SoundExchange To Launch Monthly Royalty Payments System

SoundExchange is an independent nonprofit performance rights organization that collects and distributes digital performance royalties to artists and copyright holders. SoundExchange represents artists and is responsible for these artists and copyright holders in getting paid for their music played on digital radio. 

In the past, SoundExchange has been known for disbursing payment to artists and copyright holders on a quarterly basis. On January 14, 2014, SoundExchange announced on their website that they are moving to monthly royalty payments. The requirements to receive these payments monthly are:

• If the artist or copyright holder is signed up to receive electronic payments
• If the artist or copyright holder have royalties due of at least $250

If the artists or copyright holders do not meet these requirements they will continue to receive their royalty payments on a quarterly basis. By offering monthly payments to their clients, SoundExchange is taking their company to the next level. SoundExchange is the first company to offer monthly royalty payments. According to SoundExchange President and CEO Michael Huppe, and I quote, 

“While SoundExchange was already a market-leader with quarterly distributions, moving to monthly payments takes our service to the next level. By making performance royalties available sooner, we are making it easier for recording artists and record labels to focus on creating the music we all enjoy.”

So how many artists and copyright holders are eligible to receive monthly payments? According to Billboard, SoundExchange tells them that half of its 15,000 to 18,000 payments each quarter are made electronically, and approximately 40% of payees signed up to receive electronic payment will exceed the $250 threshold. There are over 2000 services that pay royalties to SoundExchange. Some of the services include, Sirius XM, Music Choice, and Pandora. Digital performance royalties have grown and SoundExchange has paid out more than $2 billion in royalties since 2000.

This is a great benefit to artists and the copyright holders. I never understood why the companies held the royalties for so long. If you are an artist or copyright holder, will you sign up for electronic payments? Do you think this is a good idea that SoundExchange decided to do? Will other performance rights organizations follow in the footsteps of SoundExchange? Only time will tell if this was a great decision made from SoundExchange.