SoundExchange paid out $264m in Q3 – its biggest quarter in two years

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SoundExchange just paid out more than quarter of a billion dollars to recorded music rights holders – its biggest three-month distribution in two years.

According to the US company’s latest data, it delivered $263.5m to labels and artists in the three months to end of September (Q3), up 29.2% on the previous year.

Quarter-on-quarter, that figure was up $49.5m on the $214m recorded in Q2 this year.

As well as there being more money in Q3, there were also more recipients: 37,681 distinct payees received royalties from SoundExchange in the quarter, up 45.2% from Q2 2016.

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In the nine months to end of September 2016, SoundExchange distributed a near-devilish-sounding $666.9m to rightsholders- up 12.8% on the $591.2m handed out in the same period of last year.

That level of annual growth is streets ahead of the 0.1% jump seen by SoundExchange from Q1-Q3 2014 ($590.6) to the same period in 2015 9 ($591.2).

Considering that SoundExchange paid out $211.4 million in the final quarter of 2015, the company is now odds on to pay out close to – if not over – $900m across the course of 2016.

Its chances of doing so will be boosted by new US statutory webcasting rates, agreed with the Copyright Royalty Board last year, which sees the likes of Pandora liable to pay $0.0017 per play for non-subscription tiers and $0.0022 per play for subscription accounts.

SoundExchange President & CEO Michael Huppe recently told MBW: “Our growth is attributable to a lot of things. The biggest and most obvious reason is people switching to access from ownership. And we’ve had some rate increases that have helped as well.

“A lot of the industry is looking to SoundExchange as the way things should operate in terms of collective management and administration.”

We’ll get more granularity on the reason for SoundExchange’s boon in Q3 in its annual results.

The quarter could well have been boosted by a one-off payment tied to the $90m pre-1972 settlement reached by the major labels and ABKCO with Pandora last year. Other factors in the spike may have included the first fruits of the new CRB-approved Pandora rate structure, or simply backdated royalties.

Regardless, this is another slice of very good news for labels in a year which now looks firmly on course to bring the global recorded music business back to significant growth.


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