Financial insights

Buma/Stemra represents the interests of music authors and publishers. On behalf of these rightholders, we collect money from users of music. These are people or organisations that record or play music. They pay us a fee for the use of this music. We often know exactly which songs have been used and how the money that we have collected should be distributed. We know this because the music user has informed us of this, or because we automatically recognize it on radio/TV or the internet.

What if it’s not clear which songs were used and how the money that we have collected is to be distributed? We then know the music category for which the fee is to be collected from the type of music user. A restaurant for example, falls into the category of ‘horeca’ (bars & restaurants). For them, it is an impossible task to register every piece of music that is played. The fee for bars and restaurants is therefore a fixed amount per m2. We investigate the type of songs that are played in the ‘horeca’ industry using random samples and we thereby define a reference repertoire. When we receive money from a restaurant, we divide that money between the songs in the ‘horeca’ reference repertoire, and then between the rightholders of musical works within this reference repertoire.

Online

What makes online use different – and has an impact on the type of distribution and the level of the remunerations – is the ability to offer music on demand on a wide scale. This means an enormous amount of different songs can be heard or recorded by a wide variety of end-users. Via traditional media (radio or TV), one song reaches thousands of listeners at once. This means we have to deal with the usage by, for example, 800,000 listeners, only once. With on demand channels, we actually have to process all those 800,000 listeners one by one. As a result, the process needed to distribute is expensive.

Costs

The wide range of music offered via online channels means that a lot of different songs can be downloaded by a wide variety of users. The result of this is that many more different songs are being listened to than there are over the radio, and the distribution process is therefore relatively more expensive.

From what amount is it reasonable to pay out money to a rightholder? We consider this on a regular basis. After all, we work with the collective money of our members, and the distribution must be at least higher than the administrative costs. For us, this is an important reason to keep looking for new solutions that can help improve the process and reduce this threshold.

Investment policy

Because Buma/Stemra licences and collects money for the use of music before distribution is possible, there is always a certain amount of money waiting to be distributed to rightholders. In order to keep the net cost of the organisation as low as possible for its rightholders, Buma/Stemra has, in the past, decided to invest this money optimally and within set risk standards. The financial gains are used for the benefit of the organisation, which ultimately reduce costs for the rightholders.

The investments of Buma/Stemra have been in shares and bonds. As much as possible has been invested in standard combined packages consisting of separate, stock market listed funds. At the moment, more than € 200 million is invested. Our investment policy is sensible, which means that the risks of the investments are kept as low as possible. Investments are spread by us as widely as possible in various funds.

Income and distribution

The indicator below shows how much Buma/Stemra received in royalties for its members and  how much of the copyright royalties that became available has been distributed.