MBW’s World Leaders is a regular series in which we turn the spotlight toward some of the most influential industry figures overseeing key international markets. In this feature, we speak to Cécile Rap-Veber, CEO of France-based CMO Sacem. World Leaders is supported by PPL.
Of that, €1.056 billion was paid out to members — which is up 10.7% on the pre-pandemic year of 2019, when accounting for inflation.
Only two other societies in the world beat Sacem’s numbers last year: ASCAP and BMI in the US.
The IFPI currently places France as the sixth biggest music market in the world so how is Sacem punching so far above its weight?
CEO Cécile Rap-Veber points to a wealth of agreements with CMOs around the world as well as its ability to collect digital royalties directly in countries where previously it would have relied on local societies.
As she tells us as part of our interview below: “The fact that we have grown the size of the repertoire and enlarged the scope of countries has helped, finally, to have what I think is the only global footprint at this level.
“I think that we are smarter if we are together, rather than working in isolation.”
Another factor in Sacem’s success is Rap-Veber’s plan to build the society of tomorrow, which has resulted in partnerships with French music NFT marketplace, Pianity, and blockchain-based service, Musicstart, which aims to protect creators’ works.
Rap-Veber took the helm of the organisation in 2021, the first female to do so in Sacem’s 171-year history. This has opened the door for a more diverse leadership team, she says, which includes a female Chair, author Christine Lidon, and an equal gender balance across its board.
“It’s opened up a new way to work in the company,” she says. “I love the diversity and I think it’s easier [to achieve] when you are a woman. Before I was CEO, there were just two women on the executive board across 15 people. Now, it’s 50/50.”
Rap-Veber joined Sacem in 2013 after a career in law, which included a 13-year stint at Universal Music France. She was born into a family of creators and decided to pursue a career that helped to protect them.
Here, we chat to her about her ambitions for Sacem, the ‘black box’ issue, what she’d change about the music business and more…
When you were appointed CEO, you expressed a plan to build the Sacem of tomorrow. What does that look like?
At the time, I took Web3 as a reference point and presented a plan called Sacem 3.0. It was based on six pillars, three of which have been the fundamentals of Sacem since the beginning. Those are to better collect and distribute; to protect the legal environment and maybe even improve it; and to socially and culturally protect our members.
Then I added three other pillars. The first is to deliver new services and tools to our members. The fifth pillar is to invest in innovation and the diversification of our source of revenues. The sixth pillar, which is one of the most fundamental for our members, is to do that at a better cost than we used to do in the past.
It’s a three-year plan, so of course we have a lot of things to do, but the achievement in year one is already really good. In 2022, we had a record level royalty collection of €1.4 billion, we distributed more than €1 billion to our members and we reduced the cost ratio by three points from 14.8% to 11.8%.
Sacem is amongst the top three leading collection societies in the world while France is sixth on the IFPI’s list of major music markets. How are you punching above your weight?
Thanks to the digital evolution, we now have the opportunity to collect in other markets and for other repertoire than just Sacem repertoire and in our country. When I joined Sacem in 2013, Universal Music Publishing Group had entered into a partnership with us regarding digital, but it was mainly focused on downloads and in Europe. It was a limited area. Then, we made the first agreement with YouTube, covering 130 countries. That was the beginning of an expansion of digital services around the world, allowing us to collect directly in countries where we used to rely on local societies. For online, we decided to collect directly because you have one player to deal with in all the different countries.
What we did first was to preserve and reinforce our agreement with Universal Music. This year, we celebrate the 15th anniversary of that partnership, which now covers all the different DSPs, sometimes for more than 180 countries. We have global worldwide agreements with Facebook or TikTok and, on top of that, the success of our partnership has attracted other repertoire. We have also convinced other publishers and CMOs to trust us with their rights, such as Warner Chappell and IMPEL.
Now we have 75 different Anglo-American publishers that have Sacem represent the rights for digital in Europe, Africa and the Middle East. We also attracted some other sister societies that maybe couldn’t invest in the same tools or didn’t have the same knowledge about European legislation and how to licence in this region.
For instance, we partnered with Canadian society SOCAN and Korean society KOMCA, which is how we represent BTS in Europe, the Middle East and Africa. We also partnered with ASCAP last year and, more recently, the Hungarian society ARTISJUS, the Brazilian one UBC, and two African societies.
Collective management organisations have come under fire over the last decade or so for allegedly sitting on ‘black box’ income and not properly distributing to members what they’re owed. There have been various attempts to fix this over the years, none of which seemed to have come to fruition. What’s your perspective on the current situation?
When I joined in 2013, I was upset when I heard about the black box and lack of transparency. The first thing I said was, ‘Okay, if I have to deliver services, tools, I want to bring more transparency.’ This is how I want to promote the collective management model and [have dealt] in negotiations across the last ten years; you might not agree but at least you fight about something that we both understand.
We built a tool for our members and partners called URIGHTS, which shows reports from DSPs concerning digital rights payments. This includes the declaration from the DSP for the payment distribution and how we have identified the works and the level of identification. So we already provide plenty of data.
Then we realised that there was a big issue around data and it not being clean. We were the first society in the world to start using a blockchain initiative in 2015 called Elixir. ASCAP and PRS joined us and that was the beginning of cleaning the data and trying to better identify and match the reports from digital platforms. The COVID-19 pandemic put it on hold but we’ve started work on it again. We are still thinking of partnering with other organisations because it doesn’t make sense to only work with your own data. On top of that, we’ve entered into a discussion with MLC [in the US] because they have a large repertoire and we are also working with Latin American mechanical rights society, Back Office.
For me, fixing the problem is crucial and I’m sure it will be thanks to information technology and machine learning. It took a while but now it’s going faster and faster and I’m sure that before 2025, a lot of issues will have been fixed. When I see the level of identification that Sacem reached for the data sales reports from DSPs, we were able to identify more than 99% of the value. So there is less than 1% missing and when we’re talking about works, we reached almost 90% of the reference.
Are you still using blockchain technology to help fix the issue?
No, we are working on other technology that is more agile. We are using blockchain for something else called Musicstart. Sometimes, it takes 18 months to get an agreement between the composers and publishers on a given work so for all this time, they won’t register the work. It’s a pity because you could have someone else try to steal your composition in that time.
I asked my innovation team to develop a new application, based on blockchain, that is free for our members and will be released with a B2B partner abroad. It allows any creator, as soon as they start to work on a composition or lyrics, to register it on the Musicstart platform. Then they are able to prove that they were working on this and when. Maybe after three months, you want to add some music and the registration will be complete. The whole story of the different participants of the work will be recorded in the blockchain.
For the identification of works, for more than one year now, we have been working on using machine learning. We have a new tool which is embedded in Amazon [cloud service] AWS that’s able to identify, in less than one hour, billions of lines [of data] that we receive from the platforms.
Here’s a big question: what would you change about the music industry and why?
I’m very concerned that, in the future, we might only have four main platforms to distribute music in the world. I’m not sure that it will help to promote diversification of aesthetic and genre throughout the world.
The other thing that I would do is implement more value for creation into the business. When streaming services started, there were five million works available and today, we’re talking about over one hundred million. Tomorrow, it will be one billion. How can you emerge from that?
During that time, Apple has increased its subscription by €1 or €2 but Spotify hasn’t really increased the price. The value attached to each stream is too low. There are also plenty of tracks that we don’t even know where they come from. It’s a pity that we’ve lost so much value in this new environment.
When you see the amount of business, globally speaking, it’s getting better and better but the situation for each composer, creator is still really low. My fear is that you can’t really live thanks to your creation through streaming. I’m upset about the fact that we might lose some diversity and emerging talents.
What are the most exciting developments in today’s music business?
Innovation for creators and societies. What are the new ways of working while being an artist or being in a company? What will we have to build and what are the opportunities to bring new sources of revenue for creators? What is really instrumental for me is to develop diversification of revenue.
We have Musicstart to develop and we were the first society to deal with [NFT marketplace] Pianity. We already work on the metaverse. I see challenge and opportunity, I always see the glass being half full and what is positive in this new era.
The only thing that is really important is that everything’s going faster and faster. It’s unbelievable to see that iTunes downloads don’t exist anymore, of course vinyl is coming back but I’m not sure that is the most sustainable market. We have to be sure that we take the train at the right moment. At Sacem, I think we manage to do that so I’m sure that in the coming months, there will be plenty of announcements for the benefit of our members.
How about your ultimate ambitions for Sacem?
First of all, to always distribute more. For 2023, I’m already sure that we will distribute more than the billion already distributed in 2022. My ambition is to also still attract partners or renew agreements with partners. On top of that, what is really instrumental today is to better understand AI and the impact of that on our industry. We’re going to do some important seminar workshops next fall and we are already working with French and European authorities to see how we can be sure that in every step where our works can be involved in AI, we see the danger or know how to protect the creations of our members.
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