SoundExchange Reaches New Milestone

SoundExchange Reaches New Milestone

Record 2010 distributions top $252 million in digital royalties

Royalty payments to artists and copyright holders from a variety of digital streaming services reached $252 million in 2010, SoundExchange announced today. The year-end total surpasses any previous year’s distribution, and brings SoundExchange’s overall distributions during its first decade to more than $600 million. SoundExchange collects these royalties from webcasting, satellite radio, television music channels and similar streaming platforms.

“These revenues are an industry success story, hinging on the collaboration of artists, copyright holders, streaming services, and the committed SoundExchange team,” said Michael Huppe, SoundExchange’s president. “This is part of the business equation that enables music creators to continue their extraordinary work, and when that happens, everyone wins.”

Payments collected and distributed by SoundExchange have been rising steadily since it was first appointed as the sole entity in the United States to administer streaming royalties on behalf of recording artists and copyright holders. SoundExchange receives playlist data provided by music services, collects corresponding royalty payments, and distributes those payments to registered artists and copyright holders.

The royalty pay-out increases reflect several trends: the success and growth of streaming services; increased awareness among artists and copyright holders of the need to register with SoundExchange to claim royalty payments; and improved processing of previously unpayable balances through data clean-up.

“The dramatic increase in these royalties over the last several years indicates not only improvements on the process side, but the rising popularity of these kinds of services in the United States,” said Huppe. “Thanks to the innovative services offering access to music, people are consuming more music than ever before.”

Huppe also pointed to the rising subscribership and continued success of digital music services like Pandora and SiriusXM as a source of rising revenues. In 2009, SoundExchange negotiated groundbreaking business agreements with eight kinds of digital services, adapting rates to accommodate diverse business models, while ensuring continued revenues to artists and copyright holders. Cooperation since then has increased compliance by music services, Huppe said.

SoundExchange highlighted the need for artists and copyright holders to register to claim their share of these royalties. The organization registered almost 11,000 new artists and copyright holders in 2010 (more than double that registered in 2009), a development Huppe credited to extensive outreach and education efforts, as well as the organization’s rising industry profile. First-time registrations may also have contributed to the rise in individual payments, as new registrants may collect accrued back royalties.

When compared to the prior year, the 2010 average payment for artists was up 80% (to $2,800) and for rights holders it was up 39% (to over $14,000). New registrants are still able to collect several years of back royalties, often resulting in large first-time payouts.