Song publisher C2W Music runs out of cash

Sunday, November 17, 2013

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SONG publisher, C2W Music took 17 months to burn through the $129 million it raised on the Jamaica Stock Exchange (JSE) in May 2012.


The bulk of the company's spending — US$850,000 from start-up last year to September 30, 2013 — was on administrative expenses, while US$350,000 was spent on songwriting camps and development expenses.


But the start-up's income has been dismally below projections made during the intial public offering of shares.


The board had projected that it would earn US$1.32 million from royalties in 2012, with the expectations that income would grow to US$6.4 million by 2016.


Instead it recorded just over US$8,000 ($800,000) in sales since commencing operations last year and accummulated losses of US$1.1 million up to September 30, 2013, even while other income (mostly sponsorship) of US$108,000 failed to cover the huge cost of operations.


Consequently, C2W had less than US$,2000 in cash and cash equivalent at the end of September, although it reports having other current assets valued at just over US$34,000, most of which is classified as advances to songwriters.


C2W's CEO, Ivan Berry did not respond to Observer queries up to press time, but back in May this year, he said that the company's board was working on coming up with "alternative ideas to allow us to continue doing what we are doing to get enough cash for the next nine months".


And before that, Berry said that direct spending on song- writing camps would be cut. Indeed, 77 per cent of that cost was spent in the first six months of the company's operations.


In its latest financials, the CEO announced the latest move to generate revenue through new areas of business.


"This new area is called "sub-publishing", where we basically collect royalties for major foreign copyright owners, while taking a percentage of the revenues collected," he wrote in the report to shareholders. "We work closely with the Performing Rights Societies in Jamaica (JACAP), Barbados (COSCAP), Trinidad (COTT), St Lucia and the Eastern Caribbean islands (ECCO), Bahamas (PRS) and all other Islands in all languages that make up the Caribbean region."


However, he said that even though the company exceeded its copyright target — creating and/or acquiring over 900 of them — some exploitation have "taken place with numerous songs slated for release on artist's records, on TV, in film and in advertising".


"The collection of these royalties cannot occur until months after the actual releases happen, to give our administrators globally enough time to collect and distribute back to us," said Berry. "Some of the copyrights were released this year (2013), and we're hoping to see those royalties collected globally and deposited to our account in due course."


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