The 2024 budget takes into account a notional return on investments, which is consistently used to cover some of the management costs. The result for the first half of 2024 is € 5.9 million positive, mainly due to price increases in shares and bonds in Buma’s investment portfolio. This result is € 3.7 million higher […]
Management costs in the first half of 2024 were budgeted at € 22.9 million. In 2024, the indexation of contracts, including the salaries of our employees, will result in a higher level of expenditure than in 2023. Furthermore, BumaStemra will continue to strengthen the organisation and implement the strategy. Several components of our new IT […]
In the first half of 2024, € 62.2 million was distributed, which is less than the € 66.2 million budgeted. The main reasons for the deficit compared to the 2024 budget are timing differences regarding Online and VOD funds, which are planned for the second half of the year. The Latest Estimate expects this deficit […]
Royalties realised in the first half of 2024 amounted to € 172.0 million. This is € 14.7 million higher than the royalties in the first half of 2023 and € 7.6 million more than budgeted. In the Latest Estimate, the expected collection for 2024 amounts to € 300.0 million. The main reasons for the increase […]
Message from the Management Board In this semi-annual report, we explain the current developments in 2024 and the expectations for the coming period. Following the record collection of € 282.8 million from music use in 2023, the first half of 2024 was characterised by further growth in royalties. The collection of € 172.0 million is […]
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In the above overview, the figures up to and including 2020 related to the appropriated reserve. In 2021, the appropriated reserve was transferred to a provision presented on the balance sheet for temporary differences in cost absorption. The provision for temporary differences in cost absorption contains the cumulative differences in cost absorption that will be […]
The movements in this provision in 2023 concern a distribution of € 1.7 million and the positive balance of cost coverage for 2023: € 0.6 million. The distribution of € 1.7 million related to the difference between the position of the provision as at 31 December 2022 (€ 5.7 million) and the upper limit of the provision set for 31 December 2022 (€ 4.0 million). On 17 May 2023, the GMA approved the payment of this amount. The funding surplus is mainly due to the fact that the withheld administration fees were € 0.6 million higher than budgeted due to the higher royalties. Management costs were € 0.5 million lower than budgeted, the other and financial income together amounted to € 0.1 million lower than budgeted. Because the budget for 2023 had assumed a funding shortfall of € 0.6 million, the total funding surplus amounts to € 0.6 million. The provision therefore ends at € 1.6 million above the upper limit set for the end of 2023.
The movements in this provision in 2022 concerned a distribution of €9.3 million and the positive net cost absorption for 2022: €0.7 million. The distribution of €9.3 million related to the difference between the position of the provision as at 31 December 2021 (€14.3 million) and the upper limit of the provision (€5.0 million). On 25 May 2022, the General Members’ Meeting approved the payment of this amount.
The funding surplus was mainly due to the fact that the withheld administration fees were €1.0 million higher than budgeted due to the higher royalties. Management costs were €0.3 million lower than budgeted, the other and financial income together amounted to €0.4 million higher than budgeted. Because the budget for 2022 had assumed a funding shortfall of €1.0 million, the total funding surplus amounts to €0.7 million.
The movement in this provision in 2022 concerned the negative net cost absorption for 2022: €24.6 million. This was largely due to the negative investment result, which was €29.0 million lower than budgeted. On the other hand, due to higher royalties, the withheld administration fees were €3.6 million higher than budgeted. Management costs were €1.5 million lower than budgeted. Because the budget for 2022 had already assumed a funding shortfall of €0.8 million, the total funding shortfall amounts to €24.6 million.
Since the interest on liquid assets was negative in 2022 up to and including September, the financial income and expenses were €0.2 million negative on balance.
This standard focuses on the trend of the management costs level. The standard stipulates that the costs should not increase any more than the consumer index price of the year to which the annual report relates. The budgeted cost increase in 2023 is 20.1%. The actual CPI increase for 2023 will be known in early 2024.
The budgeted cost increase in 2023 is calculated in relation to the actual costs in 2022, which are lower than budgeted. The higher management costs in 2023 are caused by improvement and change initiatives, including the replacement of the IT system. Because the start was hampered by Covid-19 and tightness in the labour market, the expected growth in costs to make this possible has also remained limited in previous years. Improvements are expected in the 2023 budget.
Under this item, the management costs are related to the distribution. In the 2023 budget, this results in an expense ratio of 18.2% for Buma/Stemra. This is higher than in previous years, which is caused by the higher budgeted management costs in 2023 due to further professionalisation of the organisation. This is expected to lead to higher collection flows from 2024. This will then also have the effect of further increasing the distribution in the future, as a result of which the cost percentage in relation to the distribution is expected to decrease from 2025. Buma/Stemra applies the cost standard with regard to collection and not the cost standard with regard to distribution, because the latter offers the option of controlling.
Under this item, management costs are related to the royalties. In the 2023 budget, this jointly results in an expense ratio of 14.6% for Buma/Stemra. Despite the rising management costs, this is lower than in the budget for 2022 (14.8%), which is caused by the higher royalties in 2023. The further professionalisation of the organisation is expected to lead to higher collection flows from 2024. This will also have the effect of further decreasing the cost percentage in relation to the royalties.
The provision for temporary differences in cost coverage includes the €6.6 million appropriated reserve available at the end of 2020 plus the credit balance cost coverage over 2021 of €7.7 million.
This balance cost coverage includes a one-off gain of €7.1 million as a result of the amended Distribution Rules regarding the withholding of administrative fees. The administrative expenses were also lower than budgeted.
The provision for temporary differences in cost coverage includes the €33.8 million appropriated reserve available at the end of 2020 plus the credit balance cost coverage over 2021 of €10.7 million.
This balance cost coverage contains a €4.1 million difference between the realised investment result (€6.9 million) and the normative investment result used to partly cover the administrative expenses (€2.8 million). In addition, a one-off gain of €5.4 million was realised as a result of the amended Distribution Rules regarding the withholding of administrative fees, and the administrative expenses were lower than budgeted.
Under this item, the management costs are related to the copyright royalties. The standard is 15%.
In the 2022 budget Buma/Stemra jointly will meet this standard with a 14.8% cost ratio. On the basis of the provisional cost allocation, Stemra is expected to arrive at a cost ratio of 15.9%.
A decline is expected once the incidental high costs of replacing the obsolete IT system normalise and the results of the strategy implementation become visible.
Under this item, the management costs are related to the distribution. The standard is 15%.
In the 2022 budget Buma/Stemra jointly does not meet this standard with a 15.8% cost ratio. This is mainly due to the COVID-19 impact on Buma’s funds available for distribution and the incidental high costs for the replacement of the outdated IT system. Once these effects normalise and the results of the implementation of the strategy become visible, this cost ratio is expected to decrease. Stemra is, however, expected to satisfy this standard in 2022.
The standard focuses on the trend of the management cost level. The standard stipulates that the costs should not increase any more than the consumer index price of the year to which the annual report relates.
The budgeted cost increase in 2022 will turn out higher than the change in the consumer price index for the year. This is due to the catching up on improvement and change initiatives postponed from previous years, including the replacement of the IT system. The actual change in the consumer price index for 2022 will not be known until early 2023.
The deficit from ordinary activities for 2020 was taken from the appropriated reserve. The extraordinary expense for the payment into the Music Industry Emergency Fund was taken from the continuity reserve. This appropriation of the result is included in the financial statements.
The movement in this provision in 2023 concerns the positive balance of cost coverage for 2023: € 17.0 million. This surplus was largely due to the positive investment result, which was € 11.5 million higher than budgeted. Furthermore, due to higher royalties, the withheld administration fees were € 1.4 million higher than budgeted. Management costs were € 1.8 million lower than budgeted and (other) financial income together were € 0.3 million higher than budgeted. Because the budget for 2023 had already assumed a funding surplus of €1.9 million, the total funding surplus amounts to € 17.0 million; the provision thus ends between the upper and lower limits determined for the end of 2023.
Under this item, the management costs are related to the distribution. The standard is 15%.
In the 2021 budget, this standard is not satisfied. This is primarily because of Buma’s decreasing distribution in 2021, arising from the lower collection. Stemra is expected to satisfy this standard, however; distribution there is expected to increase, especially due to the catching up on private copy funds from previous years.
The standard focuses on the trend of the management costs level. The standard stipulates that the costs should not increase any more than the consumer index price of the year to which the annual report relates.
The budgeted cost increase in 2021 will turn out higher than the change in the consumer price index for the year. This is due to the catching up on improvement and change initiatives postponed from previous years, including the replacement of the IT system. The actual change in the consumer price index for 2021 will not be known until early 2022.
Over the series of several years, since the introduction of the standard, the development of the management costs has remained within the development in the consumer price index.
Under this item, the management costs are related to the copyright royalties. The standard is 15%.
In the 2021 budget, this standard is not satisfied, mainly because of the decrease in collection of royalties as a result of the coronavirus measures. The budgeted management costs are also increasing, especially in connection with the necessary replacement of the outdated IT system. Without the impact of the coronavirus, the expense ratio would have remained below the standard of 15.0%.
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Stemra’s management costs increased by €0.6 million to €5.3 million in 2022. This is €0.3 million lower than the budget for 2022. The allocation key of 83/17 (BumaStemra) has remained unchanged compared to previous years.
Stemra’s management costs rose mainly because the charged-on personnel costs of Buma increased in order to further implement the strategy. Growth in (external) FTEs forms part of this implementation. There was also an increase in costs due to the programme to replace the IT system (Pyramid) and higher outsourcing costs. Variable costs for outsourcing the processing of online music use rose in line with growth in this market segment.
Stemra’s management costs in 2022 consisted of personnel costs (€2.4 million), general costs (€2.7 million) and accommodation costs (€0.2 million).
Buma’s management costs increased by €2.8 million in 2022 to €25.9 million. This was €1.5 million lower than the budget for 2022. The allocation key of 83/17 (BumaStemra) has remained unchanged compared to previous years. Personnel costs allocated to Buma increased by €1.5 million and other general costs fell by €1.4 million. Accommodation costs were virtually the same and amortisation and depreciation decreased by almost €0.2 million.
Buma’s management costs in 2022 consisted of personnel costs (€11.9 million), general costs (€11.8 million), depreciation costs (€1.5 million) and accommodation costs (€0.7 million).
The surplus of the operating statement for 2019 is added to the appropriated reserve. This appropriation of the result is included in the financial statements.
The difference between the realised investment result (€ 8.7 million) and the normative investment result that is used to partially cover the management costs (€ 2.0 million), i.e. €6.7 million, was added to the appropriated reserve. This appropriation of the result is included in the financial statements.
The difference between the realised investment result (€ 15.9 million) and the normative investment result that partially covers the management costs (€ 2.2 million), i.e. € 13.7 million, is added to the appropriated reserve. This appropriation of the result is included in the financial statements.
The standard focuses on the trend of the management costs level. The standard stipulates that the costs should not increase any more than the consumer index price of the year which the annual report relates to.
Potentially, the 2020 cost increase due to initiatives for improvement and change will be higher than the CPI change in that year. This cannot be determined – and if necessary explained – until the actual CPI change is known at the beginning of 2021.
Under this item, the management costs are linked to the distribution. The standard is 15%. This standard is met in Budget 2020.
Under this item, the management costs are related to the royalties. The standard is 15%. This standard was satisfied in 2022.
The CPI movement in 2022 was 10.0%. The cost development at Stemra exceeded this percentage; this standard was therefore not satisfied in 2022. This is explained by the fact that Stemra invested in realisation of the strategy in 2022, which had been postponed in previous years due to COVID-19.
Under this item, the management costs are related to the distribution. The standard is 15%. This standard was satisfied in 2022.
Under this item, the management costs are related to the royalties. The standard is 15%. This standard was satisfied in 2022.
The CPI movement in 2022 was 10.0%. The cost development at Buma exceeded this percentage; this standard was therefore not satisfied in 2022. This is explained by the fact that Buma invested in realisation of the strategy in 2022, which had been postponed in previous years due to COVID-19.
Under this item, the management costs are related to the distribution. The standard is 15%. This standard was satisfied in 2022.
Under this item, the management costs are related to the royalties. The standard is 15%. This standard was satisfied in 2022.
Income rose by €6.8 million in 2022. This was due to a one-off gain (€7.1 million) in 2021 resulting from the transition from realising the cost withholding at the distribution moment to realising it at the collection moment.
The financial income and expenses in 2022 mainly concerned the net investment result (-€26.7 million). Both the return on equity investments (-19.1%) and the return on fixed-income securities (-13.8%) were negative. The negative investment result for 2022 was in line with the overall development of the investment markets, which experienced a bad year due to, among other things, the war in Ukraine and the rise in interest rates.
The negative investment result was absorbed by the provision for temporary differences in cost absorption.
Income rose by €1.1 million in 2022. This was due to higher administration fees on collection (+€6.4 million) due to higher royalties revenue in 2022. The increase in the total income at Buma was lower because in 2021, a one-off gain (€7.1 million) was recognised resulting from the transition from realising the cost withholding at the distribution moment to realising it at the collection moment.
As in 2022, royalties from abroad in 2023 remained almost the same as in the previous year.
In the Private Copy / Public Lending Rights category, € 1.3 million more was collected in 2023 compared to last year. This was mainly thanks to improved market conditions.
The growth in royalties from Online music use also continued in 2023. As in previous years, Online will have the largest share in Stemra’s collection in 2023 (39%), while in 2009, it still had the smallest share (3%). In 2023,
Stemra’s collection from Online music use increased by € 2.0 million, or 12%.
At € 7.2 million, the royalties from Radio & TV are in line with the revenues from 2022.
The € 0.6 million decline in royalties from Productions In Own Management (PIEB) and Special Licensing was in line with the declining trend of recent years.
BIEM
The royalties from BIEM contracts for mechanical sound carriers, a traditional Stemra market segment, increased by € 0.2 million compared to 2022. This was mainly thanks to improved market conditions.
Abroad Buma
Royalties from abroad fell by € 1.5 million in 2023 compared to 2022.
Royalties in the Online market segment fell to € 39.9 million in 2023. This is caused by a limited number of large contracts for which renegotiations are still ongoing. Due to the above adjustment, the Online share in Buma’s total collection fell from 20% in 2022 to 17% in 2023.
The Restaurants and Bars market segment was hit hardest by the Covid-19 measures and exceeded the 2019 level of royalties for the first time in 2023 (€ 15.9 million).
Revenues from Work Spaces and Shops and Stores already showed a full recovery in 2022 and increased further by € 5.3 million to € 38.5 million in 2023.
In 2023, income from the Live Performances market segment amounted to € 47.3 million. This is a large increase compared to last year (€ +11.6 million). This increase is largely driven by higher ticket prices and an increase in the number of licensed performances and events, which increased from 55,000 in 2022 to 73,000 in 2023. The share of this market in Buma’s total collection rose from 16% in 2022 to 20% in 2023.
The Radio, TV and Providers market segment grew from € 1.7 million to € 76.4 million. With 32% in 2023, this remains the market segment with the largest share of Buma’s total collections.
