Results, perspectives, challenges SACEM Midem 2010

1. Results, perspectives, challenges SACEM Midem 2010 1

2. I – Revenues remained stable

3. 1. Origin of rights collected • A 360-degree royalty collection system • The comparison with record producers’ turnover is valid only on phonograms’ collection (excepting videos) and part of the Internet-Multimedia collection (excepting musical illustration of websites) SACEM royalty collection perimeter 12 % Phono et videos 36 % Radios & Tvs Perimeter of record producers’ turnover 1 % Internet 34 % General rights: live music, discotheques, public venues… 10 % Foreign rights 7 % Private copy levies

4. 2. Origin of rights : comparing 2003-2009 2003 2009 4

5. 3. Royalty collection remains stable in a challenging economic environmentfor a number of members which does not stop increasing+4400 new authors composers and +260 new publishers in 2009 1% -0,4% 0,4% -0,2% 4,3% 2,5%

6. 4.Thanks to an efficient management 541 K€ (est) 538 K€ 514 K€ 508 K€ 484 K€ 6

7. 5.A key international player 7

8. II – But major discrepancies depending on sectors 8

9. 1. Live music: benefiting the big shows • Live music revenues are benefiting mainly heritage acts and big shows. • The 20 largest tours account for 25%of the total amount of rights collected for live musicand for 62% of professional shows. • Professional shows account for 40% of live music revenues with 30M€ of rights collected.

10. 2. Rights collection: the 20 top shows of 2009 in France French acts account for 13 of the 20 shows and make up the top 3 : JOHNNY HALLYDAY MYLENE FARMER CLEOPATRE U2 AGE TENDRE & TETES DE BOIS MOZART L'OPERA ROCK AC/DC FRANCK DUBOSC BENABAR TRYO INDOCHINE DEPECHE MODE LENNY KRAVITZ RESTOS DU CŒUR JULIEN CLERC CALOGERO RFM PARTY 80 ANDRE RIEU BHARATI TINA TURNER 10

11. 3. Music on TV: globally level The volume of music (in minutes) broadcast on TV is stable. 11

12. 4. But songs in a disappearing act The global broadcasting of French and foreign songs (i.e. pop/variety music performances by artists ) is strongly decreasing on all channels: - 32% between 2000 and 2008 12

13. 5. Especially on prime time The prime-time broadcasting of French and foreign songs is decreasing faster: - 50% between 2000 and 2008. - 16% - 42 % - 34 % - 77 % - 78 % 13

14. 5. Internet still unable to compensate for loss in the physical market • The downward trend in music rights collected from phonograms goes on, Internet still not taking over. • Rights collected by Sacem on Internet/mobile phones are 6,5 millions € in 2009, less than 1% of its global revenue. * Internet: online and mobile phone music excepting background music for websites

15. 6. A total loss of 321 M€ on phonograms without compensation - 321,5 M€ 15

16. 7. The nightmare of the long tail and the challenge of nanodistribution • The distribution of rights collected from Internet music services implies processing huge volume of information and dealing with growing complexity. • The 4 most recent distributions of rights (April, June, October, January) of Sacem are a typical example: • Over 409 millions of lines processed • (downloads and streaming declared to Sacem) • Management of 2,6 millions different titles • 6, 495 M€ distributed

17. III– Zelnik mission: a missed opportunity Photo: Didier Plowy/MCC 17

18. 1. Despite some interesting proposals..

19. 2. The mission fails to address the main issue… No measures to solve the immediate problem of loss of remuneration for music industry rightholders No compensation for current and past losses Authors, composers and publishers and their issues are totally left out 19

20. 3. What about the authors, composers and music publishers ? They are the only category of rightholders in France not to have benefited from any type of compensation whatsoever these past years: > Producers, performers Equitable remuneration rate on radios x 2 (2008, 2009), and Zelnik Mission proposes to increase it further in exchange for the collective management of neighbouring rights on the Internet Equitable remuneration rate for public places x 3.5 (January 2010) > Producers Tax credit since 2006, boosted by Zelnik Mission 20

21. 4. Sacem’s proposal > A minimal and reasonable level of contribution. > Direct support to national phonographic production. > Remuneration extended to self-produced and emerging authors and artists on the different networks. > An incentive for ISPs, and for consumers, to favour legal websites and to regulate unauthorised exchanges in the futurebecause the compensation is adjustable. > A fast and significant response to the economic needs of the music industry in this period of transition. > The only proposal to benefit all players in the music industry in a transparent and balanced manner. > Takes into account the unwarranted enrichment of operators carrying protected works over the past 10 years. > A pragmatic and lawful approach (Pr.Gaudemet’s study, October 2009). > Compatible with Europe's approach. Advantages of an adjustable compensation paid by IPS 21

22. IV– Pan European licenses 22

23. 1. « Online Commerce Roundtable » 26 May 2009 - N.Kroes Find solutions to online music licensing (fragmentation of repertoires) Participants: Amazon, BEUC, EMI, iTunes, Nokia, PRS For Music, Sacem, STIM, Universal 19 October 2009: joint agreement is issued. 2 specific initiatives followed for Sacem > Non exclusive agreement in progress with EMI > Cooperation between European societies to build a common portal offering the widest possible repertoire on a Pan european base for on-line services: - respecting the liberty of choice of rightholders - on a voluntary basis - additional but not compulsory offer for online music services 23

24. Conclusion 24

25. Thank you Your contact Elisabeth Anselin 01 47 15 45 32/ 06 07 35 67 91 elisabeth.anselin@sacem.fr 25