SoundExchange represents an increasingly vital piece of the new digital music business. The organization distributed $773 million to record labels, recording artists and backing musicians, up 31 percent from 2013 and a 207-percent increase since 2010.
Byrne will fill the position previously held by Walter McDonough, co-founder and general counsel of the Future of Music Coalition and a supporter of artist interests on the board. "I now pass the baton to one of our industry’s most innovative artists, David Byrne,” he said in a statement.
The former Talking Heads singer has been a frequent critic of streaming services. In a Q&A with Billboard last year, Byrne called for greater transparency in digital licensing deals and criticized well-capitalized streaming services that lose money while grabbing market share. He singled out Spotify as business model that's unfair to creators. "If and when Spotify goes public, these labels stand to make a lot of cash -- possibly way more than they'd ever make from the minuscule percentages derived from streaming. The labels therefore have no incentive to get tough with the streaming companies -- very, very clever."
As a director of SoundExchange, Byrne's opinions could affect non-interactive digital services like Pandora and Sirius XM, which pay statutory royalties to SoundExchange, but not on-demand services like Spotify, which pays negotiated royalties directly to record labels.