Sound Exchange

SoundExchange is the first organization formed in the United States to collect performance royalties for sound recording copyright owners (SRCOs), featured and nonfeatured artists. SoundExchange is an independent nonprofit performance rights organization that currently represents over 3,500 record companies, their 6000 labels and thousands of artists united in receiving a fair price for the licensing of their music in a new digital world. Our members include small, medium and large independent record companies, as well as the major label groups and artist-owned labels.

Before its spin-off in September of 2003 as an independent organization, SoundExchange was originally created in 2000 as an unincorporated division of the RIAA.

The Digital Performance Right in Sound Recordings Act of 1995 (DPRA) and the Digital Millennium Copyright Act of 1998 (DMCA) granted a performance right in sound recordings for certain digital and satellite transmissions. In exchange for this new right, SRCOs are subject to a compulsory license for the use of their music, provided the user complies with those conditions set forth in the copyright law. SoundExchange was established to administer the collection and distribution of royalties from such compulsory licenses taken by noninteractive streaming services that use satellite, cable or Internet methods of distribution.

SoundExchange collects and distributes royalties from statutory licenses, including:
- Digital cable and satellite television services (Music Choice and Muzak)
- Non-interactive “webcasters” (including original programmers and retransmissions of FCC-licensed radio stations by aggregators)
- Satellite radio services (XM and SIRIUS)

SoundExchange does NOT administer royalties for:

- Interactive performances of sound recordings (e.g. “on-demand” services that allow the listener to select the tracks they wish to listen to and/or the order in which they wish to hear them)
- The reproduction right for sound recordings, e.g. digital downloads. Licenses for interactive performances or reproduction of sound recordings must be obtained directly from the SRCO.
- Analog public performances (traditional radio and television)

No. SoundExchange only covers performance rights. A download is governed by the reproduction right in sound recordings, which is not subject to the compulsory license and which must be licensed directly from the SRCO, usually the record company or artist.

All royalties collected by SoundExchange are accompanied by extensive electronic play logs submitted by the statutory licensee, the service offering the digital transmission to consumers. These logs are “matched” to a database of unique sound recording information, which are in turn referenced to an SRCO and featured artist. This allows SoundExchange to accurately match unique performances with record companies and artists, and pay exactly what has been earned. SoundExchange has matched millions of digital performances from play logs submitted by the subscription service.

The SoundExchange Board of Directors oversees all operations of SoundExchange. This board approves such things as the distribution methodology and administrative expenses. It is comprised of one representative from each of the major label groups (EMI Music Group, SONY  BMG Music Entertainment, Universal Music Group and Warner Music Group); independent labels (Tommy Boy Entertainment, a large independent, and Matador Records, a small independent); a designated executive from an independent label association; a designated executive from the Recording Industry Association of America (RIAA); and an equal number of artists and artist representatives from such organizations as AFTRA, AFM, the Recording Academy, Music Manager’s Forum – U.S. and the Future of Music Coalition. For a full board member listing, check the SoundExchange Board of Directors page under the ABOUT section.

Not for artists and record companies. While songwriters and music publishers receive performance royalties from airplay on radio and television, Congress “grandfathered” traditional radio, so that radio stations will continue to perform copyrighted sound recordings free of charge. However, if stations simulcast their signal over the Internet or via satellite, the U.S. Copyright Office has ruled that they must pay performance royalties.

The SoundExchange Board of Directors reviews and approves administrative expenses. The administration fee is contingent on the service type distributed. Services that pay a license based on revenue differ from those based on per performance. The administrative fee is as low as possible and certainly in line with other collecting societies of similar type and size, even though SoundExchange does not yet benefit from the economies of scale enjoyed by many larger societies.

Yes. SoundExchange issues its own financial statements that are audited by PricewaterhouseCoopers, a well-respected international independent accounting firm.

1. Royalty Distribution Information for Featured Artists (required)
Please be sure to include any stage names and/or groups with whom you have recorded as a featured artist.

2.  W-9 Tax Form “Request for Taxpayer Identification Number and Certification” (required for U.S. residents)
We have provided this form for you to download or you may obtain it from the IRS website. Please note that the name or company that the check will be payable to must match the taxpayer identification number on the tax form. We are required by government regulations to withhold a significant portion of your royalty payment unless a valid tax form is submitted.   Further instruction are included with the form and is available in the Download Forms section of the website.

3. W-8 Tax Form (W-8BEN, W-8ECI, W-8IMY)
(non-U.S. artists)
We have provided these forms for you to download or you may obtain them through the IRS website. Please enter your U.S. Taxpayer Identification Number (TIN) as requested. By providing your TIN, you are claiming an exemption from certain taxes based on the treaty that may exist between the United States and your country. If you do not have a U.S. TIN, we are required by law, to withhold 30of any monies to be distributed, which you may claim later from the U.S. Internal Revenue Service. Please note that a hard copy, not a faxed version is required.  Further instruction are included with the form and is available in the Download Forms section of the website.

4. Designation and Authorization Letter (D&A) (optional, but required for collection of non-U.S. royalties)
A signed D&A letter is required for all U.S. artists and group members or those who do not have a foreign mandate with other collection agencies outside the U.S. If the featured artist has mandated certain foreign societies to collect on its behalf and wishes to continue as such, please indicate specifically which foreign societies Soundexchange is not authorized to collect by the featured artist. Without your designation, SoundExchange will be unable to collect royalties from non-U.S. collection societies on your behalf. The letter must be signed by the featured artist(s) or an artist representative with power of attorney.

5. Electronic Funds Transfer Authorization (optional)
Fill out this form if you wish your funds to be transferred electronically to your bank account.   Please make sure to include a voided check.

6. Letter of Direction (Optional)
SoundExchange honors Letters of Direction (LOD) submitted by artists and/or their legal representatives directing us to pay creative personnel credited or recognized publicly for the commercially released sound recording on which the featured artist performs or other usual and customary royalty participants in such sound recording, provided that the letter indicates the percentage of royalties to which each individual or entity is entitled. To facilitate administration and reduce costs, the artist or his or her legal representative must submit the Letter of Direction available on the SoundExchange web site; unfortunately no other Letters of Direction can be accepted. Letters of Direction are available only to Artist members of SoundExchange. To join, please complete and return the Designation and Authorization for Featured Artists.

7. Change of Address
Fill this out if your address has changed.

An SRCO is a recording company or person who owns the exclusive right under the U.S. Copyright Act to perform publicly by means of a digital audio transmission on one or more copyrighted sound recordings or has the right to license the public performance of one or more copyrighted sound recordings by means of a digital audio transmission. In essence, if you own the ‘master’ of a song, you are an SRCO.

No. ASCAP, BMI and SESAC represent a different copyright than SoundExchange. ASCAP, BMI and SESAC collect performance revenue for the owners of the copyrighted musical work (the song), i.e. music publishers, songwriters and composers. SoundExchange collects performance revenue for owners of the sound recording copyright (the recording) and for featured and nonfeatured artists. SoundExchange, therefore, performs a different function and does not compete with ASCAP, BMI or SESAC. In fact, a company with both publishing (“song”) copyrights and recording copyrights should join collecting societies administering both types of rights: one for the song and another for the sound recording copyright.

No. SoundExchange was ordered by the U.S. Copyright Office to pay anyone whose sound recordings have been performed by digital cable and satellite television subscription services (Muzak and Music Choice). In order to be paid by SoundExchange, you must provide the proper payee information. (See Download Forms).  SoundExchange is currently the sole entity designated to collect these royalties.

The recent U.S. Copyright Office ruling regarding webcasting designated SoundExchange to collect and distribute to all nonmembers as well as its members. The Librarian of Congress issued its decision with rates and terms to govern the compulsory license for webcasters (Internet-only radio) and simulcastors (retransmissions). For more detailed information on the different types of statutory licensees, including webcasters, click here. For questions relating to licensing, please see the Licensing 101 section of the website.

Yes. Although membership in SoundExchange prohibits you from licensing your sound recording copyrights to another royalty collective for purposes of collecting and distributing Sections 112 and 114 statutory royalties on your behalf, your membership in SoundExchange does not in any way limit your ability to enter into direct (i.e., nonstatutory) licenses of any sound recordings that you own, whether with webcasters or other potential statutory licensees. SoundExchange simply requires that SRCOs notify it of any direct licenses entered into with statutory licensees or digital music service providers so that it can ensure that payments received from services that hold direct licenses to certain recordings are calculated correctly and allocated properly.

No. Membership in SoundExchange is free. Our services are paid for by an administrative fee deducted from the royalties collected. SoundExchange is a 501(c)(6) tax-exempt organization and it only deducts its actual costs of licensing, collection, enforcement, distribution and fees incurred in establishing statutory royalty rates.

SoundExchange offers opportunities to participate in the operation, policy making and governance by your involvement in a committee or advisory group and assisting us in providing you with increased service and information regarding the noninteractive use of music on satellite, cable and digital services.

SoundExchange provides information in NewsExchange, our on-line newsletter. NewsExchange spotlights our members along with industry updates regarding trends, information and developments. It’s something you won’t want to miss. Additionally, our staff is always ready to assist you with any questions you might have about your new performance rights.

SoundExchange reports on track level data rather than a mere sampling of data. Unlike other collection societies, no performance is left behind!

SoundExchange membership is on a nonexclusive basis. This means that you are free to direct license a webcaster or other digital music service provider in addition to our representation of your catalog.

Access to the future ‘Repertoire Registry’ is limited to SoundExchange members only. This database will contain comprehensive data on all performances submitted by licensed music services. Members only can search this database and ‘claim’ any and all performances belonging to them. This will ensure a more accurate and substantial distribution to you.

By joining SoundExchange you will add your strength to that of over 1,000 other companies and their 3000  labels and assist us in fighting for your performance rights.

SoundExchange provides detailed statements to copyright owners and artists so they may evaluate their royalties and review performances as submitted to us by the digital music service providers. These reports include a summary of performances (by artist, by album, by song) and financial information.

SoundExchange data is supplied by the users (satellite subscription services, webcasters and other music services). This data is often provided to us in incomplete or variable form. Rather than spend our time in “de-duping” multiple title listings, we decided to concentrate our efforts on processing the performance data to ensure accurate payment and on paying the maximum number of artists.

Yes. While we have made every effort to ensure the absolute accuracy of these statements, we are unfortunately reliant upon the data supplied to us by the users. Sometimes this information is difficult to discern or incorrectly defined. While we make substantial efforts to correct all information prior to distribution, it is possible that adjustments may need to be made on an ongoing basis. SoundExchange and other performance rights organizations understand that this is a process that gets more accurate and more refined as the amount of data we accumulate can be checked against both copyright owner and user supplied data. If your statement identifies any performances that are not yours or does not identify performances you believe you are entitled to, please notify us immediately. Notification via E-mail is the preferred method and should be sent to info@soundexchange.com.

Yes. All royalty recipients, whether a member or not, will have the right to audit and to receive a copy of the audit report. In addition, members and nonmembers can appeal to a dispute resolution committee comprised of artists and label representatives. It is expected that this committee will settle most disputes.

A “featured artist,”  “featured recording artist,” “contract artist,” “royalty artist,” or “featured performer”means the performing group or, if not a group or ensemble, the individual performer, identified most prominently in print on, or otherwise in connection with, the sound recording actually being performed.   This means that if you are a solo artist and have released songs or albums you would be considered a “featured artist.”   If instead  you are a part of a band then that band would be considered the “featured artist.”

If a sound recording (either musical or spoken word) identifies several featured performers, then the allocation of royalties may be on a pro rata basis among all identified performers. According to the legislative history to the Digital Performance Right in Sound Recordings Act, where “both the vocalist or soloist and the group or ensemble are identified as a single entity and with equal prominence (such as ‘Diana Ross and the Supremes’), both the individual and the group qualify as the ‘featured recording artist.’” SoundExchange may also distribute royalties according to any splits agreed to among featured recording artists in private agreements, provided that all of the identified featured recording artists agree in writing to SoundExchange’s distribution of royalties according to such splits.

The royalty collected by SoundExchange is  distributed as follows:

-45 percent  to the featured artist on the sound recording

-50 percent  to the sound recording copyright owner

-5 percent to the non-featured artists who perform (for more information on the collection of a non-featured artist share, please go to www.raroyalties.org.

Yes. SoundExchange, in compliance with the rules and regulations of the U.S. Copyright Office, provides direct payment to all artists. We are providing direct payment to the major label groups and hundreds of independent labels without recoupment. We are, therefore, processing thousands of artist accounts in addition to the hundreds of SRCO accounts. All SoundExchange royalty distributions include payment of the 5share for nonfeatured musicians and vocalists to AFTRA and AFM’s Intellectual Property Rights Distribution Fund, that collects and distributes this money on their behalf. If you are a nonfeatured musician or a nonfeatured vocalist, and would like to inquire about any royalties that may be due you, please contact the AFM and AFTRA Intellectual Property Rights Distribution Fund at www.raroyalties.org

Absolutely! Artists who register with SoundExchange are welcome to become members. By signing the “Designation and Authorization” agreement, artists may become members, and thereby authorize SoundExchange to collect and distribute both statutory and nonstatutory performance royalties they earn, both domestically and overseas. Artists are also encouraged to participate as committee members on our board (which contains an equal number of artist and label representatives).

If a song is reported to us with several artists, this may call for a royalty split (where the percentage for each person or group is submitted to us). This breakdown may or may not be spelled out in the artist’s recording contract. Either way, SoundExchange’s current policy is to honor those splits if agreed to, in writing, by all the artists involved.

When SoundExchange receives registration documents, we need to verify the information, file the appropriate forms, and ensure that we’re in compliance with both our independent audit demands and with the law. Although we make improvements in efficiency every day, it can take as long as 120 days to fully process an application and ready an account for payment. That account can then be paid at our next quarterly distribution.  For example: if an application submitted on January 15 is perfectly completed, without any complications, forgotten data, or other delays, a check can be expected in September. Also, SoundExchange has a threshold of $10 in earned royalties to issue a check. If a registrant hasn’t yet accumulated $10, he should expect to wait until that amount has been accumulated before receiving royalties. If you have concerns about the state of your registration paperwork, please contact account services.

SoundExchange operates as the sole designee of the Library of Congress, and our Notice of Designation is available at www.copyright.gov. The Library of Congress, as an agent of the Congress of the United States, has authorized SoundExchange as the only group that can administer government sound recording licenses.  The Better Business Bureau designations do not apply to non-charity not-for-profits like SoundExchange.

To view the list, go to this link and select your prefered format, Excel or PDF.

We ask that Heirs or Executors of Estates contact Customer Care directly at 202-524-7839 to receive instructions on how to complete our “Estates Packet” and registration form.  Completion of this paperwork and an agreement between all parties is necessary before payments can be distributed.