Music's foreign royalties bring welcome windfall

For musician Sandra McCracken, who has managed to make a comfortable living during the past 10 years as a folk and Americana artist, the $2,500 check that arrived in her East Nashville mailbox was a welcome surprise.
The payment represents royalties for Internet and satellite radio play of McCracken's albums outside the United States. Until this year, those broadcasts had never earned her a dime.

McCracken's windfall is part of an estimated $2.5 million payout for U.S. artists this year for overseas play, after agreements negotiated by SoundExchange, a Washington, D.C.-based nonprofit created by Congress to collect and pay out digital music royalties.

Between 3 percent and 5 percent of those newly collected royalties are expected to flow to Nashville, directly to artists like McCracken and to Nashville-based managers and lawyers representing other artists who live elsewhere, SoundExchange said.

The payouts — putting a cash value on previously untapped overseas play — add one more digital revenue stream for an industry that has seen traditional music sales slump amid increased online music listening by consumers.

For independent artists such as McCracken, who have had to develop flexible business plans as the music industry evolves, the overseas income is one more sign of hope that artists can earn a living in the fast-changing digital era.

"I'm a big believer in new forms of revenue for artists," said McCracken, 33, who along with her husband, Christian music artist Derek Webb, stays busy raising two small children while working out of an East Nashville home studio.

"For me, the name of the game is doing a lot of different things to earn an income — touring, television shows, writing — and this is another way to be sustainable," she said.

SoundExchange collects royalties from digital broadcasts, cable TV and satellite radio. The bulk of the $472 million it has paid out came in fees from satellite radio and online music services such as Pandora, Sirius XM Radio and Last.fm.

Foreign agreements forged

The foreign royalties for digital and satellite radio song broadcasts are a result of reciprocal agreements negotiated within the past year with Brazil, Canada, the United Kingdom and the Netherlands, said John Simson, SoundExchange's executive director. Those agreements apply to recordings made in the United States by U.S. artists.

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