SoundExchange will collect national and foreign private copy royalties in the USA

 

By Emmanuel Legrand

US neighbouring rights society SoundExchange has announced that it will soon start collecting and distributing domestic and foreign private copy royalties.

  The Washington, DC-based rights society has so far collected royalties from the use of recorded music by non-interactive platforms. By expanding into private copying royalties, it will take over a function which had been performed by the Alliance of Artists and Recording Companies (AARC), a non-profit Alexandria, Virginia-based society created in 1993 by the US music industry, following the vote by Congress in 1992 of the Audio Home Recording Act (AHRA).

  AARC collected on behalf of performers and owners of recording rights the proceeds of the private copy levy on media such as CD-Rs, automobile systems, media centers, and satellite radio devices that have music recording capabilities. AARC had mandates from US rights holders to collect foreign private copying rights, when applicable, through reciprocal agreements with international societies such as Germany's GVL, France's SCPP and Adami, Finland's GRAMEX, the UK's PPL, among others.

Filling the void

  AARC will wind down its operations by the end of 2021 and will cease to operate in 2022, and will distribute all available royalties it has collected since 2018 in a final distribution in late 2021. AARC will accept updated payment and tax information until July 31, 2021. Meanwhile SoundExchange plans to begin claiming international PC royalties in late 2021 and domestic PC royalties in February 2022. 

  SoundExchange is adamant that it is not taking over AARC's business. The organisation told Legrand Network that AARC has made the decision to cease operations later this year and no longer perform this function for the industry. "SoundExchange is going to fill the void and pick up the work AARC has historically performed, i.e. collecting domestic and foreign private copying royalties," said SoundExchange.

  AARC's collection and distribution figures are not available but sources in Washington, DC claim that the volume of collections has been dropping in recent years, as consumers switched to streaming consumption.

Provide a service to the industry

  SoundExchange said that relative to its overall collections, private copying "will not result in a significant increase. However, these royalties, especially from foreign sources, are an important part of the music industry and SoundExchange is excited to provide this service."

  The move will also allow SoundExchange to be more active on the international scene, which is important in the context of the organisation's current campaign to have US performers be given national treatment by neighbouring rights societies in Europe and elsewhere. 

  SoundExchange said this new business development is linked to the organisation’s "multi-year technology initiative centered on leveraging the use of data to streamline systems and increase efficiency across the music industry."

  Commented Michael Huppe, President & CEO, SoundExchange: “We are committed to leveraging our best-in-class technology solutions to enhance the music ecosystem. Expanding into private copy royalty collection and distribution is just one step in our mission to make the business of music simpler and more efficient for creators."