Artists and record labels won't have to wait so long between SoundExchange royalty checks. This month the Washington D.C. performing rights organization will begin paying royalties monthly rather than quarterly to member artists, labels and rights holders that have elected to receive electronic payments. The organization claims to be the first sound recording performing rights organization in the world to offer monthly royalty distributions.
There are two requirements for SoundExchange members to receive monthly distribution: they must be signed up to receive electronic payments and have royalties due of at least $250. Artists and labels that don't meet these requirements will continue to be paid quarterly.
So how many labels and artists can receive monthly payments? SoundExchange tells Billboard that half of its 15,000 to 18,000 payments each quarter are made electronically, and approximately 40% of payees signed up to receive electronic payment will exceed the $250 threshold. The organization notes it will revisit the $250 threshold in a few months to determine if a change is needed.
SoundExchange collects and distributes royalties from non-interactive digital music services that use the Section 114 compulsory license for sound recordings. Internet radio service Pandora, satellite radio company Sirius XM and cable radio service Music Choice are among the 2,000 services that pay royalties to SoundExchange.
Digital performance royalties have grown to become a significant revenue source. Distributions in the third quarter of 2013 were $153.7 million, up 25.5% from the same period in 2012 and a 74.7% increase from the period in 2011. SoundExchange has paid out more than $2 billion in digital performance royalties since its inception in 2000.