by Tabassum Siddiqui
Upon being congratulated on the 20th anniversary of U.S.-based music tech organization SoundExchange, instead of basking in the milestone, the company’s President & CEO, Michael Huppe, immediately muses about the future – rather than the past.
As the driving force behind SoundExchange, which acquired CMRRA in 2017 and includes affiliate SX Works Global Publisher Services (SX Works), Huppe is the type of leader who is always thinking about what’s next, particularly when it comes to tackling the challenges and opportunities presented by the ever-evolving music industry.
“I spend a lot more time looking forward than looking backward – I think the role of the CEO and the leadership team is that if you’re only thinking five years ahead, then you’re already behind,” he says.
Huppe’s path to leading SoundExchange merged his longtime interest in music with his early career in law. The company has been operating since 2003 to build a fairer and more efficient music industry through technology, data and advocacy and collects and distributes digital performance royalties on behalf of 650,000-plus creators.
“I’m a recovering lawyer,” he says with a laugh. “I started out at a law firm doing a lot of intellectual property work, but also general commercial litigation. In 2000, I got a call from a headhunter to come over to the Recording Industry Association of America, a trade association in Washington, D.C. that represents the major record labels. A lot of my work there involved working with SoundExchange – I ran a majority of their big rate litigations, and at one point they asked me to join as General Counsel, which I did until I became the CEO.”
“I’ve always loved music. I play a couple instruments – not well! – and I love what music means to our culture and what it means to tap into our ability to express ourselves,” he adds. “It can cheer us up when we’re down, and it’s a way of communicating with each other. So, it was really exciting to begin working in the music industry.”
Huppe, a tireless champion for policies that support creators, played a key role in the passage of the 2018 Music Modernization Act in the U.S. and is also an adjunct professor, lecturer and published author.
During his decade-long leadership, SoundExchange’s annual collection of digital performance royalties on behalf of creators has increased from $292 million to over $1 billion, partly thanks to the organization’s focus on improving payment for creators in the digital space.
“There are so many places that people need to go to get the rights to legally use music, so part of our role has always been to think about what we can do to make the industry work better and remove any friction,” Huppe says. “There’s a lot of time and energy spent on things like metadata, ownership issues and payment disputes – they eat up a lot of resources in the industry that could otherwise go into the creation of the music.”
Balancing strategy, advocacy, education and outreach means Huppe is often juggling many priorities all at once.
“Some days focus on business development – thinking about what’s the next chapter for the company, where the industry is going and how we can go along with it,” he notes. “Other days I’m focused on advocacy for music creators – we are a business first and foremost, but we very much advocate for the value of music. Something that’s built into our DNA is to fight to make sure that creators are paid properly – whenever and wherever their music is used. We’re involved in legislation in Washington and around the world, especially in Europe, trying to make sure creators get paid fairly.”
Huppe, who oversaw SoundExchange’s acquisition of CMRRA, sees the Canadian affiliate as critical to the company’s future growth. Through CMRRA and SXWorks, SoundExchange provides administrative solutions and tools that make it easier for publishers to share data and search for unpaid digital uses of their repertoire.
“We’re the gold standard for how to do collective licensing in the industry – when it comes to our pay-through rates, admin rates, how efficient we are, how transparent we are in our processes, those are all set in place to make things work better. In joining with CMRRA back in 2017, we thought, ‘What if we could bring that approach, perspective and systems and marry that with a real leader on the publishing side in Canada and take a step in the direction of a smoother licensing regime?’” Huppe says, noting that unlike with CMRRA in Canada, the U.S. didn’t have a centralized agency to handle mechanical rights and publishing until recently.
CMRRA is owned by SX Works, a subsidiary focused on providing administration services to the publishing sector. A key element of the partnership includes an integrated database that leverages the combination of SoundExchange’s authoritative International Standard Recording Code (ISRC) and sound-recording data, and CMRRA’s extensive musical works database that encompasses 47 years of collective license administration across labels’ catalogs, UGC platforms, and across full usage reporting for digital download and streaming providers.
“CMRRA has an outstanding publishing database of songs, and we’re marrying resources together so that it helps remove some of the silos that exist – that can help make the processing of all these royalties a lot more efficient,” Huppe explains.
Combining those strengths is key to SoundExchange’s approach to addressing the big challenges posed by the digital disruption of the music industry, from the shift from sales of physical copies to revenue being driven by streaming, to the development of new platforms like the Metaverse and Web 3.0, to the much talked-about generative artificial intelligence tools.
As the company celebrates its 20th anniversary this year, Huppe says he’s optimistic about SoundExchange’s ability to meet those challenges head-on.
“It’s a great time to reflect on how far we’ve come – and yet 20 years is not a long time,” Huppe notes. “It’s really gratifying to see the advances that have happened in the digital streaming space even in those 20 years. I think back to when I first came on board – back then, people weren’t even sure what this new right was that we were administering. It’s fascinating to look at how far it has come in 10 years.
“We’re always charging ahead – but the anniversary is a good time to take a pause and assess how far the industry has come and look ahead to the changes coming.”
Engagement with creators, industry players, government officials and other stakeholders is at the heart of SoundExchange’s mandate – using everything from social media and online newsletters to direct outreach, the company makes a concerted effort to spread the word about both its business and advocacy functions.
“It’s critical for the creative community to know what CMRRA, SoundExchange and SX Works bring to the industry. Part of our engagement is making sure that all creators know that we’re more than a bank that sends the money every month – we’re also out there fighting for fair treatment of creators and rights holders,” Huppe says.
Twenty years into its mission to power the future of music, SoundExchange will continue to draw on that type of engagement as it remains committed to supporting songwriters and other music-creators.
“We’re always focused on looking after the value of music and protecting creators and rights holders around the world – that will never cease,” Huppe says. “But I think the things we’re going to be spending a lot of brainpower on are: How is music going to be consumed in five years? What will be the status of Web 3.0? How can we play a role in making sure AI benefits the industry while also incorporating the precautions that are needed? I think those are some of the big things that we will be concentrating on for the next several years.”
To learn more about SoundExchange, visit www.soundexchange.com.
