Sound Exchange

SoundExchange Ends Record-Setting Year with $89.5 Million in Q4 2011 Distributions

WASHINGTON – January 17, 2012– SoundExchange today announced a fourth quarter 2011 distribution of $89.5 million with more than 18,000 payments, bringing year-end estimated royalty payments to $292 million (up 17 percent from the prior year). SoundExchange’s distributions continue to grow each quarter, with the most recent being it’s largest to date. This brings total royalties distributed since the organization’s inception to more than $900 million.

SoundExchange Appoints Scott Day as CTO

WASHINGTON – December 6, 2011 – SoundExchange announced today the appointment of Scott Day to the role of chief technology officer (CTO). Scott will assume responsibility for identifying and implementing technology innovations that create strategic business value for the organization.

XM Satellite Radio and Sirius Satellite Radio Copyright Litigation SoundExchange Registrants and Members

You may have been contacted or have heard about settlements of class action lawsuits, involving independent record labels and master owners and XM Satellite Radio, Inc. and Sirius Satellite Radio, Inc.  Please be aware that SoundExchange is not a party to these lawsuits and is not advising its registrants or members to either opt-in or opt-out of the settlements.  SoundExchange’s participation has been limited to providing data to the administrator of the settlements in order to facilitate settlement claims.  Please consult your own legal counsel in determining whether or not it is more appropriate for you to opt into the settlement or opt out.  You can find more information about the settlements at www.notavxm.com or www.notavsirius.com.

Music Industry Veteran Joins SoundExchange As COO

SoundExchange announced today the appointment of Jonathan C. Bender to the role of chief operating officer (COO).  Jonathan will assume responsibility for the organization’s operational structure, including oversight of distribution and account services. He will also oversee repertoire management and the organization’s database for tracking, collecting and distributing music royalties on behalf of artists and record labels.

“As we move SoundExchange into its next chapter, we’re fortunate to have Jonathan’s deep level of operational, industry and technical expertise,” said SoundExchange President Michael Huppe. “Jonathan has a solid reputation, most notably for pioneering digital content development for some of the world’s leading record labels, and a track record in growing and transforming organizations.”

“I am pleased to join a group of individuals who are passionate and committed advocates for recording artists and rights owners,” said Jonathan. “Together, we have the potential to truly shape the future of music. I look forward to creating innovative and forward-looking operations that can help do just that.”

Jonathan brings more than 20 years of music industry business and management expertise to his position at SoundExchange. Over the years, Jonathan has served in senior operational roles at Concord Music Group, Universal Music Group, and EMI Music.

Jonathan was senior vice president, operations, IT and digital development at Concord, one of the fastest growing independent label groups in the world. In this role, he designed and managed a consolidated digital infrastructure to host and distribute the artist catalogs of the three combined companies: Concord Records, Fantasy Records and Telarc International. He also led the integration of all physical product operations and revamped all of the group’s online properties. Before joining CMG, Jonathan spent seven years with Universal Music Group, most recently as vice president, digital asset management and logistics. In this role, he served as team leader for building of the music industry’s first e-commerce distribution infrastructure, and converted production operations from physical assets to digital, savings millions annually.

He holds a bachelor’s degree from the University of North Carolina at Chapel Hill, where he was a Morehead Scholar, and an MBA from Harvard Business School.

Additional information on SoundExchange’s management team can be found on the company’s website at www.soundexchange.com.

October 2011: SoundExchange Statement on Sirius XM Direct Licenses and the Statutory License

SoundExchange recently received questions from artists and independent labels about Sirius XM’s requests for direct licenses.  Those offers are apparently being delivered by Music Reports Inc. (MRI), a company that represents the services who use music rather than the people and companies that make music. Indeed, MRI’s website states that it strives to license music from music creators “at the lowest possible cost.”

We are not privy to the discussions MRI is having about these direct licenses.  We can, however, provide some background about the statutory license for satellite radio, and what we do on behalf of the thousands of record labels and recording artists that we represent.

SoundExchange fights for artists and copyright owners

Unlike Sirius XM and MRI, we fight for royalty structures that recognize the vital role that the creators of music play for digital services.  We represent everyone in the creative process – record labels and recording artists – and we spend countless hours and millions of dollars fighting for their rights.  In the last satellite radio proceeding, we obtained a 300 percent increase in the rate paid by Sirius XM.  MRI, by contrast, works with services, and in past rate proceedings has closely coordinated with digital music services that sought to lower rates for creators’ music.     

SoundExchange manages the statutory license on behalf of the industry, and believes the current rates for satellite radio are below-market.

The statutory rates for satellite radio are set in proceedings before the Copyright Royalty Board (“CRB”) every five years.  SoundExchange represents artists and rights owners in those proceedings and advocates for rates that give proper weight to the value of music, and proper compensation to rights holders.  We’ve achieved dramatic increases in the statutory rates for webcasting and satellite radio in the past, and will always advocate to ensure the artist is paid rates that properly reflect the value of his or her music.

The current rates for satellite radio are based on a percentage of Sirius XM’s gross revenues, as defined in the regulations. For 2011, the rate is 7.5 percent, and will go up to 8 percent next year.  The proceeding to set rates for the next term is currently underway.  Importantly, Sirius XM also owes separate royalties for its other platforms, such as webcasting.  Those streams are not included in the 8 percent royalty rate described above.

As we’ve previously explained, SoundExchange believes the current rates are artificially low and will seek a substantial increase in the next term.  In the last rate setting proceeding, the CRB acknowledged that the evidence pointed to a market rate in the range of 13 percent, but then reduced the rate because of Sirius XM’s financial condition at the time.  We believe that it is no longer appropriate for musicians to be subsidizing Sirius XM. 

Currently, artists participate directly and immediately in the royalties paid to SoundExchange under the statutory license. With direct licenses, they will not.

SoundExchange administers a statutory license designed by Congress to ensure that artists participate directly in the stream of royalties generated by the digital performance right.  Under the statutory license, 45 percent of the performance royalties are paid directly to featured artists, whether or not they are “recouped” – or still owe money to their record labels. Recouped or not, the statutory license ensures artists are able to receive royalty payments from SoundExchange. In addition, through SoundExchange, 5 percent of performance royalties are paid to a fund for distribution to non-featured artists – again, without passing through a record label.  The ability of artists to participate directly and immediately in this new and growing stream of revenue is a core policy of the statutory license. 

SoundExchange is a non-profit organization with a passion for music

SoundExchange represents thousands of artists and labels, and is governed by a Board comprised of varying interests in the industry – half representing artists and half representing labels. As a non-profit organization, we are not overseen by any particular commercial interest. Instead, we advocate the interests of all creators. Our incentive is to ensure that artists receive their proper compensation, and our goal is to keep our operating costs as low as we reasonably can to maximize the royalties that we pay out to the creators and owners of music. We’ve been successful, paying more than $800 million in performance rights royalties to date.

The statutory license, as administered by SoundExchange, is transparent and efficient for rights owners as well as artists

The statutory license is an extremely efficient tool for rights owners and artists as well as services, and generates value for everyone in the creative process, not just record labels.  SoundExchange distributes tens of millions of dollars every quarter to artists and rights owners who owe nothing to SoundExchange other than keeping their paperwork up to date. 

In addition, SoundExchange has one of the lowest administrative rates in the industry – if not the lowest.  For 2010, our administrative rate was 6.9 percent – which covers rate settings, royalty accounting, oversight, enforcement and audits on behalf of all or our members and other activities that labels otherwise might have to undertake themselves. All of this is covered by our 6.9 percent admin rate.

We strive to be transparent, efficient and accurate in everything that we do. The way we distribute royalties is spelled out by statute and regulations – under rules that we advocate – and we’ve always sought the maximum degree of precision from services that we can get.  Whenever possible, we distribute royalties according to exactly what a service played.  We devote substantial resources to registering labels and artists to ensuring that every penny is distributed to its rightful owner, and we continue to dedicate resources to correcting the insufficient data we receive from services. Our mission is representing the creators of music, and it’s a mission that we embrace with passion.

SoundExchange Contributes To Music Industry Growth With Highest-Ever Quarterly Distribution

“World’s Biggest” Sound Recording Performance Rights Organization Delivers $88 Million in Q3 to 18,300 Artists and Labels

WASHINGTON, DC – October 25, 2011 – SoundExchange announced today that it has distributed nearly $88 million to more than 18,300 payees designated by recording artists and labels during the third quarter of 2011. SoundExchange is the non-profit performance rights organization (PRO) that was appointed by the Copyright Royalty Board to collect and distribute statutory performance royalties owed to recording artists and sound recording copyright owners. The quarterly distribution, SoundExchange’s largest to date, includes royalties paid by Internet radio, satellite radio and cable TV music-only channels.

The announcement comes days after global research publication Music & Copyright reported that SoundExchange is the “global leader” in the collection and distribution of sound recording performance royalties. Total distributions made by SoundExchange in 2010 were $249.2 million, up from $155.5 million in 2009.

“We’ve processed an unprecedented amount of digital performance data this quarter, which is proof positive that consumers are listening, purchasing and enjoying music in more ways than ever,” said SoundExchange President Michael Huppe. “These payments are the result of billions of digital performances by thousands of music services every month. It is our responsibility to ensure that this upsurge of digital performances can be converted into a reliable revenue stream for those who created the music.”

SoundExchange’s continued investment in world-class technical expertise has been critical in ramping up the organization’s ability to ingest and process high volumes of data. In addition to the accomplishments of the SoundExchange staff, the distribution was aided by the help of the very artists and labels who are receiving these payments. SoundExchange’s claims processing program permits copyright owners to claim tracks that have been reported without sufficient data. Through the claims program, artists and labels help SoundExchange as well as themselves by ensuring the organization has accurate metadata for recordings. Fully $15 million of the quarter’s payouts were the result of claims and adjustments.

Artists and copyright owners are encouraged to learn more and register to receive royalties for their work at www.soundexchange.com.

About SoundExchange: SoundExchange is the non-profit performance rights organization that collects statutory royalties from satellite radio, internet radio, cable TV music channels and other services that stream sound recordings. The Copyright Royalty Board, created by Congress, has entrusted SoundExchange as the only entity in the United States to collect and distribute these digital performance royalties for featured recording artists and master rights owners. SoundExchange has paid out more than $800 million in royalties. For more information, visit www.SoundExchange.com.

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SoundExchange and CD Baby to artists, labels: “Come claim your cash.”

Orgs. spread news of $1M in back royalties owed to 14,000+ creators

SoundExchange, the non-profit performance rights organization authorized to collect royalties for the digital performance of sound recordings, and CD Baby, the online music store and digital distributor, have announced a reprise of their initiative to notify hundreds of recording artists owed back royalties. The match, which the organizations hope to make an annual event, identified 14,380 CD Baby-affiliated artists and labels are collectively owed more than $1 million.

Federal copyright law allows music services to digitally stream sound recordings under the government’s blanket license, provided they pay royalties and provide playlists to SoundExchange.  Unfortunately, many recording artists and record labels do not know about the law that entitles them to royalties, and as a result to do not register to collect the payments from SoundExchange.

To encourage artists and labels to claim these royalties, the groups matched SoundExchange’s list of yet-unregistered artists and labels to CD Baby’s database of members. The exercise identified 12,806 recording artists and 1,574 labels with unclaimed funds at SoundExchange. This week, CD Baby began sending emails to all matched artists and labels, explaining the royalties and encouraging those artists and labels to register with SoundExchange to get paid.

“SoundExchange and CD Baby share a commitment to the long tail of independent artists and labels, and to supporting that community in making a living,” said SoundExchange President Michael Huppe, of the project. “We know that back royalties can sound too good to be true, and it makes a difference to skeptical artists and labels to hear about these funds from an organization as trusted as CD Baby.”

 “The reason that CD Baby exists is to make it easy for independent artists to get paid for their hard work,” said Brian Felsen President of CD Baby.  “That’s why we’re excited to help our artists claim their royalties through SoundExchange. Nothing makes us happier than to see new revenue streams flowing to independent musicians.”

SoundExchange & AFTRA Tell Artists: Claim Your Digital Royalties

Orgs. notify 6,126 AFTRA members about money waiting for them at SoundExchange

                                                                                                  Media Contacts:
                                                   Christopher de Haan, AFTRA, cdehaan@aftra.com
                              Laura Anderson, SoundExchange,  landerson@soundexchange.com

The American Federation of Television and Radio Artists, AFL-CIO, a national union of more than 70,000 recording artists, broadcast professionals and other performers, and SoundExchange, the nonprofit tasked by Congress with distributing royalties for the streaming of sound recordings, have teamed up to identify and register 6,126 AFTRA members who haven’t claimed their SoundExchange royalties.

The 6,126 AFTRA member artists are owed a cumulative $3.6 million in back royalties which have been collected on their behalf by SoundExchange for digital streaming of their recordings. But without current contact information, SoundExchange can’t send out the checks. AFTRA and SoundExchange compared databases to identify artists who are AFTRA members, but who haven’t yet claimed their funds from SoundExchange. Those artists will be receiving mailed letters and email messages alerting them to the waiting money and directing them to SoundExchange’s simple (and FREE) registration form.

“With more and more people choosing to experience music and other recordings online and through digital transmissions, SoundExchange royalties have become an increasingly important revenue stream for AFTRA members, including both recording artists and actors whose voiceover recordings are also streamed digitally,” said Kim Roberts Hedgpeth, AFTRA National Executive Director. “We’re pleased to assist SoundExchange in registering AFTRA members who are eligible to receive royalties.”

“SoundExchange is constantly reaching out to notify artists about their unclaimed royalties,” said SoundExchange President Michael Huppe. “When we send out emails, make phone calls, even talk to people one-on-one at conferences, the promise of new royalties can sound too good to be true, and too often, they don’t register. But when an organization artists know and trust, like AFTRA, helps us spread the word to their members who could also be receiving SoundExchange royalties, artists take notice, and are more likely to take action, too. AFTRA and SoundExchange share the goal of protecting artists’ rights to their work, and to compensation when that work is used. Our ongoing partnership is helping to advance both of those goals.”

When sound recordings are played on satellite radio, Internet radio or digital cable services, SoundExchange collects a royalty on behalf of the recording artists and the copyright holder, as directed under U.S. Copyright Law. Since 2001, SoundExchange has collected and processed billions of spins and paid out more than $720 million in digital royalties. Unfortunately, thousands of music professionals are not yet registered, and millions of dollars in royalties are currently unclaimed. AFTRA and SoundExchange have partnered to locate unregistered AFTRA members and ensure the distribution of these payments.

Any artist whose recordings are played can earn and claim royalties through SoundExchange for free, regardless of union status.

AFTRA is represented by Hedgpeth on the SoundExchange Board of Directors which consists of equal representation between artists’ representatives and label representatives. Legendary recording artist and AFTRA member Martha Reeves also serves as a SoundExchange Board member.

Artists and owners of master recordings may register with SoundExchange, free of charge, to receive royalties when their tracks are streamed on digital services, including online. For more information on registration, please visit www.soundexchange.com or call SoundExchange’s team at 202.524.7839.

About AFTRA
The American Federation of Television and Radio Artists, AFL-CIO, are the people who entertain and inform America. In 32 Locals across the country, AFTRA members work as actors, broadcasters, singers, dancers, announcers, hosts, comedians, disc jockeys and other performers across the media industries including television, radio, cable, sound recordings, music videos, commercials, audio books, non-broadcast industrials, interactive games, the Internet and other digital media. The 70,000 professional performers, broadcasters and recording artists of AFTRA are working together to protect and improve their jobs, lives and communities in the 21st century. From new art forms to new technology, AFTRA members embrace change in their work and craft to enhance American culture and society. Visit AFTRA online at www.aftra.com.

About SoundExchange
SoundExchange is the non-profit performance rights organization that collects statutory royalties from satellite radio, internet radio, cable TV music channels and other services that stream sound recordings. The Copyright Royalty Board, which was created Congress, has entrusted SoundExchange as the only entity in the United States to collect and distribute these digital performance royalties for featured recording artists and master rights owners (often record labels). SoundExchange has paid out more than $720 million in royalties since its creation in 2003. Performers and copyright holders can get their share for free by registering at www.soundexchange.com

August 2011: SoundExchange Statement on Satellite Radio Royalty Proceedings

August, 2011 (see October 2011 statement)

In recent weeks, SoundExchange has received many questions from our members about the statutory license royalty rates currently paid by Sirius XM for plays on satellite radio, as well as the status of the proceeding before the Copyright Royalty Judges to set new satellite radio rates.  So we wanted to take this opportunity to give you an update.   

SoundExchange Announces New General Counsel

SoundExchange announced today that long-time Senior Counsel Colin Rushing will step up to be the nonprofit’s new General Counsel. Rushing will fill the position vacated by Michael Huppe, who took the organizational helm as President earlier this year.

“When considering who should oversee the legal interests of our members, we knew we’d need a great legal mind, as well as someone passionate about the rights of artists and copyright holders,” Huppe said of the appointment. “Colin is the perfect fit. His help has been indispensable to SoundExchange over the past several years, and we’re excited to have him taking on a leadership role as we move the organization forward.”

Rushing was instrumental to the negotiations surrounding the 2009 Webcaster Settlement Act, a series of agreements between SoundExchange and online music services aimed at securing the emerging Internet radio model while protecting the interests of performers and record labels. Rushing’s leadership helped strengthen relationships between Internet radio and content creators by balancing compensation for artists and labels with the business needs of innovative services.

In his role as Senior Counsel of Licensing and Enforcement, Rushing oversaw legal proceedings, royalty rate settings, and the regulatory and legal issues necessary for SoundExchange’s daily operations. Since 2009, he has been developing an enforcement program for the 1,400 music services who rely on the statutory license for sound recordings.

“We want to make compliance as painless as possible for music services,” Rushing said today, “so that they can continue to provide enjoyment for consumers and revenue for music creators.” Reaching a balance between positive business relationships and enforcing the law has been Rushing’s focus at SoundExchange. “Our mission is to protect the rights of the performers and copyright owners who bring sound recordings to life,” he continued, “and that means working with the services that use recordings to ensure they’re playing by the rules.”

Rushing is a graduate of James Madison University and the University of Virginia School of Law, and served as a law clerk for the Hon. T.S. Ellis III in the United States District Court for the Eastern District of Virginia.  Before joining SoundExchange, he was an attorney at WilmerHale in Washington, D.C., where he focused on intellectual property and media law. He lives in Virginia with his wife and their young daughter.