News Room







FUND'S TOTAL ANNUAL DISTRIBUTION FOR 2009 IS $9,008,000

08/03/2009, V. Robert DiPaola - Fund Administrator,  



(Below is a copy of the letter sent to musicians that received a distribution payment this year. The letter includes details related to the distribution 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 3, 2009


Dear Participating Musician:

Enclosed is a check that represents your portion of the Sound Recording Special Payments Fundís (ďFundĒ) distribution for this year, which is based on the fiscal year ended April 30, 2009. Please note that the check is only valid for ninety days, or until October 31, 2009, and accordingly must be cashed or deposited by that date. Also enclosed for your reference is a statement of your reported scale wages, if any, for calendar year 2008.

I wish I could report that the total distribution for this year has increased, as it had over the past two years. Unfortunately, the distribution this year is about $9,008,000, or about 24% less than last year. Contributions to the Fund from the recording industry were especially hit hard by the worldwide financial crisis and recession, which accelerated the already declining sales of CDís and cassettes.

The Fund did benefit from an increase of $513,000, or 28%, in contributions attributable to digital download sales this year, and an increase of over $230,000 in compliance audit collections. We were also able to maintain tight control over operating and compliance audit expenditures, which only increased about 3%. However, this was not nearly enough to offset the decline in contributions. Additionally, our investment income decreased over $400,000 this year due to the steep decline in interest rates during the second half of our fiscal year1.

Other Fund information and news includes:

  • Through the hard work of our staff, we are continuing to have substantial success in locating and paying musicians who are entitled to unclaimed funds. This year over 97% of the total distribution will be paid out to musicians, leaving only about $200,000 as unclaimed (earlier in the decade unclaimed funds typically ranged well over $1.5 million).
  • Over the next year, we plan to improve the look of our website and to make it more user-friendly based on your comments and suggestions. We especially want to make it easier for musicians who use Apple/Mac computers. Remember we are here to serve you, so if you have any ideas or suggestions to improve our service to you, whether website-related or otherwise, please let us know!

This is one of the most unpredictable periods in the history of the recording industry. However, I remain optimistic that digital downloads will grow significantly during the next few years and surpass sales of physical and other products to become the dominant way in which consumers purchase music. I base this on a few simple observations, the most important of which is that some countries are trying to enact laws to combat music piracy by requiring internet providers to cut off the internet access of persistent illegal file-sharer customers. It is also evident that more people are listening to music than ever before; just look around and you will see countless people wearing ear-buds or headphones with their MP3 players (e.g. iPods). Finally, itís estimated that in the coming years over a billion people in the world will have mobile phones with built-in MP3 players, such as the iPhone and Blackberry. So, potentially, more than a billion people could become customers for digital downloads, which in the long run should benefit you as a participant in the Fund.

Use the Website!

As a reminder, using the Fundís website, www.sound-recording.org, enables you to get information about the Fund, view your prior yearsí 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 Fundís administrative expenses, so please, 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





1 Below is a summary comparison of financial information and participants related to the annual distributions for the fiscal years ended April 30, 2009 and 2008:
2009
2008
Contributions
$10,593,000
$13,229,000
Compliance audit collections
1,469,000
1,238,000
Investment income and interest
233,000
677,000
Other income
212,000
113,000
Unclaimed distributions
377,000
536,000
Total
12,884,000
15,793,000
Operating expenditures
2,408,000
2,215,000
Employer share of payroll taxes
886,000
1,187,000
Compliance audit expenses
451,000
555,000
Reserves and capital expenditures
131,000
(35,000)
Total
3,876,000
3,922,000
Total distribution
$ 9,008,000
$11,871,000




Total participants

19,400

20,600