Living like royalties

SoundExchange are the group, who, in their role as collectors of webcast royalties, have pressed for the ridiculously higher rates which are currently threatening to kick American radio off the net. But they're only doing it because they've got musicians interests at heart, right?

Maybe not: Apparently, only sixty cents out of every dollar they raise has made it to artists; the rest is being held "in reserve for artists and sound recording copyright owners (SRCOs) that have not been identified or located."

So, with all this cash sloshing about in the bank, that's earning interest for the artists, right?

Erm, not according to the organisation's most recent annual report[pdf]:

The administrative expenses of SoundExchange are paid first with interest income earned and then through an administrative charge applied to royalties available for distribution in the form of an Administrative Rate. SoundExchange expresses its Administrative Rate as a fraction, the numerator of which is the Total Annual Expenses less Annual Interest Earned on Investments and the denominator of which is Total Annual Royalties Received. If SoundExchange’s Administrative Rate is less than 20%, SoundExchange shall pay the difference between its Administrative Rate and 20% to repay the principal and interest outstanding on the Promissory Note entered into with the Recording Industry Association of America, Inc. (“RIAA”) for the repayment of costs incurred in the initial arbitrations to establish rates and terms for preexisting subscription services and eligible nonsubscription transmission services. For the period April through December 2004, SoundExchange repaid $575,097 in principal and interest to the RIAA.
SoundExchange’s Administrative Rate for the period April 1 through December 31, 2004 was fifteen percent (15%).

Hmm... so more money languishing around in SoundExchange's bank accounts is good news for the RIAA. Whoever would have thought?