Despite significant pullouts from Pandora, SoundExchange is steadily increasing its royalty payouts to recording artists and rights owners.
SoundExchange has just announced its Q2 2018 results, and the results are up. The company revealed more than $208.7 million in payments to registered artists and labels for the quarter ending June 30th.
That payout is up 17.5% from the same period last year, which generated $177.6 million in royalties.
During the first half of 2018, the company paid out $398.6 million to music rights holders from royalties on music streaming services like Pandora and Sirius XM Radio. That number is also up 17.4% from the previous year, which saw $339.5 million in royalties distributed to rights owners.
The combined figure of nearly $400 million during the first half of 2018 has outperformed payouts in 2014 and 2015. But the payout is less than 2016’s numbers — though that makes sense given that Pandora started inking independent deals with recording labels during that year.
In total, SoundExchange doled out more than $403 million during the first half of 2016. The company could surpass that number in 2019, part of a steady recovery.
SoundExchange’s membership also continues to expand. According to this quarter’s financial report, the company represents 28,065 individual rights holders for the period. That’s a 9.3% increase in the number of represented holders from the previous year.
Additionally, new registrants for the company’s services are up 3.4% year-over-year, with 9,390 new registrations for the second quarter.
A few important details were missing from this report, including unpaid holding accounts and executive salaries.
Traditionally, both have been sore spots for the company, with holding tranches often in the hundreds of millions. Executive salaries are also getting more attention, in particular CEO Michael Huppe’s annual salary of more than $1 million. Those payouts are happening despite broader issues — including declines over the past two years.
Those issues could be impacting the success (or lack thereof) of the Music Modernization Act (MMA). Rumors continue to point to a ‘no-bid contract’ awaiting SoundExchange, specifically to fulfill the duties of a government-controlled Mechanical Licensing Collective (MLC). Just recently, Blackstone Group, owner of mechanical licensing group Harry Fox Agency, protested the seemingly rigged selection process.
SoundExchange also announced that cumulative payouts to artists had surpassed $5 billion at the end of 2017 and are expected to exceed the $6 billion milestone beginning in the first quarter of 2019.
The company will continue to collect royalties for non-interactive streaming on services like Pandora and SiriusXM.
Any digital music rights holder or artist can register with the service to begin collecting streaming royalties. SoundExchange holds the royalties collected before rights holders enroll in its services to be distributed after registration.
The company was originally spun-off from the RIAA to be a non-profit collective rights management organization.