Business Matters: Inside SoundExchange's 2010 and 2011 Numbers
Business Matters: Inside SoundExchange's 2010 and 2011 Numbers

The Inevitability of Unpaid Royalties: SoundExchange's 2010 & 2011 Numbers
-- SoundExchange, the non-profit organization tasked with collecting and distributing royalties from non-interactive webcasters, paid out $250 million to artists and labels in 2010 and expects to pay out $292 million in 2011. Since its inception, SoundExchange is nearing $900 million in total distributions.

In 2010, SoundExchange collected $270 million in royalties and paid out about $250 million. That unbalance may seem bad, but there's actually a positive trend: the growth in SoundExchange's payments (60.3 percent) was greater than the growth in its collections (32.2 percent). The 2010 numbers can be found in the organization's IRS Form 990 recently made public.

Why would money leave faster than it came in? SoundExchange tells it had 12,000 new registrations in 2010 and another 15,300 in 2011. In the last year, SoundExchange has done over 80 matching programs with partners such as TuneCore and RootMusic to help identify artists and labels who have unclaimed royalties. SoundExchange adds that it has added in-house staff to help contract unregistered artists and labels.

In another good sign, the year-ending balance of unpaid royalties declined to $252 million at the end of 2010 from $294 million at the end of 2009. The amount marked as unpayable fell from to $111 million from $132 million.

Of the $252 million cash balance, about $120 million has either been already or is almost paid, the organization claims. Here's how that breaks down: About $60 million was paid in 2011, uncashed checks account for $26 million (up from $11 million a year earlier) and $14 million are queued for distribution in 2012. Another $20 million represents royalties for which SoundExchange has no data. And $49 million was accrued but not received at the end of 2010.

The remaining $132 million is marked as unpayable, down from $111 million a year earlier. Almost half of the amount, $60 million, is earmarked for artists but is unclaimed because the artist has not yet registered with SoundExchange. A year earlier, the unclaimed balance was $43 million.

SoundExchange routinely takes heat for the amount of unpaid royalties on its books. Critics want to see artists and labels located and paid - and rightly so - before unpaid amounts are taken off the books and paid out to existing members. Indeed, nobody can be happy that $132 million in royalties is unpayable when digital revenue is needed more than ever.

But some level of unpayable royalties is inevitable, unfortunately. And artists and labels need to take responsibility. One figure shows the long, though slog involved in securing new registrants: 36 percent. That's the fraction of artists and labels that were located through matching programs with partners - and contacted by those partners - who actually registered in 2011. According to figures shared by SoundExchange, matching programs located 42,400 unpaid parties yet SoundExchange had only 15,300 new registrants in 2011.

Google, Vevo comScore High

-- Google sites retained their spot atop comScore's top U.S. web properties in November while music video network Vevo maintained its footprint. Out of 221 million U.S. Internet users, Google sites had 186.7 million unique visitors in November, the same it had in October. That's a huge number with direct implications for the music industry. Google Music will need to leverage Google's breadth to get its music locker and download store off the ground. Vevo videos are viewed on YouTube and thus benefit from Google's massive footprint. And the fortunes of the Android mobile platform are in some ways tied to the success of Google's online products and properties. Needless to say, it's good to be No. 1.

Vevo had 63.3 million unique U.S. visitors in November, about even with the 63.6 million unique visitors it reached in October. But Vevo dropped one spot to #17 on comScore's rankings. As detailed by comScore's U.S. Online Video Rankings for November, Vevo was the top YouTube channel with 53.3 million unique visitors, 845.5 million videos viewed and 71.1 minutes per viewer on the platform.
( comScore)

3,300: The Echo Nest's Artists-That-Called-It-A-Day-in-2011 List

-- Paul Lamere, director of developer platform at music intelligence company The Echo Nest, compiled a list of artists who "called it a day in 2011." These are people who died, went on indefinite hiatus or retired this year. Lamere created the list searching The Echo Nest's metadata and limiting the results for artists with an end-year of 2011. The results were ranked by The Echo Nest's proprietary measure of an artist's hotness.

The list shows not only the surprising number of artists who stopped making music in 2011 - the list has 3,300 names! - but shows the ways The Echo Nest's music intelligence platform can be used in unexpected ways. The alternative to Lamere's method for creating this list is a far more cumbersome process that would undoubtedly involve much human labor instead of simple coding.
(Artists That Called It A Day in 2011, via Copyhype)