What is SoundExchange?
SoundExchange is a non-profit collective rights management organization, meaning that they administer the copyrights of others. Pandora, SiriusXM, and webcasters are required by law to pay for streaming musical content. SoundExchange collects and distributes digital performance royalties from the use of sound recordings on behalf of more than 155,000 recording artists and master rights owners (typically the record label) and administers direct agreements on behalf of rights owners and licensees. It is the only organization officially designated by the U.S. Congress to do so. SoundExchange pays featured and master rights owners for the non-interactive (you don’t choose which song plays) use of sound recordings under the statutory licenses outlined in 17 U.S.C. § 112 and 17 U.S.C. § 114.
It is important to reiterate that SoundExchange administers performance royalties and deals only with the sound recording (master) copyrights attached to a song.
In this newsletter:
- Irish Singer Sinéad O'Connor dies aged 56
- Alphabet Sees Green in Earnings Report as YouTube’s Quarterly Ad Revenue Hits $7.7BN
- Music Rights Giant BMI in Renewed Talks to Sell Itself
- SoundExchange Collects $1.017BN in Digital Royalties From Over 3,600 Streaming Platforms in 2022
- Spotify Q2 2023 Results Announced
Irish singer and activist Sinéad O'Connor has passed away at the age of 56, her family and team have revealed.
Alphabet reported $7.665 billion in revenue from YouTube ads, a 4.4% YoY increase.
US performance rights company Broadcast Music Inc. is once again exploring options including a sale.
Now, the details...
Exploration Weekly - July 28, 2023
Compiled by Ana Berberana
Irish Singer Sinéad O'Connor dies aged 56
Irish singer and activist Sinéad O'Connor has died at the age of 56. Her family announced the news "with great sadness", saying "her family and friends are devastated". The cause of death has not been made public. She was best known for her single Nothing Compares 2 U, released in 1990, which reached number one and brought her worldwide fame. Taoiseach (Irish PM) Leo Varadkar said her music "was loved around the world and her talent was unmatched”. Irish President Michael D Higgins praised O'Connor's "authenticity" as well as her "beautiful, unique voice”. "What Ireland has lost at such a relatively young age is one of our greatest and most gifted composers, songwriters and performers of recent decades, one who had a unique talent and extraordinary connection with her audience, all of whom held such love and warmth for her," he said.
Alphabet Sees Green in Earnings Report as YouTube’s Quarterly Ad Revenue Hits $7.7BN
The second quarter of 2023 was a smashing success for Alphabet. In its latest earnings report, the parent company of Google and YouTube reported quarterly revenue of $74.60 billion and a net income of $18.37 billion during Q2. Those figures allowed Alphabet’s earnings report to exceed Wall Street expectations for the second-straight quarter. The tech giant posted a strong overall showing in Q1 despite disappointing results from YouTube. YouTube’s Q2 2023 performance told a different story. Over three months, the leading video platform hauled in $7.7 billion of ad revenue, which represents a year-over-year increase of about 5%. YouTube’s ad revenue had previously declined for three straight quarters. Several factors contributed to YouTube’s reversal. In CEO Neal Mohan‘s first full quarter since he took over for former YouTube boss Susan Wojcicki, he began to deliver the creator-friendly tools he had previously teased. Q2 2023 was the first full quarter for Primetime Channels and YouTube Shorts ads. The latter feature helped Shorts add users; according to Google boss Sundar Pichai, YouTube’s TikTok competitor is now watched by two billion logged-in users, up from 1.5 billion a year ago.
Music Rights Giant BMI in Renewed Talks to Sell Itself
Broadcast Music Inc (BMI), the music rights company representing top songwriters such as Lady Gaga, Taylor Swift and Rihanna, is once again exploring options including a sale after it ditched its non-profit model, people familiar with the matter said. BMI has turned to Goldman Sachs Group (GS.N), the investment bank that also advised it on deal discussions last year, for guidance as it fields interest from potential acquirers, including private equity firms, the sources said, cautioning that the company may still decide not to sell itself. The company also explored a sale last year when it was run as a non-profit and handed the vast majority of its profits to music artists and their publishers. For interested parties who submitted offers last year, the fact that BMI did not keep more money for itself made it more difficult to justify the price tag of more than $2 billion that the company was seeking, the sources said. BMI reported revenue of about $1.57 billion for the fiscal year that ended on June 30, 2022, and paid out about $1.47 billion to its songwriters, composers and publishers, according to its last annual report. The company generates about $145 million in 12-month earnings before interest, taxes, depreciation and amortization, according to the sources. The sources asked not to be identified because the matter is confidential. Spokespeople for BMI, which is controlled by several TV networks and radio broadcasters, and Goldman Sachs declined to comment. In a memo to employees last year, BMI Chief Executive Mike O’Neill said it was important for the company to be more commercial going forward.
SoundExchange Collects $1.017BN in Digital Royalties From Over 3,600 Streaming Platforms in 2022
US organization SoundExchange collected USD $1.017 billion in royalties to artists and labels in 2022. SoundExchange collected those royalties from over 3,600 digital streaming providers and distributed them to more than 600,000 creators like Ludacris and Billie Eilish, as well as rightsholders, the company said in its annual report released Thursday (July 20). “In doing so, the company crossed the $9 billion threshold for distributing royalty payments since its inception in 2003,” President and CEO Michael Huppe said. Huppe credited the resurgence of live music in 2022 as a significant contributing factor to the figures. He also highlighted the organization’s relentless efforts in advancing fairness for creators in the US Congress. The company’s 2022 annual report featured additional noteworthy highlights, including its administration of over 50 reciprocal agreements worldwide, prompt monthly payouts with 90% of royalties disbursed within 45 days, coverage of 80% of the neighboring rights market outside of the US, and the processing of billions of lines of data transactions each month. CTO Luis Bonilla said: “The speed and frequency at which we pay is unheard of in the music industry — 90% of the royalties are paid out within 45 days. Strategic investments in technology and partnerships propel our best-in-class platform.”
Spotify Q2 2023 Results Announced
Spotify, after raising prices in 53 countries, quickly announced its Q2 results for 2023, and it’s a familiar story of big numbers going up, while one or two go down: paying Premium subscribers now totalling 220 million (up by 17% year-on-year), total Monthly Active Users (MAUs) up a whopping 27% YoY to 551 million, a large number possibly connected to another large number: Ad-Supported MAUs also went up by 34% YoY to 343 million. Premium subscribers contributed €2.77 billion in Q2, and Ad-Supported users another €404 million. The company reported a €247 million operating loss, adjusted to a €112 million loss. One number went down again: ARPU, the average revenue per paying user, fell to €4.27, down from €4.32 in Q1. As a point of reference, Spotify’s ARPU has been falling as its paying subscribers numbers have gone up, from €6.84 back in 2015, to €4.89 in Q2 2018. By 2019, we reported that labels were concerned about this drop – but of course, as subscriber numbers have rocketed and ARPU has dipped, more money overall has entered the business.
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