SoundExchange Crosses $1 Billion Payment Threshold

SoundExchange has paid out $1 billion in digital royalties since its inception. As digital music has increased in popularity, the organization’s payments have also increased. The $108.6 million distributed in Q1 2012 marks the first time the organization has distributed over $100 million in a given quarter.

Michael Huppe, president of the non-profit digital performance rights organization, credits the rising distributions to increased collections, and improvements in data management and technology to track performances.

SoundExchange collects and distributes royalties from non-interactive digital services, including satellite radio and streaming services such as Pandora. By comparison, on-demand digital services including Spotify and Rhapsody typically pay royalties directly to record companies, bypassing SoundExchange.

Terrestrial radio does not pay royalties to artists or labels, instead it only pays songwriters and publishers. The recent headline making deal between Big Machine Label Group and Clear Channel is shaking up that formula, with the radio giant set to pay BMLG and its artists directly without going through SoundExchange.

While SoundExchange paid out $292 million last year, terrestrial radio royalties remain more lucrative. For the 2011 fiscal year, BMI and ASCAP distributed a combined total of $1.62 billion in performance royalties.

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Sarah Skates has worked in the music business for more than a decade and is a longtime contributor to MusicRow.

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