The Custom Channels Blog

Music royalties increase despite a complicated licensing system

Posted by John on August 22nd, 2014

Half way through this year, SoundExchange has sent $323.6 million to artists and labels. SoundExchange is a performance rights organization that collects royalties on the behalf of sound recording copyright owners (record labels, generally) and featured artists for non-interactive digital streaming including satellite and Internet radio. Custom Channels pays monthly royalties to SoundExchange in order to stream our music into businesses.

It’s interesting to note that SoundExchange’s second quarter 2014 payout of $161 million was paid to artists and labels in a roughly half-and-half split. The recording artist’s share was 45%, 5% was paid to backup musicians and session players, and a 50% was paid to record labels. Most people assume performers and songwriters get all of the royalty money. There have been numerous articles about artists arguing that they are not getting their fair share of royalties from digital plays. Perhaps part of the problem lies with the artist’s contacts and agreements with their label.

SoundExchange royalties paid this year should easily top the $590.4 million paid in 2013.

Also of note is that there were 22,343 payees by SoundExchange so far in 2014, about one-third more than last year.  A 33% increase in music-makers in one year punctuates how many more recording artists are now vying for listener’s ears and a share of the digital revenues than in the recent past.

Music licensing and royalty payments is a very complex issue. Here’s a good primer in music royalties to help dissect the complicated system. And we’ve written many blogs about music licensing for businesses.

When you use Custom Channels for online streaming or background music for your business, we pay ALL of the music licensing fees. It’s included in our low standard monthly fee – we don’t add fluctuating costs in later – so you know how to budget for your music needs. Businesses that play music in their store, restaurant or office without paying licensing fees not only risk fines, but they keep musicians from making money through their music.

Share this: