Legal Issues

by Mike Masnick


Filed Under:
collections, money

Companies:
choruss, soundexchange



How Come SoundExchange Is Holding Onto Over $100 Million?

from the questions,-questions,-questions dept

We've talked about the ridiculousness of the various music collections societies being involved in the discussions on new music business models. To them, the answer is always the same: add another license and let us collect it. They're middlemen and they take in tons of money and would only be all too happy to take in more. Some got upset with us in the comments, by noting that some of these collections societies are non-profits. In fact, the new Choruss offering, which we've already explained why it's a bad idea that's more of a bait-and-switch than anything useful, has been described as a similar "non-profit" collections group.

But, as we've noted in the past, supposedly nonprofit collections groups such as SoundExchange (a spinoff of the RIAA) are notorious for not finding artists to pay -- even some of the biggest names in the business. Oh, and did we mention that if the royalties go "unclaimed" the recording industry (via SoundExchange) often gets to keep the money? Given that bit of info, it's perhaps no surprise at all that P2Pnet is noticing that SoundExchange's own tax returns note that the nonprofit was sitting on over $100 million at the end of 2007, a pretty significant leap over previous years, and a somewhat startling sum for a supposed "nonprofit" in charge of both collecting and distributing funds.

It seems like those musicians sure are difficult to find.

The P2Pnet report also points out that it will be interesting to see how much SoundExchange has spent on lobbying efforts. SoundExchange is actually barred from lobbying the government, but has been ignoring that for years by funding musicFIRST, a recording industry lobbying group that's trying to add a new license for radio stations to pay (collected by SoundExchange, of course) by claiming that radio is actually a form of piracy.

So, even if Choruss or these other collections societies seem to be designed with the best intentions in mind (and I'm sure they are), it seems that they're wide open to abuse -- which is yet another reason to be quite worried about simply handing over the entire industry's business model to such an operation.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Weird Harold, 23 Mar 2009 @ 6:28pm

    Re: Re: Re: Re: Weird Harold's #3 Fan

    ..and the song writer gets a cut, and the producer gets a cut, and the manager gets a cut, and so on.

    You can't take the artist take $1 NET and then try to compare it to gross ticket sales at a concert. It isn't logical. More importantly (and more my point) is that if the values of music sales and concert sales are the same today, and you want the same total GROSS sales in the future, concert tickets have to double in price (assuming all possible concert dates are played already). Alternately, you could double the number of concerts, or double the number of seats to have the same gross.

    If records sales disappeared, the artist net on the concert side would change dramatically, as the vast majority of people on the recording site right now would have to make their money on the concert side instead. They aren't going away for the most part. So rather than get into a lengthy (and meaningless) discussion about artist nets, I just went with the simple math.

    Sorry if it doesn't meet up to the standards of the board.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Insider Shop - Show Your Support!

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.