SoundExchange Hits $5 Billion in Streaming Royalty Distributions

[Stephan Bobb]

SoundExchange Hits $5 Billion in Streaming Royalty Distributions

Mar 15, 2018

2017 – An Historic Year of Diversification

WASHINGTON, D.C. – March 15, 2018 – With its December 2017 distribution, SoundExchange exceeded $5 billion in cumulative digital royalty distributions since the company was founded. SoundExchange distributes royalties for the digital performance of sound recordings to recording artists, rights owners, session musicians and background vocalists.

In 2017 SoundExchange diversified its offerings to add services for the music publishing community in addition to its core business managing digital sound recording performance royalties.

“Surpassing $5 billion in digital radio distributions marks an important moment for the new music economy. It’s a milestone for the digital music services and, of course, for the artists and rights owners who create the music that makes those services possible. We have been on course to diversify our offerings for several years now. With our entrance into music publisher services through the launch of SXWorks and the acquisition of the Canadian Musical Reproduction Rights Agency, SoundExchange is poised to become the leading global player administering both sound recording and music publishing rights on a multi-territorial basis,” SoundExchange President and Chief Executive Officer Michael Huppe said.

SoundExchange extended its reach into music publisher services with the formation of SXWorks, a wholly-owned subsidiary that provides global administration capabilities to publishers. With the acquisition of the Canadian Musical Reproduction Rights Agency Ltd. (CMRRA) in May, the SoundExchange companies expanded the scope of rights represented to include the mechanical rights of music publishers in Canada, in addition to the sound recording rights the company administers in the United States on behalf of all artists and rights owners.

SoundExchange achieved many other important milestones in 2017 including:

• Achieving an immediate 41 percent increase in royalty rates for SiriusXM’s satellite radio service from 2018 through 2022 in a rate litigation before the Copyright Royalty Board
• Advocating for several pieces of important legislation, including the Fair Play Fair Pay Act of 2017 and The CLASSICS Act, which seek to reform antiquated U.S. copyright policy to more fairly compensate creators of music
• Launching SXWorks, a music publisher services company. The SXWorks Board of Directors includes senior executives from major and independent music publishers
• Announcing NOI LOOKUP, a new service from SXWorks to help publishers and songwriters search address unknown Notice of Intention to Use filings with the U.S. Copyright Office
• And our consolidated gross distributions to creators from the SoundExchange Companies (including distributions from CMRRA for music publishing royalties) hit $683.1 million in 2017.

The dual impact of digital radio growth leveling off coupled with direct deals entered into between rights owners and Pandora resulted in a decrease in U.S. sound recording gross distributions made by SoundExchange to $652 million in 2017. SoundExchange continues to manage artists distributions of Pandora royalties on behalf of rights owners for the ad-supported tier of the Pandora service.  SoundExchange was selected to administer these artist royalties by more than 50 major and independent labels.

More than 3,100 non-interactive Internet radio, satellite radio and cable television services pay digital performance royalties to music creators through SoundExchange.