Laura Williams manages SoundExchange’s communications strategies, including the new, better-than-ever www.SoundExchange.com. She holds degrees in Political Communications and Writing from Susquehanna University.

Imagine you’re at a busy metropolitan airport. The luggage carousel goes around, and people stop by, check the luggage tags, and pick up their belongings. As the day wanes, though, there are still lots of suitcases left on the conveyer belt with no luggage tags and no one to claim them. Now, what if I told you that those suitcases are all filled with cash – stacks of bills totaling millions of dollars – and some of it might be yours.

 

This is the problem created by the music industry’s awful lack of standardized, quality metadata. Before the late 1990s, copyright law offered no compensation to the recording artists or copyright holders of sound recordings – unlike songwriters and publishers, these creators of music didn’t earn a royalty when their work was used by music services. Now, that loophole in the law has been closed (at least for digital services – AM and FM radio are still unfairly exempt from paying their fair share, but that’s another story). As we discussed in a previous post, the Copyright Office appointed SoundExchange to collect those royalties and distribute them to the artists and owners. Before that happened, no one had an incentive to keep a database of contact information on recording artists – who played on which track, and how to reach them now – or copyright information – which label or artist owned the masters on any track. So when music services began sending royalties to SoundExchange for the tracks they’d played, we faced an enormous challenge.

 

There are three major areas of data failure along the path of getting money to artists and copyright holders. One: the failure of artists and copyright holders to register with SoundExchange. Two: the failure of the services which use music to properly report what they’ve used. Three: the failure of copyright holders and artists to provide good metadata with tracks before release, and to claim their repertoires after release. But there’s good news – all of these are problems we can work toward solving, so that artists and copyright holders can get paid faster and more efficiently. Let’s look at each data gap, and what we can all do to help fill in those gaps.

 

Artists and copyright holders fail to provide or update registration information with SoundExchange.

 

Services which use music pay SoundExchange royalties for each recording they play.

 

This happens whether the artist has registered with SoundExchange or not, whether they know about us or not, because it’s required by law. That money is then held in escrow for the artist or copyright holder until they register. An artist who registers today can claim their funds all the way back to the first collection in 1996 – but they MUST register with SoundExchange. SoundExchange can’t absorb or spend the unclaimed money – we’re a non-profit – but without the necessary payment and contact information, the money languishes in a marked account, waiting to be claimed.

 

There have been occasional grumblings in the media about SoundExchange being unable to “find” artists – as though having a website for someone is the same as being able to pay them. As an independently audited non-profit, SoundExchange needs registration paperwork, signed by the payee, a state ID to prove identity, and tax forms to be able to cut a check. Many artists do not register, even after being contacted four, six, or more times. Their money just sits here until they come and register.  After registering, all artists and copyright holders to make sure that they keep their contact information and payment information up to date.

 

2. Services which use music and pay royalties to SoundExchange fail to properly report the tracks they have used.

 

A huge percentage of this responsibility for providing good data falls on the music-using services, who must file the proper reports of use with the royalties they owe to artists.

 

Reports sent to SoundExchange which are supposed to tell us whom to pay often contain entries like “Playlist unavailable” or “Artist Unknown”. Sometimes this is because the services do not have accurate information on the songs they play.  For instance, a recording owned by one rights holder may be licensed to another for use on a soundtrack and the label who released the soundtrack may be incorrectly credited as the owner of that recording.  Sometimes this is negligence on the part of services that use the recordings. Under the law, services are penalized for paying royalties late, but there is no penalty for providing bad data, unusable data, or even no data at all. SoundExchange has millions of dollars which came in with no data at all attached. That means we don’t know who the royalties belong to, and we can’t send them out. Further millions are tied up in sloppy reporting: large sums held for “Various Artists,” “Playlist unavailable,” “Artist Unknown,” and “Station break.” Among our top 25 unpaid artists, you’ll find “Beethoven,” who never created a sound recording, and was reported instead of the orchestra who earned that royalty. Some of these funds will never be able to be sent out - there simply isn’t enough information to find out who earned the royalties. But in cases where the track-level information may be traceable, SoundExchange staff sort through millions of these lines of data to correct them, and get people paid. They correct misspellings, track down bad abbreviations and comb through the myriad other variations we receive. And that doesn’t take into account someone like Texas R&B/Gospel artist Kane West, (who may be earning or losing royalties due to misspellings in reported logs containing Kanye West) or hundreds of other near-duplicates which must be untangled with track-level corrections.

 

SoundExchange processed more than 7 billion performances last year. Even if 93% of the log entries we received last year were perfect, that still means 49 million had to be adjusted by hand by our staff. Incomplete and incompetent reporting continues to be a massive problem, as music services use music without providing the proper information to help get its creators compensated.

 

3. Copyright holders and artists fail to provide good metadata with recordings before release, and fail to claim their repertoires after release.

 

We have very significant sums of money held in escrow for “Promo Only,” “Self-Released,” and “White Label.” When sending your releases to all radio (AM & FM, Internet, satellite, cable), make sure that they contain all the proper data services need to report accurately, so SoundExchange can get you paid. We have developed an innovative system called “PLAYS” (Performance Log Archive of Your Songs) which allows any artist or copyright holder to access the performance logs provided to SoundExchange. If you see an incomplete or incorrect listing in PLAYS for your recordings, you can send a message to SoundExchange’s Customer Care department to make the correction. We’ll verify and adjust the performances accordingly.

 

As the first organization to really confront issues of artist and copyright holder data in its day to day operations, SoundExchange is proud to also be on the forefront of helping to resolve them. We have already had several meetings this year with copyright holders and directors of organizations at the highest levels to work on developing consistent methods of encoding and reporting metadata. We have met with the heads of international groups facing the same problems, and worked toward strategies to improve payments.

 

SoundExchange encourages any label or independent artist (anyone who owns master recordings) to join us in our upcoming webinar, a joint project with A²IM, The American Association of Independent Music, to address these and other concerns in getting independent artists and labels their proper royalties. The live webinar will take place Wednesday, February 10 at 2pm ET, and will include a demonstration of the PLAYS data correction mentioned above. Register to attend here: https://www1.gotomeeting.com/register/915090177, or check out our blog after the event for the rundown.

 

So before those suitcases full of unclaimed money go around the carousel another time, make sure you slap a luggage tag on what’s yours. Register with SoundExchange, and make you’re your friends, colleagues, bandmates and contacts are registered, too. Reach out to your favorite digital music services and ask them to report accurately on what they play. Make sure you send out your tracks with all the data you can, and follow up in our PLAYS database to claim your tracks if they’re misreported. Help SoundExchange help you get paid when you get played.

 

 

 

Laura Williams manages SoundExchange’s communications strategies, including overseeing the launch of a new, better-than-ever www.SoundExchange.com in coming weeks. She holds degrees in Political Communications and Writing from Susquehanna University.

You may have heard about SoundExchange lately. We’ve paid out more than $111 million in royalties so far this year, are out in front fighting for fair compensation for artists, and making sure the 43,000+ recording artists and 5,000+ copyright holders we represent are getting paid when they get played.

With all those artists and all that money, it’s surprising how many people don’t know about SoundExchange yet. If you've got questions about what SoundExchange is or does, check out our ‘What Is SoundExchange’ video:

Here's the upshot: when sound recordings are played on certain digital services, satellite radio like SIRIUS-XM, Internet radio like Pandora, those high-numbered cable channels like MusicChoice, or streamed as background music in some restaurants or stores, the artist who performed on that recording earns a royalty. So does the copyright owner, which may be a label, or an independent artist who owns his own masters.

The digital services who owe those royalties either have to make a deal with each and every artist and rights owner directly (a direct licenses) and cut them a check, or they can use the blanket permission set up by the government (a statutory license). If they’re eligible for the statutory license, that service can use any commercially-released track ever made, without asking for permission from the artist. The service writes a check to SoundExchange, and provides a report of use - basically, a playlist of every track they've used, and who the artist and copyright holder are for that track.

SoundExchange is the only service the government allows to collect those royalties. Our job is to sort through the reports, find out what percentage of the money each artist or rights holder is owed, and then send them a check for what all the services together owed them. That's harder than it sounds. We don't always get good data from the services that use your tracks - how are we going to distribute to "various artists" or "label unknown"?

More importantly, SoundExchange collects royalties for EVERYONE whose tracks are played, even if they haven't registered with us, even if they've never heard of us! SoundExchange has only been around since 2001, so we're still getting the word out to artists and rights holders that this royalty stream exists. Unlike our friends at ASCAP, BMI and SESAC (more on them later) we don't just collect for our members. But we need artists to register with us, or we have no way of knowing where to send the money. We have many ways of contacting artists, from social networking to database matches to one-on-one meet-ups at conferences and festivals, but it’s a big job. Our 43,000+ artists and 5,000+ rights holders spread the word to their friends and colleagues, and success stories are our best method of outreach. So get registered, get paid, and tell a friend.

If you're not registered, get registered. Don't worry, though- SoundExchange hasn't given away your royalties. Artists and rights owners who sign up today can collect royalties they earned all the way back to the beginning of collections in 1998. We get a few hundred new registrations every month, and our online registration site has them coming in faster than ever. Remember, it’s always 100 percent FREE. We’re just giving you money that’s already yours. 

Another big difference between SoundExchange and other performance rights societies is that we advocate and expect per-play reporting from services. That means that instead of relying on sampling reports – four weeks a year or a few days a month – to determine what to pay, we ask services to report every track they play, every time they play it. In fact, 95 percent of the money we distribute is accompanied by ‘census data’ – that is, every track played, every time it’s played. We strongly believe this is the fairest way to distribute, and to make sure royalties get to the people who’ve earned them. We still accept sampling data from a few webcasters as a special accommodation, but we believe that census data is the way of the future, and SoundExchange is on the cutting edge of that movement. 

SoundExchange is a nonprofit. None of our staff of forty-five music lovers is in this for the money. We come to work every day excited about helping the people who create music get paid for their work. A lot of us are musicians ourselves, and some are recording artists. Our Board of Directors, who set our organization’s course and priorities, is evenly split between the representatives of recording artists and of rights holders. We're run by the people we pay, and staffed by people who believe in what we do.

When we’re out on the road spreading the word about SoundExchange and digital performance rights, we hear and answer the same questions over and over. So in case you’re wondering, too, here are a few of our top FAQs.

Q: You have money for me? And it’s free? What’s the catch?

A: There isn’t one. Zero, zip, nada. We were set up by the Library of Congress and the Copyright Royalty Board to collect money you’ve already earned. It’s your money, waiting here for you. You just have to tell us where to send it. That’s all there is to it. No registration fee. No Nigerian email addresses. Promise.

Q: I’m already a member of ASCAP, BMI or SESAC. Can I be a member of SoundExchange, too?

A: YES! We collect for a different royalty, for a different copyright than our friends at these organizations. They pay songwriters and publishers, the creators of music and lyrics written down on paper, and we pay recording artists and copyright holders, the creators of the master sound recordings. We encourage you to be a member of one of these organizations, AND of SoundExchange. They’re in no way in conflict.

Q: How does SoundExchange make money?

A: As an organization, we don’t. We’re a non-profit. We do retain a small percentage of the royalties we collect to pay our staff and keep the lights on. Although all performance rights organizations are funded this way, we have the lowest rate in the industry.

Q: Who does SoundExchange pay?

Of the royalties earned on a track, we pay 50% to the copyright holder and 45% directly to the featured recording artist. 5% goes into a fund which compensates backup musicians and session players. Independent artists who own their own masters keep 95%! 

Q: If I register, will I get paid right away?

A: Although we’re improving efficiency every day, SoundExchange can take up to 180 days to fully process a registration, including tax information, and compare it to our database of 7 BILLION performances. If those searches show you’ve accrued more than $10 in royalties, you’re eligible to be paid right away by Direct Deposit. Our average annual payout per registrant is about $3,000.

Q: What don’t you collect royalties for?

A: SoundExchange DOES NOT collect for digital downloads (like iTunes or “podcasting”) or “on-demand” plays like YouTube or MySpace, where a user can select and immediately play the song she wants to hear. SoundExchange also does not collect for the streaming of any audiovisual work, including music videos.

We also don’t collect royalties for AM and FM radio plays. Why? Because artists and copyright holders don’t get paid for radio plays. When you hear “Respect” on the radio, Otis Redding, who wrote the song, gets paid. Aretha Franklin, who sang the song and made it famous, doesn’t see a penny. Surprised? Most people are. Sound unfair? We agree. That’s why when our members authorize us to use a little bit of their money to protect and promote their rights, SoundExchange uses some of that to help out a group called musicFIRST (Fairness in Radio Starting Today). Our allies at musicFIRST are trying to close the loophole in copyright law which lets over-the-air radio stations to use your music without compensating you. Check out their website at www.musicfirstcoalition.org, and get in touch with your representatives in Congress, and let them know you support a full performance right for artists.

So if you hadn’t heard about SoundExchange, or you thought digital performance rights were just too good to be true, now you know. Get registered, get a friend registered, and let us help you get paid when you get played.

Laura Williams