COUNTRIES

REPORTING WORKS WITH BREAKDOWN OF SHARES WITHIN WORKS

INFORMATION ABOUT WORKS FROM OTHER RIGHTSHOLDERS

MEMBERSHIP APPLIES TO PUBLIC PERFORMANCE AND RECORDINGS (MECHANICAL REPRODUCTION)

AUTHOR

MEMBERSHIP APPLIES TO PUBLIC PERFORMANCE AND RECORDINGS (MECHANICAL REPRODUCTION)

7


2012 | STIM ANNUAL REPORT

DISTRIBUTIONS IN

2012

WERE AT AN ALL-TIME HIGH The core of STIM's assignment is to pay money to the rightsholders whose music is played in public. The organization has been very successful in this area for a long time. In 2012 STIM paid almost SEK 1.3 billion, which is more than it has ever paid before. The largest revenue increase in 2012 was in the Online and new media area, which as a whole increased by SEK 49 million, or 43 percent. Revenue in the Live and Background Music areas also increased sharply during the year. Record sales continue to fall, but at a slower rate. In 2012 revenue related to record production landed at approximately the same level as revenue from Online and new media.

Performance revenue, Sweden, SEK million 800

But it is not sufficient to merely increase market coverage. Working consistently to minimize the administrative costs has become an increasingly important goal for collecting societies. In order to be able to compare the efficiency of different organizations, we use a comparison figure, i.e. the administrative overhead ratio. This describes the relationship between the administrative costs and total revenue. STIM's administrative overhead ratio in 2012 was the same as in 2011, just under 11 percent, which in an international comparison puts STIM among the most efficient collecting societies in the world.

Mechanical reproduction revenue, SEK million 300

700

+8.3% +7.2%

600 500

A prerequisite for STIM's continued success is, naturally, the attractive repertoires that we represent. With this as support, we continue to increase the number of customers in the traditional market, while at the same time we are working with industry representatives to find systems for the new areas of use for music that are constantly appearing.

250

+7.1%

+20.2%

200

-19.1%

+9.5% -14.9%

400 300

150

100

200 100 0

8

50

0

-10.4%


2012 | STIM ANNUAL REPORT

Total revenue per revenue category

International distributed by STIM 2.9%

Mechanical reproduction 11.2%

Radio and TV 23.5%

International 30.1%

Payment of performance revenue, Sweden 2012

Foreign music with STIM affiliated sub-publishers 25%

Foreign music 39%

Live music 8.2%

Online and new media 11.0%

Background music 10.6%

Music with STIM affiliated authors and music publishers 36%

Other revenue 1.8% Private copying levy 0.7%

STIM's profit before distribution, SEK million Performance in Sweden Performance abroad Performance abroad for distribution by STIM Other revenue Total revenue for performances Operating costs Distributable revenue for performances Mechanical reproduction STIM 's profit before distribution

Distribution of STIM's profit, SEK million Royalties for performances in Sweden Promotion of Swedish music Scholarships Royalties for performances abroad Royalties for performances abroad that are distributed by STIM on behalf of a third party Royalties for mechanical reproduction Distribution of STIM's profit

2012

2011

%

785.1

724.8

8.3%

443.0 42.8 36.0

457.5 34.9 40.8

–3.2% 22.6% –11.8%

1,306.9 –160.4 1,146.5 165.5 1,312.0

1,258.0 –154.3 1,103.7 184.8 1,288.5

3.9% 4.0% 3.9% –10.4% 1.8%

2012

2011

%

626.7 32.6 8.1 443.0 36.1 165.5 1,312.0

571.7 37.2 7.8 457.5 29.5 184.8 1,288.5

9.6% –12.4% 3.8% –3.2% 22.4% –10.4% 1.8%

9


2012 | STIM ANNUAL REPORT

Distribution per category of revenue DISTRIBUTION CATEGORY

PAYMENT TO BE DISTRIBUTED

PAYMENT DETERMINED AMOUNT BY NATURE OF COLLECTED SEK PERFORMANCE / MILLION WORK

AMOUNT DISTRIBUTED SEK MILLION

% MUSIC WITH STIM AFFILIATED AUTHORS AND MUSIC PUBLISHERS

% FOREIGN % FOREIGN MUSIC WITH MUSIC STIM AFFILIATED SUB-PUBLISHERS

1

Concerts total of all of the catPublicly subsidized egory's music reports concerts with contemporary classical music

Grading large/small concert

7.1

(5.6)

5.4

(4.3)

34

(35)

16

(14)

50

(51)

2

Church concerts

total of all of the category's music reports

grading

2.1

(1.7)

1.6

(1.3)

49

(55)

13

(9)

38

(36)

4

Dance - discothèque

total of the category's statistically selected music reports

grading

9.6

(7.5)

7.3

(5.7)

36

(33)

27

(26)

37

(41)

5

Other live music, logged concerts and other performances with reporting

per music report

grading

66.6

(56.5)

50.8

(43.1)

60

(60)

17

(16)

23

(24)

6

Other live music, unlogged

based on information from the Other live music category

in accordance with analogous data

35.9

(30.7)

27.4

(23.4)

69

(63)

12

(14)

19

(23)

7

Theatre music

total of all of the category's music reports

grading

0.7

(0.6)

0.5

(0.5)

20

(25)

32

(27)

48

(48)

8

Background music, logged Recorded background music

per music report and total of all of the category's music reports

grading

2.1

(1.9)

1.6

(1.4)

42

(62)

24

(12)

33

(26)

9

Background music, unlogged

based on data from SR, commercial radio, TV and record sales/ downloads in Sweden

in accordance with analogous data

135.8

(128.2)

103.6

(97.9)

39

(37)

25

(26)

36

(37)

10

Public service radio

total of all of the category's music reports

grading

50.7

(49.8)

38.7

(38.0)

36

(36)

21

(21)

43

(43)

11

Public service TV

total of all of the category's music reports

grading

70.7

(82.9)

54.0

(63.3)

29

(31)

20

(20)

51

(49)

12

Commercial radio

total of all of the category's music reports

grading

27.2

(27.4)

20.8

(20.9)

28

(26)

33

(35)

39

(39)

13

Commercial TV

total of all of the category's music reports

grading

148.2 (153.8)

15

(16)

28

(29)

57

(55)

14

Community radio

total of the category's selected music reports and analogous data from SR, P4 local radio, respectively

grading and in accordance with analogous data

15

Cinema, Movie, Theaters

per music list and movie

16

Online and new media, logged

total of all of the category's music reports

grading

19

Online and new media, unlogged

based on data from SR, SVT and commercial radio

in accordance with analogous data

7.7

17

Private copying levy

based on data from SR, TV and record sales/ downloads in Sweden

in accordance with analogous data

18

Library levy

based on borrowing statistics from libraries

20 International perfor-

194.2 (201.5) 3.4

(3.3)

2.6

(2.5)

38

(38)

25

(25)

37

(37)

17.3

(14.7)

13.2

(11.2)

12

(18)

33

(32)

55

(50)

153.9 (106.9)

139.5

(97.1)

45

(46)

28

(26)

27

(28)

(5.7)

6.9

(5.1)

30

(30)

27

(28)

43

(42)

10.2

(7.4)

10.2

(7.4)

58

(58)

28

(28)

14

(14)

2.5

(2.5)

2.5

(2.5)

100

(100)

0

(0)

0

(0)

(457.5) 443.0 (457.5)

47

(41)

53

(59)

0

(0)

(29.5)

15

(15)

48

(44)

37

(41)

165.5 (184.8)

39

(35)

61

(65)

0

(0)

443.0

mance royalties

21

International performance royalties, for distribution by STIM

98 Mechanical

reproduction rights

10

42.8

(34.9)

165.5 (184.8)

36.1


Profit, SEK million Klara and Johanna Sรถderberg in First Aid Kit

1400 1200 1000 800 600 400 200 0

Mechanical reproduction Performance

11


2012 | STIM ANNUAL REPORT

STIM SOON as big as

SKELLEFTEÅ The number of STIM afffiliates has increased by almost 33% in the past five years. The number of new members in 2012 was also strong. During 2012, 3,088 authors and 142 music publishers registered with STIM. At year-end, STIM had 71,291 affiliates, of which 68,273 were authors and 3,018 were music publishers. This means that there are just as many members in STIM as there are residents in Skellefteå Municipality. The breakdown between men and women is roughly the same as before, i.e. just under 20 percent women and just over 80 percent men. However, this trend appears to be changing – of the new affiliates in 2012, the share of women was slightly higher, more than 23 percent. A number of activities are being conducted among STIM's affiliates to raise an interest in music creation among young women and to include women's music to a larger extent in the repertoire of the concert institutions. It is worth noting that foreign rightsholders continue to register with STIM – both authors and music publishers. At the end of 2012, STIM

Number of affiliates 80,000

Publishers Authors

70,000

had more than 1,000 registered rightsholders from 64 countries throughout the world. This shows that STIM is a strong international player in the competition for music rights. Stim Music Expo, the annual music industry trade show, was held as usual in October. This fully scheduled all-day event pulled around 700 people and filled Hotel Rival. Based on the survey filled in by the visitors, this year's Stim Music Expo was also much appreciated. During the day, international hit writer Johan ”Shellback” Schuster won STIM's award, the Platinum Guitar. The Platinum Guitar has been awarded since 2004 to a STIM-affiliated author who has experienced exceptional success during the year. In December, the STIM scholarships were handed out at a ceremony at The STIM Building. The objective of STIM's scholarships is to encourage the broad, professional creation of music in all genres.

Number of works with at least one STIM affiliated author 1,300,000 1,200,000 1,100,000

60,000

1,000,000

50,000

900,000 800,000

40,000 30,000 20,000

700,000 600,000 500,000 400,000

10,000 0

12

300,000 200,000


2012 | STIM ANNUAL REPORT

13


2012 | STIM ANNUAL REPORT

SWEDISH COMPOSERS' successes are paving the way for

GLOBAL COLLABORATION Swedish music successes are continuing unabated. This means that STIM can take a leading position in an international context – in terms of both collaborations and competition. During large parts of 2012, Swedish song writers were completely dominant on the top half of the Billboard chart, and on many other charts around the world. Johan ”Shellback” Schuster and Max Martin are topping the charts week after week, sometimes with other STIMaffiliated songwriters, such as Carl Falk, Rami Yacoub, Jörgen Elofson and Avicii. Max Martin was named Pop Music Songwriter of the Year in the spring of 2012 by American performing rights organization ASCAP. This is the fifth time this songwriter and producer won this award – he won in 1999, 2000, 2001 and 2011. In the 2012 Eurovision Song Contest, the Swedish entry, which was written by STIM members Thomas G:son and Peter Boström, took home the coveted first prize. But this winning song was not the only one that had a link to STIM. STIM-affiliated songwriters were behind no less than nine of the entries in the finale. Swedish music exports are much more than just top hits on the charts. Swedish metal has a broad, dedicated international following with bands such as Opeth, In Flames and Sabaton. Under the international definition of jazz/folk, artists such as Lisa Ekdahl, Nils Landgren, Oddjob and First Aid Kit continue to attract attention outside of Sweden. Singer-songwriters such as Lykke Li and Ane Brun have made a name for themselves outside of Sweden.

In terms of art works, the music of STIM affiliated composers made an impression on international stages in 2012. For example, an entire festival in Toronto was dedicated to the music of Anders Hillborg at the beginning of the year. At the same time, Rolf Martinsson's successes in Europe continued. A younger generation of composers is being played regularly in other countries, for example Tobias Broström and Esaias Järnegard, whose music was performed in both Europe and the USA in 2012. The STIM affiliated composers Hanna Hartman and Klas Torstensson, both of whom live abroad (Germany and Holland, respectively) have created a following not only in their home countries but also internationally. The reason Swedish music is so successful around the world is partly structural, i.e. popular movements, municipal music schools and a musical infrastructure. An openness to influences from other cultures and the creative self-image that was formed, for example, by the Cheiron studio's successes in the 1990s, have also played an important role. Just like in Finland, where successful conductors are continuously emerging, the Swedish music marvel has become the norm. There has been no indication that the successes will abate, and in fact the opposite holds true. The positive image of Sweden as a music nation combined with Sweden's strong IT skills and long tradition of cooperation has created excellent conditions for STIM's international work. Today, STIM is one of the most influential copyright organizations in the world and

Songs with the most foreign revenue in 2012 (with at least one STIM-affiliated author)

14

Title

Author

Artist

F**KIN PERFECT

MARTIN, M/SHELLBACK/MOORE, A

PINK

RAISE YOUR GLASS

MARTIN, M/SHELLBACK/MOORE, A

PINK

DJ GOT US FALLING IN LOVE

KOTECHA, S H/PEREZ, AC/MARTIN, M/SHELLBACK

USHER feat. PITBULL

I-I-I WANNA GO-O-O

MARTIN, M/SHELLBACK, J/KOTECHA, S H

BRITNEY SPEARS

TILL THE WORLD ENDS

MARTIN, M/GOTTWALD, L/SEBERT, K/KRONLUND, A

BRITNEY SPEARS

MOVES LIKE JAGGER

LEVINE, A/MALIK,A/LEVIN, B/SHELLBACK

MAROON 5

LAST FRIDAY NIGHT (T.G.I.F.)

MC KEE,B L/GOTTWALD, L/MARTIN, M/PERRY KATY

KATY PERRY

ET

PERRY KATY/GOTTWALD, L/COLEMAN, J E/MARTIN,M

KATY PERRY

DANCING QUEEN

ANDERSSON, B/ULVAEUS B/ANDERSON, S

ABBA

ON THE FLOOR

PEREZ, A C/HAJJI, B/HAMID, K V/JANNUSI, A/KHAYAT, N/HERMOSA GONZALES, G/HERMOSA GONZALES, U/TEDDY, S

JENNIFER LOPEZ


John Eriksson, Björn Yttling and Peter Morén in Peter Bjorn and John

is represented in basically all of the international contexts where the music market of the future is being formed. One example of a successful and innovative international cooperation is ICE, International Copyright Enterprise AB. The company is currently owned by STIM and our British counterpart, PRS for Music. ICE and the international cooperative FastTrack received the assignment to deliver the technical platform for the global repertoire database, GRD. The purpose of this database is to facilitate the online dissemination of music and at the same time be able to quickly handle payments to rightsholders. Through the ICE cooperation, STIM is in all material respects ready to work in accordance with the regulations the EU Commission proposed last summer for all European performing rights organizations. Before the Directive can be adopted, it must be approved by the EU Council and the European Parliament.

At the beginning of 2012, STIM presented its new technological solution, the WOI portal, which enables the simultaneous licensing of rights in multiple territories. During the year STIM also negotiated an agreement with the influential publisher, Kobalt Music Group. In January 2013, STIM and Kobalt announced that they had jointly started a company, Kobalt STIM Aggregated Rights AB, to license rights for multiterritorial, digital music services. STIM's foreign revenue fell by 1 percent between 2011 and 2012. The cause behind this was not that Swedish music was played less in other countries, but rather primarily that other performing rights organizations changed their payment periods. The future for STIM as an international player – both in terms of collaboration and competition – is bright. And there have not been any indications that its successes will abate.

15


2012 | STIM ANNUAL REPORT

STIM - BALANCE OF PAYMENTS WITH INTERNATIONAL COLLECTING SOCIETIES 2011 AND 2012 2012 (SEK thousand) Countries

Finland Denmark

Of which, revenue Of which, revenue Paid from sub-published from Swedish foreign music music abroad

Received

Of which, revenue Of which, revenue Paid from sub-published from Swedish foreign music music abroad

78,088

67,979

10,109

5,326

77,014

66,320

10,694

4,895

133,042

114,978

18,065

10,875

140,026

120,729

19,297

11,970

Iceland

1,810

1,627

184

0

2,323

2,136

187

214

Norway

63,330

48,539

14,791

5,311

80,179

60,184

19,995

5,613 170

Estonia

1,542

1,233

309

100

2,308

2,075

233

Latvia

4,303

3,661

643

42

2,230

2,059

171

53

Lithuania

3,525

3,109

416

121

3,700

3,281

419

93

285,641

241,126

256,784

50,996

23,009

Total Nordic & Baltic

44,515

21,776

307,780

Belgium

3,853

3,853

513

3,708

3,708

410

France

7,305

7,305

10,035

11,521

11,521

11,532

Greece

371

371

158

508

508

106

Ireland

1,561

1,561

720

1,060

1,060

459

Israel

726

726

82

361

361

146

Italy

5,125

5,125

2,866

4,092

4,092

1,879

Netherlands

15,914

15,914

2,882

8,873

8,873

2,202

Poland

2,369

2,369

254

2,713

2,713

337

Portugal

449

449

65

310

310

104

Romania

427

427

106

1,335

1,335

97

Russia

977

977

218

712

712

318

4,075

4,075

1,314

3,503

3,503

687

333

333

30

392

392

58

Spain

4,664

4,664

2,975

3,763

3,763

1,714

Great Britain

21,851

21,851

46,858

23,121

23,121

43,046

608

608

192

764

764

272

19,480

19,480

7,117

20,008

20,008

7,530

Switzerland Slovakia

Czech Republic Germany Hungary

1,335

1,335

96

1,679

1,679

104

Austria

3,274

3,274

746

2,780

2,780

683

Rest of Europe Total Europe (excl. Nordic & Baltic) Argentina

542 95,239

0

542

165

843

95,239

77,391

92,046

0

843

227

92,046

71,910

653

653

489

237

237

394

Australia

6,892

6,892

4,485

7,276

7,276

4,498

Brazil

2,575

2,575

704

2,753

2,753

161

216

216

12

163

163

11

Japan

7,277

7,277

457

6,344

6,344

502

Canada

6,484

Hong Kong

5,574

5,574

6,865

5,390

5,390

Korea

730

730

19

548

548

38

Mexico

478

478

103

666

666

232

Singapore South Africa USA Other Total Rest of world (excl. Europe, Nordic & Baltic) TOTAL

16

Received

2011 (SEK thousand)

504

504

0

366

366

25

1,659

1,659

202

2,150

2,150

233

35,568

35,568

119,336

33,302

33,302

110,511

1,761

1,761

99

839

839

242

63,888

0

63,888

132,771

60,033

0

60,033

123,333

444,768

241,126

203,641

231,938

459,859

256,784

203,075

218,252


2012 | STIM ANNUAL REPORT

SCHOLARSHIPS Every year, STIM earmarks three per cent of the STIM members' Swedish royalties for scholarships. Only STIM affiliated authors are eligible to apply for these scholarships, which are awarded once a year. Of the scholarship funds for 2012 totaling SEK 8.1 million, SEK 4.7 million was allocated to STIM scholarships and SEK 3.4 million was split equally between FST and SKAP. Ahovalli, Jimmy

Ekelund, Magnus

Karlsson, Sofia

Olsson Bauer, Axel

Söderberg, Johanna

Almgren, Karolina

Eklöf, Andreas

Krafman, Johan

Persson, Britta

Söderberg, Klara

Almgren, Malin

Eriksson, Anna

Küchen, Martin

Persson, Cecilia

Sörling, Isabel

Almgren, Vera (to be shared with Jack Almgren and Linnea Eriksson)

Evileye, Ida

Larsson, Jeremia

Tarrodi, Andrea

Moin, Mahan Fathi

Larsson, Karl

Richter, Suvi (to be shared with Julius Duhs) Rintamäki, Jukka

Antilla, Kristian

Flyckt, Rasmus (to be shared with Emil Gustafsson)

Lidbo, Håkan

Risberg, Mattias

Lindebergh, Mikael

Risberg, Susanna

Lindfors, Elin (to be shared with David Lehnberg)

Rosen, Gustav

Bao, Noonie Force, Klara Beijbom, Daniel Grönberg, Niklas Benkahla, Nadir

Tomner, Martina von Hofsten, Anders Rydvall, Erik

Gustafsson, Emelie

Rådström, Victor

Warelius, Dennis (to be shared with William Turner, Christoffer Apell, Patrik Larsson and Niclas Staberg)

Samuelsson, Marie

Wennström, Niklas

Sandell Billström, Olivia (to be shared with Lisa Grotherus, Erik Boman, Timmy Fredriksson, August Persson and Eric Ahlqvist)

Westin, Maja (to be shared with Lina Westin)

Lindsjö, Clara

Bergmark, Johannes

Rylander, Lisen Hedberg, Johan

Bertilsson, Andreas Hellstrand, Staffan Blomdahl, Tony

Lindström, Niclas(to be shared with Daniel Gustafsson, Jakob Gustafsson and Daniel Svensson)

Hogman, Sanna Livebrant, Sofie

Bromander, Vilhelm Humlebo, Oskar Carlberg, Martin Hylander, Tobias Cervin, Billy (to be shared with Joacim Nilsson, Hugo Mårtensson and Elias Jungqvist) Coldheart, Mia Correia de Verdier, Leo Costéus, Henrik (to be shared with Daniel Cvetcovic) Danell, Daniel

Ljungqvist Henrik (to be shared with Otto Wallgren)

Johansson, David

Lundin, Linus (to be shared with Emil Lundin, Oscar Rydelius and Fredrik Johansson)

Johansson, Jäje

Löfberg, Anders

Högberg, Fredrik

Johansson, Natalie Johansson, Ove Jutterström, Johan

Shah, Rebin Sidén, Eva

Wicked, Nicki Wärme, Sabina (to be shared with Amanda Lindgren) Zethraeus, Leo

Sigvardsson, Elin Ruth Zetterlund, Magnus

Magnusson, Per Simmerud, Patric

Åberg, Johan

Molavi, Saeed Stackenäs, David

Åhlund, Lars

N’Diaye, Mary Staern, Benjamin

Jäger, Mio (to be shared with Maria Säfstrand, Elizabeth Andrews and Sandra Randi Stensen)

Abdelaziz, Karima Nait

Diffner, Fredrik (to be shared with Alexander Ceci Forsberg, Oliver Boson and Arthur Acking)

Kadic, Adna

Nordström, Fredrik

Sundemo, Frida (to be shared with Joel Humlén)

Kallerdahl, Fabian

Nurulla-Khoja, Farangis

Svensson, Fabian

Duncanson, Johan

Karlsson, Nalle

Olsson, Ida

Svensson, Johan

Devercerski, Alina (to be shared with Christoffer Wikberg)

Thurfjell, Lovisa (to be shared with Lisa Löfgren, Canan Rosén and Lotta Wennström)

Öberg, Linn Stolt, Benjamin

Nilsen, Charlotta

17


2012 | STIM ANNUAL REPORT

Multi-faceted festival year

and sold-out arenas More and more live music is being played in Sweden. Despite rising ticket prices, more people are choosing to attend concerts and festivals. It is obvious that live music plays an important role in people's lives. Many of the visitors to the summer's music festivals got wet and cold. But this is not to say that 2012 was a lost year for the festival promoters.

fans with three sold-out concerts in the newly opened Friends Arena in Solna. Tim ”Avicii” Berg also sold out three arena shows in Stockholm.

The EDM festival, Summerburst, which had its premier in 2011 as a one-day festival in Stockholm, expanded to two days and also established itself in Gothenburg. A number of new festivals were also held throughout the year. The three-day Stockholm Music and Arts festival in August sold out quickly. The new Öresund Festival, a cooperation between music venues in Malmö and Copenhagen, presented a broad, two-day program within the electro-soul, reggae, experimental jazz and indie rock genres. A number of musical events were arranged at Hesselby Slott outside of Stockholm during the year, but the one that received the most attention was Stockholm Folk Festival, a twoday festival in August that offered an ambitious program of folk and world music.

In addition to the large shows that were held at music festivals and arenas, a large number of smaller music venues – clubs, restaurants and music associations – throughout the country continued to promote concerts. One of these devoted concert promoters, the Sticky Fingers rock club in Gothenburg, received the STIM Guitar in April. This award is intended to encourage work that results in financial compensation for composers and songwriters when their music is played.

German festival promoten FKP Scorpio, announced that in June 2013 it will be holding a giant festival in Bråvalla outside of Norrköping. FKP Scorpio also promotes the Hultsfred festival (since 2011) and Getaway Rock Festival (since 2012).

Anna-Lena Laurin, a composer who moves freely between jazz and art music, was one of the composers who received a lot of attention in 2012. During the year she premiered in big band jazz, chamber music and orchestral music, including Persephone for orchestra and jazz groups that premiered in Helsingborg in September.

STIM continues to focus on its communication with the festival promoters, in part through a regular newsletter but also through personal contact with festivals throughout Sweden. At the end of the year, STIM was in discussions with Sweden Rock Festival. These discussions resulted just a few days into 2013 in the resolution of a dispute that had been going on for several years. The parties were thus able to withdraw their claim from the court. Performances in large arenas continue to draw large crowds, not in the least for EDM. Swedish House Mafia said goodbye to their Swedish

18

The number of art music premiers increased in 2012. No less than 325 newly composed works of music premiered during the year, which can be compared to just over 200 the year before. A handful of these were held at the Sounds of Stockholm festival at Kulturhuset in November.

Anders Hillborg, who in 2011 became the first Swede to have the premier of a commissioned work performed by the Berlin Philharmonic, was asked in January 2012 by the Los Angeles Philharmonic to write a piece for Polar Prize winner, cellist Yo-Yo Ma, and pianist Emanuel Ax. The new work will premier some time during the 2013‑2014 season. One of the world's oldest festivals, Nordic Music Days (which has been arranged since 1888), rotates between the Nordic countries. In the fall of 2012 the festival returned to Stockholm and lit up three locations in the city for four days in October.


Anders Hillborg

19


2012 | STIM ANNUAL REPORT

STIM - PROMOTING the Swedish

MUSIC CULTURE By promoting the creation and distribution of both new music and what is referred to as "areas of music that are vulnerable to market forces", STIM's owners want to contribute to a vital and multi-faceted Swedish music culture. The possibility of allocating up to 10% of the Swedish revenue after deductions for expenses to fund Swedish music is written into the reciprocal agreements between STIM and its international counterparts. In 2012, STIM allocated a total of SEK 32.6 million to national funds. Until 2012, STIM's operations were primarily carried out via the subsidiary Svensk Musik Swedmic AB, which worked with communications, PR activities, sheet music and documentation. In addition, the national funds were also used as special support for music areas that are vulnerable to market forces and grants for the owner associations' projects and member activities. Svensk Musik In 2012, Svensk Musik finished an opera anthology that contains a unique collection of Swedish opera arias written during the period 1874–2009. The sheet music in four volumes contains 147 arias from 89 operas. No less than 54 Swedish composers are represented in the anthology: Elfrida Andrée, Helena Munktell, Kurt Atterberg, Karl-Erik Blomdahl, Jonas Forssell, Hans Gefors, Paula af Malmborg, Karin Rehnqvist, SvenDavid Sandström, Wilhelm Stenhammar, and many more. During the year the following three CD releases were finalized under the inhouse label, Phono Suecia:

Promotion Committee Svensk Musik's assignment changed in 2012 and a new promotion committee was established, STIM's Committee for the Promotion of Swedish Music. The Promotion Committee should create conditions for the future creation of music. It should strive to be at the forefront in terms of understanding the new Swedish music and using the best tools and projects to disseminate information about this music. During the Promotion Committee's first operational year, around 25 different types of projects were implemented or initiated. The projects cover a wide base, for example: Swedish music in Spanish in Mexico – presenting, introducing and opening a new market for Swedish music in Latin America. Plug-in – continued education in the creation of music for music teachers in elementary and middle schools.

Swedish Concertos for Soprano Saxophone (PSCD 188) Solo concerts by Rolf Martinsson, Sven-David Sandström and Anders Eliasson. Soloist: Anders Paulsson.

KVAST network (Association of Swedish Women Composers) – development and marketing of the KVAST webpage – a website with information about composers and repertoires.

ZzzKaa’s Dance (PSCD 191) The Nogenja ensemble performs compositions by Bosse Broberg.

In addition, a preliminary study for international projects, copyright seminars and much more was started.

Pendants (PSCD 192) Benjamin Carat and Gageego! under the leadership of Pierre-André Valade perform works by Jesper Nordin.

20

In 2012, the project to scan in all of Svensk Musik's database of unpublished contemporary Swedish art music, in total 18,400 works, was completed. Only the digital copies are now used for printing sheet music. All of the original manuscripts are stored at the National Archives.


Ann Rosén, Ida Lundén and Lise-Lotte Norélius in Syntjuntan (Synth Circle)

21


2012 | STIM ANNUAL REPORT

STREAMED MUSIC

increasing in popularity - and now

TV IS NEXT Subscription services for streamed music have proven themselves to be a successful concept. The digital market has multiplied in just a few years. All signs are now pointing toward a similar development in the TV segment.

The digital market continues to grow. STIM's Online and new media revenue increased by 43 percent in 2012. In the past five years, revenue has increased tenfold. During the same period, revenue from music on "physical sound carriers" (music on CDs, LPs, etc.) fell by 50 percent, although this decrease has slowed in the past couple years. Revenue from digital music and physical sound carriers are almost the same. Of the digital music services, subscription services for streamed music are the largest. The transition from an ownership model (purchased CDs) to a subscription model has proven itself to be very successful, even for compensating the author.

180 162 +43%

126 108

+71%

90 72 54 36 18 0

22

+64%

+138%

During the year, STIM signed a new agreement with Spotify and started negotiations with Youtube. The start of a development similar to that in the music industry is discernible on the TV market. Several new actors established themselves in Sweden in 2012 and the sale of smart TV sets rocketed. SVT Play has been established for several years, but the commercial channels' on demand TV services are now growing at the same time as viewers are being offered more online-based TV services such as simulcasting (simultaneous web broadcast) and live streaming. STIM continuously analyses the changes in the media market and follows the new techniques for the dissemination of TV that are emerging. As part of this work, we maintain an ongoing dialogue with cable operators and TV channels about the future of the TV market.

Revenue Online and new media

144

It also does not appear to be a problem for streamed music and the downloading of music files to co-exist. Legal downloading of music increased sharply in 2012.


Sonny Boy Gustafsson and Linda Carlsson – Miss Li

23


2012 | STIM ANNUAL REPORT

MUSIC CHOICE IMPORTANT FOR

BUSINESS At the cafĂŠ, on the airplane, in the clothing store or at the hairdresser. Music is played everywhere. But even if more background music is being played today, the way music is being played has changed. Companies are profiling themselves today with the help of music. Everyone wins with this development. The radio that used to be a standard at the hairdresser's or in a clothing store is becoming less common. Music is naturally still present, but today it is used in a manner that is more thought-out. This is a development that is evident in both the sales and service sectors. Companies are working very consciously with music as a tool to profile their operations and to create the right atmosphere in their premises. A number of surveys conducted in the past year confirm the opportunities that are created by taking a deliberate approach to how music is used, both in terms of strengthening the brand and increasing sales.

Shops, shopping centres etc., revenue, SEK million 50

STIM's revenue for music in businesses rose by more than 11 percent in 2012. The largest part of the increase comes from the restaurant industry, which experienced improved profitability since the restaurant tax was lowered at the beginning of 2012. In order to offer a better service to its customers, STIM directed considerable resources in 2012 to the development of a new CRM system. This system will simplify and streamline STIM's contact with its customers, but it also includes a number of improvements to the online services for music reporting and accounting. We also developed a more convenient function for new customers to obtain a license for their use of music. The new system will be taken into operation during the spring of 2013.

Restaurants, revenue, SEK million 30

16

45

14

25

40

Fitness, revenue, SEK million

12 35

20

10

30

15

25

8

20

6

10

15

4 10

5

2

5

0

0

24

0

Example:

Example:

Example:

The license fee for a shop with a sales area of up to 100m2 that is open more than 312 days a year is SEK 1,450 per year, i.e. SEK 4.65 per day of business. Establishments with a sales area of between 2,001-2,500m2 open for more than 312 days a year pay a fee of SEK 17,921 per year, i.e. SEK 57.44 per day of business.

The license fee for the use of background music in a restaurant establishment with 1-20 covers that is open more than 312 days a year is SEK 2,423, i.e. SEK 7.77 per day of business. The fee for a restaurant with 101-150 covers that is open more than 312 days a year is SEK 9,753 per year, i.e. SEK 31.26 per day of business.

The license fee for a supervised fitness session and up to 25 participants is SEK 13.21 per session/occasion. The licence fee for a fitness session with more than 75 participants is SEK 58.93 per session/occasion.


Chief Legal Officer Helena Woodcock and Legal Counsellor Emil Dicksved

25


2012 | STIM ANNUAL REPORT

GENDER EQUALITY ORGANIZATION

equipped for

THE FUTURE As a special interest organization in a competitive market, STIM is subject to special requirements. The solution is to develop its personnel and mix new skills with experience. Authors and publishers are the focus of STIM's activities, which characterises our commitment and corporate culture. A willingness to develop and change is part of this culture, which, for example, is manifested in our constant efforts to develop our work so that it functions as simply and efficiently as possible for our customers and members. This places great demands on the entire organization. The management development program that was started in the fall of 2011 continued during the year. The aims of the program include clarifying the role of the executive management group, establishing a structure for meetings and improving management efficiency. The program comprised development activities at both the group and individual level. The trainee program that was started in 2011 ended in mid-year 2012. A need for a mix of skills was behind the initiative – new knowledge as well as solid experience. Our industry is constantly evolving and we need employees who are aware of the latest research findings and have acquired the tools to apply these findings. At year-end, STIM had 65 employees. The Swedish Equal Opportunities Act requires employers with at least 25 employees to analyse its salary structure once every three years. STIM analyses its salaries every year in collaboration with the STIM branch of local trade union Unionen. The analysis from 2012 shows that women's salaries are 100.26 percent of the men's salaries, and that there are no unjustified salary differences in the organization.

26


2012 | STIM ANNUAL REPORT

Scott Farrant International Director

Kristina Paulsson Director of Finance

Tomas Ericsson Deputy CEO and Head of Strategy

Karin Jihde Communications Director

27


2012 | STIM ANNUAL REPORT

THE

STIM SPHERE

Board of Directors The Society of Swedish Composers (FST), the Swedish Society of Popular Music Composers (SKAP) and the Swedish Music Publishers Association each appoint two members and two deputy members. FST, SKAP and the the Swedish Music Publishers Association jointly appoint the chairman and two additional members. The STIM branch of Unionen appoints one member and two deputy members. Regular Members Kjell-Åke Hamrén Martin Q. Larsson Erik Peters Alfons Karabuda Johan Ekelund Monica Ekmark Erik Hasselqvist Kristina Rennerstedt Leif Pagrotsky Claes Tullbrink

Chairperson FST FST SKAP SKAP Swedish Music Publishers Association Swedish Music Publishers Association External member External member Unionen

Deputy members Jonas Forssell Ida Lundén Douglas Carr Elise Einarsdotter Lars Karlsson Nutta Hultman Eva Botmar Anders Cangemark

FST FST SKAP SKAP Swedish Music Publishers Association Swedish Music Publishers Association Unionen Unionen

Svensk Musik Swedmic AB Board of Directors Paulina Sundin Erik Hasselqvist Alfons Karabuda Co-opted member Eva Modin

28

FST, chairperson Swedish Music Publishers Association SKAP

STIM


2012 | STIM ANNUAL REPORT

STIM CEO Kenth Muldin

STIM FASTIGHETS HOLDING AB

CEE SERVICES AB

SVENSK MUSIK SWEDMIC AB

CEO MAGNUS BOSTRÖM

DIRECTOR OF OPERATIONS GUSTAF BERGEL

ICE AB

NCB

INTERNATIONAL COPYRIGHT ENTERPRISE

NORDISK COPYRIGHT BUREAU

JOINTLY OWNED WITH BRITISH PRS FOR MUSIC

JOINTLY OWNED WITH STIM'S NORDIC COUNTERPARTS CEO KARSTEN DYHRBERG NIELSEN

CEO CARSTEN DRACHMANN

29


2012 | STIM ANNUAL REPORT

CEE Services AB

ICE, International Copyright Enterprise

In 2007, STIM established the wholly owned subsidiary CEE Services AB to provide administrative support and development resources in documentation, music reporting, distribution and IT. The processes involved are complex, and CEE is currently engaged in a number of projects aimed at simplifying functions for STIM, Svensk Musik and ICE above all via IT facilities, support and service. Every year, CEE issues a cost reduction guarantee for administrative services on a fixed-price basis. As a result, operations that are taken over by CEE are made more efficient in a clear and measurable way.

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 financial remuneration to authors and publishers, both Swedish and international, when their works are played, recorded, streamed or legally downloaded.

Board of Directors Kenth Muldin Eva Modin Nicklas Lindström Hans Wickberg

Board of Directors Wanda Goldwag Kjell-Åke Hamrén Kenth Muldin Tomas Ericsson Robert Ashcroft Craig Nunn

Chairperson Deputy member Unionen Unionen, deputy member

PRS For Music, Chairperson STIM STIM STIM PRS For Music PRS For Music

NCB, Nordic Copyright Bureau NCB, Nordisk Copyright Bureau, is tasked with safeguarding the rights of authors and music publishers during the recording, copying and distribution of protected music and lyrics on CD, vinyl, DVD, etc. NCB is owned by STIM and its counterparts in Denmark (KODA), Finland (TEOSTO), Norway (TONO) and Iceland (STEF). NCB also administers the mechanical reproduction rights of the Baltic collecting societies, LATGA-A (Lithuania), EAÜ (Estonia) and AKKA-LAA (Latvia). NCB has agreements with collecting societies abroad that administer mechanical reproduction rights in a corresponding manner in their countries. In 2011, NCB’s Board of Directors passed a decision to centralize its entire operations. As a result, regional operations in the Nordic and Baltic countries were transferred to NCB’s headquarters in Copenhagen in 2012.

Board of Directors Anders Lassen Susi Hyldgaard Tine Birger Christensen Gudrun Björk Bjanadottir Kenth Muldin Alfons Karabuda Lars Karlsson Katri Sipilä Kim Kuusi Tommi Tuomainen Cato Ström Bendik Hofseth Steinar Fjeld Observers from the Baltic countries Inese Paklone Kalev Rattus Jonas Liniauskas Anne Louise Holsoe

30

CEO, Koda, Chairperson Author, Koda Music publisher, Koda CEO, STEF CEO, STIM Author, STIM Music publisher, STIM CEO, TEOSTO Author, TEOSTO Music publisher, TEOSTO CEO, TONO, Deputy Chairperson Author, TONO Music publisher, TONO

CEO, AKKA/LAA CEO, EAÜ CEO, LATGA-A Employee representative


Sara Kilander Chief Operating Officer

31


2012 | STIM ANNUAL REPORT

STIM COMMITTEES

Assessment Committee for Music and Copyright Makes statements regarding similarities between musical works in the event of copyright disputes. Helena Woodcock Per Wahlsten Patrik Sventelius Douglas Carr Jonas Forssell

STIM, Chairperson STIM, Secretary Swedish Music Publishers Association SKAP FST

Scholarship Committee Selects STIM's scholarship recipients. Ragnar Grippe Ben Malén Sarah Riedel Per Mårtensson Eva Lindal Josephine Forsman

Chairperson Swedish Music Publishers Association SKAP FST External External

Grading Committee Establishes industry practice for grading and the handling of grading complaints. Regular members Mats Edén Torgny Söderberg Jonas Valfridsson Paulina Sundin Kristina Fryklöf

SKAP SKAP FST FST Swedish Music Publishers Association

Deputy members Jan Levander Anna Einarsson Ylva Q. Arkvik Per Mårtensson Ingemar Hahne

SKAP SKAP FST FST Swedish Music Publishers Association

Distribution Committee Preparatory body for the Board in matters pertaining to distribution. Kenth Muldin Martin Q. Larsson Chrichan Larson Alfons Karabuda Johan Ekelund Kettil Skarby Monica Ekmark

32

Chairperson FST FST SKAP SKAP Swedish Music Publishers Association Swedish Music Publishers Association


2012 | STIM ANNUAL REPORT

Deputy CEO

CEO

Deputy CEO

Tomas Ericsson

Kenth Muldin

Eva Modin

Finance Kristina Paulsson

Strategy & Business Development Tomas Ericsson

Legal Helena Woodcock

Operations Sara Kilander Sales & Marketing Media/Online Nicklas Sigurdsson (as of 2013) Service (Acting) Robert Gehring Distribution Fredrik Lom채ng

Personnel Venke Osnes

Communication Karin Jihde

33


Johan ”Shellback” Schuster

34



2012 | STIM ANNUAL REPORT

ADMINISTRATION REPORT The Board of Directors and the Chief Executive Officer of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a., CIN 702002-3524, hereby present their Annual Report and Consolidated Financial Statements for the 2012 financial year. Description of operations STIM was established to protect the copyright interests of authors and music publishers in Sweden. On their behalf, STIM administers and licenses rights to music and lyrics. Through its international network, STIM also represents rights to the worldwide repertoire of music. In addition, STIM promotes the creation and dissemination of new Swedish music. At year-end STIM had more than 71,000 registered composers, lyric writers, arrangers and music publishers. STIM’s task is to safeguard the rights of authors and music publishers, as defined in the Swedish Copyright Act Based on inter-governmental agreements and reciprocal agreements between the collecting societies, rights to both domestic and international music are safeguarded in Sweden. On joining STIM, the rightsholder assigns to STIM his legal rights to compensation in connection with public performance, recording and mechanical reproduction. It is STIM’s task to ensure that anyone who plays music in public or who records, downloads or streams music has a valid licence and pays a fee. STIM then pays the monies received to the owner or owners of the right to the music. Thus, 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, for example in a radio broadcast, in a shop or in a discotheque, may, via a STIM licence, obtain simple access to millions of works. It also means that the owners of the copyright to the music are paid for the use of their music. STIM and the British performing rights organization, PRS for Music, jointly own a company to administer bulk data in works documentation, music reporting and certain distribution services. Each party owns an equal share of this associated company, International Copyright Enterprise AB (ICE). Significant events during the financial year The "CISAC case", which resulted in a prohibition ruling on July 16, 2008, addressed to STIM and the European collecting societies, has now been tried by the Tribunal, the EU's first court of instance. The EU Commission's decision from 2008 ordered STIM and the other European societies to eliminate territorial limitations within cable and satellite TV and the Internet. STIM signed new agreements with the other European performing rights organizations that were interested

36

in a collaboration and phased out the territorial limitations. The EU Commission's requirements for STIM have therefore been fulfilled. The Tribunal upheld the Commission's decision against STIM in April 2013 but ruled in favor of the other societies. The reason for the differing outcomes is that STIM presented a different legal basis than the other societies for its appeal. The other performing rights organizations asserted that they had not entered into any "organized proceedings" with the aim of dividing the EU market into national territories. STIM asserted that the decision entailed risks for the cultural diversity in the EU since there was a risk that smaller repertoires would be treated unfairly. The Tribunal followed STIM's line in principle, i.e. it ruled that the Commission must take cultural diversity in the EU into consideration. However, the Tribunal found that the Commission had been sufficient in its consideration of cultural diversity and therefore rejected STIM's appeal. The ruling does not have a significant legal or financial impact on STIM's operations. STIM acquired the building Krukomakaren 7, Hornsgatan 103, Stockholm, at the end of 2011. In September 2012, STIM moved as planned into the new offices together with its subsidiaries and FST, SKAP and the Swedish Music Publishers Association. Approximately 1,800 m2 are leased to external tenants, primarily other music or copyrights organizations. Significant events after the end of the financial year In January 2013, Kobalt STIM Aggregated Rights AB was founded by STIM and music publisher Kobalt Music Group. This partnership makes it possible for multi-territorial digital music services to acquire music licenses for the entire European market through an integrated turn-key solution. The licensing service is offered by a newly formed subsidiary to STIM, which started operations on March 1, 2013. Sales and profit Group The Group’s revenue during the financial year was SEK 1,479.9 million (1,433.0). Operating costs totaled SEK 175.6 million (160.0). Profit/ loss from participations in associated companies amounted to SEK 0.7 million (–0.2). Profit/loss for the Group before distribution totaled SEK 1,312.0 million (1,288.5).


2012 | STIM ANNUAL REPORT

Parent Society Parent Society profit (SEK thousand) Operating income

1,455,816

1,425,780

1,373,605

1,385,137

Operating costs

–160,263

–154,025

–151,648

–146,413

–127,225

Operating profit

1,295,553

1,271,755

1,221,957

1,238,724

1,037,165

16,551

16,822

5,370

10,495

20,184

–71

–78

–40

1,527

4,660

1,312,033

1,288,499

1,227,287

1,250,746

1,062,009

Interest Appropriations and tax Profit before distribution

Turnover for the current financial year for Parent Society STIM amounts to SEK 1,455.8 million (1,425.8), which corresponds to an increase of 2.1 percent (3.8) compared to the previous year. Revenue for music performed both in Sweden and abroad increased by SEK 53.6 million (99.7) or 4.4 percent (8.9), while revenue for mechanical reproduction rights is in a negative trend and decreased by SEK 19.3 million (32.3) or –10.5 percent (–14.9). Profit/loss for the Parent Society STIM before distribution totals SEK 1,312.0 million (1,288.5), which means that distribution to rightsholders increased by SEK 23.5 million (61.2) or 1.8 percent (5.0). Financial position Group The Group’s accumulated loss at year-end was SEK –13.1 million (–12.1). Parent Society The Parent Society STIM’s equity at year-end was SEK 1.2 million (1.2) or 0.1 percent (0.1) of total assets. Debts to rightsholders at year-end totaled SEK 709.2 million (708.0).

1,164,390

Group contributions Group contributions during the financial year were paid to Stim Fastighets Holding AB in accordance with the following: STIM CEE Services AB Stim Fastighets AB Stimhuset KB

SEK –337.1 thousand SEK –2,963.0 thousand SEK –1,532.0 thousand SEK –2,991.7 thousand

Proposed appropriation of profits The following amount is available for allocation by the Annual General Meeting: Retained earnings, SEK Profit/loss for the year, SEK Total

4,841 0 4,841

The Board of Directors proposes that the profit be allocated as follows: profit carried forward, SEK 4,841

Liquidity STIM’s cash and cash equivalents, including short-term investments, totaled SEK 148.2 million (229.8) for the Parent Society and SEK 183.6 million (259.4) for the Group.

37


2012 | STIM ANNUAL REPORT

INCOME STATEMENT SEK thousand

Operating income Performance revenue Mechanical reproduction revenue Other revenue Total operating income Operating costs External costs Personnel costs Depreciation/amortization according to plan Total operating costs Profit/loss from participations in associated companies Distribution Operating profit/loss Interest income Interest expenses Profit/loss before tax Tax on profit for the year Profit/loss for the year

38

Group

Parent Society

Note

1, 3

2, 3, 6 2, 4, 5 2, 9 –11

13 7

20

1,270,818 165,456 43,635 1,479,909

1,217,226 184,805 30,994 1,433,025

1,270,818 165,456 19,542 1,455,816

1,217,226 184,805 23,749 1,425,780

–78,972 –83,768 –12,862 –175,602

–64,797 –86,702 –8,469 –159,968

–105,459 –49,335 –5,469 –160,263

–101,309 –47,474 –5,242 –154,025

739

–225

–1,312,033 –6,987

–1,288,499 –15,668

–1,312,033 –16,480

–1,288,499 –16,744

9,420 –3,637 –1,204 197

13,856 –12 –1,824 –140

20,170 –3,619 71 –71

16,830 –8 78 –78

–1,007

–1,964

0

0


2012 | STIM ANNUAL REPORT

BALANCE SHEET SEK thousand Assets Non-current assets Intangible assets Current investment in new IT systems Capitalized system development costs Total intangible assets Property, plant and equipment Buildings and land New construction, extensions and renovations in progress Equipment Total property, plant and equipment Financial assets Participations in Group companies Participations in associated companies Receivables from Group companies Receivables from associated companies Total financial assets Total non-current assets Current assets Current receivables Accounts receivable Receivables from Group companies Receivables from associated companies Other receivables Tax assets Prepaid expenses and accrued income Total current receivables Current investments Cash and bank balances Total current assets Total assets

Group Note

8 9

10, 21 11

12 13

14

16

Equity and liabilities Equity Restricted equity Capital contributed Restricted reserves/Statutory reserve Total restricted equity Accumulated deficit/non-restricted equity Accumulated deficit/non-restricted equity Profit/loss for the year Total accumulated deficit/unrestricted equity capital Total equity Provisions Deferred tax Total provisions Current liabilities Liabilities to credit institutions Accounts payable Distribution liabilities Liabilities to Group companies Liabilities to associated companies Other liabilities Accrued expenses and deferred income Total current liabilities Total equity and liabilities Pledged assets Contingent liabilities

Parent Society

15

20

17

18

19

33,207 4,584 37,791

11,079 7,136 18,215

33,207 4,584 37,791

11,079 7,136 18,215

418,570 7,580 12,498 438,648

352,222 3,099 8,709 364,030

– – 9,596 9,596

– – 6,610 6,610

– 42,334 – 33,632 75,966 552,405

– 41,595 – 43,632 85,227 467,472

250 0 491,435 33,632 525,317 572,704

250 0 419,261 43,632 463,143 487,968

96,953 – – 26,384 2,866 175,384 301,587 66,704 116,917 485,208 1,037,613

120,969 – – 20,804 3,175 158,781 303,729 124,403 134,982 563,114 1,030,586

95,468 9,227 597 19,066 2,503 173,130 299,991 66,704 81,512 448,207 1,020,911

120,627 1,299 – 20,163 2,370 158,380 302,839 124,403 105,366 532,608 1,020,576

5 1,226 1,231

5 1,226 1,231

5 1,226 1,231

5 1,226 1,231

– 12,144 –1,007 – 13,151 –11,920

–10,180 –1,964 –12,144 –10,913

5 0 5 1,236

5 0 5 1,236

1,716 1,716

2,052 2,052

– –

– –

100,000 25,243 709,168 – 4,345 13,539 195,522 1,047,817 1,037,613 176,045 –

100,000 17,834 708,004 – 14,947 12,603 186,059 1,039,447 1,030,586 176,045 –

100,000 14,496 709,168 6,335 – 6,656 183,020 1,019,675 1,020,911 176,045 –

100,000 13,973 708,004 17,641 – 3,222 176,500 1,019,340 1,020,576 176,045 –

39


2012 | STIM ANNUAL REPORT

CASH FLOW STATEMENT SEK thousand

Group

Operating activities Payments from customers Payments to rightsholders Payments to suppliers and employees Cash flow from operating activities before payment of interest and income taxes

Parent Society

Note 1,496,347 –1,278,303 –201,927

1,459,117 –1,189,648 –172,781

1,465,800 –1,278,303 –194,855

1,132,022 –1,189,648 –165,466

16,117

96,688

–7,358

–223,092

9,420 –3,637 170 22,070

13,856 –12 –309 110,223

20,170 –3,619 –203 8,990

16,830 –8 –709 –206,979

–22,128 –85,253 675 –739 10,000 57,699 –389 – –40,135

–11,079 –4,338 457 2,971 – 137,182 –298,450 – –173,257

–22,128 –6,412 509 –72,175 10,000 57,699 – – –32,507

–11,079 –4,001 157 2,971 – 137,182 – 50 125,280

– – – –

100,000 – – 100,000

– – –337 –337

100,000 3,763 – 103,763

Cash flow for the year

–18,065

36,966

–23,854

22,064

Cash and cash equivalents at beginning of year Cash and cash equivalents at year-end

134,982 116,917

98,016 134,982

105,366 81,512

83,302 105,366

17

Interest received Interest paid Income tax Cash flow from operating activities Investing activities Investments in intangible assets Investments in property, plant and equipment Disposal of property, plant and equipment Investments in financial assets Amortization of financial assets Current financial investments Investment in subsidiaries Disposal of subsidiaries Cash flow from investing activities

8 10-11 10-11

21

Financing activities Loans from credit institutions Group contributions received Group contributions paid Cash flow from financing activities

ACCOUNTING AND MEASUREMENT PRINCIPLES

40

Accounting principles

Consolidated accounts

The applied accounting and measurement principles are in agreement with the Swedish Annual Accounts Act and the general recommendations of the Swedish Financial Accounting Standards Council, except for the accounting for Group contributions, which are reported in the income statement as Other income or expense. Unless otherwise indicated, the accounting principles are unchanged from the preceding year.

The consolidated accounts include subsidiaries where the parent company, directly or indirectly, controls more than 50 percent of the votes, or in any other way exercises a controlling influence. The Group's 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 value of the assets and liabilities - is eliminated in its entirety. Thus, the Group's equity includes only the portion of the equity in its subsidiaries that has arisen after the acquisition.


2012 | STIM ANNUAL REPORT

Accounting for associated companies "Associated companies" are companies that are not subsidiaries but in which the parent company, directly or indirectly, controls no less than 20% of the votes represented by all participations, or otherwise exercises a controlling influence. In the Group's financial statements, participations in associated companies are recognized using the equity method. According to this method, participations in a company are accounted for at acquisition value on the acquisition date and are then adjusted to reflect the Group's share of the change in the net assets of the associated company. The Consolidated Income Statement includes the Group's share in the profit/loss of associated companies. The parent company financial statements recognize shares in associated companies at acquisition value less any impairment losses. Revenue recognition Operating income includes - after deductions for value added tax rental income during the rental period and royalties in accordance with the economic impact of the current agreement. Interest income is recognized at the effective return.

The following depreciation periods are applied: Buildings Tenant adjustments Facade Walkway and elevators Passageway, locks and fiber Plumbing and plumbing fixtures System development Machinery and equipment Computers

50 years 5 years 30 years 25 years 15 years 10 years 5 or 10 years 5 years 3 years

Pensions The Group's employees are covered by the ITP scheme, which is managed by Alecta. Some senior executives have pension commitments in addition to the ITP scheme that fall within the national pension plan. These pensions are covered by insurance arrangements. Taxes

Intangible assets and property, plant and equipment

Reported income taxes refer to tax to be paid or refunded in respect of the current year. Income tax liabilities/assets are valued at the amounts that in the Society's view will be paid to or received from the Swedish Tax Agency. This judgement is based on the tax rules and tax rates that are in effect or that have been announced and are considered highly likely to be effected.

Intangible assets, such as computer software, are recognized at cost, less accumulated amortization. “Off-the-shelf� software is shown at cost.

Cash flow statement

Expenditure in connection with software developed or modified substantially on STIM's behalf is capitalized as an intangible asset if such software is deemed to lead to probable economic benefits that after one year will exceed the cost incurred. Capitalized expenditure on purchased software is amortized on a straight-line basis over the estimated service life, although subject to a maximum of 10 years. Amortization is applied as of the time at which the asset is ready to be placed in service. Thus, no depreciation is applied to new investments in progress. Property, plant and equipment is reported at acquisition cost, less accumulated depreciation. Expenditure to improve the performance of assets above their original level is added to the reported value of the asset. Expenses for repairs and maintenance are recognized as costs. Property, plant and equipment 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 property, plant and equipment and intangible assets.

The cash flow statement is prepared in accordance with the direct method. Reported cash flow consists only of the transactions that involve incoming or outgoing payments. Cash and cash equivalents comprise cash in hand and on deposit. Receivables Receivables are shown at the amount at which they are expected to be received, following an examination of the circumstances in each case. Foreign currency The Parent Society receives a not-insignificant part of its revenue in foreign currencies. The amounts are reported in SEK at the exchange rates prevailing on the date of conversion. STIM has no receivables or liabilities in foreign currency. Leasing All leasing costs reported by STIM refer to operational leases. Leasing costs for the year total SEK 0.3 million.

41


2012 | STIM ANNUAL REPORT

NOTES (SEK thousand)

Note 1.

OPERATING INCOME Group

Performance licenses

Parent Society

1,270,818

1,217,226

1,270,818

1,217,226

785,085

724,818

785,085

724,818

Online and new media

161,556

112,636

161,556

112,636

Radio

30,596

31,549

30,596

31,549

Public service TV & Radio

121,472

132,641

121,472

132,641

Swedish TV

166,540

164,829

166,540

164,829

Foreign TV

15,464

14,155

15,464

14,155

Copyswede TV

12,207

21,669

12,207

21,669

Performance of Swedish and foreign music in Sweden Of which,

Cinemas

17,301

14,677

17,301

14,677

Festivals, concerts and events

67,465

53,388

67,465

53,388

Dancing, entertainment

31,615

23,704

31,615

23,704

Shops, sales

47,265

46,795

47,265

46,795

Hotels

22,352

20,135

22,352

20,135

Restaurants

27,385

24,081

27,385

24,081

Municipal, county council and care

15,953

17,448

15,953

17,448

Sport and fitness

19,419

16,272

19,419

16,272

Music in the workplace

10,523

9,661

10,523

9,661

8,225

8,489

8,225

8,489

Transport Theatre, variety and cabaret

4,193

5,398

4,193

5,398

Church music

5,356

4,649

5,356

4,649

Miscellaneous

198

2,642

198

2,642

Performance of Swedish music abroad and foreign music sub-published by STIM-affiliated publishers for entire Nordic region

442,958

457,536

442,958

457,536

Performance of Swedish and foreign music abroad that STIM distributes on behalf of others

42,775

34,872

42,775

34,872

Mechanical reproduction licenses Relates to the right to record, reproduce and and sell phonograms, etc. See Note 17. Licensing was administered by NCB, Nordic Copyright Bureau, in Copenhagen for the Nordic territory.

165,456

184,805

165,456

184,805

43,635

30,994

19,542

23,749

983

1,158

STIM/Svensk Musik govt grant/subsidy

3,353

3,366

Private copying levy

10,185

7,383

10,185

7,383

Library levy

2,500

2,500

2,500

2,500

Administrative contribution from NCB

1,720

4,004

1,720

4,004

Other revenue STIM/Svensk Musik, hiring out of sheet music and phonogram sales

Rental income

11,482

3,899

Miscellaneous

13,412

8,684

5,137

6,099

3,763

Group contributions received by the Parent Society Total operating income

42

1,479,909

1,433,025

1,455,816

1,425,780


2012 | STIM ANNUAL REPORT

Note 2.

OPERATING COSTS Group

External costs Office and administration IT operations System development and maintenance Development costs brought forward Property costs Group contributions paid by the Parent Society Total external costs Personnel costs Salaries and other remuneration Social security expenses Pension expenses Other personnel costs Total personnel costs Of which Board of Directors, CEO and Deputy CEO Salaries and other remuneration Social security expenses Pension expenses Depreciation/amortization Capitalized system development expenditure Equipment Buildings Total depreciation/amortization Total operating costs

Parent Society

69,768 3,954 16,651 –20,460 9,059 – 78,972

55,779 3,905 9,422 –9,020 4,711 – 64,797

95,814 8,845 20,923 –20,460 – 337 105,459

91,565 9,221 9,543 –9,020 – – 101,309

54,835 17,528 7,868 3,537 83,768

56,721 17,810 8,416 3,755 86,702

31,776 12,959 2,328 2,272 49,335

30,621 9,814 5,045 1,994 47,474

7,808 2,453 2,044

6,791 2,134 2,093

6,513 2,046 1,750

5,342 1,678 1,768

2,552 3,732 6,578 12,862

2,577 3,477 2,415 8,469

2,552 2,917 – 5,469

2,577 2,665 – 5,242

175,602

159,968

160,263

154,025

Note 3.

INTRA-GROUP PURCHASES AND SALES

Of the Parent Society’s total operating income for 2012, 0.2 percent refers to sales to other Group companies. Of the Parent Society’s total operating costs for 2012, 52.7 percent refer to purchases from other Group companies.

43


2012 | STIM ANNUAL REPORT

Note 4. AVERAGE NUMBER OF

EMPLOYEES

Average number of employees

Average number of employees

Men

Women

Average number of employees

Men

Women 48%

Parent Society

61

51%

49%

64

52%

Subsidiaries

61

48%

52%

60

48%

52%

122

50%

50%

124

50%

50%

Number on balance sheet date

Men

Women

Number on balance sheet date

Men

Women

Group Board members and senior executives Parent Society Board members, including personnel representatives

10

80%

20%

10

80%

20%

Deputy Board members, including personnel representatives

8

50%

50%

8

50%

50%

CEOs, deputy CEOs and other senior executives

11

45%

55%

9

50%

50%

Group Board members, including personnel representatives

15

87%

13%

15

87%

13%

9

44%

56%

9

44%

56%

18

44%

56%

18

44%

56%

Deputy Board members, including personnel representatives CEOs, deputy CEOs and other senior executives

Note 5.

CONDITIONS OF

EMPLOYMENT FOR CEOS

44

Parent Society

Group

An agreement on severance payment has been entered into with the CEO, under which the CEO will be paid two years’ salary if the CEO’s employment is terminated by STIM. The required period of notice is six months on both sides. Any severance payments shall be reduced by salary or other remuneration that the CEO may earn from other activity during the period in which the severance payment is payable. The CEO's pensionable age is 60 years. The insurance arrangement is a defined-benefit plan.

An agreement on severance payment was entered into with the CEO of CEE Services AB, under which a severance payment amounting to 18 months’ salary will be paid in the event of employment being terminated by CEE Services. The required period of notice is 6 months on the part of CEE Services and 3 months on the part of the CEO.


2012 | STIM ANNUAL REPORT

Note 6.

FEES TO AUDITORS Group

Auditing Ă–hrlings PricewaterhouseCoopers Auditors appointed by STIM Other non-auditing assignments Total fees to auditors

490 30 331 851

510 30 90 630

Parent Society

355 30 331 716

380 30 90 500

Note 7.

DISTRIBUTION Group

Parent Society

Distribution, performance licences Performance in Sweden Performance abroad Performance abroad for distribution by STIM Total performance distribution

634,945 442,958 36,108 1,114,011

579,473 457,536 29,455 1,066,464

634,945 442,958 36,108 1,114,011

579,473 457,536 29,455 1,066,464

Distribution of mechanical reproduction licenses

165,456

184,805

165,456

184,805

32,566

37,230

32,566

37,230

1,312,033

1,288,499

1,312,033

1,288,499

Distribution of national funds Total distribution

45


2012 | STIM ANNUAL REPORT

Note 8.

CURRENT INVESTMENT IN NEW

IT SYSTEM

Parent Society

Group

Opening acquisition value Acquisitions during the year Closing acquisition value

11,079 22,128 33,207

– 11,079 11,079

11,079 22,128 33,207

– 11,079 11,079

Note 9. CAPITALIZED EXPENDITURE

FOR SYSTEM DEVELOPMENT Parent Society

Group

Opening acquisition values Acquisitions during the year Reclassification Closing accumulated acquisition values

88,262 – – 88,262

88,534 – –272 88,262

88,262 – – 88,262

88,534 – –272 88,262

Opening depreciation/amortization Depreciation/amortization for the year Reclassification Closing accumulated depreciation/amortization

–81,126 –2,552 –83,678

–78,821 –2,577 272 –81,126

–81,126 –2,552 – –83,678

–78,821 –2,577 272 –81,126

4,584

7,136

4,584

7,136

Closing residual value according to plan

46


2012 | STIM ANNUAL REPORT

Note 10.

BUILDINGS AND LAND Group

Parent Society

Buildings Opening acquisition value Acquisitions during the year Value on consolidation attributable to acquired subsidiary (see Note 21) Closing accumulated acquisition value

266,421 72,537 –

92,182 – 174,239

– – –

– – –

338,958

266,421

Opening depreciation/amortization Depreciation/amortization for the year Closing accumulated depreciation/amortization

–54,256 –6,578 –60,834

–51,841 –2,415 –54,256

– – –

– – –

278,124

212,165

140,057

11,301

389 140,446 418,570 276,000 171,000

128,756 140,057 352,222 276,000 171,000

– – – – –

– – – – –

Closing residual value according to plan, buildings Land Opening acquisition value Value on consolidation attributable to acquired subsidiary (see Note 21) Closing acquisition value, land Closing residual value according to plan, buildings and land Tax value of property of which, buildings

Note 11.

EQUIPMENT Group

Opening acquisition values Acquisitions during the year Disposals/Sales Closing accumulated acquisition values Opening depreciation/amortization Depreciation/amortization for the year Disposals/Sales Adjustment for differences, previous years Closing accumulated depreciation/amortization Closing residual value according to plan

Parent Society

22,367 8,235 –1,716 28,886 –13,658 –3,732 1,041 –39 –16,388

19,593 4,338 –1,564 22,367 –11,372 –3,477 1,191 – –13,658

18,517 6,412 –1,406 23,523 –11,907 –2,917 897 – –13,927

15,664 4,001 –1,148 18,517 –10,390 –2,665 1,148 – –11,907

12,498

8,709

9,596

6,610

47


2012 | STIM ANNUAL REPORT

Note 12.

PARTICIPATIONS IN GROUP COMPANIES Parent Society

Subsidiaries CEE Services AB Svensk Musik Swedmic AB Stim Fastighets Holding AB Total participations in Group companies Subsidiaries, indirectly owned Stimhuset KB Stim Fastighets AB

CIN

Reg’d office

556723-5923 556754-1338 556842-4880

Stockholm Stockholm Stockholm

CIN

Reg’d office

969696-4361 556745-2841

Stockholm Stockholm

Share of capital % Number of shares, thousands 100 100 100 1 100 1

Book value 12/31/2012 100 100 50 250

Book value 12/31/2011 100 100 50 250

Note 13.

PARTICIPATIONS IN ASSOCIATED COMPANIES

Group Associated companies, indirect holdings International Copyright Enterprise Services AB Opening balance Share in profit/loss of associated companies Closing balance

48

CIN 556723-5907

Reg’d office Share of capital and voting rights, % Stockholm 50

Number of shares, thousands 50

Carrying amount 12/31/2012

Carrying amount 12/31/2011

41,595 739

41,820 –225

42,334

41,595


2012 | STIM ANNUAL REPORT

Note 14. PREPAID EXPENSES AND

ACCRUED INCOME Group

Accrued performance revenue Accrued revenue, private copying levy Pre-paid expenses Miscellaneous Total prepaid expenses and accrued income

142,104 14,222 10,962 8,096 175,384

133,234 13,486 6,585 5,476 158,781

Parent Society

142,104 14,222 10,962 5,842 173,130

133,234 13,486 6,388 5,272 158,380

Note 15.

CHANGES IN EQUITY Group Restricted equity Capital contributed Non-distributable reserve Restricted reserves Total restricted equity

Parent Society

5 – 1,226 1,231

5 – 1,226 1,231

5 1,226 – 1,231

5 1,226 – 1,231

Non-restricted equity Accumulated deficit/non-restricted equity Profit/loss for the year Total non-restricted equity

–12,144 –1,007 –13,151

–10,180 –1,964 –12,144

5 – 5

5 – 5

Total equity

–11,920

–10,913

1,236

1,236

Note 16. BANK OVERDRAFT

FACILITY Both the Group and Parent Society have an unutilized bank overdraft facility of SEK 100 million.

49


2012 | STIM ANNUAL REPORT

Note 17.

DISTRIBUTION

LIABILITIES

Parent Society & Group

Distribution of performance revenue, Sweden Undistributed revenue from previous years Payment to Swedish rightsholders Payment to foreign collecting societies Outstanding payments of previous years' revenue Revenue for the year for distribution Payment to Swedish rightsholders Payment to foreign collecting societies Outstanding payment from revenue for the year Outstanding payment at year-end

533,230 –200,239 –128,021 204,970 671,053 –195,202 –124,802 351,049 556,019

506,615 –164,933 –101,087 240,595 609,133 –196,229 –120,269 292,635 533,230

Distribution of performance revenue, international Undistributed revenue from previous years Payment to Swedish rightsholders Outstanding payments of previous years' revenue Revenue for the year for distribution Payment to Swedish rightsholders Outstanding payment from revenue for the year Outstanding payment at year-end

162,916 –87,878 75,038 442,958 –374,637 68,321 143,359

121,615 –54,111 67,504 457,536 –362,124 95,412 162,916

Distribution of mechanical reproduction revenue Undistributed revenue from previous years Payment to Swedish rightsholders Outstanding payments of previous years' revenue Revenue for the year for distribution Payment to Swedish rightsholders Outstanding payment from revenue for the year Outstanding payment at year-end

11,858 –11,858 0 165,456 –155,666 9,790 9,790

17,948 –17,948 0 184,805 –172,947 11,858 11,858

709,168

708,004

Total distribution liability at year-end

Note 18.

ACCRUED EXPENSES

AND PREPAID INCOME Group

50

Parent Society

Prepaid performance revenue Prepaid rental income Accrued vacation pay liability Accrued social security expenses and special employer's contribution Other accrued expenses

171,383 6,653 4,005 3,751 9,730

169,524 904 3,438 1,717 10,476

171,383 – 2,110 2,446 7,081

169,524 – 1,998 1,845 3,133

Total accrued expenses and deferred income

195,522

186,059

183,020

176,500


2012 | STIM ANNUAL REPORT

Note 19. CONTINGENT LIABILITIES AND

PLEDGED ASSETS

Contingent liabilities

Pledged assets

On 4 August 2008, STIM entered into a guarantee (Swedish: proprieborgen) as for its own debt as regards CEE Services AB's commitments as stated in the shareholders' agreement between CEE Services AB and MCPS-PRS-Alliance Ltd, regarding the associated company, International Copyright Enterprise Services AB.

STIM has in its possession mortgages totaling SEK 27.2 million at Stettin 7 (Sandhamnsgatan 75–83). A mortgage totaling SEK 176.0 million for the property Krukomakaren 17 (Hornsgatan 103) is held by SEB as collateral for loans and an overdraft facility.

Group

For own provisions and liabilities regarding liabilities to credit institutions: Property mortgages Total pledged assets

176,045 176,045

176,045 176,045

Parent Society

176,045 176,045

176,045 176,045

Note 20.

TAXES Group

Tax on profit for the year Current tax for the year Current tax attributable to previous years Change in deferred tax for the year due to changed tax rate Total tax as per the income statement

–141 2 336 197

–151 11 – –140

Group

Deferred income taxes attributable to untaxed reserves at acquisition of Stimhuset KB (previously GE Real Estate Söder KB).

1,716

2,052

Parent Society

–73 2 – –71

–89 11 – –78

Parent Society

51


2012 | STIM ANNUAL REPORT

Note 21.

ACQUISITION OF

SUBSIDIARIES

On 30 December 2011, Stim Fastighets Holding AB acquired all shares in GE Real Estate Söder KB (CIN:. 969696-4361), now renamed Stimhuset KB, at an estimated consideration of SEK 300.6 million in accordance with the set out below. Final settlement of the consideration was made in 2012 via a payment of an additional SEK 0.4 million.

Group

Parent Society

Cash purchase consideration on day of taking possession Additional purchase price Acquisition-related costs

299,300 389 1,300

299,300 – 1,300

– – –

– – –

Total acquisition cost

300,989

300,600

The 2011 consolidated financial statements do not include any part of the net sales or profit/loss from the limited partnership since the acquisition was made at the end of the 2011 financial year. The Group profit/loss for 2012 includes the limited partnership's operations for the entire 2012 financial year. In the acquisition of the limited partnership, the total value of the acquired assets and liabilities, consideration and impact on the Group’s cash and cash equivalents was as follows: Group

Consideration paid previous years Buildings and land Redevelopment and extension in progress Current assets Provisions - deferred tax liability Current liabilities Total consideration Cash and cash equivalents in acquired company Impact on Group's cash and cash equivalents

52

Parent Society

300,600 389 – – – – 300,989

– 302,995 3,099 2,625 –2,052 –6,067 300,600

– – – – – – –

– – – – – – –

– 389

–2,150 298,450

– –

– –


2012 | STIM ANNUAL REPORT

SIGNATURES The income statement and balance sheet will be presented to the Annual General Meeting on May 22, 2013, for adoption. Stockholm, April 25, 2013

Kjell-Ă…ke HamrĂŠn Chairperson of the Board of Directors

Kenth Muldin CEO

Nutta Hultman

Martin Q. Larsson

Alfons Karabuda

Monica Ekmark

Erik Peters

Leif Pagrotsky

Kristina Rennerstedt

Johan Ekelund

Eva Botmar

Our auditor's report was submitted on April 25, 2013.

Evy Jakobsson Authorized public accountant

Kettil Skarby Appointed by the General Meeting

53


2012 | STIM ANNUAL REPORT

AUDIT REPORT To the annual general meeting of the Society Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a. Corporate Identity Number 702002-3524 Report on the annual accounts We have audited the annual accounts of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a. for the year 2012. The annual accounts and the consolidated accounts of the Society are included in the printed version of this document on pages 36 - 53. Responsibilities of the Board of Directors and the CEO for the annual accounts The Board of Directors and the CEO are responsible for the preparation and fair presentation of annual accounts in accordance with the Annual Accounts Act, and for such internal control as the Board of Directors and the CEO determine is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. Auditors’ responsibility Our responsibility is to express an opinion on these annual accounts based on our audit. The audit was conducted in accordance with generally accepted auditing standards. This implies that the authorized public accountant has performed the audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that the authorized public accountant complies with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free from material misstatement.

54

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the annual 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 in order to design audit procedures that are appropriate in the circumstances, 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, as well as evaluating the overall presentation of the annual accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the Society as of December 31, 2012, and of its financial performance and cash flows for the year then ended, in accordance with the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts. We therefore recommend that the annual general meeting of the Society adopt the income statement and balance sheet for the Society.


2012 | STIM ANNUAL REPORT

Report on other legal and regulatory requirements In addition to our audit of the annual accounts, we have also examined the proposed appropriations of the Society’s profit or loss and the administration of the Board of Directors and the CEO of Svenska Tonsättares Internationella Musikbyrå (STIM) u.p.a. for the year 2012. Responsibilities of the Board of Directors and the CEO The Board of Directors is responsible for the proposal for appropriations of the Society’s profit or loss, and the Board of Directors and the CEO are responsible for administration under the Swedish Cooperative Societies Act. Auditors’ 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.

determine whether any member of the Board of Directors or the CEO is liable to the Society. We also examined whether any member of the Board of Directors or the CEO has, in any other way, acted in contravention of the Swedish Cooperative Societies Act, the Annual Accounts Act or the Society’s Articles of Association. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion We recommend to the annual general meeting of the Society that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the CEO be discharged from liability for the financial year. Stockholm, April 25, 2013

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 Cooperative Societies Act. As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts, we examined significant decisions, actions taken and circumstances of the company in order to

Evy Jakobsson Authorizsed Public Accountant

Kettil Skarby Appointed by the general of the Society

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Photo: The pictures on page 13 and page 34 were taken by photographer Rickard Eriksson. The other pictures were taken by photographer Viktor G책rds채ter Graphic design: Ineko AB Printer: Ineko AB, which satisfies ISO 9001, ISO 14001 and FSC certification and is a Nordic Ecolabelled printing works.


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