What is SoundExchange? Are you missing out on performance royalties as a producer or a mixer with a royalty on a recorded release? It crucial for producers and mixers to capitalize on every revenue stream available, particularly in the digital age. Over here at GPS Management, we receive dozens of questions a week on the subject. So we put together a four-part video series on SoundExchange from the perspective of a producer or mixer with a royalty on a recorded release. We ask and answer the following:
1. What is SoundExchange?
2. Am I Missing Out On Royalties?
3. Why Is SoundExchange Important For Producers & Mixers?
4. What Do I Need To Do In Order To Receive SoundExchange Royalties?
Our clients? projects include Kings of Leon, The Rolling Stones, Garbage, The Avett Brothers, Marilyn Manson, Ray LaMontagne, Devendra Banhart, Eric Clapton, Chris Stapleton and Run The Jewels, to name a few. Overseeing the administration of SoundExchange royalties has been a crucial step in the successful management of our roster. We hope you find the below videos and answers useful. If you feel that you may be missing out on royalties, we offer SoundExchange collection services.
1. What Is SoundExchange?
SoundExchange is a non-profit performance rights organization. It administers a statutory license which allows services to stream artistic content for a pre-determined fee set by the copyrights royalty board. Specifically, SoundExchange collects for non-interactive digital transmissions. Examples include SiriusXM, Pandora and Internet Radio.
Unlike ASCAP or BMI, who collect on behalf of songwriters and publishers, SoundExchange collects and distributes on behalf of record labels and featured artists. Where ASCAP and BMI deal with the copyright of the composition, SoundExchange deals with the copyright of the sound recording itself.
You should care because if you are a producer or mixer with a royalty on a released recording, you may be eligible to receive a percentage of the featured artist?s Sound Exchange royalties. SoundExchange distributes royalties directly to the artist and copyright owners. It is also possible to have SoundExchange distribute your share directly to you provided you have a letter of direction: a signed letter from the artist authorizing SoundExchange to pay your share directly to you.
2. Am I Missing Out On Royalties?
If you are a producer or mixer with a royalty on a recorded release that has performed fairly well, yes ? it is possible that you are missing out on due royalties.
In the first quarter of 2016 alone, SoundExchange paid out 189 million dollars directly to featured artists and recording copyright owners.
Now, it should be noted that SoundExchange is authorized by regulation to release old, unclaimed royalties in order to offset our costs. So, if you are concerned about historical payments from a previous release ? the earlier you tie things up, the better. To our knowledge, SoundExchange is currently able to adjust retroactively to three years.
3. Why Is SoundExchange Important?
Currently, there is no performance right for over-the-air broadcasts. What that means is that terrestrial radio stations, such as KiisFM or WHTZ-FM, are not required to pay sound recording copyright owners for playing their recorded music. So artists and record labels are not compensated when their creative works are used by traditional radio.
Now, The Digital Performance Right in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 together granted a performance right for sound recordings. Artists and record labels could finally receive a royalty for the performance of their recordings, for certain digital transmissions. This was, and is, a very significant break through.
Producers and mixers who receive a royalty on a recording are typically paid out of the artist?s share, and so they too are entitled to receive this royalty.Generally speaking, a performance royalty does not stand behind the recoupment of recording costs ? and so these royalties may be immediately payable to the producer or mixer.SoundExchange has been at the forefront in the fight for performance royalties for both traditional terrestrial radio, and digital transmissions. It is important for record labels, artists and producers or mixers to capitalize on every revenue stream ? including this digital performance right.
4. What Do I Need To Do To Receive SoundExchange Royalties?
Firstly, you will need a letter of direction from the artist authorizing SoundExchange to pay you directly. This letter typically outlines the percentage due to you, a list of the recorded song titles, and a signature by the artist themselves. If it is a band, all members will need to sign.?Secondly, the artist needs to be registered with SoundExchange, as does the record label or owner of the recording. There is no fee for this process. It is not necessary for the producer or mixer to be registered.
One should remember that it is beneficial for all parties involved to be registered and have accurate repertoire submitted. SoundExchange has more than 20 collection agreements with counterparts in multiple countries worldwide. When your music is played in their territory, SoundExchange will collect royalties and distribute these payments directly to the artist, record label, and any authorized third parties ? such as a producer or mixer.
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