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SoundExchange Payouts Reach Record High in Third Quarter

SoundExchange distributed a record $267 million in the third quarter, up 74 percent over the prior-year period and 39.7 percent higher than the $161 million distributed in the second quarter. The number of payees — both record labels and performing artists — increased 21 percent.

Showing the continued growth of Internet and satellite radio, SoundExchange paid out more in three quarters of this year than it did in all of 2013. The organization’s year-to-date distributions for statutory webcasting, satellite and cable radio royalties are $590.6 million, slightly more than the $590.4 million distributed last year.

SoundExchange Payouts Rise Again, Poised for Record Year

At this pace, SoundExchange distributions could reach $800 million by the end of the year. That would put SoundExchange fairly close to the value of digital downloads in the U.S. Last year, the trade value of downloads was $1.3 billion. At its current 12-percent rate of decline, downloads could finish the year around $1.15 billion in trade value. If streaming services continue to grow and download sales continue to fall, SoundExchange distributions could come close to matching download revenues in 2015.

SoundExchange Payouts Reach Record High in

What happens to revenues after 2015 depends on what services must pay. SoundExchange distributions could be affected by a change in the statutory rates services like Pandora and iHeartRadio pay to SoundExchange. The Copyright Royalty Board has started the proceedings to establish statutory rates for 2016 through 2020 and is expected to announce the rates late next year.