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SoundExchange to Payout $860 Million in Digital Royalties This Year, CEO Calls Out Radio Over Royalties

While most companies in the music industry are immigrants to the digital world, having been formed when the industry was still in the analog world, SoundExchange are "digital natives," born at the…

While most companies in the music industry are immigrants to the digital world, having been formed when the industry was still analog, SoundExchange is a “digital native” by design.

This was the opening salvo to the A2IM convention, held in New York City, from SoundExchange president and CEO Mike Huppe.

The organization accounted for $803 million in payouts last year — in its first that figure was $20 million — with Huppe projecting that payouts would reach around $860 million this time around the sun. Not including this year SoundExchange has paid out $3.5 billion. Overall, SoundExchange claims 16 percent of the U.S. market for royalty collections. Huppe also claimed to have the lowest overhead of any royalty collection organization, with a 4.6 percent administration rate — although that would be disproved later in the day by Merlin, which carries a 2 percent administration rate.


SoundExchange Calls for Appeal of New Webcasting Rates, Saying They ‘Erode the Value of Music In Our Economy’

Huppe reported that SoundExchange administers collections from 2,500 digital radio licensees and makes payments to more than 110,000 recording artists and rights owners. In addition, SoundExchange also administers royalty payments for about a dozen direct deals between copyright owners and radio, mainly iHeartMedia. And, he added, SoundExchange would likely administer the pre-1972 settlements between the RIAA and Pandora and SiriusXM.

Besides economics, Huppe claimed SoundExchange can be an important source of industry data, already having collected metadata on 26 million recordings and creating an ISRC search for 20 million titles.

Huppe reminded the room that SoundExchange was one of the industry’s groups pushing for the Fair Play Fair Pay legislation, which, if even enacted, would require radio to pay record labels and artists for the music they play. As it is now, terrestrial radio only pays songwriters.

Congressman Slams ‘Free Ride’ of Terrestrial Radio; Broadcasters Hit Back

The other big issue before Congress is proposed legislation that would revise the Digital Millennium Copyright Act, including the Safe Harbor provisions, which results in the industry playing whack-a-mole. He says that with all the free music on the internet, it should be termed “safe harbor” anymore, but the loophole is so big its more like an ocean.