News Room







FUND'S TOTAL ANNUAL DISTRIBUTION FOR 2008 IS $11,871,000

08/01/2008, Fund Administrator,  



(Below is a copy of the letter sent to musicians that outlines this year's distribution after operating expenses and includes discussion on prospects for the future and other information regarding the Fund. For those musicians utilizing direct deposit and participants that are beneficiaries, your distribution letter is slightly modified to reflect your circumstances.)

 

August 1, 2008

 

Dear Participating Musician:

Enclosed is a check that represents your portion of the Sound Recording Special Payments Fund (“Fund”) distribution for this year, which is based on the fiscal year ended April 30, 2008. I am pleased to report that this year’s total distribution is $11,871,000, or about $800,000 or 7.3% more than last year. Also enclosed for your reference is a statement of your reported scale wages for calendar year 2007, if any, and a form to designate a beneficiary(s) if you have not already done so or wish to make a change to your existing designation (along with a postage-paid return envelope). Please note that the check is only valid for ninety days, or until October 29, 2008, and accordingly must be cashed or deposited by that date.

As you are probably aware, sales of CDs have continued to steadily decline, while digital download sales have continued to grow strongly, though not yet enough to offset the decline in CD sales. Certainly changes in technology and stiff competition for consumers’ entertainment dollars (e.g. DVDs, video games, and internet services) have placed the recording industry in transition and in one of the most tumultuous periods in its history. Accordingly, attempting to predict the future direction of sales of sound recordings is speculative at best.

However, certain data still suggest that contributions from sales of digital downloads should significantly increase in the future. Since last year, when I reported that Apple Inc. had sold its 100th million iPod since 2001, with 60 million being sold in the year ended April 2007 alone, another 52 million iPods have been sold. Recent forecasts still indicate that a projected 1.1 billion phones with a built-in MP3 player (e.g. iPhones, Blackberrys) are expected to be sold by 2011 worldwide. These factors, combined with competition in the marketplace, have resulted in increasingly user-friendly MP3 players and more vendors that provide consumers with additional outlets to purchase digital downloads legally (e.g. WalMart.com, Amazon.com) and can only bode well for sales in the future.

The Fund benefited this year from an increase of $1.7 million in recording company contributions over the prior year. The increase in contributions is mainly attributable to the strong growth in digital download sales, including ringtones ($1.8 million this year, or a 157% increase), as well as to companies making catch-up payments based on the new Sound Recording Labor Agreement (“SRLA”) that was effective retroactive to February 1, 2006. In addition, reducing our operating expenditures and adjusting our reserves to match our future needs for new computer software and hardware saved an additional $259,000, and this amount was also added to the distribution.

Also, based on provisions of the SRLA, the Fund received contributions for the first time ever for music videos and concert DVD’s, totaling over $367,000. (Note that these contributions are payable directly to the musicians who worked on the projects and are not included in the current distribution.)



Below is a summary comparison of financial information related to the annual distributions for the fiscal years ended April 30, 2008 and 2007:

2008
2007
Contributions
$13,229,000
$11,544,000
Compliance audit collections
1,238,000
2,363,000
Investment income and interest
677,000
492,000
Other income
113,000
210,000
Unclaimed distributions
536,000
744,000
Total
15,793,000
15,353,000
Operating expenditures
2,215,000
$2,374,000
Employer share of payroll taxes
1,187,000
1,308,000
Compliance audit expenses
555,000
541,000
Reserves and capital expenditures
(35,000)
65,000
Total
3,922,000
4,288,000
Total distribution
$11,871,000
$11,065,000

 

Total participants

 

20,600

 

22,400



One of our highest priorities at the Fund is to listen to and support the needs of the musicians. To that end, some recent initiatives we’ve taken include working with AFM locals to locate musicians with unclaimed funds (we’re pleased to note that we’ve been able to locate musicians entitled to over 97% of this year’s total distribution, up from 90% or less in prior years), showing musicians how their distributions were calculated on their payment voucher, and truncating social security/insurance numbers in our correspondence to better protect musicians’ privacy. We’re here to serve you, so if you have any ideas or suggestions to improve our service to you, please let us know!

As a reminder, using the Fund’s website, www.sound-recording.org enables you to get information about the Fund, view your prior years’ tax and scale-wage statements, make changes to your address and personal information, designate a beneficiary and sign up for direct deposit (available to U.S residents only). Using the website also helps reduce the Fund’s administrative expenses. So if you have not already done so, visit the website and fill out the registration form and return it to the Fund.

Hoping all is well,

V. Robert DiPaola

V. Robert DiPaola
Fund Administrator