A2IM Names Soundexchange Finalist for Libera Awards 1

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A2IM Names Soundexchange Finalist for Libera Awards 1 March 20, 2018 Vol 6 | Issue 1 In This Issue INDIE NOTES A2IM Names SoundExchange Finalist for Libera Awards 1 SXSW NOTES That’s a Wrap! SXSW® 2018 2 PUBLISHING NOTES CMRRA Closes 2017 With Strongest Quarter Ever 3 ROYALTY NOTES SDARS III: The CRB Weighs In 4 MONTHLY TIPS & CUES Paying Music Creators is Our Primary Objective 6 TECH NOTES SXWorks Launches Database for Publishers and Songwriters of More than 60 Million Address Unknown NOI Filings 7 INDIE NOTES A2IM Names SoundExchange Finalist for Libera Awards SoundExchange supports the independent music community every day, so we were honored when the American Association of Independent Music (A2IM) announced March 6 that we are a finalist for the Libera Awards Independent Champion. “We passionately believe the health and vitality of independent record labels all over the world is crucial for the future of the entire industry. We are big supporters of the independent artists and labels we 1 www.soundexchange.com INDIE NOTES serve, and big believers in A2IM’s mission. It is rewarding that our efforts have been recognized by our peers with this nomination for the Libera Awards’ ‘Independent Champion.’ We commend our fellow nominees for their service to the independent community,” SoundExchange President and CEO Michael Huppe said. The Libera Awards will take place on June 21 at PlayStation Theater in New York City. The awards are the culmination of A2IM Indie Week, presented by SoundExchange. To show our support for indies, we have started a video series called “Declarations of Independents” to capture the spirit and drive of indie artists and labels. Check out our second video in the series here. SXSW NOTES That’s a Wrap! SXSW® 2018 And just like that, SXSW® 2018 is behind us. We had a wonderful week in Austin connecting with artists, record labels and creators. We met people who had money waiting for them and even registered a few people on the spot at our booth in the Artist Gifting Suite in the Austin Convention Center (ah, the conveniences of modern technology and a fast, quick and free registration!). Gato Preto registering for SoundExchange with Associate Jade Bird performing at the SOUNDExchange SESSIONS (photo Director of Industry Relations Sean Glover (center) at the Artist credit: Lauren Slusher for SoundExchange) Gifting Suite during SXSW® 2018. We also put on the SOUNDExchange SESSIONS at Mohawk on Thursday, March 15. The packed showcase featured incredible performances from Billie Eilish, Jade Bird, Jukebox the Ghost, Nina Nesbitt, MAX and more. Check out some of the photos from the SOUNDExchange SESSIONS below. 2 www.soundexchange.com | March 20, 2018 SXSW NOTES Jukebox the Ghost performing at the SOUNDExchange MAX performs at the SOUNDExchange SESSIONS (photo credit: SESSIONS (photo credit: Lauren Slusher for SoundExchange) Lauren Slusher for SoundExchange) Stay tuned to our YouTube channel for more content from SXSW® 2018 coming soon! PUBLISHING NOTES CMRRA Closes 2017 with Strongest Quarter Ever The Canadian Musical Reproduction Rights Agency Ltd. (CMRRA), which is part of SXWorks, a wholly-owned subsidiary of SoundExchange, distributed more royalties than ever in the fourth quarter of 2017. Contributing to this achievement was the distribution of substantial retroactive payments of online music royalties resulting from a recent, but long awaited, rate decision from Canada’s regulatory body. With its record-breaking quarter, CMRRA has once again proven that they are a leader in rights management and a key partner for music publishers and self-published songwriters who earn music publishing royalties in Canada. Introducing CMRRA CMRRA issues licenses and collects royalties for the reproduction of musical works in Canada on behalf of its music publisher clients. Licensees pay royalties to CMRRA, which in turn distributes the royalties to its music publisher clients on a quarterly basis. “We are proud of our record distribution in the fourth quarter. Our ability to quickly process back- payments associated with such large volumes of data – linked to more than 22 billion streams and downloads – demonstrates the strength of our technology, our team and our brand,” CMRRA President Caroline Rioux said. “In conjunction with SXWorks, it is clear that we have incredible opportunities to do great things on behalf of all music publishers in 2018.” 3 www.soundexchange.com | March 20, 2018 PUBLISHING NOTES CMRRA’s Better Technology Investments Boost Efficiency, Faster Payments CMRRA’s technology upgrades have enhanced the organization’s matching capabilities and led to greater efficiencies that allow the agency to pay royalties faster, more efficiently and with greater transparency than ever. CMRRA completed its transition to a cloud-based licensing and royalty distribution system in 2017. This benefits all clients. CMRRA’s Advocacy Work Pays Off CMRRA has also taken the lead and invested heavily to advocate for publishers in national rate-setting efforts before the Copyright Board of Canada, as well as directly through negotiations with licensees. The organization’s work is responsible for the important flow of digital royalties paid to all publishers and self-published songwriters. The organization also has established strong relationships with licensees to ensure that the best possible deals can be reached and that royalties are paid in the most efficient and expedient way. CMRRA collects publishing royalties from dozens of online digital companies, such as Apple, Google and Spotify. “It is an important responsibility, but it’s one that we welcome because we know that our work supports all music publishers from around the world who are owed royalties in Canada,” Rioux said. For more information check out CMRRA’s web page here. ROYALTY NOTES SDARS III: The CRB Weighs In The Copyright Royalty Board (CRB) issued its decision on the determination of rates for SiriusXM’s satellite radio service late last year. SoundExchange advocated in this proceeding for artists and rights owners. The CRB’s determination applies to rates through 2022. The determination also covers royalty rates for the cable and satellite television music services provided by Music Choice and Muzak. The CRB provided the reasoning behind its decision on January 10, when the Copyright Royalty Judges made their “initial determination” public. The CRB increased the rates immediately for SiriusXM by 41 percent, from 11 percent of revenue to 15.5 percent of revenue effective January 1, 2018. By contrast, the CRB reduced the rates for Music Choice’s and Muzak’s services from 8.5 percent to 7.5 percent of revenue. We combed through the 129-page ruling. One of the most compelling passages demonstrates the judges’ clear understanding of SiriusXM’s ability to pay the new royalty rate without suffering fiscal damage. 4 www.soundexchange.com | March 20, 2018 ROYALTY NOTES “The Judges find that SiriusXM’s increased profitability does not provide an independent basis to adjust the 15.5% identified by the Judges. SiriusXM earns sufficient profits, as the only satellite radio provider, to allow it to pay the opportunity costs of its service to the record companies. Those opportunity costs, properly weighted, constitute the building blocks for the 15.5% rate. The evidence … makes it abundantly clear that SiriusXM, through its monopoly of the satellite radio distribution channel, has the financial capacity to pay higher rates and still maintain a high level of profitability.” In other words, it’s not SiriusXM’s financial performance alone that warranted an increase in royalty rates, the judges wrote. It’s this idea of “opportunity cost.” SoundExchange witness Professor Robert Willig described opportunity costs as something incurred when “sales through one distribution channel reduce … sales through other distribution channels (thereby reducing compensation earned by content creators from those other channels …).” In colorful language, the CRB also said SiriusXM bears all the hallmarks of a “natural monopoly.” “As a natural monopolist in the satellite radio market, SiriusXM can, and does, realize substantial profits, as demonstrated in fine detail by [SoundExchange witness] Professor [Thomas] Lys,” the judges wrote. “The history of SiriusXM bears out this point. When there were only two satellite firms – Sirius and XM – both were on the brink of bankruptcy. … After they merged, they were transformed from two pumpkins into a single coach, as it were, realizing profits across many financial measures.” We issued our statement following the CRB decision. Many others also weighed in on the important matter. In case you missed it, here’s a sample of what others said about the determination of rates. From The Trichordist: “Major score for artists, musicians, vocalists, as well as major and indie labels.” From Variety: Although the CRB ruling fell short of the 23 percent hike SoundExchange was seeking, the increase is a significant victory for SoundExchange and its constituents at a time when hard-fought music royalty battles in the compulsory license space can result in increases that are incremental, if granted at all. 5 www.soundexchange.com | March 20, 2018 ROYALTY NOTES From Billboard: [musicFIRST executive director Chris Israel said] SiriusXM has benefitted from a below- market rate at the expense of music creators for nearly two decades, during which time they “dragged legacy artists through the courts rather than pay them what they deserve.” He called upon Congress to pass Fair Play Fair Pay Act, which would apply willing
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