SoundExchange Names Micahel Huppe New President & Our Exclusive Interview

SoundExchange today named long-time Executive Vice President and General Counsel Michael Huppe as its new President. Huppe succeeds John Simson, who announced in July that he would be leaving SoundExchange after 10 years. On accepting his new position, Huppe promised to be “an eager champion of the music industry’s future,” and in an exclusive interview with Hypebot, worked to answer critics of the non-profit rights organization.

HYPEBOT: Despite some aggressive actions, some in the music industry remain critical of what they say are slow reporting and payments.  How do you answer those criticisms, and do you have plans to change how SoundExchange operates?

HUPPE: We’re in the very fortunate position that our greatest success is also our greatest challenge: we grew faster than anyone could have anticipated, including massive amounts of data and payments to process. We’ve spent the past several years mastering the size and scope of the mission we’ve been given – one no one else in the world has attempted.

As we move forward, one of our top goals will be to streamline those systems and install the means to make the processes even more transparent to all the parties concerned.  We expect payments and our workload, as well as the number of services we work with and the number of creators we pay, to keep growing. That will mean new and better efficiencies. And since the bulk of our challenges are in managing billions of performances, our first priority is assembling a world-class technical team to help us scale up and meet those needs for the industry.  

HYPEBOT: Some in internet radio and music streaming have also argued that SoundExchange’s efforts to raise rates is stifling music tech innovation and limiting fan options. How do you answer those critics and how statutory digital rates in the U.S. compare to those in other countries?

HUPPE: It’s not in anyone’s interest to put webcasters or music platforms out of business. That’s why we’ve been so flexible in designing alternate rates and terms for services to opt into – so they can choose the solution that works best for their business model. I think the myriad of business solutions we’ve undertaken in recent years is a testament to our desire for finding solutions that work for everyone.

But it’s of paramount importance that we properly compensate the artists and copyright holders who create the music that fuels all those cool new services. Returns on their hard work make it possible for them to keep creating, and the system can keep growing. Also, with all the discussion about the royalty rates, it’s easy to think they must be exceptionally high. On the contrary. For example: let’s think of a hypothetical pure-play service that offers forty hours a month for free to each listener. That’s 480 hours a year of entertainment: around 7200 songs. At the 2011 pure-play rates, the total royalty payment to artists and copyright holders for that listener, for that year, is about $7.35 – divided among all the artists and owners that listener enjoyed, all year long. That’s a great value for consumers.

It’s not too much to ask for that service (who, by the way, has had 480 hours of your attention to their revenue-generating ads) to pay that sum to those whose content drew the listener in in the first place. There are more services, more choices, more listeners than ever before, and innovators are running to this space. With that type of growth, it’s hard to argue that we’re stifling the industry.