20182018 ANNUAL REPORT 2018

PublisherAKM Autoren, Komponisten und Musikverleger reg. Gen. m.b.H.

Baumannstrasse 10, 1030 Vienna, AustriaPostal adress: Postfach 259, 1031 Vienna, AustriaTel: +43 (0) 50717-0Fax: +43 (0) 50717-19199E-Mail: direktion@akm.atInternet: www.akm.at

The cooperative is registered in the commercial register of theCommercial Court of Vienna under registration number FN 95866f Business yearCalendar year 2018 AuthorizationBy public announcement of the Ministry of Education on 31 August 1946, BGBI 193, consolidated version as per KommAustria’s decision KOA 9.102/08-015 dated 30 June 2008, and the decision of the Copyright Senate, UrhRS 5/08-4 dated 29 October 2008, as well as the decision of the Super-visory Authority for Collective Management Organisations dated 18 October 2016 (AVW 9.110/16-002), AKM was granted permission to administer the copyrights of composers, authors and music publishers as Collective Management Organisation as defined by the act on Collective Management Organisations. State supervisionBy law, Collective Management Organisations are subject to regulatory supervision which isexercised by the Supervisory Authority for Collective Management Organisations based in the Ministry of Justice.

EditorSusanne Lontzen

Graphic-DesignChristian Modlik

PicturesEva Kelety Photography

Contents05 Letter from the General Manager

07 Business development License Revenues Expenses and Admin rate Distribution sum

11 Our members Beneficiaries Registration of works and programs Distribution

14 About us

18 Financial Statements Balance sheet Profit and loss statement

22 What we do

23 Mission statement20

18

2018

GernotGraningerGeneral Manager

2018

2018

04

Dear membersof AKM, dearreaders,Our business development in 2018 is reason to celebrate. Revenues increased by 4.35% to € 118 million and the distribution sum broke the 100 million mark for the first time; it now stands at € 101 million. With an ad-ministrative rate of 11.35%, AKM remains one of the most efficient collecting societies for music and does not need to shy away from international comparison.

2018 was marked by our efforts to bridge the value gap in copyright and ensure fair compensation for creatives for online use of their works. Selected AKM members participated in events organized by the European umbrel-la organization Gesac in Brussels and Strasbourg, where they met with Austrian MEPs in the European Parlia-ment and presented their views. At the same time massive misinformation campaigns of the policy opponents led to uncertainty among users.

Eventually, there was a positive vote for the directive in March 2019, so copyright has finally arrived in the 21st century. We will continue to support its implementation at the national level. The Broadcasting Directive has also developed positively and, among other things, simplifies the licensing of transnational online services offered by broadcasters.

Numerous measures were taken last year to improve internal processes and modernize our services. We introduced NEON, a new tool that enables multi-territorial online licensing of your repertoire. The speed and efficiency of this self-learning system allows quick distribution of royalties. Our online service portal is also constantly evolving to ensure secure and convenient access to information.

Many of our activities are based on the feedback you gave us during the 2018 Member Survey. We will continue to work hard to improve our member services over the next few years so that you can devote your time to your core task: to write, compose and publish your music, enriching our everyday lives and cultural diversity.

Gernot GraningerGeneral Manager

05

BusinessdevelopmentScope

AKM stands for authors (A), composers (K) and music publishers (M). AKM is a Collective Management Organisa-tion according to the Austrian law on Collective Management Organisations. Based on the authorization granted by the Austrian Supervisory Authority for Collective Management Organisations, AKM administers the perfor-ming rights, broadcasting rights and provision rights in musical works with or without text from composers, authors, their legal successors and music publishers.

AKM grants all users the licenses required for the use of music, collects license fees and distributes the royalties among the entitled authors, their legal successors and music publishers.

AKM administers the exploitation rights of its members not only in Austria but almost all over the world through reciprocal agreements with 79 foreign sister societies. This ensures that the beneficiaries of AKM receive their royalty share for the use of their works abroad. In addition, AKM also provides collection services for other Aust-rian collecting societies in their name and on their behalf.

Besides its main purpose, the licensing and settlement of royalties, AKM fulfils important social and cultural tasks in favour of its beneficiaries.

License revenues2018 was an economically successful year for AKM. Total revenues increased by 4.3% to EUR 118.153 million.

2018 T€ 2017 T€ %-change vs PY

License revenues domestic and foreign 113,167 108,366 4.4

Other revenues 4,807 4,624 4.0

Revenues total 117,974 112,991 4.4

Other income 178 237 –24.8

Total 118,153 113,228 4.3

Expenditure 16,164 15,103 7.0

Financial result 8 203 –96.2

Distribution sum 101,996 98,328 3.7

06

License revenues total; Split by types of use

License revenues development

LicensesWhen protected music is presented outside the private sphere, it is considered a „public performance“. The orga-nizer or company needs a license which is issued by AKM.

Single-day events

2018 T€ 2017 T€ %-change vs PY

Live performances 20,746 20,597 0.7

Performance from audio carriers 31,106 30,131 3.2

Television 17,445 17,436 0.0

Radio 14,598 14,099 3.5

Cable retransmission 11,198 10,988 1.9

Online* 4,709 1,924 144.8

License revenues domestic 99,803 95,176 4.9

License revenues foreign 13,365 13,190 1.3

License revenues total 113,168 108,366 4.4

(T€) Domestic license revenues Foreign license revenues

9,43710,58410,76211,606

13,190

2013 85,9232014 87,5542015 90,2112016 91,7142017 95,176

80,000

* Online revenues include settlements dating back to 2014

13,364 +1.3 %2018 99,803 +4.9 %

Total

95,36098,138100,973103,320108,366113,168 +4.4 %

7,298Ballroomdances

35,112Concerts

16,953Fairs

4,704Clubbings& Discos

4,349Früh-

schoppen

3,833Carneval

07

Permanent licensesOur customers with permanent license use the positive effect of music in their outlets. These include:

4,553 Restaurants

7,584Taverns

397Discos/Dance cafes

18,660Accommodation provider

8,553Retail outlets

95 Radio programs

Foreign license revenues per country/organisation

Country Organisation 2018 T€

DE GEMA 6,858

CH SUISA 1,900

FR SACEM 968

IT SIAE 787

UK PRS 307

JP JASRAC 306

US ASCAP, BMI 281

DK KODA 229

NL BUMA 222

HU ARTISJUS 192

Payment to foreign CollectiveManagement Organisations / TOP 10 in 2018

Country Organisation 2018 T€

DE GEMA 12,367

US ASCAP, BMI 8,020

UK PRS 4,539

FR SACEM 1,648

IT SIAE 727

Payment from foreign CollectiveManagement Organisations / TOP 5 in 2018

157 Movie theatres

158 Webradios111 TV programs

150 Cable networks

08

09

Admin rateThe central indicator for the cost-effectiveness of a collecting society is the administration rate.

Distribution sumThe most important indicator for the rights holders is the distribution sum of the respective year.

More royalties for rights holders.Distribution sum increased by 3.7%.

Development admin rate

Development of distribution sum% increase vs PY

2013 12.02 %2014 10.96 %2015 9.92 %2016 9.75 %2017

2013 2014 2015 2016 2018

+3.7 %

+0.5 % +3.6 % +3.2 % +2.7 %

2018 11.35 %9.76 %

2017

+4.2 %

2012

+3.4 %

2018

2018SusanneLontzenMembership Services &Communications

„Our members’ demands areas diverse as their music.Timely and transparentcommunication is essentialfor working together ina spirit of trust.“

10

OurmembersBeneficiariesAround 25,000 authors, composers and music publishers joined AKM already. In the year under review, a further 1,075 composers, text authors and music publishers decided to entrust their exploitation rights to AKM and benefit from our high service level.

Statistics of AKM-beneficiaries* 2018(31. 12. 2018)

22,031Authors & Composers1,593 Legal successors660 Music publishers

24,870 Total

Gender splitAuthors & Composers

* AKM beneficiaries = all of the above who have signed a rights administration agreement with AKM. As of 31.12.2018, there are 586 full members of AKM (members of the cooperative) of whom 531 are authors and 55 are publishers.

84 %16 %

Beneficiariesper age group

Beneficiariesper region

15.6 %33 %8.8 %

5.5 % 14.5 %10.5 %

5.9 %

3.5 % 2.8 %

up to 30 yearsup to 40 yearsup to 50 yearsup to 60 yearsup to 70 yearsup to 80 yearsabove 80 years 2.4 %

5.1 %11.7 %

22.0 %22.4 %24.1 %

12.3 %

11

2018

Works registrationWithin the last 10 years, the number of works submitted has quadrupled.

Distribution tobeneficiariesThe table shows the splitof the distribution sum 2018to the beneficiaries.93 % of all beneficiariesreceive up to € 5,000 each.

80 %up to 1,000 €

13.4 %1,000–5,000 €

3.4 % 5,000–10,000 €

2.6 % 10,000–50,000 €

0.3 % 50,000–100,000 €

Works registration from AKM beneficiaries

Registration of ProgramsMusic programs of concerts or other events with live music build the foundation for the distributionof license fees.

Registration of Programs from AKM-beneficiaries

2014 2015 2016 2017 2018

16,856 17,531 17,78423,024 23,439

0.2 % 100,000 € and m

ore

+3.6 % +4.0 % +1.4 %+29.5 % +1.8 %

2008 2011 2014 2016 2018

454,055 661,3261,181,603 1,343,572

1,949,996

12

2018

2018

PaulFischerLegal Department

„The new EU CopyrightDirective enables creatorsto obtain fair compensationfor the use of their workson internet platforms.“

13

Management Boardand Supervisory Board Management Board

The board elected by the General Members Meeting consists of four members each of the authors, composers and music publishers group.

In the year under review the board consisted of the following members:

About usAKM is organized as a cooperative and belongs to the authors, composersand music publishers. The bodies of AKM are composed according to the basic ideaof self-administration of the right holders and consist exclusively of rights holders.The Management Board and Supervisory Board are elected from their midstevery five years by the General Members Meeting.

ComposersRobert OpratkoPresident (until June 13, 2018)Peter ViewegerVice president (until June 13, 2018)President (as of June 13, 2018)Paul HertelVice president (as of June 13, 2018)Peter JandaLothar Scherpe (as of June 13, 2018)

AuthorsJohann EckerVice presidentHorst ChmelaVictor PoslusnyAdam Stassler

The Management board as a collective body and on its behalf the General Managerruns the business according to the statute of AKM.

Music publishersEdith Michaela Krupka-DornausVice presidentClemens BruggerChristian KobelAstrid Koblanck

From left to right: Johann Ecker, Victor Poslusny, Clemens Brugger, Peter Vieweger, Peter Janda,Vivi Krupka-Dornaus, Paul Hertel, Adam Stassler, Lothar Scherpe, Horst Chmela.Not pictured: Christian Kobel, Astrid Koblanck.

14

Organisation chart

Supervisory Board

The board elected by the General Members Meeting consists of two members each of the authors,composers and music publishers group.

In the year under review the board consisted of the following members:

Commissions

AKM has some statutory commissions, such as the Program Review Commission and the Musical Grading Committee. The members of all commissions are also elected by the General Members Meeting.

ComposersRichard DünserChairmanKurt Brunthaler

AuthorsHermi Lechner-Fasching2nd deputy ChairwomanWerner Marinell

Music publisherHelmuth Pany1st deputy ChairmanHorst Bichler

Works council representativesSiegfried Flenreisz, Franz Fröhlich (as of June 13, 2018),Romana Herker, Monica Valenta

From left to right: Horst Bichler, Helmuth Pany, Hermi Lechner-Fasching, Richard Dünser,Werner Marinell. Not pictured: Kurt Brunthaler, Heinz Manfreda

Financial expertHeinz Manfreda (as of June 13, 2018)

Supervisory Board

General Members Meeting

Management Board

General Manager

15

Business unitsand employeesGeneral Manager: Gernot GraningerNumber of employees (Dec. 31, 2018): 150 employees

There are 95 employees working at the head office in Vienna, 54 in the nine branches (including the Vienna of-fice), plus 1 marginal employee. The offices of AKM are located in the state capital of the nine federal states and are part of the Business Unit Licenses.

The Business Unit (BU) Licenses grants licenses to music users and collects license fees. The Business UnitNew Media is responsible for the licensing of online usage. The Business Unit Royalties distributes the royalty income to authors, their legal successors and music publishers. The accurate mapping of business transactions and accounting is handled by the Business Unit Finance. The Business Unit Information Technology provides the necessary IT infrastructure. The administrative departments reporting to the General Manager take care oflegal matters, membership services and communications.

Organisation chart

Gernot GraningerGeneral Manager

Paul FischerLegal

Susanne LontzenMembership Services &

Communications

Barbara BastirschBU Royalties

Ingrid PolakBU New Media

Georg LinhartBU Licenses

Arno ObrietanBU Finance

Roman OslanskyBU IT

16

2018

2018IngridPolakBusiness Unit New Media

„Online use of music is morepopular than ever. NEON,our new software tool formulti-territorial onlinelicensing, allows the quickand accurate distributionof license fees.“

17

Financial Statements

Assets 31/12/18 31/12/17 € T€A) Fixed assets I) Intangible assets 1) Software and licenses 1,012,083.06 1,5422) Progress payments 29,295.00 125 1,041,378.06 1,667II) Tangible assets 1) Land and buildings 9,071,932.21 7,6382) Other fixed assets, tools and equipment 840,498.45 9413) Assets under construction 31,305.56 947 9,943,736.22 9,527III) Financial assets 1) Investments in subsidiaris 63,254.42 552) Other investments 419.00 03) Securities 18,875,037.60 19,130 18,938,711.02 19,185 29,923,825.30 30,378B) Current assets I) Accounts receivable and other assets 1) Receivables from trade 13,757,617.97 11,225 thereof payable after more than one year 0.00 0

2) Receivables from members 1,710,167.70 1,623 thereof payable after more than one year 0.00 0 3) Other receivables and other assets 384,742.29 372 thereof payable after more than one year 102,835.22 111 15,852,527.96 13,220II) Cash in hand, cash at bank 64,937,141.16 63,697 80,789,669.12 76,918 C) Prepaid expenses and deferred charges 1) Other prepayments 99,530.58 123 99,530.58 123 110,813,025.00 107,419

Balance sheet as of December 31, 2018 Figures of previous year in 1,000 € (T€)

18

LIABILITIES 31/12/18 31/12/17 € T€A) Equity I) Stockholders equity 1) Stockholders remaining 4,254.36 4 thereof paid: € 4,225.32, 2017: T€ 4 2) Stockholders leaving 101.64 0 thereof paid: € 50.82, 2017: T€ 0 4,356.00 4

II) Unappropiated income 0.00 0 thereof income brought forward € 0.00, 2017: T€ 0 4,356.00 4B) Provisions 1) Provisions for severance payments 2,205,000.00 2,0432) Provisions for pensions 3,690,000.00 3,8253) Other provisions 1,122,700.00 908 7,017,700.00 6,776C) Liabilities 1) Accounbts payable from trade 3,577,117.80 3,790 thereof payable within one year 3,577,117.80 3,790 2) Accounts payable from appropriated royalties 3,007,862.39 2,757 thereof payable within one year 3,007,862.39 2,757 3) Accounts payable to affiliated companies 517,521.78 493 thereof payable within one year 517,521.78 493 4) Other liabilities 5,715,367.82 5,658 thereof payable within one year 5,595,328.63 55,546 thereof payable after more than one year 120,039.19 112 thereof liabilities from taxes 2,194,416.63 2,188 thereof payable within one year 2,194,416.63 2,188

thereof liabilities from social security 168,802.03 164 thereof payable within one year 168,802.03 164

5) Accounts payable from unappropriated royalties 105,926,499.21 103,312 thereof payable within one year 105,926,499.21 103,312

6) Less prepayments of unaproppriated royalties -14,953,400.00 -15,370 103,790,969.00 100,639 thereof payable within one year 103,670,929.81 100,528 thereof payable after more than one year 120,039.19 112 110,813,025.00 107,419

Balance sheet as of December 31, 2018 Figures of previous year in 1,000 € (T€)

Financial Statements

19

Statement of income 2018 Figures of previous year in 1,000 € (T€) 2018 2017 € T€1) Sales income a) Domestic income 99,802,608.61 95,176b) Income from abroad 13,364,499.55 13,190c) Other income 4,807,210.67 4,624 117,974,318.83 112,9912) Other operating income a) Income from the disposal of fixed assets other than financial assets 15,907.25 29b) Income from the reversal of provisions 19,342.33 12c) Other operating income 143,133.23 196 178,382.81 2373) Personnel expenses a) Salaries -6,219,930.20 -6,257b) Expenses for (contributions to) social security ba) Expenses for severance payments and payments for severance funds -172,209.01 -186bb) Expenses for pensions -599,090.72 -559bc) Expenses for statutory social security contributions and pay-related levies and compulsory contributions -1,737,690.20 -1,685bd) Other -175,385.58 -171 -2,684,575.51 -2,601 -8,904,505.71 -8,8584) Depreciation and amortisation a) Depreciation and amortisation on intangible and fixed assets other than financial assets -1,829,740.78 -1,627

5) Other operating expenses a) Taxes other than taxes on income -11,434.85 -14b) Other operating expenses -5,418,681.47 -4,604 -5,430,116.32 -4,618

6) Subtotal of lines 1 to 5 (earnings before interest and tax) 101,988,338.83 98,1247) Income from securities shown und financial assets 14,890.52 228) Other interes and similar income 107,081.97 1309) Income from the write-up of financial assets 0.00 5910) Expenses from financial assets -105,000.00 -711) Interest and similar expenses -9,266.41 -012) Subtotal of lines 7 to 10 (financial success) 7,706.08 20313) Net income = Royalties to be appropriated 101,996,044.91 98,32814) Beneficiaries Claims -101,996,044.91 -98,32815) Annual surplus = Net profit 0.00 0

Financial Statements

20

2018

2018

21

What we doAKM

> is the largest Collective Management Organisation in Austria,

> acts as trustee and assures rights and claims of music authors and publishers,

> is organized as a cooperative and belongs to the text authors, composers and music publishers,

> represents the rights of more than 25,000 members in Austria and via reciprocal representation agreements with international affiliates of millions of copyright holders around the world.

AKM provides services formusic creators and music users

> Music authors and music publishers

receive their royalties through AKM, if their music is publicly performed or broadcast or made available on the Internet/mobile network.

> Music users (event organizers etc.) can acquire the required license for these music uses for almost the entire world repertoire of protected music

centrally at AKM.

AKM passes all revenues to themusic authors and publishers.

> Royalties are settled according to fixed rules.

> Before distributing all revenues, only the operating expenses incurred are deducted. AKM is not profit oriented.

> As part of its social and cultural tasks and in accordance with its guidelines, AKM provides social benefits to its beneficiaries and promotes Austrian music productions.

22

23

Our missionThe loyalty of our customers and membersis our key objective.

We create trust through transparency,speed and reliability.

Our professional expertise ensures the qualityof our services in our core business andin new business areas.

We focus on flexibility, innovation and cost awareness.

We act service oriented and showappreciation for our members, customers and partners.

We communicate clearly andimplement consistently.

International alignment is of great importance to us.

We feel committed to socialand cultural values.

2018

2018

2018