All About Soundexchange
By Adam Freedman & Alyssa Minnec
What is SoundExchange?
You’re probably already familiar with registering your music with organizations like ASCAP, BMI, Harry Fox Agency, etc., who collect PUBLISHING royalties on behalf of songwriters and publishers. However, SoundExchange is the only rights organization in the US that collects royalties for the MASTER side of commercial music.
Most countries around the world (EXCEPT FOR THE US) actually provide for a general public performance royalty on the master side — called “Neighboring Rights” — in addition to the royalties on the publishing side.
However, in the US, this domain is covered by SoundExchange, but for some reason (don’t ask us why), it’s limited specifically to royalties generated from DIGITAL, NON-INTERACTIVE STREAMING. SoundExchange doesn’t collect all digital streaming royalties — only those generated from “NON-INTERACTIVE” platforms — where consumers can’t choose what song they want to listen to. These platforms include Pandora Radio, Spotify Radio, etc. On the other hand, Spotify Premium and Apple Music are interactive because you can choose your music.
How Do I get my Money from SoundExchange?
On the registration section of SoundExchange’s website, there will be option to select what type of account you are registering for: 1) performer, 2) the sound recording copyright owner, or 3) both.
ARTIST SHOULD REGISTER AS BOTH, just to cover your bases.
If you release music on a label, the label will most likely be the owner of the sound recording here. However, there may also be situations where you release music independently, and therefore will be acting as both the performer and copyright owner, and want to register as both.
If you have previously only registered as a performer, register as a sound recording copyright owner as well (if that applies to you). If you don’t, you’ll only be receiving 45% of your total money. SoundExchange’s breakdown for payment is 45% to the featured artist, 50% to the sound recording owner (this is generally the label, or you, if you released the music yourself), and 5% to “non-featured artists.” So, for you independent artists out there who own 100% of the copyright in your work, it is up to you to register your songs yourself to make sure you’re seeing the results of that 100% ownership.
Next, SoundExchange will ask you to submit a full catalog of your work. When you do this, take a few days to get your music catalog organized in an Excel spreadsheet and make sure that you submit all of the necessary information about your work.
After you have reviewed your account information after registering, proceed to the “Search & Claim” section under the “My Catalog” tab to claim recordings you should be paid for. “Search & Claim” enables you to find recordings in SoundExchange’s database that have not yet been associated with your account. Search for your recordings, add them to your cart, and submit the cart with your claim information. If you do not find a recording in the database, that means it has not been submitted to SoundExchange yet by a rights owner or it has not been reported and therefore has not accrued any royalties.
If you are not in the United States, you do not need to sign up for SoundExchange. Instead, you can sign up for your country’s Neighboring Rights Organization.
How Do I get my Money from SoundExchange as a Producer?
As a producer on an artist’s album, if agreed upon, you are entitled to a share of the artist’s SoundExchange royalties, in addition to royalties coming from the label.
However, the way SoundExchange’s website is set up, this is accomplished by having the artist execute a “Letter of Direction” (LOD), instructing SoundExchange to pay a percentage of his or her royalties to the producer.
Soundexchange requires that you use their specific LOD form, which you can find here — https://www.soundexchange.com/artist-copyright-owner/registration-membership/.
If you, as a producer, are not registered with SoundExchange, you should still collect and submit signed LODs in the meantime. Once you do sign up, all of the LODs that SoundExchange received should automatically populate in your account.
There is one important aspect to note regarding artists and their producers and featured artists: SoundExchange can’t pay royalties to producers or featured artists or producers if the main artist isn’t signed up for SoundExchange. Even if you have a signed letter of direction, you have to get the artist to sign up themselves in order to receive your money.
Getting the artist to sign up with SoundExchange isn’t always easy; you might have to stay persistent with their team or the label and stay on top of things in order to receive what’s owed to you. Regardless, check out the website and register. If you have registered, make sure your catalog and/or letters of directions are submitted to make sure you receive your money.
If your music is available on any of the digital distribution platforms and you are not registered with SoundExchange, you are most likely missing out on some income that you should have received. So, if you are the featured artist on a track or album, and/or own the master recordings of your songs, you probably have royalties waiting for you. SoundExchange will release any unclaimed digital performance royalties after three years of being unclaimed, so that’s why it is important to become a member of SoundExchange as soon as you have music available through any of the usual digital service platforms.
Contact us at the Law Office of Adam C. Freedman, PLLC to learn more about SoundExchange and making sure your music is properly registered