Annual report Buma/Stemra 2010
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Annual report 2010
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Photo: Mike Breeuwer
Buma Harpen Gala 2010
This is Buma/Stemra The facts: - There is no European market for online music licenses even though everyone is said to be striving for a uniform European market. - The lengthy formation of the cabinet has delayed the discussion about the renewal of copyright by a year. - The exploitation of Phono-Mechanical rights has, to all intents and purposes, become unfeasible, not just at Buma/Stemra but also at other societies in Europe. - The courts have endorsed that downloads from illegal sources are allowed under Dutch law. - The cabinet-Rutte is inflicting cutbacks of c 200 million on Dutch culture, in addition to that the VAT rate on admission tickets for cultural performances is going from 6% to 19%. The opportunities: -B uma/Stemra boasts 20,000 music authors and with that is a factor of significance. - I t is the copyright organization with proportionately the highest distribution. - I t goes the furthest to make the exploitation of copyright for music authors as flexible as possible. - I t has a top 3 position in the field of cost efficiency among the collecting societies in Europe. -B uma Cultuur is the most important promoter of Dutch copyright.
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Photo: Mike Breeuwer
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Annual report 2010
Table of contents
Key figures
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Buma Five-year plan
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Stemra Five-year plan
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Report of the management boards
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Directors’ Report
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Buma financial statements for 2010
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Stemra financial statements for 2010
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Management boards and directors
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Key figures Turnover development Buma/Stemra
Results Buma/Stemra
Turnover in € millions
Results in € millions 30
200
20 150
10 0
100
-10 50
-20 -30
0
2006
48,421 106.002
2007
2008
2009
51,576
45,041
40,680
112.770
119,972 129,432
113.575
140,004
2010
35,662
119.972
129.432
136,440
140,346
2006
2007
2008
2009
2010
(S) (B)
Financial results Result on ordinary activities
Stemra (S)
Buma (B)
Operating results
Breakdown of 2010 turnover in percentages – Buma
Breakdown of 2010 turnover in percentages – Stemra
0.5% Performing Rights Online
1.4% Mechanical Rights Online
Licensing
Licensing
7.5%
Performing Rights Abroad
9.0% Home Copy / Lending Rights
8.5%
Sales outlets
10.6% Mechanical Rights Abroad
8.7%
Cable
17.7% Special Licensing / Private Labels
12.7% Workplaces
12.1% Catering
14.4% Radio & TV Mechanical Rights
14.2% Stage
46.9% Biem Phonomechanical
Rights / Central Licensing
35.8% Radio & TV Performing Rights
Distribution by Buma
Royalties in € millions
140 130 120 110 100 90 80 70 60 50 40 30 20 10 0
Distribution by Stemra
Royalties in € millions
80
60
40
20
0 2006
6
2007
2008
2009
2010
2006
2007
2008
Members and participants
Associations and participants
Foreign organisations
Foreign organisations
Fund for cultural and social purpose
Administrative costs deducted
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Staffing levels as per year-end Buma/Stemra As per year end 300
Number of FTE
250 200 150 100 50 0 2006
Part-time
2007
2008
2009
2010
Full-time
Turnover segmentation Buma (x € 1,000)
2010
Radio & TV Performing Rights Stage Catering Workplaces Sales Outlets Performing Rights Online Licensing Cable Performing Rights Abroad
2009
2008
2007
2006
50,228 19,899 17,015 17,799 11,940 757 12,168 10,540
51,329 21,513 14,663 13,777 11,716 893 12,396 10,153
52,541 20,799 14,710 15,215 11,901 946 13,035 10,857
45,714 18,249 15,744 15,143 11,427 840 12,292 10,023
42,286 18,354 15,431 12,620 10,605 564 11,387 8,725
140,346
136,440
140,004
129,432
119,972
2009
2008
2007
2006
Turnover segmentation Stemra (x € 1,000)
2010
Biem Phonomechanical Rights / Central Licensing 16,684 18,229 19,866 24,599 23,917 Special Licensing / Private labels 6,306 5,656 8,860 9,930 7,064 Radio & TV Mechanical Rights 5,138 7,266 6,211 5,276 6,124 Mechanical Rights Online Licensing 515 1,314 1,219 1,664 1,081 Home Copy / Lending Rights 3,223 3,533 4,184 4,269 4,727 Mechanical Rights Abroad 3,796 4,682 4,701 5,838 5,508 35,662 40,680 45,041 51,576 48,421
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Buma five-year plan for 2006 – 2010 Buma five-year plan for 2006-2010 (x ₏ 1,000)
2010
2009
2008
2007
2006
Distribution Members and participants 78,925 81,537 80,406 73,015 66,497 Foreign organizations 47,427 44,010 44,336 39,703 42,739 Distributed in the reporting year
126,352
125,547
124,742
112,718
109,236
To be distributed at year-end
162,211
156,536
153,816
151,991
136,798
Turnover
140,346 136,440 140,004 129,432 119,972 Profit and loss account Income 3,357 3,140 3,033 2,709 2,828 Expenses -16,919 -16,381 -15,195 -14,659 -14,772 Operating result -13,562 -13,241 -12,162 -11,950 -11,944 Financial result 8,496 8,322 -7,782 10,429 9,392 Result on ordinary activities -5,066 -4,919 -19,944 -1,521 -2,552 Key index figures Total turnover index (2006 = 100) 117.0 113.7 116.7 107.9 100 Operating costs index (2006 = 100)
114.5
110.9
102.9
99.2
100
Operating costs as % of turnover
12.1%
12.0%
10.9%
11.3%
12.3%
Distributed in the reporting year as % of (turnover last year -/- result on ordinary activities last year)
96.1%
104.6%
97.5%
96.0%
98.8%
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Stemra five-year plan for 2006 – 2010 Stemra five-year plan for 2006-2010 (x ₏ 1,000)
2010
2009
2008
2007
2006
Associates and participants Foreign organizations
31,297 5,453
37,989 6,276
38,700 8,198
46,071 7,946
45,444 8,079
Distributed in the reporting year
36,750
44,265
46,898
54,017
53,523
To be distributed at year-end
38,755
40,863
45,438
49,175
51,332
Turnover
35,662
40,680
45,041
51,576
48,421
Income Expenses
3,700 -8,241
4,377 -8,975
4,728 -9,726
5,418 -9,446
5,248 -9,652
Operating result
-4,541
-4,598
-4,998
-4,028
-4,404
Financial result
4,821
4,187
-1,132
4,312
4,325
280
-411
-6,130
284
-79
Total turnover index (2006 = 100)
73.6
84.0
93.0
106.5
100
Operating costs index (2006 = 100)
85.4
93.0
100.8
97.9
100
23.1%
22.1%
21.6%
18.3%
19.9%
Distribution
Profit and loss account
Result on ordinary activities
Key index figures
Operating costs as % of turnover
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Armin van Buuren Annual report 2010 | Buma/Stemra
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Photo: Roy Laros and Guido van de Zanden
Report of the management boards
Report of the management boards Financial statements
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t is our pleasure to hereby present you with the financial statements of the Vereniging Buma (Buma Association) and the Stichting Stemra (Stemra Foundation) for the financial year 2010. Both sets of financial statements have been audited by KPMG Accountants N.V. and been issued with an unqualified report. We recommend you to approve the financial statements for 2010 of Buma and the financial statements for 2010 of Stemra, including the board of directors’ proposals, and to discharge the management board and board of directors.
Meetings he management boards met formally six times in the year under review. The Supervisory Board met three times. During the management board meetings a large number of topics were discussed. All of these topics were dealt with in one or more meetings. Some of them will develop into proposals which will reach the members in 2011. Matters which were discussed concern such things as complaints development, housing, the establishment of the Podcasts working group (in which charges for the use of music in podcasts are determined), the progress that the Pastors working group is making and the start of the joint basic administration (in which the users’ data is shared between Buma and Sena). The management boards have also taken note of the proposals of the College of Copyright Supervision with regard to sound management and transparency. They have considered these proposals in their deliberations.
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Flexibility he management boards have thoroughly gone into proposals to adjust the regulations. This is necessary as the members have emphatically brought to the fore their desire for making a greater flexibility possible in the way in which royalties are apportioned in the composers part. More and more frequently our rights owners work with so-called co-writes. Several composers and lyricists are then involved in the creation of a musical work. Within the current regulations each writer receives an equal share in the royalties but the desire is that the authors themselves can come to agreements about that, in which the publishers share stays the same. The management boards have also approved a proposal about a so-called Royalty Free Service in which the promotion of own music for non-commercial use on the own website and on CD and DVD may occur free. Furthermore, the management boards have accepted the proposal concerning flexible rights transfer
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Online. The appraisal concerning various sorts of use of music was also discussed. It was decided that the Management Committe on Distribution will present a clear proposal in 2011. The future of Stemra n the past management year a great deal of attention was given to the future of Stemra. The issue is well-known: the sale of music carriers is dropping at a high tempo and is not being replaced by income from the use of music on the internet. This latter is the result of a lack of adequate legislation for the protection of copyright in the digital world. Furthermore, the royalties from the commission percentage, according to the Cannes-agreement, Stemra may charge, do not offset the cost of maintaining the administration in a financially justified way . All the sister organizations of Stemra in Europe have the same problem. Even large societies like Gema and MCPS no longer manage to carry out the exploitation and administration of Phono-Mechanical rights in a financially healthy way. The Management Board have had many discussions in the past year to see where favourable solutions lie. It is clear that, no matter what, the administrations are going to have to be combined. There are good arguments, both from the side of the industry as of the societies, to keep up the administration of PhonoMechanical rights in Europe. The current year should make clear if this leads to a long-term solution in which a healthy operational management of this administration is ensured.
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Politics ne of the matters which has started to move is that the Ministry of Justice has published a rough draft of Authors Rights Contracts. The only concrete step that has been taken in European, the context is that the European parliament accepted the Gallo-Report at the end of September. This report recognizes the problem of the illegal use of music, for instance, on the internet and the fact that measures must be taken against this. It is now a question of waiting to see what the European Commission is going to do with the recommendations of the report.
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We anxiously await State Secretary Teeven’s spearhead memorandum, which was announced in 2010, in which the position of copyright in the digital world will also be discussed.
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Social-Cultural n several management board meetings the deduction percentage for social-cultural was discussed. The balance that is available for this purpose must, for instance, be able to cover the (conditional) obligations that the fund entered into. Furthermore, the annual allocations and withdrawals are brought in balance. Therefore it was decided to reduce the deduction percentage in three steps from 10% to 8%.
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The organization he promotion of the importance of copyright and the role that Buma plays in this as well as implementing the PRpolicy have been on the agenda several times. The management boards decided, after lengthy deliberation, to set up a PR & Communication department for both Buma Cultuur and Buma. The management boards have ascertained that the policy of Buma Cultuur as formulated in 2009 has successfully been taken up in 2010 with vigour. During the managerial discussions on the budget and allocation for Buma Cultuur, specific support of certain genres, such as jazz was also discussed. In the light of the development of the outlook for Buma Cultuur, attention will also be given to the way in which genres, which are commercially interesting and those which are not are supported, also partly in relation to any possible pay back opportunities of an event on the one hand and cultural aspects on the other. The management boards have also spoken about the possibility of undertaking the activities of Musi©opy.
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Second phase outsourcing n accordance with the original decision making concerning outsourcing, the board of directors started the second phase of the outsourcing project in the second half of 2010. In this phase the operations are transferred from Prague to India. As of 2011 operations for Buma/Stemra in Prague ceased and all activities take place under the responsibility of Accenture in India.
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The General Members’ Meeting he Joint General Members’ Meeting of the Vereniging Buma (Buma Association) and the Meeting of Affiliates of the Stichting Stemra (Stemra Foundation) took place in Amsterdam on May 17, 2010. As introduced in 2009 the public part again had a number of workshops and seminars with various topics that are of interest to the visiting rights owners. At the meeting the financial statements of Buma and Stemra were presented by Mr Cees Vervoord for the last time in his capacity as chairman of the Board of Directors and he gave his explanatory remarks on the implemented policy.
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The members gave their approval for the financial statements of Buma 2009 and the financial statements of Stemra 2009 and discharge management board and board of directors for the implemented policy. Also the meeting agreed to an age limit and term of office for members of the management board of Stichting Stemra (Stemra Foundation), the Supervisory Board and the management Committees. This means the upper age limit of candidates is fixed at 70 years. At the meeting the upper limit of the term of office for the Supervisory Board was fixed at three terms of a maximum of 4 years. The age limit for the management board at Buma remains unchanged. Appointments n March 22, 2010 an extra general members meeting took place. The meeting agreed to the appointment of Mr Hein van der Ree as chairman of the Board of directors of Buma/ Stemra. Mr Cees van Rij was appointed by the meeting as statutory co-director and vice-chairman of the board. The Joint General Members’ meeting of May 17 elected Mr Tom Peters as a member of the management board and reappointed Mr Maurice Mensink and Mr Paul van Brugge. The Meeting of Affiliates elected Mr Jochem Gerrits as a member of the management board of Stemra and re-elected Mr Hans Kosterman and Mr René Smit.
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During a reception at Artis on June 19 Buma/Stemra bid farewell in an appropriate way to Cees Vervoord as chairman of the board of directors. Mr Vervoord held this position from 1994 to May 2010. During the festive gathering Mayor Spekreijse of Lochem pinned on the decoration which goes with his appointment as Companion of the Order of Oranje-Nassau. The management boards realize that the organization under the leadership of the new chairman of the board of directors is faced with a heavy task. The organization is in a precarious phase in an environment in which copyright is respected less and less and in which the income position of rights owners and affiliates is continually being meddled with. However, the board of directors know however that they are confident of an organization that with the greatest possible degree of scrupulousness and efficiency does its work, as the figures in the financial statements show. The management boards of Buma and Stemra Hoofddorp, April 6, 2011
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Photo: Remke Spijkers
NBE New Year’s Concert 2010 14
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Directors’ report
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Directors’ report INTRODUCTORY REMARKS
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t the end of 2010 an amount of c 162.2 million is available for distribution to Buma rights owners. This is well over c 5 million more than there was to distribute at the end of 2009. At Stemra has per the end of 2010 an amount of c 38.8 million to distribute compared to c 40.9 million at the end of 2009. Whereas the turnover of Buma has risen, Stemra has been deteriorating for a succession of years, 2010 was no exception to this. Not just Stemra, but all the other societies in Europe have great difficulty in financially maintaining the exploitation of Phono-Mechanical rights. Therefore intensive consultations are taking place with societies in order to come to a common solution. At the moment of writing this annual report the final details are being settled for a new Cannes-agreement. With that the compensation percentage for Phono-Mechanical rights remains virtually unchanged. This agreement is valid up to and including 2013 and offers some repose regarding the compensation percentage that Stemra can count on.
THE KEY FIGURES 2010 General Turnover Buma increases, Stemra decreases
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he state of affairs per product sector at Buma and Stemra provided a higher turnover at Buma in 2010 and, once again, a substantially lower turnover at Stemra. In general. The increase in turnover at Buma is partly the result of a number of settlement of accounts with music users which also relate to preceding years.
Settlement of accounts from preceding years plays a decisive role in the achieved turnover In general licenses, Buma (catering, stage, work and sales outlets) the economic crisis has, for the second successive year, clearly had an impact on the turnover invoegen of Buma. Especially catering has been considerably hard hit, which is apparent in an increase in bankruptcy cases. Fewer music users also means less contributions to Buma. Also the turnover at Stage ar below expectations. The organizers of great events have achieved substantially lower turnover through the lack of large acts in 2010. In former
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years performances by artistes as U2, Madonna, Coldplay, but also those of Marco Borsato and Guus Meeuwis were great sources of income, in 2010 there were significantly less of this kind of event. The fact that the decrease at Stage remained limited and nevertheless generated a turnover of c 19.9 million, is due to the extra efforts of the increase of small-scale and often one-off events. In 2010, for the first time, technology, which automatically traces websites that have information about events, was used to track and investigate relevant performances.
The advance of cable viewers disappointing In the Cable sector we see that in the past two years more and more more households have switched to a form of digital television. At the end of 2008 that applied to approximately 50% of families, in 2010 that percentage increased to 62%. The remaining part use a satellite dish or have a connection with a telephone company. For Buma/Stemra the growth in the number of subscribers to cable television on digital channels is especially of importance, the advance last year lapsed disappointingly. The majority of cable viewers still watch analog channels. This is an important fact because this leads to the redistribution of turnover among the groups of rights owners in the cable collective. Through this the share for Buma will decrease. Moreover, because the consumer price index was negative per January 1, 2010, no growth could be realised by means of the index adjustments.
Broadcasting companies provide far fewer mechanical recordings than formerly One would assume that through the growing use of music on radio and television that here, of all places, the turnover would increase. On the other hand however, broadcasting companies record much fewer broadcasts for the long-term. This has to do with other technical storage systems in which music is called up from a central server. Consequently far fewer copies of each musical work are recorded. Also the broadcasts themselves are recorded in another way. More and more frequently the music, for example for a television documentary, is removed in storage. This also leads to a diminished contribution, because, in this way, no Stemra-license is necessary for the recording of own productions.
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In 2010 the Dutch entertainment market once again disappointing In 2010 the income from the use of music on the internet remained zero, this as a result of the lack of protection of copyright in the digital world. Furthermore, at the end of 2009, the Online sector was negatively affected by the discontinuation of the charges for background music. In addition to this in 2010 it was decided not to charge websites for embedded content, in view of the discussion about a definite regulation for this form of online use of music. Another important reason of the large decrease of income in the Online sector is the fact that various publishers have withdrawn their mechanical rights from almost all societies. Through this, the income from both existing and new streaming and download contracts have been more than halved.
The market disappoints
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he Dutch entertainment market in 2010 was once again disappointing. The sales and turnover, both in money and numbers, taken as a whole, have dropped by more than 10 per cent in nearly all the product groups. The whole market dropped by 12.7 per cent and consequently, ended up for the first time under the turnover level of c 1 billion. In 2009 a turnover of c 1.1 billion was achieved, whereas in 2010 this amounted to c 970.6 million. The music market shrank by well over 15 per cent to c 218.1 million. In 2009 this turnover was still c 258.4 million. Only the sales of digital albums and digital singles rose by respectively 22.7 and 4.7 per cent. The above-mentioned, emerged from figures that trade association NVPI published at the beginning of 2011. Analysis of the figures show that the national product has done relatively well. The success of Caro Emerald, Marco Borsato, Nick & Simon and Jan Smit have contributed to this.
turnover category. For the first time the operation of the Cannes agreement has been extended to music DVDs. A higher compensation percentage has been agreed on for this, namely 9.325 per cent, because more rights owners are involved in this and it means a more complex administration for the societies.
New Cannes agreement entered into for the period up to 2013 inclusive At the beginning of 2011 the final negotiations were conducted for the Cannes-IV agreement. The new agreement will last for a period of three years, from January 1, 2011 up to and including December 31, 2013. As regards the percentages Cannes-IV will be a virtually unchanged continuation of Cannes-III. This new agreement means that there will be certainty for three years about the compensation percentage on which Stemra can count on. Hereafter, it is described how the above-mentioned factors have affected the figures for Buma and Stemra for 2010.
Buma
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ith a turnover of c 140.3 million in 2010 the royalties from copyright exploitation have come out slightly higher than that of the record year 2008. It is too premature to draw the conclusion from this that Buma is once more on the growth path, after the slight relapse of 2009 (turnover c 136.4 million). In the largest sector, Performing Rights Radio & TV, the turnover has decreased slightly to c 50.2 million compared to c 51.3 million in 2009. With this it is maintaining the level of last year when a non-recurring income was still incorporated in the turnover. Also in the Stage sector there is a question of a decrease, of c 21.5 million in 2009 to c 19.9 million in 2010.
New Cannes agreements
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fter months of delays a new Cannes agreement, Cannes-III, was established in 2010. This encompasses retroactively the years 2009 and 2010. The agreement regulates the percentages which the societies for PhonoMechanical rights may retain as remuneration for their administrative activities and distribution of royalties. The two parties involved, are the international music publishers on one hand and the organizations for Phono-Mechanical rights in West Europe on the other. In both years Stemra obtained a compensation percentage of 7.325 for this
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Turnover Buma has risen to over d 140 million The turnover of the Catering sector increased by c 2.3 million from c 14.7 million in 2009 to c 17.0 million in 2010. This is remarkable in view of the economic recession in catering. The higher turnover also chiefly has to do with the settlement of accounts over a number of years. Furthermore marketing was intensified and the joint invoicing which was set up with other collecting societies (CSs) under the name
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Directors’ report
SCAN resulted in an increase in the number of invoices. The Workplaces sector also achieved a higher turnover. Also here it is a question of one-off income from preceding years through which the turnover figures stand out favourably compared to preceding years. The turnover increased from c 13.8 million in 2009 to c 17.8 million in 2010. The Sales Outlets sector achieved a practically unchanged turnover of c 11.9 million in 2010 (2009: c 11.7 million). The sector Performing Rights Online Licensing turnover decreased to c 757,000 compared to c 893,000 in 2009. The Cable sector realised a turnover of c 12.2 million compared to c 12.4 million in 2009. In Performing Rights Abroad the turnover increased slightly to c 10.5 million (2009: c 10.2 million). A positive boost came from the extra use of tunes & jingles from Dutch music creators by European broadcasting stations.
Stemra
T
he decrease in turnover at Stemra was not brought to a halt in 2010. Whereas in 2009 c 40.7 million income was secured, in 2010 it was c 35.7 million. The greatest decrease was at Mechanical Rights Radio & TV, with a turnover of c 5.1 million in 2010 compared to c 7.3 million the year before. The largest sector is Phono-Mechanical rights Biem/Central Licensing. Here the turnover was c 16.7 million (2009: c 18.2 million). The decline is directly connected to the caving in of the sale of physical music carriers. The annual decline last year was still somewhat compensated by the unexpected sale of Michael Jackson CDs.
Slump in turnover chiefly through decrease at Radio & TV With the amount of c 6.3 million the Special Licensing/Private Labels sector booked a slightly higher turnover (2009: c 5.7 million). The income from Mechanical Rights Online Licensing was decimated from c 1.3 million in 2009 to c 515,000 in the year under review. Here we see the consequences of the fact that the large music publishers have taken away the exploitation of their repertoire for online from the European societies, and therefore also from Buma/ Stemra. However, the most important cause of the decrease in turnover is the lack of a earning model for use of music on the internet. In Homecopy/Lending Rights the turnover is dependent on a third party. This went down to c 3.2 million (2009: c 3.5 million). Mechanical Rights Abroad noted a decrease from c 4.7 million in 2009 to c 3.8 million in 2010.
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The development of the results
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he revenue from investments is of important value in the financial foundation of the organization. The practice of investing available funds under conditions, came into effect on the basis of a management decision in the nineties. The management board was confronted with the fact that funds which the organization receives from the exploitation of rights cannot immediately be distributed to the rights owners. The administration needs time to gather all data and to arrive at a correct distribution. It often takes many months before certainty is gained about the exact use of musical works by licensees, certainly if it concerns users overseas. In the last decade of the previous century it became clear that it was more sensible, under conditions, to invest received funds that were waiting for distribution, rather than just paying them into a, mediocre yield, deposit account. That applied then, and it still does now. To that end an investment policy was formulated in which many risks were reduced. On the understanding that of course no investment is completely without risk. Shares and bonds are valued in the balance sheet against the prices on the stock exchange on the balance sheet date. The results derived from this are incorporated in the revaluation reserve. As far as the balance of the revaluation reserve permits, in addition to the dividend received on shares and – from 2006 – in addition to the received interest on the fixed interest portfolio, a so-called standard return can also be entered in the financial results. This methodology fits in with the objective of Buma/Stemra that the well-considered investment results on shares and fixed interest securities over the years show as constant as possible course in the operating statement. Since then the revenue from the investments is used to cover a considerable part of the costs of the organization . In retrospect it can be ascertained that this, against the background of the compensation which societies received for their activities, was a wise decision. The administration costs which we at Stemra can charge within the framework of, among others, the Cannes-agreement have not covered costs for years. In the meantime the investment proceeds have become a stable second source of revenue. They contribute to the fact that, of the European societies, Buma has the lowest level of costs year after year and consequently also the highest distribution ratio. The following record reflects the netto costs as percentage of the achieved turnover in the year 2009 (figures for 2010 are not yet available):
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Buma operates with the lowest cost percentages in the branch
Stemra has completely redeemed the loan from Buma
The results of the investments is entered in the profit and loss account of Buma and Stemra under the item financial results.
Balance Buma and Stemra
Profit and loss account Buma
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esides the reported turnover from the exploitation of rights of c 140.3 million in 2010, revenue was also received of c 3.4 million (2009: c 3.1 million). This revenue partly emanated from the administrations of other collecting societies which Buma takes care of. The expenditure at a higher turnover has largely remained unchanged and came to c 16.9 million. In 2009 the expenditure amounted to c 16.4 million. The exploitation result amounted to c 13.6 million negative (2009: c 13.2 million negative). The financial results (including the changes revaluation) improved slightly and amounted to c 8.5 million (2009: c 8.3 million), as a result of which ultimately c 5.1 million costs were debit to the turnover compared to c 4.9 million in 2009. Before Buma goes on to the distribution of the collected funds, after processing revenue and expenditure, a portion is added to the Fund for Social and Cultural purposes. This occurs in accordance with a decision of the management board which is reconfirmed each year. The addition for 2010 is fixed at 8.5% (2009: 9%) of the amount of the Netherlands royalties available for distribution. With that the allocation amounted to c 10.2 million (2009: c 10.4 million).
Profit and loss account Stemra
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he turnover of Stemra in year under review, amounted to c 35.7 million, once again a sharp decline compared to 2009 (c 40.7 million). Also the revenue went down and amounts to c 3.7 million (2009: c 4.4 million). In comparison to expenditure of c 8.2 million (2009: c 9.0 million). From this an exploitation result of c 4.5 million negative remains. In 2009 this was c 4.6 million negative. The financial result (including the revaluation changes) amounts to c 4.8 million. What remains is a result from ordinary activities of c 280,000 positive compared to c 411.000 negative in 2009. This result will have an influence on the financing of the negative appropriated reserve which was set up in 2008.
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n important decision which has an influence on the balance of both Buma and Stemra is that in the year under review, Stemra completely redeemed the loans from Buma and BSO/BSA for a total of c 55.7 million. This amount is deducted from the current account with Stemra.
DISTRIBUTION General
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n two years’ time Buma hopes to celebrate its 100th anniversary. The Vereniging Buma (Buma Association) was founded in 1913 by composers and music authors who, with the advent of the radio, were not able to monitor the use of their musical works themselves. For that purpose they founded the Vereniging Buma (Buma Association) to whom they handed over the exploitation of their Performing Rights. When later on the sale of records and other music carriers also boomed, the association members set up the Stichting Stemra (Stemra Foundation). Stemra targeted on the exploitation of Phono-Mechanical rights. Later the minister of Justice deemed Buma as the sole collecting society which may deal with the exploitation of music rights in The Netherlands. Since then the organization has worked under the supervision of the Ministry. The exploitation of rights and the collection and distribution of the resulting royalties from that is the most important task of the organization. It is important to realise that the distribution which is justified each year in the annual report, relates to what is distributed to rights owners in the year under review, primarily on the basis of the turnover royalties which were realised the year before. Buma has as per December 31, 2010 an amount of c 162.2 million on the balance that is available for distribution, Stemra has an amount of c 38.8 million. The distribution of this will largely take place in 2011. The distribution for Buma which took place in October 2010, is related to the amount that was available for distribution to the rights owners on December 31, 2009. For Buma that was c 156.5 million and for Stemra c 40.9 million.
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Go Back to the Zoo
Directors’ report
For Buma the available amount for distribution has risen, for Stemra it has fallen Distribution Buma once again higher
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t the beginning of the year under review there was c 156.5 million to distribute. In addition to this, during 2010 an amount of c 132.0 million became available for distribution. From that, the amount that was distributed in 2010 is deducted. On balance at the end of 2010 c 162.2 million is available for distribution to the rights owners of Buma. This is largely distributed in 2011. The construction of these amounts is described in the Notes on the balance of Buma on page 42 of this annual report.
Distribution Stemra is lower
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t the beginning of the year under review there was an amount of c 40.9 million to distribute. During 2010 an amount of c 34.6 million is available for distribution. From that, the amount that is distributed in 2010 is deducted. On balance at the end of 2010 c 38.8 million is available for distribution to the rights owners of Stemra. This is distributed in 2011. This is nearly c 2 million less than the comparable amount over 2009. The composition of these amounts is described in the Notes on the balance of Stemra on page 62 of this annual report.
The only turnover online that is not increasing is that of music Protection of copyright
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he expectation from years ago that legal downloads would amply surpass the sale of physical carriers has, for the time being, turned out to be an illusion. As far as that is concerned, the Netherlands is one of the most infamous music markets in the world. Research by the organization of the international record industry, IFPI, over 2010 shows that the online market in The Netherlands is bringing up the rear in Europe and the world. Whereas, in Denmark and GreatBritain respectively, approximately 25 per cent and 20 per cent of the music sales take place online, in our country it is only 6 to 8 per cent. For the whole of Europe this percentage is on average, 15 per cent of the turnover. By way of comparison: in the US currently 43 per cent of the music sales take place online. PriceWaterhouseCoopers has another relevant observation about the Dutch market. They observe that the music sales are steadily dropping and that
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this is in sharp contrast with the turnover which internet service providers realise and the amounts that are spent on advertising and direct mailings on internet. Each year since 2006 these numbers are again substantially higher than those of music sales. The efforts of tracing organization BREIN to trace as many sites as possible which distribute music without licences and to have legal action taken are indeed successful but still very troublesome. BREIN (a collaboration of rights and producer organizations in our country) manages to take effective action against online infringements of copyright, but for each shut down illegal website a few new alternatives crop up.
Home Copying Scheme frozen
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n Dutch copyright it states that the copying of music is allowed provided that this is done for own use or for study purposes. To compensate the rights owners for this the legislator devised the Home Copying Scheme, based on a compensation on blank carriers and other objects which can be used to store music. Through this music authors, composers and publishers were somewhat compensated financially for the loss of income which they suffered as a result of the Homecopy exception. There are two major problems with this scheme.
In the Home Copying Scheme the recordable CD is the most modern music carrier In the first place the scheme has not been adjusted anymore since 2003. Since then the rights owners have, to no avail, been zealous advocates of the implementation of the Home Copying Scheme on modern music carriers such as MP3players, smart phones, hard disc recorders, memory sticks, recordable DVDs and other new recording media. But last year, via an Order in Council, the government froze the scheme for another three years. Not only has the scale of charges been left unchanged, but also modern music carriers fall outside the scheme for another three year. The compensation is imposed on carriers which are hardly ever sold anymore. The income from the Home Copying Scheme is, not surprisingly, also halved.
Bill on supervision pushed through
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his year the parliamentary considerations over the bill that regulates the supervision of the collecting societies
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must be rounded off. It is certain that the bill will mean an expansion and strengthening of government supervision.
Discussion in parliament about the future of copyright delayed by one year
decided that music authors have the possibility to do the online exploitation of their works whether or not carried out by Buma/Stemra. In the latter case the exploitation risk comes to lie by the rights owner. This means for example that Buma/Stemra will no longer take action against sites that make illegal use of their works. The members meeting of May 2011 will receive a proposal about this.
Authors Rights Contracts
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nother political topic caused a lot of turmoil in 2010. During the summer a rough draft for the regulation of the Authors Rights Contracts was made public. With this regulation the Netherlands wants to follow the example of a number of other European countries, where it appears to work well. The rough draft outlines the rules which must be observed when entering into contracts between authors and the exploitant of his work. With this the legislator wants to improve the negotiating position of the author in relation to the licensee. The regulation will not just apply to music authors but for the creators of all works protected by copyright. Licensees are, according to Authors Rights Contracts, not just the recording companies, but also broadcasting companies, software companies, publishers, film and television producers etc.
The proposal Authors Rights Contracts jeopardizes publishers’ investments in acts
Buma Works hard on greater flexibility for rights owners Another part where Buma/Stemra offers more flexibility is allowing variant distributions. Now it is so that in the Buma/ Stemra regulations fixed distributions are employed. For an increasing number, in particular younger authors and composers the fixed distribution is no longer satisfactory. Hits are more and more frequently co-writes; the sum of contributions from various authors. Within the current regulations more authors can be registered for a work, but in that case they each receive an equal percentage of the Buma share. The members meeting of May 2011 can look forward to a proposal in which it is possible that within the authors share variant agreements can be made among the authors themselves.
COLLABORATION Pastors working group: concrete agreements
Brussels
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n the meantime Europe is becoming more important by the day for national copyright and for the regulating of the exploitation and administration of this right. It must be stated that the European Commission in 2010 has also not yet taken action to get a clear picture of European copyright in the digital age, let alone that an effective regulation is reached. While technology is racing like a storm through the various sectors, the music author is left to fend for himself.
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astors working group made good progress in 2010 and moreover achieved important results. The working group, officially Working Group Improvement Collection Royalties, was started in 2008. Within the working group consultations between the collecting societies and the business community take place, combined in VNO/NCW and MKB The Nederland (Small and Medium Sized Enterprises the Netherlands). In 2010 a great amount of work was accomplished.
Pastors Working group achieves important results
NEW INITIATIVES FlexCo further fleshed out
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n 2010 the concept of FlexCo became more concrete. Flexible Collective Management is an initiative that meets the desire of rights owners to be able to deal more flexibly with the transfer of rights to Buma/Stemra. In particular young composers and lyricists want to be able to exploit their music themselves via internet. There is already a pilot running with Creative Commons. In the past year it was
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The working group is engaged in five matters: 1. The setting up of a central basic registration. The aim is that copyright organizations arrive at a joint database with all the user data. At the closing of this annual report the planning was that the basic registration will go ahead in spring 2011. This starts in any case with Buma, SENA and Videma. Also other organizations can join this. 2. Joint negotiating. Via mutual understanding from both CSs and user-representatives to endeavour to establish parameters and make regulations. Thus a new regulation for live-performances was thoroughly discussed. This has also come into being. 3. Disputes and complaints settlement. A number of preparations have been made, but the definite interpretation of the regulation will depend on the Supervision of Collecting Societies Act which must be dealt with in parliament within the foreseeable period. 4. A hallmark for rights organizations. Definite agreements have been made about this. Buma meets the requirements. 5. Electronic invoicing. This was realised at the beginning of 2010 with the start of the Service Centrum Authorsand Naburige Rights (Service Centre Copyright & Related Rights) (in short “SCAN”). In December the working group decided to freeze the charges for 2011. So that this year a number of sensitive discussion points can be settled in peace and quiet, such as the adjustment of the parameters by Buma and SENA plus the adjustment of charges so that they are better attuned to the requirements in the market. The working group has given itself time till October 1, 2011 for this purpose, so that the business community knows in time which changes come into effect in 2012.
Tasks transferred to SCAN
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xcept for one production function all the tasks of the department Individual Licences of Buma have been transferred to the Stichting Service Centrum Authors and Naburige Rights (Service Centre Copyright & Related Rights) SCAN. SCAN does not serve as a new rights organization but acts purely as an administration service centre for various rights organizations. At the moment these are Buma, SENA and Videma. On behalf of these three organizations SCAN now takes care of the administration, invoicing and collection for music licences.
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SCAN has been in operation since 2008. In 2010 it further improved and supplemented the joint database. Last year SCAN consisted of 60,000 accounts. In 2011 it will reach 100,000 accounts. Furthermore, in 2010 for the first time, the invoicing was done jointly. It was found that SCAN contributes to greater efficiency in the administrative process. The aim is that as many as possible rights organizations and music users place their invoicing and collection with SCAN as a result of which the costs per invoice for the participating CSs can decrease. In addition, this year the field organizations from the participating organizations will be combined.
SCAN grows to 100,000 accounts this year THE ORGANIZATION Social-Cultural: allocation of € 10.2 million
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he most important task of the social-cultural activities of the organization is the promotion of Dutch music and the arrangement of a supplementary pension for rights owners. The activities are financed from the allocation to the Funds for Social & Cultural purposes. The level of the addition to this fund comes from the agreements which were made within the CISAC, the international umbrella for Copyright organizations. In the financial year 2010 c 10.2 million (2009: c 10.4 million) was added to the fund. As a percentage of the turnover this is 8.5% compared to 9% in 2009. The management board has namely decided that in the case of growth of the turnover, Buma does not have to automatically stay the addition at the same percentage of the turnover.
The aim is to bring Buma to the attention of the public, politics and industry the whole year long In 2010 Buma Cultuur received from this addition c 3.6 million. The “Toeslag Ernstig” (Surcharge Serious), the provision which is used for supporting of activities in the category Serious Music, amounted to c 2.4 million in 2010. Other cultural objectives were assigned c 0.7 million. Furthermore in 2010 c 3.9 million was assigned to support the social objectives of the organization. It concerns the Buma Social Fund that was assigned c 1.5 million. To Other Social c 2.4 was distributed. For this item it concerns contributions on behalf of the AENA superannuation scheme and the Publishers superannuation scheme.
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Buma Cultuur (Buma Culture) reaches its targets
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n 2010 Buma Cultuur implemented its policy plan 2009 2012. Buma Cultuur’s aim is to promote and support Dutch music copyright in the broadest sense. With this the organization has a unique place in the Dutch cultural climate, in which music from The Netherlands takes up an increasingly important role. In foreign countries the attention for music from The Netherlands is greater than ever. Buma Cultuur has been able to contribute a lot to this.
Broadening of the field of activity
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uma Cultuur streamlined its own organization in 2010 to be able to work more efficiently and effectively. This has led to a broadening of the initiative package, so that all the relevant genres are supported and illuminated. Buma Cultuur sees it as its task to make certain that rights owners have the feeling that the cultural activities are relevant and actually supportive of the genres in which they are active. The genres that Buma Cultuur concentrates on, are: 1. Dutch -language (Folk) 2. Pop/rock/alternative 3. Dance/urban/world-music 4. Jazz/cabaret/contemporary/applied music/World-music One of the first priorities in 2010 was the broadening of the field of activity. This led to the launching of two new events, BUMA NL and Buma Rotterdam Beats. BUMA NL is the showcase-festival for Dutch language songs. For two days BUMA NL, with more than 500 professionals and artistes, formed a cross section of Dutch language music and the Dutch language industry. The BUMA NL Award show drew a large public. Buma Rotterdam Beats is the new showcase and seminar event for Dutch urban music, a genre that produces many hits and with which Dutch composers score internationally.
Buma Cultuur successfully launches two new events Bonds with media partners
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nother priority in 2010 was the expansion of the collaboration with media partners at various events. Thus the Buma Harpen Gala in 2010 was, for the second time, broadcast live by the TROS. Also BUMA NL and Buma Rotterdam Beats received a lot of media interest. The collaboration with media partners at other large events as
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Eurosonic Noorderslag, the Amsterdam Dance Event and the Annie M.G. Schmidtprijs is enhanced and extended. Thus Buma on Tour was extensively heard on 3FM. There were also many sets to be heard on this station from DJs who performed during the 15th Amsterdam Dance Event. The whole year through Buma Cultuur will create media attention and couple the name Buma to as many media and programmes as possible. In addition, Buma Cultuur is setting its sights at calling attention in public opinion, in politics and industry to Dutch music and music copyright. Buma Cultuur is aiming with that not just at the professionals but also at the public at large.
Focus on top-marketing
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inally Buma Cultuur has discontinued a number of activities because allocation of resources was not optimal or the coupling to its own objective got insufficient attention. Thus participation in Music Export was stopped. Instead of that Buma Cultuur targets on top-marketing support, the promotion abroad of authors who have already built up a reputation in the Netherlands. Buma Cultuur does not pay towards the costs of artistes tours abroad but offers support with the promotion to do with it. It consequently has more the character of sponsoring than subsidizing. In exchange for this the artistes promote Buma, in interviews and other things. In this way in 2010 acts such as Caro Emerald and Wouter Hamel are effectively supported. The tightening up of the policy was also noticeable at the Buma Harpen Gala held in March 2010. The accent at the Gala was more on the music author and composer than on the performing artiste. Also the publicity that the event drew was extremely great. Thus both the NOS News and the RTL News devoted a lot of space to the Buma Harpen Gala, both in the broadcasts on the evening of the presentation as in the morning broadcasts the day after. Also many other programmes, such as RTL Boulevard, dedicated various items to the event. The 2011 edition which was held on March 3 had as a new element that it was no longer a professional jury that awarded the prizes, but the Buma-Affiliates themselves.
Disputes The Arbitration board
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ince 2006 rights owners at Buma/Stemra with complaints concerning decisions from the Board of Directors and management board can invoke a dispute. A special Arbitration board makes a ruling about the complaint.
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The Arbitration board is made up of three members who are appointed by the members meeting of Buma/Stemra. The Arbitration board consists of an independent chairman (a lawyer in the field of copyright), and two Buma/Stemrarights owners. The Disputes settlement is accessible to all authors and music publishers who are affiliated to Buma/ Stemra. With that the Arbitration board of Buma/Stemra is the professional body for a rights owner with a concrete complaint about a decision from the management board and the board of directors through which he/she individually and directly is affected in his/her interests. The ruling of the Arbitration board serves parties as a binding recommendation, unless the judge in a concrete case rules differently. In 2010 the Arbitration board made a ruling in two matters. In the one case the Arbitration board decided in the complainant’s favour and in the other case not. In both cases it was about the implementation of the double claim procedure when two rights owners claim the same (part of a) work.
The Standing Committee on Plagiarism (SCP) The Plagiarism Committee makes simple settlements of disputes possible. Currently five musicologists and two professors serve on the SCP. The SCP came into being in 1967 as an extra service to our members. The background is that members who are in dispute with each other about the origin and originality of a musical work do not immediately have to turn to the courts. In the meantime the SCP has turned out to be an extremely useful addition to the service of Buma/Stemra; the procedure is efficient, fast, practical and relatively inexpensive. In 2010 the SCP dealt with two complaints. In both cases it was established that there was no question of plagiarism.
Musi©opy at Stemra
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tichting Musi©opy (Musi©opy Foundation) intends to cease its activities in 2011. Stemra has offered to carry on the activities of Musi©opy. Through this one service desk comes into being for collective music arrangements at the Stichting Stemra (Stemra Foundation). Since 1995 Musi©opy has served the interests of music authors and music publishers in the field of the copyright aspects of song texts and musical notations, and the licensing of the re-use of these works. Musi©opy had too little income to be able to work as a professional organization. Furthermore, it was difficulty for them to reach the choirs, brass bands, orchestras and wind and percussion bands. Buma/Stemra has the necessary systems which makes the administration easier and more efficient. In addition to this our organization can draw on contacts with the groups mentioned. With the activities of Musi©opy, Stemra can offer interested parties an extra service. At the moment of writing, the agreement with all the large interested parties is not yet completely finalized, as a result of which the take-over of Musi©opy is not yet definitely settled.
Licenses for online use of music possible
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ince May 2010 music users at Buma/Stemra can also apply online for licences for online use of music. Consequently, we are able to offer our clients more ease and efficiency and achieve greater transparency. Most users of this service currently come from the world of webcasting: the live broadcasting of image and sound material via internet. Through this new service these users can also arrange their licences themselves.
PINO realises ultimate goal Mediation
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s of 2010 Buma/Stemra facilitates, under certain conditions, the possibility of solving disputes via mediation. At least one of the parties involved must be a Buma/Stemra rights owner and Buma/Stemra itself should not be a party in the conflict. To the present day no use has yet been made of the abovementioned possibility.
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he term PINO became an important term in 2010 for all rights owners and affiliates. PINO stands for Paper Is No Option: the name of the operation which was started in 2009 to make communication with members, including the settlement of accounts, completely digital. In 2010 the project was successfully rounded off. 95 per cent of the affiliates receive their data via internet. The remaining five per cent mostly consists of older people who have no computer or who find it troublesome to deal with. They, of course, still receive their pieces by post.
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A LOOK AHEAD 2011
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he current year promises, on various points, to give more clarity. If we look at the political front, then State Secretary Teeven will come with his bill concerning the supervision of collecting societies. Also the report of the Gerkens committee will be dealt with in the Lower House of the Dutch Parliament and the Authors Rights Contracts is on the agenda. n Brussels a lot of interest is shown in the new directive from the European Commission concerning copyright and the online possibilities of exploiting musical works. Though whether the directive will see the light this year is still the question.
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2011 promises to be the year of clarity The future of Stemra is also waiting for clarity this year. Consequently, the current talks with “sister” organizations in Europe and the publishers are of overriding importance. Only if we succeed in bundling administrations is the exploitation of Phono-Mechanical rights feasible in the long term. Three factors are important for the turnover which can be achieved this year. The first is that a new Cannes-agreement is entered into for a duration of three years up to and including 2013. Therein, the international music publishers assent to a virtually unchanged deduction percentage for the exploitation of Phono-Mechanical rights. The second factor is that at the beginning of 2011 an agreement is reached on a new contract with Koninklijke Horeca The Netherlands (Royal Dutch Catering). The third factor is that as of December 31, 2010 the contracts with the commercial tv-stations, NPO and Kabel expire. The negotiations about that, which began last year, will have to be wrapped up this year.
The strategy of Buma/Stemra is aimed at: • Lobby for legislation for the protection of copyright in the digital world • Enhancing service direction (improve complaints process) • Improved and more frequent communication with our members, extension portal functionality) • Maintaining the position as licenser of the world repertoire • Maximization of the turnover • Top-3 position amongst the CSs in Europe in the field of cost efficiency • The strategy of Stemra focusing on the creating international collaboration with as aim the efficient administration of Mechanical Rights With the steps that we have taken in 2010 and taking into consideration the expected market circumstances we anticipate being able to further realise these strategic targets in 2011. The Board of directors Buma/Stemra Hein van der Ree (chairman) Cees van Rij Wieger Ketellapper Hoofddorp, April 6, 2011
Achieving results is determined by whatever requirements the cabinet stipulates for the investment policy of the CSs. To all appearances it looks as if the room to invest will be limited. If that happens, then the investment revenue is no longer an extra source of income to cover the costs and is therefore also no longer a stable cornerstone under our financial household. That will again be to the cost of the height of the distribution to rights owners.
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Financial statements for 2010 Buma
Buma balance sheet Buma balance sheet as per 31 December 2010 After appropriation of the result (x â‚Ź 1,000)
31 December 2010
31 December 2009*
Assets Fixed assets
Intangible fixed assets (1) Company information system
-
40
-
40
Tangible fixed assets (2) Hardware/computer equipment Other operating assets
414
683
90
121
504
804
Financial fixed assets (3) Securities
202,846
159,781
202,846
159,781
Current assets
Accounts receivable Debtors
8,151
4,528
Current account balances (4)
2,619
47,052
Taxes and dividends Other receivables and prepayments (5)
344
966
9,261
10,898
20,375
63,444
Cash at bank and in hand (6) Deposit accounts
16,944
23,030
Other cash at bank and in hand
18,912
3,179
35,856
26,209
259,581
250,278
Liabilities Reserves
Continuity reserve (7) Appropriated reserve (8) Revaluation reserve for financial fixed assets (9)
1,855
2,367
-
-3,253
10,796
9,878
12,651
8,992
Provisions (10)
11,174
12,275
23,825
21,267
Long term liabilities Fund for cultural and social purposes (11)
17,168
17,557
17,168
17,557
Current liabilities Royalties to be distributed (12) Creditors Current account balances (13) Taxes and social security contributions Other accruals and deferred income (14)
162,211
156,536
6,237
6,922
45,884
43,402
405 3,851
303 4,291
218,588
211,454
259,581
250,278
* Adjusted for comparison
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Buma profit and loss account Buma profit and loss account for 2010 (x â‚Ź 1,000)
2010
2009*
Income Administrative costs charged
2,151
1,940
Entrance fees and annual allowances
604
549
Other income
602
651
3,357
3,140
Expenses Personnel expenses (15)
8,151
8,150
Housing expenses
1,141
1,160
Depreciation and amortisation Other expenses
406
656
7,221
6,415
16,919
16,381
Operating result
-13,562
-13,241
Financial result (16)
8,496
8,322
Result on ordinary activities
-5,066
-4,919
Exceptional income
512
-
Exceptional expenses
-512
-
Result
-5,066
-4,919
Result appropriation Result allocated to appropriated reserve
3,253
3,254
Result deducted from royalties to be distributed
-8,319
-8,173
* Adjusted for comparison
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Buma cash flow statement Buma cash flow statement (x â‚Ź 1,000)
2010
2009*
Cash flow from operating activities Turnover
140,346
136,440
Distribution incl. administrative costs charged
-126,352
-125,547
Changes in Fund for cultural and social purposes
-389
-512
Operating result
-13,562
-13,241
Depreciation and amortisation
406
656
Investment costs, including charge-ons
175
346
Changes in indemnification obligation
15
23
Changes in provisions
-1,116
-607
Withdrawal from continuity reserve
-512
-
Changes in accounts receivable (excl. Interest due) Changes in current liabilities (excl. royalties to be distributed)
43,312
-602
1,459
1,378
44,771
776
Cash flow from business operations
43,782
-1,666
Interest received on securities Financial expenses Interest paid on securities
5,578
7,069
-
-527
-314
-420
5,264
6,122
Cash flow from operating activities
49,046
4,456
Cash flow from direct investment activities Investments in tangible fixed assets
-240
Cash flow from investing activities
-175
-240
-175
Cash flow from indirect investment activities Purchase of securities Repayments/sales
-84,670
-28,883
45,511
39,236
Cash flow from indirect investment activities
-39,159
10,353
Changes in cash at bank and in hand
9,647
14,634
* Adjusted for comparison
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Notes to the Buma balance sheet and profit and loss account General
Tangible fixed assets
Buma Association’s objectives
The valuation of tangible fixed assets takes place on the basis of historical cost less cumulative depreciation.
The Association aims to promote both the material and immaterial interests of authors and music publishers, with its ensuing activities taking place on a non-profit basis. The Association participates in the implementation and promotion of various activities in this context to achieve its objective.
Principles for the valuation of assets and liabilities and determination of the result
Depreciation is calculated as a percentage of the purchase price according to the straight-line method on the basis of the expected useful life. The following expected useful life terms are used: • Hardware/Computer equipment 3 years • Other operating assets 3 - 7 years
The principles adopted for the valuation of assets and liabilities and determination of the result are based on historical costs unless otherwise explained.
Accounts receivable
Unless stated otherwise, assets and liabilities are stated at face value. Income and expenses are allocated to the period to which they apply.
Financial fixed assets
The figures of 2009 are re-classified for comparison (with the figures of 2010).
Accounting principles for the translation of foreign currency Transactions denominated in foreign currency are translated to euros at the applicable exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currency are translated to euros at the exchange rate applicable on balance sheet date. Exchange rate differences are taken to the profit and loss account. Non-monetary assets and liabilities denominated in foreign currency that are valued on the basis of historical costs are translated at the applicable exchange rate on the transaction date.
Accounts receivable are stated at nominal value less a provision for bad debts.
The securities included under financial fixed assets are listed shares, bond funds, and (convertible) bonds. Securities are stated at market value as at balance sheet date.
Revaluation reserve for financial fixed assets Price gains/losses arising from the valuation of securities at market price are not directly taken to the trading account, but are first included in the revaluation reserve for financial fixed assets (hereinafter: ‘revaluation reserve’). To the extent that the revaluation reserve is insufficient, the deficit is charged to the result. Each year, the size of the revaluation reserve needed to absorb price fluctuations is determined by the management board in consultation with its asset managers. If the revaluation reserve is larger than deemed necessary, this surplus is eligible for addition to the royalties to be distributed.
Principles of consolidation
Financial result and standard return
In view of their transparent structure, Stichting Buma/Stemra Obligatiefonds and Stichting Buma/Stemra Aandelenfonds are included in the Buma financial statements by means of proportional consolidation. Assets and liabilities, as well as income and expenses, are included in proportion to the participating interest. On the basis of the information provided in the notes, no separate financial statements for Buma are included.
Dividends are accounted for in the period in which they are made payable, interest income is accounted for in the period to which it relates.
Intangible fixed assets The intangible assets concern the expenses for the new business information system to support the primary business processes. These are valued at historical cost less cumulative investment expenses or amortisation. These investments are charged to the profit and loss account over a period of three years.
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Insofar as the balance of the revaluation reserve, less a possible appropriate reserve for (un)realised gains or losses arising from changes in market prices, leaves room for this, a ‘standard return’ is included in the financial result, in addition to any receivable share dividend and interest on bond funds. In the calculation of the standard return, the dividend and interest already paid out are taken into account, and only the difference between the dividend/interest received and the standard return is settled with the revaluation reserve. The standard return is calculated as a percentage of the average value of the shares and bond funds over the financial
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Notes to the balance sheet and profit and loss account
year, and comprises the effective return on 5-year euro government bonds at the end of the financial year plus a risk mark-up for shares. The difference between the standard return and the dividend received on shares or interest received on bond funds is withdrawn from the revaluation reserve, if possible. Due to progressive changes in legislation and regulations, the system of applying a standard return is no longer regarded as a generally acceptable principle. However the system of standard return fits in with the requirement that the recorded investment results on shares and fixed-income securities show the most even development possible in the profit and loss account over the years. For this reason the management board and directors have decided to continue the system of standard return.
Provisions Provisions are measured at either the nominal value of the estimated expenditure required to settle liabilities and losses, or the present value of that expenditure. A provision is mentioned in the balance sheet when there is: • a legal or constructive obligation as a result of a past event, and • of which a reliable estimate can be made, and • it is probable a cash outflow is necessary to settle the obligation. The provision for reorganization costs is related to the estimated costs of redundancy. The long-service awards provision is a provision for future long-service awards. The provision is the present value of future benefits to be paid for long-service awards.
Continuity reserve The continuity reserve’s aims include guaranteeing the continuity of the work. It also serves to fulfil obligations in respect of third parties, in particular with regard to distribution of the royalties yet to be distributed in accordance with the financial statements. This reserve furthermore serves to level out unwanted fluctuations in the amounts available for distribution, resulting, among other things, from domestic and international pressure on turnover, as well as continuing changes in the distribution of rights.
Determination of the result Income and expenses are accounted for in the year to which they apply. The result is determined by calculating the difference between the balance of realised income and expenditure and the financial result for the year. The balance of the profit and loss account is allocated/deducted from the royalties to be distributed and/or the reserves by means of profit appropriation.
Financial expenses Fund for cultural and social purposes For the benefit of this fund, in accordance with Article 29(3) of the Articles of Association, each year a percentage defined by the management board on the recommendation of the board of directors, with a maximum of 10%, is deducted from the Dutch royalties available for distribution. The amounts deducted are reserved by the management board for payments to institutions or organizations whose purpose is to represent the idealistic or material interests of composers, lyricists and music publishers, or who otherwise promote Dutch music. The fund for cultural and social purposes is classified as liability, because the fund is never available to the organization.
Appropriated reserves Appropriated reserves are the parts of reserves that management has set aside for a special purpose. In this case, it concerns the appropriated reserve for (un)realised gains/ losses arising from changes in market prices. For more detailed information on this appropriated reserve, please refer to the notes to the balance sheet.
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The operating costs of the system for the collection of programme data, Fingerprinting, are no longer classified as financial expenses, but from 2010 directly charged to the operating result.
Pension plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account when the contributions are due.
Turnover In the financial statements, the turnover in royalties is added to the royalties distributed. Buma includes the exploitation of performing rights in turnover, insofar as these relate to the financial year, can be determined in a reliable manner, and there is reasonable certainty that the revenue is collectible.
Tax With regard to Buma, the Dutch tax authorities stipulated in an agreement dated November 6, 2001, determining the legal relationship between the parties, that Vereniging Buma is liable to pay corporation tax. This agreement was extended at the end of 2008 for a period of three years, and is valid until
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December 31, 2011. Foreign withholding tax available for set-off and Dutch dividend tax may be deducted from the tax due by virtue of this agreement determining the legal relationship between parties. A tax item is only included in the financial statements if corporation tax is still owed after deduction of the foreign withholding tax available for set-off.
Accounting principles for cash flow statement The cash flow statement is drawn up using the indirect method.
Use of estimates Drawing up the financial statements requires management to form opinions and make estimates and assumptions that influence the application of principles and the reported value of assets and liabilities, and of income and expenses. The estimates and the associated assumptions are based on past experience and various other factors that are considered reasonable in view of the circumstances. The outcome forms the basis for the opinion on the carrying value of assets and liabilities that does not emerge clearly from other sources. The actual results may differ from these estimates.
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Notes to the Buma balance sheet as per 31 December 2010 (1) Intangible fixed assets The changes in the intangible fixed assets can be specified as follows
Business information system
(x â‚Ź 1,000) Actual cost as per 1 January 2010
6,958
Cumulative investment costs
-6,918
Balance sheet value as per 1 January 2010
40
Changes during financial year: Investments
-
Amortisation
-40
-40
Actual cost as per 31 December 2010
6,958
Cumulative amortisation
-6,958
Balance sheet value as per 31 December 2010
-
Amortisation in number of years on average:
3
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Tangible fixed assets (2)
Hardware/
changes in the tangible fixed assets can be specified The
Computer-
operating-
as follows: (x € 1,000)
equipment
assets
Actual cost as per 1 January 2010 Cumulative depreciation Balance sheet value as per 1 January 2010
Other Total
3,085
5,263
8,348
-2,402
-5,142
-7,544
683
121
804
Changes during financial year: Investments
207
33
240
Depreciation
-476
-64
-540
-269
-31
-300
Actual cost as at 31 December 2010 Cumulative depreciation Balance sheet value as per 31 December 2010 Depreciation in number of years on average
3,292
5,296
8,588
-2,878
-5,206
-8,084
414
90
504
3
7
The depreciation accounted for in the statement of movements is partly charged on, as the assets in question are used by Stemra or sub-tenants. The amounts charged on to Stemra and the sub-tenants is for both € 0.1 million.
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Notes to the Buma balance sheet as per 31 December 2010
(3) Financial fixed assets The changes in the financial fixed assets can be specified as follows: (x € 1,000)
2010
2009
Securities Balance sheet value as per 1 January
159,781
157,608
Changes during the financial year: Acquisitions
84,670
28,883
Repayments / sales
-45,511
-39,236
Price movements
3,906
12,526
43,065
2,173
Balance sheet value as per 31 December
202,846
159,781
Securities and bonds of Vereniging Buma are carried at market value.
current account to BSO and BSA € 13.3 million, increase cash Stemra
Valuation differences on bonds and shares are charged or
€ 0.5 million).
credited to the revaluation reserve for financial fixed assets. Buma’s securities have been placed in Stichting Buma/Stemra The total face value of the bonds amounted to € 47.6 million (2009:
Obligatiefonds and Stichting Buma/Stemra Aandelenfonds. The
€ 41.9 million) compared to a market value of € 49.1 million (2009:
foundations are proportionally consolidated in Buma’s financial
€ 42.3 million). The reduction in the face value of € 41.9 million to
statements at an average percentage of 79.9% (2009: 63.5%).
€ 47.6 million is on the one hand the effect of the conversion of part
At the end of 2010 the interest is changed from 63.5% to 79.9%.
of the fixed-income securities to bond funds and on the other hand
For the result implies that the percentages are used as applied for
an increase in interest in the Stichting Buma/Stemra Obligatiefonds
2010 (63.5%). The participations give Vereniging Buma a 79.9%
of 16.4%. This increase of 16.4% is the result of the sale of
(2009: 63.5%) interest in Stichting Buma/Stemra Aandelenfonds
participations by Stemra worth € 69.5 million (repayment of loan
and a 79.9% (2009: 63.5%) interest in Stichting Buma/Stemra
in current account to Buma € 55.7 million, repayment of loan in
Obligatiefonds at year end 2010.
The fully-combined Financial statements of Stichting Buma/Stemra Obligatiefonds (BSO) [Buma/Stemra bond Fund Foundations] and Stichting Buma/Stemra Aandelenfonds (BSA) [Buma/Stemra Equity Fund] can be represented in condensed form as follows: (x € 1,000)
31 December 2010
31 December 2009
ASSETS Fixed assets Financial fixed assets
254,006
251,695
Other assets
15,823
73,440
269,829
325,135
269,395
324,752
Creditors
434
383
269,829
325,135
LIABILITIES Participants’ account Current liabilities
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(4) Current account balances
three-month rate.
The loan of € 55.7 million (2009 € 43.8 million) from Buma to
Further notes about the settlement of this current account balance is
Stemra is completely redeemed and is reduced on the current
mentioned at the financial fixed assets.
account balance with Stemra. The loan is subject to the Euribor (5) Other receivables and prepayments (x € 1,000)
31 December 2010
31 December 2009
Cable fees due
5,782
Interest due
1,160
5,086 917
Other receivables and prepayments
2,319
4,895
9,261
10,898
(6) Cash at bank and in hand For the rent of the office building, a bank guarantee has been issued for € 0.5 million. All the other cash at bank and in hand is freely available. (7) Continuity reserve The changes can be specified as follows
2010
2009
2,367
2,367
Allocations
-
-
Withdrawals
-512
-
As per 31 December
1,855
2,367
2010
2009
(x € 1,000) As per 1 January
During the year a withdrawal is made that refers to the completion of the streamlining of the organization which started in the previous years. The withdrawal of € 0.5 million was recognized through the profit and loss account (exceptional income and expenses). (8) Appropriated reserve The changes can be specified as follows: (x € 1,000) As per 1 January
-3,253
-6,507
Allocations
3,253
3,254
Withdrawals
-
-
As per 31 December
-
-3,253
€ 6.5 million of the negative result in 2008 is set aside by means
year. In accordance with the intention of 2008, 50% of the appropriate
of result appropriation by the management board and the board of
reserve of 2008 was balanced with the distributions of the 2009
directors in the appropriated reserve, in order to not fully settle the
collection year and the remaining 50% is settled with the distributions
effects of the stock exchange decline in 2008 with the 2008 collection
of the 2010 collection year.
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Notes to the Buma balance sheet as per 31 December 2010
(9) Revaluation reserve for financial fixed assets The changes in the revaluation reserve for financial fixed assets can be specified as follows:
2010
2009
(x € 1,000) As per 1 January
9,878
-
(Un)realized gains/losses arising from price changes
3,907
12,526
Withdrawal to the credit of the financial result to standard return
-2,989
-2,648
As per 31 December
10,796
9,878
The (un)realized gain in securities amount to € 3.9 million (2009:
was 6.2% (2009: 6.6%) for shares and for fixed-income securities 3.7%
12.5 million) and are taken directly to the revaluation reserve for
(2009: 4.1%). The withdrawal for the benefit of the financial result at a
financial fixed assets. The results on shares, (convertible) bonds and
standard return was € 3.0 million (2009: € 2.6 million).
bond funds are stated at a standard return. The percentage for 2010 (10) Provisions The changes in the provisions can be specified as follows: (x € 1,000)
Balance as per
Additions
1 January 2010
2010
Long-service awards
419
198
-198
Reorganization costs
157
-
-18
139
11,133
-
-1,098
10,035
566
581
-566
581
12,275
779
-1,880
11,174
SFB scheme annual allowance Obligation to indemnify
Withdrawals
Balance as per
2010
31 December 2010
419
Provision for long-service awards
end of 2022, and it has been calculated on the basis of the nominal
The provision for long-service awards is a provision for future long-
amounts of the annual allowances with non-actuarial assumptions
service awards, calculated on the basis of actuarial assumptions with
with regard to indexing and life expectancy. The provision was
regard to indexation and life expectancy.
formed from the Fund for cultural and social purposes; releases are part of the deductions and taken to the Fund.
Provision for reorganization costs The expectation is that the provision for estimated severance payments will largely be settled in 2011.
Provision for obligation to indemnify As a party to the agreements concluded with cable operators
Provision for SFB scheme annual allowance
concerning copyright arrangements for relaying programmes from
The provision for annual SFB allowances concerns a provision for the
broadcasting companies, Buma has undertaken obligations with
actual obligations by virtue of the annual allowances paid to (former)
regard to copyright claims that could be enforced against cable
authors and publishers and their next of kin through the Stichting
operators by third parties, not represented in the matter by Buma.
Sociaal Fonds Buma (SFB).
In respect of obligations to indemnify arising from these agreements,
Although the obligations have been included provisionally, there is
the provision for obligations to indemnify amounts to 3% of the
a firm intention to meet the obligations. The part of the provision
monies collected. The addition/withdrawal takes place to the debit/
for which no subsidy has been committed to the SFB as yet is
credit of the collection.
recognised. The expected remaining term of the provision is until the
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(11) Funds for cultural and social purposes The changes can be specified as follows:
2010
2009
(x € 1,000) As per 1 January
17,557
18,069
Allocations
10,212
10,395
Withdrawals
-10,601
-10,907
17,168
17,557
As per 31 December
The withdrawal from the available amount to be allocated for distribution of royalties in the Netherlands and the resulting addition to the Fund is set by the board of directors at 8.5% (2009: 9%). € 10.7 million of the total fund has a short term characteristic.
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Notes to the Buma balance sheet as per 31 December 2010
(12) Royalties to be distributed (x € 1,000)
2010
2009
Royalties to be distributed at the beginning of the year
156,536
153,816
Royalties turnover
140,346
136,440
Changes in royalties to be distributed
-8,319
-8,173
288,563
282,083
Members and participants
67,440
69,943
Foreign organizations
46,549
43,269
Fund for cultural and social purpose
10,212
10,395
Administrative costs charged
2,151
1,940
Distribution incl. administrative costs charged
126,352
125,547
162,211
156,536
Available for distribution Distributed in the reporting year:
Royalties to be distributed at the end of the year
Of the available amount to be processed for distribution in 2011, € 4.7 million will be added to the indivisible rights (2009: € 4.5 million, distributed in the 2010 payment). The negative result for 2010 amounts to € 5.1 million (2009: € 4.9 million negative). In accordance with the decision of 2008, € 3.3 million was allocated to the appropriated reserve and € 8.3 million (2009: € 8.2 million) was deducted from the royalties to be distributed.
Available for distribution Buma (x € 1,000)
2010
2009
Royalties turnover
140,346
Indivisible rights
4,715
136,440 4,469
Changes in royalties to be distributed
-8,319
-8,173
Became available for distribution during the year
136,742
132,736
To be distributed at the beginning of the year
156,536
153,816
Available *
132,027
128,267
Distributed
-126,352
-125,547
162,211
156,536
Royalties to be distributed at the end of the year *Excluding indivisible rights which have already been accounted for in the opening balance sheet
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Distribution of Buma’s turnover (x € 1,000)
2010
2009
Radio & TV Performing Rights
50,228
51,329
Stage
19,899
21,513
Catering
17,015
14,663
Workplaces
17,799
13,777
Sales Outlets
11,940
11,716
Performing Rights Online Licensing
757
893
Cable
12,168
12,396
Performing Rights Abroad
10,540
10,153
140,346
136,440
The amount available for distribution (including addition for indivisible rights) is allocated to the different categories as follows:
2010
2009
(x € 1,000) Live entertainment
16,335
18,407
Mechanical entertainment
38,345
32,138
Radio
5,868
5,848
Television
7,637
7,556
Film
2,403
1,965
Serious categories
3,222
3,219
Cable
10,859
10,982
Satellite
31,321
32,073
International
10,540
10,153
Fund for cultural and social purposes
10,212
10,395
136,742
132,736
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Notes to the Buma balance sheet as per 31 December 2010
(13) Current account balances (x € 1,000)
31 December 2010
31 December 2009
Sister companies abroad
26,064
25,464
Specific obligations
14,719
14,210
Buma members and participants
752
613
Current account Stemra
949
Other
3,400
45,884
3,115 43,402
The amounts owed to sister companies abroad were largely settled at the beginning of 2011. The specific obligations are obligations to foundations with social-cultural purposes:
• Buma Cultuur • AENA • Sociaal fonds Buma
€ 5,309 (2009: € 4,317) € 5,071 (2009: € 5,265) € 4,339 (2009: € 4,628)
(14) Other liabilites and accruals (x € 1,000)
31 December 2010
31 December 2009
Third-party cable right owners
1,882
Holiday allowance/annual leave
793
Other liabilities and accruals
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1,176
2,848 754
3,851
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689 4,291
OFF-BALANCE SHEET COMMITMENTS Partially pledged bond portfolio In accordance with the decision of the management board, at the end of 2002, part of the bond portfolio of Stichting Buma/Stemra Obligatiefonds amounting to € 27.5 million was pledged as security to ING Bank N.V. in connection with a cash facility needed for normal operations.
Longterm financial liability The financial liability with regard to the business accommodation in Hoofddorp was entered until April 30, 2012. The annual rent for Buma/Stemra together amounts to € 1.9 million of which approximately 40% will be charged to third parties. In the current composition, the annual amount for the leasing of cars by Buma/Stemra is € 0.3 million. The liability for terms longer than one year is € 0.4 million. The financial liability for the rent of the printers was entered until May 1, 2013. The annual rent amounts to € 0.1 million. Buma/Stemra entered into a contract allowing Accenture to perform a large portion of Buma/Stemra’s back office activities from 2007 until March 31, 2017. The resulting financial obligation amounts to € 18.2 million for the remaining duration of the contract, assuming consistent volumes. The off-balance sheet commitments of € 21.5 million can be summarised as follows: • less than 1 year:
€ 5.1 million
• between 1 and 5 years:
€ 15.7 million
• longer than 5 years:
€ 0.7 million
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Notes to the Buma profit and loss account for 2010 Expenses (15) Personnel expenses (x € 1,000)
2010
2009
Salaries
8,473
7,868
Social security contributions
1,030
940
Pension contributions
1,032
862
Other personnel expenses
2,652
3,207
13,187
12,877
Charged /compensated to third parties
-5,036
-4,727
8,151
8,150
The average number of employees during the reporting year was 173 employees (2009: 165 employees) which corresponds to an average of 166.5 FTE (2009: 154.6 FTE). This includes:
• a verage 4 employees (2009: 1 employee) are charged to SCAN, which corresponds to an average of 4.0 FTE (2009: 0.8 FTE)
• e mployees who work partly for Stemra, on the basis of which part of the costs are charged on to Stemra
• 1 .0 FTE which is charged to other affiliated foundations
Salary management board Buma and registered Directors Buma/Stemra for the year 2010 (x € 1,000)
Management Buma Fee for 12 members of the management board Buma (incl. expense allowance)
€ 95.4
Registered Directors Buma/Stemra H.G. van der Ree
salary
€ 200.0
(from May 1, 2010)
pension charges
€ 40.4
C. van Rij
salary (incl. variable reward)
€ 233.9
pension charges and car
€ 55.2
C.P. Vervoord, former chairman of the board of Directors salary (incl. variable rewards)
€ 379.2
(till August 1, 2010)
€ 56.1
pension charges
Of the amounts mentioned above 70% is recognized in the financial statements of Vereniging Buma and 30% in the financial statements of Stichting Stemra. In preparing the financial statement until 2009 we used the exemption under Article 383 paragraph 1, Title 9 BW2.
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(16) Financial result (x â‚Ź 1,000)
2010
2009
1,605
1,957
Share dividend received
3,509
3,755
5,114
5,712
2,989
2,648
Interest income and other income Fixed-income securities Interest received on bonds Shares
Mutations revaluation reserve Withdrawal from revaluation reserve for the benefit of the financial result at a standard return Other interest income and similar income
707
909
Total income from investments
8,810
9,269
Financial expenses
-
-527
Interest expenses and other costs
-314
-420
8,496
8,322
Financial expenses The operating costs of the system for the collection of programme data, Fingerprinting, are no longer classified as financial expenses, but from 2010 directly charged to the operating result.
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Other information To: The Board of Directors and the general meeting of affiliates to Vereniging Buma
Independent auditor’s report We have audited the accompanying financial statements 2010 of Vereniging Buma, Hoofddorp, which comprise the balance sheet as at December 31, 2010, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.
Management’s responsibility Management is responsible for the preparation of the financial statements in accordance with the accounting policies selected and disclosed by the entity, as set out in the notes to the financial statements. Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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 financial statements are prepared, in all material respects, in accordance with the accounting policies selected and disclosed by the entity, as set out in notes to the financial statements.
Basis of accounting and restriction on distribution and use We draw attention to notes to the financial statements, which describes the basis of accounting. The accounting policies used are selected and disclosed by the entity. Our opinion is not qualified in this respect.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
Amstelveen, April 6, 2011 KPMG ACCOUNTANTS N.V. R.J. Groot RA
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by mana gement, as well as evaluating the overall presentation of the financial statements.
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Subsequent events Profit appropriation For Buma, the result for 2010 will be deducted from the royalties still to be distributed. Then, according to the assessment of the reserve, it will be determined to what extent funds will have to be added to or deducted from this. This movement will also be credited or charged to the royalties to be distributed.
Proposal of the board of directors As shown in the financial statements, which we prepared in accordance with Article 26(2) of the Articles of Association, the board of directors proposes deducting c 8.3 million of the negative result of c 5.1 million from the royalties to be distributed and allocating c 3.3 million to the reserve. (in accordance with the decision made in 2008). The proposal has already been incorporated in the 2010 financial statements.
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Typhoon & New Cool Collective Annual report 2010 | Buma/Stemra
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Photo: Mike Breeuwer
Financial statements for 2010 Stemra
Stemra balance sheet Stemra balance sheet as per 31 December 2010 After profit appropriation (x â‚Ź 1,000)
31 December 2010
31 December 2009*
Assets Fixed assets
Tangible fixed assets (1) Hardware/computer equipment
210
224
210
224
Financial fixed assets (2) Securities
51,159
91,915
51,159
91,915
Current assets
Accounts receivable Debtors
4,868
2,791
Current account balances (3)
4,180
2,512
Taxes and social security contributions
885
1,762
Other receivables and prepayments (4)
288
426
10,221
7,491
Cash at bank and in hand (5) Deposit accounts
2,781
12,724
Other cash at bank and in hand
3,524
1,924
6,305
14,648
67,895
114,278
Liabilities Reserves
Foundation capital Continuity reserve (6) Appropriated reserve (7) Revaluation reserve financial fixed assets (8)
1
1
5,760
5,929
-
-1,300
5,561
5,683
11,322
Provisions (9)
213
10,313 379
11,535
10,692
Current liabilities Royalties to be distributed (10) Creditors Current account balances (11) Other accruals and deferred income (12)
38,755
40,863
932
986
4,618
49,643
12,055
12,094
56,360
103,586
67,895
114,278
* Adjusted for comparison
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Stemra profit and loss account for 2010 Stemra profit and loss account for 2010 (x â‚Ź 1,000)
2010
2009
Income Administrative costs charged Entrance fees and annual allowances
3,096
3,828
604
549
3,700
4,377
Expenses Personnel expenses (13)
5,018
4,951
Housing expenses
761
774
Depreciation and amortisation
270
437
2,192
2,813
Other expenses
8,241
8,975
Operating result
-4,541
-4,598
Financial result (14)
4,821
4,187
Result from ordinary activities
280
-411
Exceptional income
169
-
Exceptional expenses
-169
-
Result
280
-411
Result allocated to appropriation reserve
1,300
1,300
Result deductions from continuity reserve
-
-721
Changes in royalties to be distributed
-1,020
-990
Profit appropriation
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Stemra cash flow statement Stemra cash flow statement (x â‚Ź 1,000)
2010
2009
Cash flow from operating activities Turnover
35,662
40,680
Distribution
-36,750
-44,265
Operating result
-4,541
-4,598
Depreciation and amortisation
270
437
Investment costs, including charge-ons
-99
-270
Changes in provisions
-166
-51
Withdrawal from continuity reserve
-169
-
Changes in accounts receivable (excl. interest due) Changes in current liabilities (excl. royalties to be distributed)
-2,868
-583
-45,118
10,121
-47,986
9,538
Cash flow from business operations
-53,779
1,471
Interest received on securities Financial expenses Interest paid on securities
3,299
3,570
-
-132
-709
-704
2,590
2,734
Cash flow from operating activities
-51,189
4,205
Cash flow from direct investment activities Investments in tangible fixed assets
-157
Cash flow from investing activities
-102
-157
-102
Cash flow from indirect investment activities Purchase of securities Repayments/sales
-10,790
-17,842
53,793
23,819
Cash flow from indirect investment activities
43,003
5,977
Changes in cash at bank and in hand
-8,343
10,080
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Notes to the Stemra balance sheet and profit and loss account General Stemra Foundation’s objectives The Foundation’s objective is to represent and promote both the tangible and intangible interests of music authors and publishers and other copyright owners, in particular with regard to mechanical reproduction rights. The Foundation’s other goals are exercising and maintaining mechanical reproduction rights for participating authors, participating publishers, as well as other authors and copyright owners. The Foundation’s participates in the implementation and promotion of various activities in this context to achieve its objective.
Principles for the valuation of assets and liabilities and the determination of the result The principles adopted for the valuation of assets and liabilities and determination of the result are based on historical costs unless otherwise explained. Unless stated otherwise, assets and liabilities are stated at face value. Income and expenses are allocated to the period to which they apply. The figures of 2009 are re-classified for comparison (with the figures of 2010).
Accounting principles for the translation of foreign currency Transactions denominated in foreign currency are translated to euros at the applicable exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currency are translated to euros at the exchange rate applicable on balance sheet date. Exchange rate differences are taken to the profit and loss account. Non-monetary assets and liabilities denominated in foreign currency that are valued on the basis of historical costs are translated at the applicable exchange rate on the transaction date.
Principles of consolidation In view of their transparent structure, Stichting Buma/Stemra Obligatiefonds and Stichting Buma/Stemra Aandelenfonds are included in the Stemra financial statements by means of proportional consolidation. Assets and liabilities, as well as income and expenses, are included in proportion to the participating interest. On the basis of the information provided in the notes, no separate financial statements for Stemra are included.
Tangible fixed assets The valuation of tangible fixed assets takes place on the basis of historical cost less cumulative depreciation.
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The depreciation is calculated as a percentage of the purchase price according to the straight-line method on the basis of the expected useful life. The following expected useful life terms are applied: • Computer equipment 3 years
Accounts receivable Accounts receivable are stated at nominal value less a provision for bad debts.
Financial fixed assets The securities included under financial fixed assets are listed shares, bond funds, and (convertible) bonds. Securities are stated at market value as at balance sheet date.
Revaluation reserve for financial fixed assets Price gains/losses arising from the valuation of securities at market value are not directly taken to the trading account, but are first included in the revaluation reserve for financial fixed assets (hereinafter: ‘revaluation reserve’). To the extent that the revaluation reserve is insufficient, the deficit is charged to the result. Each year, the size of the revaluation reserve needed to absorb price fluctuations is determined by the management board in consultation with its asset managers. If the revaluation reserve is larger than deemed necessary, this surplus is eligible for addition to the royalties to be distributed.
Financial result and standard return Dividends are accounted for in the period in which they are made payable; interest income is accounted for in the period to which it relates. Insofar as the balance of the revaluation reserve, less a possible appropriate reserve for (un)realised gains or losses arising from changes in market prices, leaves room for this, a ‘standard return’ is included in the financial result, in addition to any receivable share dividend and interest on bond funds. In the calculation of the standard return, the dividend and interest already paid out are taken into account, and only the difference between the dividend/interest received and the standard return is settled with the revaluation reserve. The standard return is calculated as a percentage of the average value of the shares and bond funds over the financial year, and comprises the effective return on 5-year euro government bonds at the end of the financial year plus a risk mark-up for shares. The difference between the standard return and the dividend received on shares or interest received on bond funds is withdrawn from the revaluation reserve, if possible.
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Notes to the Stemra balance sheet and profit and loss account
Due to progressive changes in legislation and regulations, the system of applying a standard return is no longer regarded as a generally acceptable principle. However the system of standard return fits in with the requirement that the recorded investment results on shares and fixed-income securities show the most even development possible in the profit and loss account over the years. For this reason the management board and directors have decided to continue the system of standard return.
Continuity reserve The continuity reserve’s aims include guaranteeing the continuity of the work. It also serves to fulfil obligations in respect of third parties, in particular with regard to distribution of the royalties yet to be distributed in accordance with the financial statements. This reserve furthermore serves to level out unwanted fluctuations in the amounts available for distribution, resulting, among other things, from domestic and international pressure on turnover, as well as continuing changes in the distribution of rights.
Appropriated reserve Appropriated reserves are the parts of reserves that management has set aside for a special purpose. In this case, it concerns the appropriated reserve for (un)realised gains/losses arising from changes in market prices. For more detailed information on this appropriated reserve, please refer to the notes to the balance sheet.
Provisions Provisions are measured at either the nominal value of the estimated expenditure required to settle liabilities and losses, or the present value of that expenditure. A provision is mentioned in the balance sheet when there is: • a legal or constructive obligation as a result of a past event, and • of which a reliable estimate can be made, and • it is probable a cash outflow is necessary to settle the obligation.
Determination of the result Income and expenses are accounted for in the year to which they apply. The result is determined by calculating the difference between the balance of realised income and expenditure and the financial result for the year. The balance of the profit and loss account is allocated/deducted from the royalties to be distributed and/or the reserves by means of profit appropriation.
Financial expenses The operating costs of the system for the collection of programme data, Fingerprinting, are no longer classified as financial expenses, but from 2010 directly charged to the operating result.
Pension plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account when the contributions are due.
Turnover In the financial statements, the turnover in royalties is added to the royalties distributed. Stemra includes the exploitation of mechanical rights in the turnover, insofar as these relate to the financial year, can be determined in a reliable manner, and there is reasonable certainty that the revenue is collectible.
Tax With regard to Stemra, the Dutch tax authorities stipulated in an agreement dated November 6, 2001, determining the legal relationship between the parties, that Stichting Stemra is liable to pay corporation tax. This agreement was extended at the end of 2008 for a period of three years, and is valid until 31 December 2011. Foreign withholding tax available for set-off and Dutch dividend tax may be deducted from the tax due by virtue of this agreement determining the legal relationship between parties. A tax item is only included in the financial statements if corporation tax is still owed after deduction of the foreign withholding tax available for set-off.
Accounting principles for cash flow statement The cash flow statement is drawn up using the indirect method.
The provision for reorganization costs is related to the estimated costs of redundancy. The long-service awards provision is a provision for future long-service awards. The provision is the present value of future benefits to be paid for long-service awards.
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Use of estimates Drawing up the financial statements requires management to form opinions and make estimates and assumptions that influence the application of principles and the reported value of assets and liabilities, and of income and expenses. The estimates and the associated assumptions are based on past experience and various other factors that are considered reasonable in view of the circumstances. The outcome forms the basis for the opinion on the carrying value of assets and liabilities that does not emerge clearly from other sources. The actual results may differ from these estimates.
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Notes to the Stemra balance sheet as per 31 December 2010 (1) Tangible fixed assets The changes in the tangible fixed assets can be specified as follows:
Computer equipment
(x € 1,000) Actual cost as per 1 January 2010
1,354
Cumulative depreciation
-1,130
Balance sheet value as per 1 January 2010
224
Changes during the financial year: Investments
157
Depreciation
-171
-14
Actual cost as per 31 December 2010
1,511
Cumulative depreciation
-1,301
Balance sheet value as per 31 December 2010
210
Depreciation in number of years on average
3
In the profit and loss account, the depreciation expense is stated, including depreciation charged on by Buma of € 0.1 million as a result of Stemra’s use of Buma’s assets.
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(2) Financial fixed assets The changes in the financial fixed assets can be specified as follows: (x € 1,000)
2010
2009
Securities Balance sheet value as per 1 January
91,915
90,687
Changes during financial year: Acquisitions
10,790
17,842
Repayments / sales
-53,793
-23,820
Price movements
2,247
7,206
-40,756
1,228
Balance sheet value as per 31 December
51,159
91,915
Securities and bonds of Stichting Stemra are carried at market value.
account to BSO and BSA € 13.3 million, increase cash Stemra € 0.5
Valuation differences on bonds and shares are charged or credited to
million).
the revaluation reserve for financial fixed assets. Stemra’s securities have been placed in Stichting Buma/Stemra The total face value of the bonds amounted to € 12.0 million (2009:
Obligatiefonds and Stichting Buma/Stemra Aandelenfonds. The
€ 24.1 million) compared to a market value of € 12.4 million (2009:
foundations are proportionally consolidated in Stemra’s financial
€ 24.4 million). The reduction in the face value of € 24.1 million to
statements at an average percentage of 20.1% (2009: 36.5%). At
€ 12.0 million is on the one hand the effect of the conversion of part
the end of 2010 the interest is changed from 36.5% to 20.1%.
of the fixed-income securities to bond funds and on the other hand
For the result implies that the percentages are used as applied for
a decline in interest in the Stichting Buma/Stemra Obligatiefonds
2010 (36.5%). The participations give Stichting Stemra a 20.1%
of 16.4%. This decline of 16.4% is the result of the sale of partici
(2009: 36.5%) interest in Stichting Buma/Stemra Aandelenfonds
pations by Stemra worth € 69.5 million (repayment of loan in
and a 20.1% (2009: 36.5%) interest in Stichting Buma/Stemra
current account to Buma € 55.7 million, repayment of loan in current
Obligatiefonds at year end 2010.
The fully-combined Financial statements of Stichting Buma/Stemra Obligatiefonds (BSO) [Buma/Stemra bond Fund Foundations] and Stichting Buma/Stemra Aandelenfonds (BSA) )[Buma/Stemra Equity Fund] can be represented in condensed form as follows: (x € 1,000)
31 December 2010
31 December 2009
Assets Fixed assets Financial fixed assets
254,006
251,695
Other assets
15,823
73,440
269,829
325,135
269,395
324,752
Liabilities Participants’ account
Current liabilities Creditors
434
383
269,829
325,135
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Notes to the Stemra balance sheet as per 31 December 2010
(3) Current account balances These consist mainly of current account balances with Stemra associations and participants. Further notes about the settlement of this current account balance is mentioned at the financial fixed assets.
(4) Other accruals and deferred income (x € 1,000)
31 December 2010
Interest to be received
31 December 2009
228
426
(5) Cash at bank and in hand All the cash at bank and in hand is freely available (6) Continuity reserve
changes can be specified as follows The
2010
2009
5,929
6,650
(x € 1,000) Balance as per 1 January Allocations
-
-
Withdrawals
-169
-721
Balance as per 31 December
5,760
5,929
During the year a withdrawal is made that refers to the completion
withdrawal of € 0.7 million was made by way of profit appropriation.
of the streamlining of the organization which started in the previous
The withdrawal levels out unwanted fluctuations in the amounts
years. The withdrawal of € 0.2 million was recognized through the
available for distribution partly as a result of the negative financial
profit and loss account (exceptional income and expenses). In 2009 a
result.
(7) Appropriated reserve The changes can be specified as follows
2010
2009
(x € 1,000) Balance as per 1 January
-1,300
-2,600
Allocations
1,300
1,300
Withdrawals
-
-
Balance as per 31 December
-
-1,300
€ 2.6 million of the negative result in 2008 is set aside by means
collection year. In accordance with the intention of 2008, 50% of the
of result appropriation by the management board and the board
appropriate reserve of 2008 was balanced with the distributions of
of directors in the appropriated reserve, in order to not fully settle
the 2009 collection year and the remaining 50% is settled with the
the effects of the stock exchange decline in 2008 with the 2008
distributions of the 2010 collection year.
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(8) Revaluation reserve for financial fixed assets The changes in the revaluation reserve for financial fixed assets can
2010
2009
be specified as follows: (x € 1,000) Balance as per 1 January
5,683
-
(Un)realised gains/losses arising from price changes
2,247
7,206
standard return
-1,719
-1,523
Withdrawal allocated to financial result
-650
-
Balance as per 31 December
5,561
5,683
Withdrawal to the credit of the financial result to
The (un)realized gain in securities amount to € 2.2 million (2009: 7.2 million) and are taken directly to the revaluation reserve for financial fixed assets. The results on shares, (convertible) bonds and bond funds are stated at a standard return. The percentage for 2010 was 6.2% (2009: 6.6%) for shares and for fixed-income securities 3.7% (2009: 4.1%). The withdrawal for the benefit of the financial result at a standard return was € 1.7 million (2009: € 1.5 million). The withdrawal allocated to the financial result was € 0.7 million.
(9) Provisions The changes in the provisions can be specified as follows: (x € 1,000)
Balance as per
Additions
Withdrawals
Balance as per
1 January 2010
2010
2010
31 December 2010
148
-
-148
-
74
12
-12
74
157
-
-18
139
397
12
-178
213
Optimisation of operations Long-service awards Reorganization costs
Provision for optimisation of operations
Provision for long-service awards
The international changes with regard to music use and as a result of
The provision for long-service awards is a provision for future long-
this the allocated funds require an adjustment of the organization to
service awards, calculated on the basis of actuarial assumptions with
optimise the services provided in accordance with domestically and
regard to indexation and life expectancy.
internationally accepted standards and competitive conditions.
Provision for reorganization costs The expectation is that the provision for estimated severance payments will generally be settled in 2011.
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Notes to the Stemra balance sheet as per 31 December 2010
(10) Royalties to be distributed (x € 1,000)
2010
2009
Royalties to be distributed at the beginning of the year
40,863
45,438
Royalties turnover
35,662
40,680
Changes in royalties to be distributed
-1,020
-990
75,505
85,128
Associations and participants
28,493
34,128
Foreign organizations
4,964
5,638
Central Licensing
195
671
Administrative costs withheld in The Netherlands
2,920
3,604
Administrative costs withheld abroad
178
224
Distribution incl. administrative costs charged
36,750
44,265
38,755
40,863
Available for distribution Distributed in the reporting year:
Royalties to be distributed at the end of the year
Of the available amount to be processed for distribution in 2011, € 2.3 million will be added to the indivisible rights (2009: € 2.3 million, distributed in the 2010 payment). The positive result for 2010 amounts to € 0.3 million (2009: € 0.4 million negative). € 1.0 million (2009: € 1,0 million) of this amount is deducted from the royalties to be distributed and in accordance with the decision of 2008, € 1.3 million (2009: € 1.3 million) was allocated to the appropriated reserve.
Available for distribution for Stemra (x € 1,000)
2010
2009
Royalties turnover
35,662
40,680
Indivisible rights
2,348
2,285
Changes in royalties to be distributed
-1,020
-990
36,990
41,975
To be distributed at the beginning of the year
40,863
45,438
Available*
34,642
39,690
Distributed
-36,750
-44,265
38,755
40,863
Became available for distribution during the year
Royalties to be distributed at the end of the year * Excluding indivisible rights which have already been accounted for in the opening balance sheet
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Break-down of Stemra turnover (x € 1,000)
2010
2009
Biem Phonomechanical Rights/Central Licensing
16,684
18,229
Special Licensing/Private labels
6,306
5,656
Radio & TV Mechanical Rights
5,138
7,266
Mechanical Rights Online Licensing
515
1,314
Home Copy/Lending Rights
3,223
3,533
Mechanical Rights Abroad
3,796
4,682
35,662
40,680
(11) Current account balances (x € 1,000)
31 December 2010
31 December 2009*
Sister organizations abroad
3,063
Stemra associations and participants
1,555
3,475 1,522
Buma current account
-
44,646
4,618
49,643
The amounts owed to sister organizations abroad were largely settled at the beginning of 2011. In the current account balance with Buma a loan was included of € 55.7 million (2009: € 43.8 million) from Buma to Stemra. This loan is completely redeemed in 2010 by Stemra, so the Buma current account was nil at the end of 2010. The loan is subject to the Euribor three-month-rate. (12) Other liabilities and accruals (x € 1,000)
31 December 2010
31 December 2009*
Advances to Dutch industry
11,355
11,209
To be offset with industry and private labels
263
196
Holiday allowance/annual leave
102
142
Other liabilities and accruals
335
547
12,055
12,094
* adjusted for comparison
Advances to Dutch industry This includes the invoiced advances on reproduction rights to be settled by the Dutch industry for periods up to the end of 2010. When the settlements are received from these producers, the advances are deducted from the royalties to be received.
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Notes to the Stemra balance sheet as per 31 December 2010
OFF-BALANCE SHEET COMMITMENTS Partially pledged bond portfolio In accordance with the decision of the management board, at the end of 2002, part of the bond portfolio of Stichting Buma/Stemra Obligatiefonds amounting to € 27.5 million was pledged as security to ING Bank N.V. in connection with a cash facility needed for normal operations.
Longterm financial liability The financial liability with regard to the business accommodation in Hoofddorp was entered until April 30, 2012. The annual rent for Buma/Stemra together amounts to € 1.9 million of which approximately 40% will be charged to third parties. In the current composition, the annual amount for the leasing of cars by Buma/Stemra is € 0.3 million. The liability for terms longer than one year is € 0.4 million. The financial liability for the rent of the printers was entered until May 1, 2013. The annual rent amounts to € 0.1 million. Buma/Stemra entered into a contract allowing Accenture to perform a large portion of Buma/Stemra’s back office activities from 2007 until March 31, 2017. The resulting financial obligation amounts to € 18.2 million for the remaining duration of the contract, assuming consistent volumes. The off-balance sheet commitments of € 21.5 million can be summarised as follows: • less than 1 year:
€ 5.1 million
• between 1 and 5 years:
€ 15.7 million
• longer than 5 years:
€ 0.7 million
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Notes to the Stemra profit and loss account for 2010 Expenses (13) Personnel expenses (x € 1,000)
2010
2009
Salaries
826
884
Social security contributions
119
121
Pension contributions
78
86
Other personnel expenses
72
41
1,095
1,132
Charged/compensated to third parties
3,923
3,819
5,018
4,951
The average number of employees during the reporting year was 22 employees (2009: 23 employees) which corresponds to an average of 20 FTE (2009: 20 FTE). This amount does not include employees charged on via Buma.
Salary management board Stemra and registered Directors Buma/Stemra for the year 2010 (x € 1,000)
Management Stemra Fee for 12 members of the management board Stemra (incl. expense allowance)
€ 74.2
Registered Directors Buma/Stemra H.G. van der Ree
salary
€ 200.0
(from May 1, 2010)
pension charges
€ 40.4
C. van Rij
salary (incl. variable reward)
€ 233.9
pension charges and car
€ 55.2
chairman
salary (incl. variable rewards)
€ 379.2
(till August 1, 2010)
pension charges
€ 56.1
C.P. Vervoord, former
Of the amounts mentioned above 30% is recognized in the financial statements of Stichting Stemra and 70% in the financial statements of Vereniging Buma. In preparing the financial statement until 2009 we used the exemption under Article 383 paragraph 1, Title 9 BW2.
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(14) Financial result (x â‚Ź 1,000)
2010
2009
Interest income and other income Fixed income securities Interest received on bonds
923
1,126
Share dividend received
2,019
2,160
2,942
3,286
of the financial result at standard return
1,719
1,523
Withdrawal from revaluation reserve allocated to financial result
650
Shares
Mutations revaluation reserve Withdrawals from revaluation reserve for the benefit
Other interest income and similar income
219
214
Total income from investments
5,530
5,023
Financial expenses
-
-132
Interest expenses and other costs
-709
-704
4,821
4,187
Financial expenses The operating costs of the system for the collection of programme data, Fingerprinting, are no longer classified as financial expenses, but from 2010 directly charged to the operating result.
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Other information To: The Board of Directors and the general meeting of affiliates to Stichting Stemra
Independent auditor’s report We have audited the accompanying financial statements 2010 of Stichting Stemra, Hoofddorp, which comprise the balance sheet as at December 31, 2010, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.
Management’s responsibility Management is responsible for the preparation of the financial statements in accordance with the accounting policies selected and disclosed by the entity, as set out in the notes to the financial statements. Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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 financial statements are prepared, in all material respects, in accordance with the accounting policies selected and disclosed by the entity, as set out in notes to the financial statements.
Basis of accounting and restriction on distribution and use We draw attention to notes to the financial statements, which describes the basis of accounting. The accounting policies used are selected and disclosed by the entity. Our opinion is not qualified in this respect.
Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
Amstelveen, April 6, 2011 KPMG ACCOUNTANTS N.V. R.J. Groot RA
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
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SUBSEQUENT EVENTS Profit appropriation For Stemra, the result for 2010 will be deducted from the royalties still to be distributed. Then, according to the assessment of the reserve, it will be determined to what extent funds will have to be added to or deducted from this. This movement will also be credited or charged to the royalties to be distributed.
Proposal of the board of directors As shown in the financial statements, which we prepared in accordance with Article 26(2) of the Articles of Association, the board of directors proposes deducting c 1.0 million of the positive result of c 0.3 million, from the royalties to be distributed and allocating c 1.3 million to the appropriated reserve (in accordance with the decision made in 2008). The proposal has already been incorporated in the 2010 financial statements.
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Photo: Mike Breeuwer
management boards and directors
Composition of management boards and directors Directors of Buma/Stemra
H.G. van der Ree Chairman of the Board of Directors
J.A. van Bergen lyricist
R.D. van Vliet vice chairman - publisher
mr. C. van Rij Director Legal Affairs
A.J.H. van Berkel publisher
mr. E. Boom secretary – author
drs. W.J. Ketellapper Director General Affairs
P.M. van Brugge composer media music
mr. drs. L.J. Deuss publisher
H.C.M. de Clercq composer serious music
J.C.R. Gerrits publisher
M.W. Mensink publisher
J.H. Grevelt author
T.J.M. Peters composer/lyricist light music
J.N. Hamburg author
dr. K.P. Boehmer Chairman – composer serious music
A.L.L. de Raaff publisher
mr. H. Kosterman author
mr. H. Kosterman Vice-chairman - composer/ lyricist light music
drs. H.O. Westbroek composer/lyricist light music
A.J. Kraamer author
As per April 1, 2011
Management board of Vereniging Buma
T. Berk Secretary – publisher
Management board of Stichting Stemra
A.C.M. Ruiter author
Vacancy per 1-1-2011 drs. S.A.A. Abdoelbasier composer / lyricist light music
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dr. K.P. Boehmer, chairman – author, appointed by Buma
drs. H.O. Westbroek author
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Photo Hans Kosterman: Roy Beusker; other photos: Dik Nicolai
mr. H. Eijkelenboom Secretary of the Board of Directors
Additional jobs statutory directors H.G. van der Ree, Chairman of the Board of Directors Buma/Stemra as per May 1, 2010 - S tatutory chairman of the Board of Directors Stichting Buma/Stemra Aandelenfonds - Statutory chairman of the Board of Directors Stichting Buma/Stemra Obligatiefonds - Member of the board Stichting Buma/Stemra Deelneming - Secretary/treasurer Stichting SCAN - Member of the board Stichting Brein - Secretary Stichting Buma Cultuur - Vice chairman Vereniging VOICE
mr. C. van Rij, Vice Chairman of the Board of Directors Buma/Stemra, Director Legal Affairs Buma/Stemra - M ember of the board Stichting Buma/Stemra Deelneming - Secretary Stichting Brein - Treasurer Stichting de thuiskopie - Member of the board Stichting Leenrecht - Member of the board Stichting onderhandelingen Thuiskopievergoeding - Member of the board Stichting Onderhandelingen Leenrechtvergoeding
- M ember of the board Stichting Beheer Rechten Fingerprinting Database - Member of the board vereniging VOICE
C. Vervoord, 1 May resigned as Chairman of the Board of Directors and in August 2010 resigned from Buma/Stemra
List of additional positions of members of the board of Buma as per April 1, 2011 Drs. S.A.A. Abdoelbasier, Composer/lyricist light music - Employed at Royal Bank of Scotland - Chairman Stichting Consent - Commissioner and shareholder of Financial Street VOF - Commissioner and shareholder of Beaubury Trading Street VOF - Member of the board Palm - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
J.A. van Bergen, Lyricist - F reelance Author for theatre, tv, movie, radio, song, print and advertising - In partnership Van Bergen and Storimans/ Authors, Hoorn - Advisor Music Theatre Fonds Podium Kunsten - Intended secretary and joint managing Director of Stichting Paul van Vliet Academie i.o. - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
T. Berk, Publisher - M anaging Director ( President) of Talpa Music B.V., AMV/Talpa Music GMBH, 8ball Musisic and “The Voice Talent Agency BV.” Also of his private holding “Son Vida Holdings BV” - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
A.J.H. van Berkel, Publisher - M anaging Director Warner/ Chappell Music Holland BV. - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
Dr. K.P. Boehmer, Composer serious music - F reelance composer - Member of the board GeNeCo
- M ember of the board Unie van Composeren in The Netherlands - Vice-Chairman European Composers Forum (ECF) - Vice-Chairman BIEM - Chairman Stemra - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
P.M. van Brugge, Composer media music - F reelance composer - Senior lecturer composition bij Codarts Hogeschool voor de Kunsten Rotterdam - Freelance executive musician and conductor (ZZP) - Member of the board of the association Dutchfilmcomposers.nl - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
H.C.M. de Clercq, Composer serious music - F reelance composer - Freelance filmmaker(directing, camera, editing) - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
Mr. H. Kosterman,
Stemra Aandelenfonds) - M ember of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
T.J.M. Peters, Composer/lyricist light music -
reelance composer / lyricist F Freelance Music producer Music publisher Owner/Partner NRGY Music BV Partner BOEPBV (digital music distributor) Member of the board Sena (sector Performers) Member of the board Vereniging Palm Treasurer GONG Treasurer STOMP (independent record label NVPI) - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
A.L.L. de Raaff, Publisher - M anaging Director and majority shareholder of entertainment company CTM BV, including the Music publisher CP Masters BV and Imagem CV - Chairman Nederlandse Muziek Uitgevers Vereniging - Production Harpengala - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
Composer/lyricist light music
Drs. H.O. Westbroek
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hairman of Palm C Secretary of Sena Member of the board Stemra Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
Composer/lyricist light music
M.W. Mensink, Publisher
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- D irector Strengholt BV - Managing Director and majority shareholder VOC BV - Treasurer Vereniging Muziekhandelaren and – uitgeverijen van Nederland - Member of the board BSA (Stichting Buma/
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opywriter C Performing artist Columnist Radio and TV presenter at radio Veronica, respectively RTV Utrecht Joint manager Café-Restaurant ‘Stairway to Heaven’ Member of the board Stemra Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
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List of additional positions of members of the board of Stemra as per April 1, 2011 Dr. K.P. Boehmer,
Mr. drs. L.J. Deuss, Publisher
Author, appointed by Buma
- D irector Albersen Verhuur bv and Deuss Holding bv - Chairman of the board Leo Smit Stichting - Chairman Stichting Output/Amsterdam Electric - Vice-chairman board VMN (Vereniging of Music sellers and Music publishers in Nederland) - Member of the board/treasurer Stichting Nederlands Music Instituut - Member of the board Stichting Sociaal Fonds Buma - Advisor Cultural projects of the city The Hague - Freelance teacher Artez Conservatorium Arnhem - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
- F reelance composer - Member of the board GeNeCo - Member of the board Unie van Composeren in Nederland, - Vice-chairman European Composers Forum (ECF) - Vice-chairman BIEM - Chairman Buma - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
R.D. van Vliet, Publisher - Owner of Cloud 9 Music bv - Member of the board Buma Cultuur - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds) - Managing Director and majority shareholder Cloud 9 Music bv - Managing Director and majority shareholder Cloud 9 Dance nv - Managing Director and majority shareholder Chrysalis Songs Benelux - Managing Director and majority shareholder Dance Foundation bv - Managing Director and majority shareholder Napith LTD - Managing Director and majority shareholder The Right Track Music - Owner RVV Music bv
Mr E. Boom, Author - C omposer/Copywriter - Musician - Managing Director and majority shareholder Number One Music Holland BV, music publisher - Managing Director and majority shareholder Gentle Consultancy BV, legal consultancy entertainment-line of business - Member of the board; secretary Stichting Sociaal Fonds Buma - Member of the board; secretary Vereniging PALM - Member of the board occupational pension fund Stichting AENA - Teacher Johan Alsbach Stichting, College for Music publishers - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
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Annual report 2010
J.C.R. Gerrits, Publisher - M anaging Director and majority shareholder High Fashion Music BV - Member of the board Nederlandse Muziek Uitgevers Vereniging - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
J.H. Grevelt, Author - M ember of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds) - Treasurer Vereniging PALM - Owner HSG Music
J.N. Hamburg, Author - C omposer - Director and joint owner of Rapenburg Produkties V.O.F. including FutureClassics (CD’s) and FutureClassicsMusic (publisher) - Chairman of Genootschap Nederlandse Componisten - Chairman of Stichting GeNeCo - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
- M ember of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
A.J. Kraamer, Author - M usician, composer, lyricist, Performing artist, producer, publisher, conductor, arranger, technician - Owner/Director NEW B.V. (New Efficient Wholesale B.V.), TED B.V. (The Electronic Designers), AKM B.V. (Ad Kraamer Music B.V.) - Member of the board (Chairman) HTR (Stichting Heusdense TV& Radio station) - Member of the board PALM (professional association, Professional Authors Light Music) - Member of the board GONG (Genootschap Onafhankelijke Nederlandse Geluidsproducers) - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
A.C.M. Ruiter, Author - F reelance composer - Freelance performing musician - Member of the board BVPOP, department of FNV KIEM - Member of the board PALM, professional association of Professional authors of Light Music - Member of the board General Management of Sena and Member of the board of department Executives of Sena - Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) - Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
Drs. H.O. Westbroek, Author -
Mr. H. Kosterman, Author
opywriter C Performing artist Columnist Radio and TV presenter at radio Veronica (respectively RTV Utrecht) Joint manager Café-restaurant ‘Stairway to Heaven’ Member of the board Buma Member of the board BSA (Stichting Buma/ Stemra Aandelenfonds) Member of the board BSO (Stichting Buma/ Stemra Obligatiefonds)
- C hairman of PALM - Secretary van Sena - Vice-chairman Buma
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Colophon
CHIEF EDITORS
Photo Cover:
Frank Helmink, Buma/Stemra
Caro Emerald Photo: Adrie Mouthaan
Erik de Boer, Boardroom Financial PR
PHOTOS BACK COVER FROM TOP TO BOTTOM:
Kyteman CONCEPT & DESIGN
Photo: Mike Breeuwer
Link Design, Amsterdam
Sara Kroos (Annie M.G. Schmidtprijs) Photo: Frans van Zijst
Michel van der Aa PRINTING
Photo: Marco Borggreve
W.C. Den Ouden bv, Amsterdam
The Ploctones Photo: Jeroen Dietz
Seung-Ah Oh Typographical and printing errors reserve. All amounts quoted in this annual report are in euros. Disclaimer The original financial statements of Vereniging Buma and Stichting Stemra are prepared in the Dutch language. This document is an English translation of these financial statements. In case of differences between the English and Dutch text the latter will prevail.
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Photo: Co Broerse
Richard Rijnvos Photo: Co Broerse
Renske Taminiau Photo: Hans Speekenbrink
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Frans Duijts / Photo: All Access Entertainment
TEXT
Some of the most-talked about composers/lyricists in 2010
Buma Association/Stemra Foundation Siriusdreef 22-28 2132 WT Hoofddorp T 023 799 79 99 F 023 799 77 77 E info@bumastemra.nl www.bumastemra.nl 76 Annual report 2010
The Hague office Lange Voorhout 86-12 2514 EJ Den Haag T 070 310 91 09 F 070 310 91 00 E denhaag@buma.nl
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